chapter  3
20 Pages

Restoration of land as assets

Genesis of a market of land leasehold
WithJieming Zhu

The economic reforms since 1978 have introduced marketization to the management of the economy, which has changed the modes of China’s urbanization profoundly. Shenzhen Special Economic Zone acts in the vanguard, pioneering the market-driven land development with institutional change that phases out free land utilization initially. The issue was how to reinstall the notion of land as economic assets and to strengthen the status of the state as the landowner. Land and building development had not been considered as independent economic activities since socialist China was established, because of an all-inclusive public economy and dominant state ownership. Lessees of subsidized land benefit, to a great extent, by capitalizing the price differences – an arbitrage of several markets. In hindsight, urban-centered reforms have significantly transformed China from an agrarian economy toward an urban society. The housing reforms aim to put an end to the universal state provision of urban housing in the socialist countries.