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Land Policy and Urbanization in the People’s Republic of China

Author

Listed:
  • Zhang, Li

    (Asian Development Bank Institute)

  • Xu, Xianxiang

    (Asian Development Bank Institute)

Abstract

We explore the relationship between land policies and urbanization in the PRC. We analyze the land policies associated with urbanization and summarize findings related to central and local government involvement in the process of urbanization. In particular, we explore the relationship between urbanization and land leasing. We find that the urbanization rate and the land leasing revenue are positively related. Land leasing provides financial support for PRC urbanization, but damages the interest of landless peasants. Especially in the west, population urbanization lags behind land urbanization, resulting in much higher land and house prices in the east than those in inland PRC. Current land and household registration policies hinder the mobility of production factors, including construction land and the labor force, and distort the process of urbanization and industrialization. Land policy should be revised such that the market determines the allocation of land resources, which will create a unified, competitive urban–rural land market.

Suggested Citation

  • Zhang, Li & Xu, Xianxiang, 2016. "Land Policy and Urbanization in the People’s Republic of China," ADBI Working Papers 614, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:0614
    as

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    References listed on IDEAS

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    1. World Bank & the People’s Republic of China Development Research Center of the State Council, 2014. "Urban China : Toward Efficient, Inclusive, and Sustainable Urbanization," World Bank Publications - Books, The World Bank Group, number 18865.
    2. Davis, James C. & Henderson, J. Vernon, 2003. "Evidence on the political economy of the urbanization process," Journal of Urban Economics, Elsevier, vol. 53(1), pages 98-125, January.
    3. Ding, Chengri & Lichtenberg, Erik, 2008. "Using Land to Promote Urban Economic Growth in China," Working Papers 36748, University of Maryland, Department of Agricultural and Resource Economics.
    4. Wang, Jin, 2013. "The economic impact of Special Economic Zones: Evidence from Chinese municipalities," Journal of Development Economics, Elsevier, vol. 101(C), pages 133-147.
    5. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    6. Barro, Robert J, 1976. "The Loan Market, Collateral, and Rates of Interest," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 8(4), pages 439-456, November.
    7. Liang, Wenquan & Lu, Ming & Zhang, Hang, 2016. "Housing prices raise wages: Estimating the unexpected effects of land supply regulation in China," Journal of Housing Economics, Elsevier, vol. 33(C), pages 70-81.
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    Cited by:

    1. Hu, Zhining, 2022. "Six types of government policies and housing prices in China," Economic Modelling, Elsevier, vol. 108(C).

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    More about this item

    Keywords

    Urbanization; land policy; land leasing; land prices; hukou system;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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