Allow Mortgage of Rural Land
As contract and house-site land are both “collectively owned”, farmers are only entitled to the land use rights. The law forbids them from mortgaging neither the land nor the structures on it. In transforming the dualism mechanism, such legal barrier should be removed. Credits can be channeled into agriculture development and enhanced productivity, thus improving the incomes of rural population; it can also help to finance the relocation of rural population into the cities and promote urbanization.

The crucial question here is to whom they could mortgage their assets? If they opted for an individual, be it a fellow villager or otherwise, there may be risk of encouraging “loan shark” businesses or lead to disputes. Similarly, mortgaging the assets to an enterprise may open room for abusive land acquisition.

As such, a better solution is to set up a “Land Bank”, which functions like a rural financial institution. Alternatively, let those better managed rural trust fund organization or township banks handle the mortgage of rural contract and house-site land along with property built on them.

The mortgage problem should be viewed as a priority task. We have to understand that rural population looking for jobs or relocation in the cities, they are facing urgent need of money to realize the move, and very often, they face problems in sourcing credits.

By mortgaging their rural assets, they can afford to fund their needs in the cities, such as buying or renting accommodations, or to set up small businesses, all of which can ensure the stability of their livelihood.  

For those who choose to remain in the countryside, the mortgage can be channeled to purchasing new equipment for farming, or building new facilities for their crops or animal farms. It will help them to improve productions and efficiency, thus, leading to better incomes to repay installment fees and lead them to live better lives.

Once the land mortgage guidelines are laid down and rural insurance policies are strengthened, the rural economy will be looking up. This will benefit not only those opting for a life in the cities, but will also help those who choose to stay behind. In fact, even the urban residents are beneficiaries because when the incomes of rural populations improve, itwill also enhance rural-urban economic ties.