Dealing with “Small Property Rights” in China’s Land Market Development

This research aims to examine the knotty issue in China’s continued land market reform, the so-called “small property right” (SPR) referring to the ambivalent right to the commercial properties developed on rural “collective” land without first going through the legally required state intervention. Despite the various government efforts to halt this “illegal” practice, SPR has been spreading fast across the country, causing concerns to many. At the core of the problem lays the fundamental need for China to broaden its land market reform by extending clear and secure property rights to farmers so that the latter become full participants of the modernization progress and benefit from it. The weaknesses in the existing land laws and administration, including those governing land expropriation and land-based local government finance, underline the SPR difficulties; and reforms in these aspects are essential if the SPR problem is to be effectively addressed. Moreover, China can benefit from the experiences of other countries which have encountered similar land use conflicts in fast-paced development, whereas China’s experience—both successes and failures—can offer valuable lessons to the rest of the world.

Keywords: Land and Real Estate Markets, Informal Land Market, Land Market Regulation, Local Government, Security of Tenure