yuan xiao: making land fly

MAKING LAND FLY

YUAN XIAO, PHD

NOVEMBER 14, 2016

Land Quota Markets and Growth Management in Chinese Urbanization

I. INTRODUCTION: NEW PHENOMENON

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1 DENSIFICATION OF RURAL SETTLEMENTS

I. Introduction

2 RECLAMATION OF RESIDENTIAL LAND FOR FARMING

I. Introduction

3 TRADING OF “LAND QUOTAS” ON THE MARKET

Source: http://news.ifeng.com/gundong/detail_2011_07/29/8035871_0.shtml

I. Introduction

4. WIDESPREAD PRACTICE AND INTENSE CONTROVERSIES

Source: http://www.travelchinaguide.com/map/

•  29 out of 31 provinces in mainland China run similar programs •  Chongqing Municipality: 670,000 households resettled (2008 – 2013)

•  Controversial: à efficient or distorting? à pro-peasant or hurting peasants?

I. Introduction

TAKE A STEP BACK Why study growth management? Why study China?

II. THE RESEARCH

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1. RESEARCH QUESTIONS As a new institution, how were the land quota markets formed? What are the impacts of land quota markets?

II. The Research

2. LITERATURE REVIEW

Revisiting urban spatial economics Extending fiscal federalism/socialism Learning from theory of property rights evolution Bridging studies of location-based land politics

II. The Research

3. RESEARCH DESIGN AND DATA COLLECTION

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II. The Research

III. INSTITUTIONAL EVOLUTION: CENTRAL CONTROL AND LOCAL RESPONSES

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URBAN LAND

RURAL LAND

LAND MARKETS, PROPERTY RIGHTS, AND PUBLIC FINANCE IN CHINA

•  Partial marketization

peasants à government à urban land users

Leasing public land Land taking

Non market-based: government uses

command and control

Market-based: government leases land

use rights

•  Local Governments Leverage Land Conversion to Finance Infrastructure

peasants à government à urban land users

1. DEVELOPMENT VS. PRESERVATION

Local Land Bureau

Municipal Government

Ministry of Land and Resources

Preserve Land! (farmland protection + social stability)

Develop Land! (fiscal revenues + economic growth)

Land Conversion Quota System

III. Institutional Revolution

Urban Expansion with Official Quota Constraint

è Shortage of Quotas

Top-down Allocation of Quotas

2 LOCAL RESPONSE: QUOTA CREATION THROUGH RESIDENTIAL LAND CONSOLIDATION

III. Institutional Revolution

LAND USE CHANGES AT VILLAGE LEVEL

Source: Replication of Figure 7 in Yang 2011, How to Build a New Socialist Countryside. (Unpublished manuscript)

Before

LAND USE CHANGES AT VILLAGE LEVEL

Source: Replication of Figure 7 in Yang 2011, How to Build a New Socialist Countryside. (Unpublished manuscript)

After

SPATIAL SCHEME OF QUOTA MARKETS

3. CIRCUMVENT CENTRAL CONTROL

Local Land Bureau

Municipal Government

Ministry of Land and Resources

Preserve Land! (farmland protection + social stability)

Develop Land! (fiscal revenues + economic growth)

Land Conversion Quota System

Land Quota Markets

IV. IMPLICATIONS

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IV. IMPLICATIONS 1.  New Spatial Logics and Urbanization Pattern 2.  Mixed Welfare Impact on Peasants depending on

Location

3.  Reinforce the Dominance of the Municipality over Counties

1(a) New Spatial Logics: “De-spatialization” and “Re-spatialization”

IV. IMPLICATIONS

•  Same price of quota regardless of generation location

•  Remoteness, rather than proximity increases the likelihood of land consolidation

•  The most rural areas get densified first

1(a) New Spatial Logics: “De-spatialization” and “Re-spatialization”

IV. IMPLICATIONS

URBAN EXPANSION WITH LOCAL QUOTA CREATION AND TRADING

Villages in deep rural areas are affected    

IV. Implications

1(b) New Spatial Pattern of Urbanization

DISTRIBUTION OF QUOTA GENERATION PROJECTS BY DEVELOPMENT ZONES IN CHENGDU

LOCATION(Development

Zones)

JURISDICTIONS (district/county)

NO. OF PROJECTS

SIZE OF QUOTA

GENERATED (MU)

NO. OF PEOPLE

DISPLACED

Total 20 735 ���(100%)

361,888.83(100%)

1,389,522(100%)

1st 6 urban 16(2.2%)

11,437.61(3.2%)

57,545(4.1%)

2nd 6 suburban 244(33.2%)

120,991.98(33.4%)

533,852(38.4%)

3rd 8 rural 475(64.6%)

229,459.24(63.4%)

79,8125(57.5%)

DISTRIBUTION OF QUOTA GENERATION PROJECTS BY COUNTY IN CHENGDU

Densification Deep in the Countryside

Two Types of Peasants Affected

on urban fringe (quota use projects)

(-) more land taken, more peasants displaced

RURAL SUBURBAN URBAN

in deep rural area (quota generation projects) (+) better housing conditions, better infrastructure and services (-) lifestyle adjustment, impact on mode of production

2 Mixed Impact on Peasants, depending on Location IV. IMPLICATIONS

IV. IMPLICATIONS

Distribution of Official Quotas

3 Reinforcing the Dominance of Municipality over Counties

Distribution of New Quotas

Summary of Findings

•  Flying land: rural densification for urban expansion •  Outgoing of land resources from rural to urban areas •  Mixed welfare impact on peasants, depending on

location •  “Municipality-managing-counties” structure

unsuitable for the urbanization era •  Reinforcing dominance of big cities over small cities

in land resources distribution

Thank you! Yuan Xiao

yuanxiao@alum.mit.edu

yxiao@worldbank.org