Analysis on Chongqing Securitized Land Exchange System from the Perspective of Land Finance

Abstract

Through a rapid economic development of more than 30 years, China has created tremendous wealth in many fields. However, the contradiction caused by urban-rural dual structure, in particular, by the stringent land use regulation in rural area, has been still prominent. Industrialization and urbanization, before the industrial structural upgrading complete, are still based on the expansion of construction land at the cost of farmlands encroached, which has posed a huge challenge to environmental protection and food safety. In 2008, Chongqing government innovatively designed the securitized land exchange system based on the transfer of development right (TDR) in order to balance the land preservation and social development. However, some problems have gradually emerged in the implementation, which homogenized the securitized land exchange system and land finance system. This paper aims to reveal the inter relations between the securitized land exchange system and land finance by analyzing the initiative driving force, the benefits for local government and the negative influence from either vertical or horizontal perspectives. The vertical analysis primarily regards to the government economic man, including the fiscal difficulty in local government under the tax-sharing system, and the lack of supervision in the securitized land exchange system itself. From the horizontal prospective, all participants, including farmers, local government and developers, whose benefits distribution and intentions in the securitized land exchange system have been discussed against the land finance system.