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6 White Paper on the Business Environment in China
narrowing the gap: though land still officially belongs to the State), reform in rural
areas—and particularly with regard to arable land—has been
1. steadily increase grain output (grain production of slower.35
China should realize a capacity increase of 50 million
tons over the next five years, however, it will be a In response to overzealous appropriation of agricultural land
formidable task); by localities, the “Regulation on Protecting Basic Farmland” was
enacted in 1994, with an amendment in 1999. The regulation
2. implement deeper reform to provide equal public services stipulates, basically, that agricultural land (which is scarce to
(services include infrastructure and maintenance, basic begin with) is not to be reassigned to industrial or commercial
social welfare, maintaining legal order, and providing purposes, and should neither be “left idle nor deserted.”5
other services to meet educational and cultural needs)
for urban and rural residents; and The Ministry of Agriculture additionally noted that “in
2003, due to some tendency in some localities toward neglect-
3. raise the income for farmers by the means of new ing basic farmland protection in recent years, the Chinese Gov-
measures (supporting more professional farmers, ernment issued the Circular on Further Measures to Implement
expanding their business scale and making them more Strict Farmland Protection System,” in an oblique reference to
competitive in the global market).33 the land appropriations by authorities looking to resell the land
for profit, a significant cause of social unrest in rural areas. 5
According to the Ministry of Agriculture, “in 2013 per
capita net income of rural residents reached 8896 yuan. Among The result of the circular was that “efforts have been made to
the four elements in rural residents’ income, the fastest growing rectify and straighten out various kinds of development zones,
one is property income, with an increased of 17.7 % over the and resolutely reverse any illegal establishment of development
previous year, followed by wage income, an increase of 16.8 zones and expansion of the areas the development zones
%, while transfer income increased by 14.2 % , and family-run occupy.”5
income, 7.4%. The total number of China’s migrant workers
in 2013 was 26,894 million with an increase of 633 million Xinhua subsequently reported that “More than 50,000 land
compared with that of last year, increased by 2.4 percent, among dispute cases arose in 224 cities and counties across the country
which local migrant workers were 10,284 million, increased by from 2003 to March 2008.”36
3.6 percent. The average income of migrant workers was ¥2609
per month, with an increase of 13.9% over the previous year.” 43 The State Council also got involved, having issued the Cir-
cular of the State Council on Strengthening Land Control
A stated, tangible goal of increasing net per capita income (Guo Fa [2006] No. 31) in 2006, half-way through the period
in rural regions by seven percent in real terms over the next five of study reported by Xinhua.37
years has been articulated by the National Development and
Reform Commission.34 The Wall Street Journal suggests that reform efforts are still
necessary, citing a Chinese Academy of Social Sciences report
At the same time, the government is inching towards in- that 65 percent of the estimated 187,000 “mass incidents”
creased assistance for the welfare of rural families. On Septem- (demonstrations or protests) in 2010 were related to land dis-
ber 11, 2013, the National Family Planning Council released an putes.38
announcement on the work of New Rural Cooperative Medical
System, which stated that “from 2013, the new rural coopera- In 2011, the State Council promulgated further measures to
tive medical system subsidy from financial department at all lev- “correct procedural errors in the rural land use reform,”39 with
els should be increased from ¥240 per person per year to ¥280 China Daily reporting Premier Wen Jiabao’s remarks that “re-
per person per year, and the reimbursement rate for hospitaliza- gional authorities must protect farmers’ rights” and that no land
tion expenses covered by related policies should be increased to should ever be taken “against a farmer’s will.”40
about 75%. In 2013, the new rural cooperative medical system
was not confined to the local region and the reimbursement can The World Bank also concurs that land reforms in China
be made in different provinces. Nine provinces and municipal- are “likely to have the largest growth impact. Land is of central
ities, including Beijing, Inner Mongolia, Jilin and Jiangsu were importance to China’s economic growth and social stability,
the first ones that had cross-province reimbursement.” 44 but local implementation of land policies has led to unintended
consequences widely viewed as unsustainable (Urban China
Ongoing Land Reform (World Bank and DRC, 2014)). Rigid land policies have
Rural land reform continues to be an issue of great impor- effectively tied half the population to rural areas that produce
only 10 percent of GDP. Rural land is held in small parcels,
tance to a great number of people in China. While urban hous- making it difficult to assemble economically sized farms,
ing has been essentially privatized for more than a decade (al- increase agricultural productivity, and raise rural incomes. The
2008 global economic crisis and the subsequent accommodative
118 fiscal policy stance have had a dramatic effect China’s land-based
