ABSTRACT
To the majority of scholars and the general public, land development is most commonly understood as essentially an economic phenomenon that involves developers who seek to make a profit. It is thus not surprising that, to make sense of the recent massive land development observed in China, attempts have been made to draw insights from the established theory of land economics. A critical evaluation of the Chinese practice with reference to the theory of land economics has led many to identify a noticeable ambiguity in the Chinese definition of property rights for both urban and rural land. It is widely believed that the ambiguous definition of land property rights has been responsible for China’s massive and inefficient land use and land development. Reasoning along the line of logical thinking in urban land economics, a number of researchers have observed that massive land development in many Chinese cities occurred after the decentralization of economic property rights over urban land from the central state to municipal governments and state units.4 Although decentralization of land use rights has provided necessary incentives for land users to use land in an efficient and profitable manner, it has not clearly delineated the property rights over urban land among the many different kinds of actors involved. As a consequence, property rights over urban land have become ‘a contested sphere’ among the central state, local governments, developers and state units (danwei).5 Theoretically, ambiguous property rights definition will leave valued assets in the public domain for competitive access and inefficient land development. Without a clear delineation of land property rights with exclusivity and transferability, the desire to capture land assets in the open domain and to transform them into secure assets has become a powerful force driving massive and uncontrolled land development in many Chinese cities. This ambiguous delineation of land property rights is therefore identified as the root cause for inefficient allocation and irrational (over)development of urban land.
