Securing Land Rights Crucial for China’s Stability and Growth

Land rights will increase farmers' wealth by more than half a trillion dollars

October 15, 2007 • News Releases

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Securing land rights for China’s 700 million farmers is crucial to reducing social unrest, the growing urban‐​rural income gap, and poverty, finds a policy analysis released by the Cato Institute. 

Based on a survey conducted in 17 provinces among 1,962 farmers and other respondents, the study, “Securing Land Rights for Chinese Farmers: A Leap Forward For Stability and Growth,” found that: “Most Chinese farmers still lack secure and marketable land rights that would allow them to make long term investments in land, decisively improve productivity and accumulate wealth.”

“This worsening income disparity reflects a lack of opportunity for, and a threat to the general welfare of, Chinese farmers. If the sources of this income disparity are not addressed in the near future, the country’s long‐​term growth and stability will be in jeopardy,” write the authors, Keliang Zhu, a Beijing‐​based attorney and China Program Manager for the Rural Development Institute, and Roy Prosterman, founder and chairman emeritus of the Rural Development Institute. 

Though Chinese law calls for farmer’s property rights to be protected, local government and village officials commonly violate those rights, and farmers who lose their land typically receive little or no compensation.

As the Chinese Communist Party convenes on October 15th for its 17th National Congress, it should call for measures to implement and enforce the new Property Law passed earlier this year.

Effective October 1, the new Property Law has the potential to rectify land rights deficiencies in China by providing a more authoritative statement of farmers long‐​term (30‐​year), documented and marketable land rights.

However, this law must be enforced at local levels. Abuse by local governments, the lack of due process, and vague ownership can be corrected by issuing land right documents to all farmers, creating a land registration system, and monitoring progress implementing the law.

In cases where Chinese farmers have had well‐​documented rights the authors find a notable increase in investment. In fact, the authors calculate that the vigorous implementation of the law could create as much as half a trillion dollars in land wealth for farmers.

“Japan, South Korea, and Taiwan all conducted extremely successful land reforms after World War II by providing small farmers with private ownership of land. China will be able to replicate such experiences if the government can effectively and faithfully implement its recent pro‐​farmer policies and laws.”