economic growth model through accelerated land taking and
narrowing the gap: though land still officially belongs to the State), reform in rural
areas—and particularly with regard to arable land—has been
1. steadily increase grain output (grain production of slower.35
China should realize a capacity increase of 50 million
tons over the next five years, however, it will be a In response to overzealous appropriation of agricultural land
formidable task); by localities, the “Regulation on Protecting Basic Farmland” was
enacted in 1994, with an amendment in 1999. The regulation
2. implement deeper reform to provide equal public services stipulates, basically, that agricultural land (which is scarce to
(services include infrastructure and maintenance, basic begin with) is not to be reassigned to industrial or commercial
social welfare, maintaining legal order, and providing purposes, and should neither be “left idle nor deserted.”5
other services to meet educational and cultural needs)
for urban and rural residents; and The Ministry of Agriculture additionally noted that “in
2003, due to some tendency in some localities toward neglect-
3. raise the income for farmers by the means of new ing basic farmland protection in recent years, the Chinese Gov-
measures (supporting more professional farmers, ernment issued the Circular on Further Measures to Implement
expanding their business scale and making them more Strict Farmland Protection System,” in an oblique reference to
competitive in the global market).33 the land appropriations by authorities looking to resell the land
for profit, a significant cause of social unrest in rural areas. 5
According to the Ministry of Agriculture, “in 2013 per
capita net income of rural residents reached 8896 yuan. Among The result of the circular was that “efforts have been made to
the four elements in rural residents’ income, the fastest growing rectify and straighten out various kinds of development zones,
one is property income, with an increased of 17.7 % over the and resolutely reverse any illegal establishment of development
previous year, followed by wage income, an increase of 16.8 zones and expansion of the areas the development zones
%, while transfer income increased by 14.2 % , and family-run occupy.”5
income, 7.4%. The total number of China’s migrant workers
in 2013 was 26,894 million with an increase of 633 million Xinhua subsequently reported that “More than 50,000 land
compared with that of last year, increased by 2.4 percent, among dispute cases arose in 224 cities and counties across the country
which local migrant workers were 10,284 million, increased by from 2003 to March 2008.”36
3.6 percent. The average income of migrant workers was ¥2609
per month, with an increase of 13.9% over the previous year.” 43 The State Council also got involved, having issued the Cir-
cular of the State Council on Strengthening Land Control
A stated, tangible goal of increasing net per capita income (Guo Fa [2006] No. 31) in 2006, half-way through the period
in rural regions by seven percent in real terms over the next five of study reported by Xinhua.37
years has been articulated by the National Development and
Reform Commission.34 The Wall Street Journal suggests that reform efforts are still
necessary, citing a Chinese Academy of Social Sciences report
At the same time, the government is inching towards in- that 65 percent of the estimated 187,000 “mass incidents”
creased assistance for the welfare of rural families. On Septem- (demonstrations or protests) in 2010 were related to land dis-
ber 11, 2013, the National Family Planning Council released an putes.38
announcement on the work of New Rural Cooperative Medical
System, which stated that “from 2013, the new rural coopera- In 2011, the State Council promulgated further measures to
tive medical system subsidy from financial department at all lev- “correct procedural errors in the rural land use reform,”39 with
els should be increased from ¥240 per person per year to ¥280 China Daily reporting Premier Wen Jiabao’s remarks that “re-
per person per year, and the reimbursement rate for hospitaliza- gional authorities must protect farmers’ rights” and that no land
tion expenses covered by related policies should be increased to should ever be taken “against a farmer’s will.”40
about 75%. In 2013, the new rural cooperative medical system
was not confined to the local region and the reimbursement can The World Bank also concurs that land reforms in China
be made in different provinces. Nine provinces and municipal- are “likely to have the largest growth impact. Land is of central
ities, including Beijing, Inner Mongolia, Jilin and Jiangsu were importance to China’s economic growth and social stability,
the first ones that had cross-province reimbursement.” 44 but local implementation of land policies has led to unintended
consequences widely viewed as unsustainable (Urban China
Ongoing Land Reform (World Bank and DRC, 2014)). Rigid land policies have
Rural land reform continues to be an issue of great impor- effectively tied half the population to rural areas that produce
only 10 percent of GDP. Rural land is held in small parcels,
tance to a great number of people in China. While urban hous- making it difficult to assemble economically sized farms,
ing has been essentially privatized for more than a decade (al- increase agricultural productivity, and raise rural incomes. The
2008 global economic crisis and the subsequent accommodative
118 fiscal policy stance have had a dramatic effect China’s land-based
economic growth model through accelerated land taking and
