New regulations aimed at strictly supervising the availability
of land for development were announced by the Chinese government on
Tuesday in a further effort to prevent overheating of the
economy.
The new rules warn local leaders that they'll be penalized if
they fail to stop or investigate illegal land sales in the areas
they're responsible for, according to a State Council notice.
The new rules state that the use of farm land for construction
purposes will no longer be approved by the State Council on a
project by project basis but should be reported to provincial
governments and submitted to them for consideration on an annual
basis.
Land management authorities must keep a closer watch on local
governments and stop land supply applications from them which
breach the regulations, states the notice. Civil servants who
violate the regulations will be disciplined and prosecuted if
they've broken the law, it adds.
The Ministry of Supervision along with the Ministry of Land and
Resources and other central departments will soon launch a
nationwide crackdown on irregularities in land supply, the notice
explains.
China recorded an economic growth of 10.9 percent in the first
half this year on the back of a 30-percent growth in fixed asset
investment. Both these figures are the highest in recent years.
In its bid to prevent possible economic meltdown China has
repeatedly raised the benchmark interest rate and clamped down on
unauthorized investment projects. The government contends that
illegal land availability is a leading cause of runaway
investment.
A survey of 16 cities by the Ministry of Land and Resources last
year showed that nearly 50 percent of land under development had
been acquired illegally. The figure was as high as 90 percent in
some cities.
To stop local governments from giving land to investors free of
charge or at very low prices the notice says central government
will impose a minimum price tag on land. This will vary according
to what it's to be used for. Officials who sold land at prices
lower than the minimum market rate would be prosecuted, the notice
explained.
The government will also raise the taxation levels on investors
for land use. The tax revenues would be used for the protection of
existing and development of new farmland. Analysts observed that
the new regulations would raise the cost of land and help improve
the efficiency of how it was used.
The notice also bans the lease of land from farmers for
construction purposes. This method is increasingly used by some
local governments and investors to dodge taxes associated with land
sales and approval from higher authorities.
The notice also includes new policies aimed at protecting the
interests of farmers whose land is sold by local governments. It
says revenues from land sales must be first used to pay for the
resettlement of farmers and compensation for their crops.
It makes clear for the first time that if the sale price of any
piece of land is not enough to cover the costs of resettling a
farmer local government must assist from their pool of land sale
revenues.
Local governments should ensure that farmers who've lost their
land are trained for new jobs and provided with means to support
themselves, the notice states.
Zhang Xinbao, a senior official from the Ministry of Land and
Resources, said reining in local government was a major target of
the new policy as "local governments are actually behind almost all
the major cases of illegal land use."
There were many reasons for this but the main motivation was the
fact that land sale revenues had become a major source of income
for many local governments, Zhang said.
To address these problems the new regulations state that land
sale revenues must be incorporated into local budgets so they can
be scrutinized by higher authorities. This is a significant
departure from the current practice where local governments have
total freedom to spend the money as extra-budget revenue.
(Xinhua News Agency September 6, 2006)