Page 172 - 2017 White Paper
P. 172
7 White Paper on the Business Environment in China
In 2011, the State Council promulgated further tradition of collective farming and embracing the new
measures to “correct procedural errors in the rural land world of corporate farming. The new policy, announced
use reform”, with China Daily reporting Premier Wen by the Ministry of Agriculture in November 2016, Reuters
Jiabao’s remarks that “regional authorities must protect reports, aims to promote and standardize the “transfer
farmers’ rights” and that no land should ever be taken of the right to use farmland from rural residents to
“against a farmer’s will” (Wei 2011). commercial entities” (Glenn and Yao 2016).
The World Bank also concurs that land reforms in Government guidelines regarding the transfer
China are “likely to have the largest growth impact. Land of management rights of rural land were issued on
is of central importance to China’s economic growth and three separate occasions between November 2014
social stability, but local implementation of land policies and April 2015. In March this year, during the annual
has led to unintended consequences widely viewed National Political Congress in Beijing, this year’s released
as unsustainable (Urban China (World Bank and DRC, Government Work Report encouraged farmers to
2014)). Rigid land policies have effectively tied half the voluntarily transfer contracted land for compensation in
population to rural areas that produce only 10 percent of accordance with the law, and to enter into land stakes,
GDP. Rural land is held in small parcels, making it difficult to partnerships or joint-custody agreements (Yicai 2016).
assemble economically sized farms, increase agricultural
productivity, and raise rural incomes. The 2008 global Reuters reported that the Ministry has recommended
economic crisis and the subsequent accommodative separating various rights to rural land, which they
fiscal policy stance have had a dramatic effect China’s say would improve land circulation, increase farmers’
land-based economic growth model through accelerated incomes, and contribute to the development of modern
land taking and conversion, bringing the inefficiencies agriculture. China’s Agriculture Minister Han Changfu,
of current land tenure arrangements and the need for in a November 2016 news conference, stated that the
reform into even clearer focus” (World Bank 2014). separation of rural land ownership rights, contracted
rights and operating rights is a “key reform step”. He said:
However, it also cautions that reforms to land, public “This helps guide the orderly transfer of land operating
finance and the hukou system “require a carefully rights and lays a system foundation for appropriate-scale
coordinated approach”. Reforms need to recalibrate agricultural operations for development and modern
the use of land, improve land governance, and reduce agriculture.” The step will help improve land and labor
the government’s dependence on revenue from land efficiency in the farm sector, he said, but he added that
conversions and land leases. They could facilitate the farmers will not be forced to transfer their land rights
transition from land asset sales to a modern tax system (Glenn and Yao 2016).
aligned better with China’s new economic structure. They
could also deepen land markets, clarify rural citizens in While the Chinese leadership have been discussing
their property rights and land assets at home, and boost the need to attract business investments into agriculture
their opportunities and entitlements for integrating for years, and have even initiated measures to lure
into cities. Thus to increase the efficiency of land use, it international agriculture investment and companies
is necessary to ensure the security of agricultural land into carefully selected and pre-approved specialized
tenure, including introducing the transferability of land zones, the Voice of America (VOA) opines that this latest
rights and reforming land acquisition and compensation move by the Ministry is the first attempt to create a legal
practices. This action includes rolling out the recent policy process that could affect rural farms, collectively owned
decision to grant indefinite land use rights to farmers, to but individually operated by farmers as per Chinese law,
expand land registration, and to strengthen rural land across the entire country (Dasgupta 2016). VOA observed
markets (World Bank 2014). that Chinese state media say that there is popular support
for a switch to corporate farming. “There has been a
Welcome to China Farm, Inc. - R.I.P. growing demand from rural residents for transferring
Collective Farming? farmland to others for management and production,”
Xinhua stated, adding, “The new policy will lead to the
China is hoping to entice foreign and private capital formation of mechanisms that will make the transfer
to invest in its tightly-controlled agricultural sector by more standardized, while land owners’ rights will be
opening up the industry, shifting from a decades-long better protected.”As for foreign investment opportunities
172
In 2011, the State Council promulgated further tradition of collective farming and embracing the new
measures to “correct procedural errors in the rural land world of corporate farming. The new policy, announced
use reform”, with China Daily reporting Premier Wen by the Ministry of Agriculture in November 2016, Reuters
Jiabao’s remarks that “regional authorities must protect reports, aims to promote and standardize the “transfer
farmers’ rights” and that no land should ever be taken of the right to use farmland from rural residents to
“against a farmer’s will” (Wei 2011). commercial entities” (Glenn and Yao 2016).
The World Bank also concurs that land reforms in Government guidelines regarding the transfer
China are “likely to have the largest growth impact. Land of management rights of rural land were issued on
is of central importance to China’s economic growth and three separate occasions between November 2014
social stability, but local implementation of land policies and April 2015. In March this year, during the annual
has led to unintended consequences widely viewed National Political Congress in Beijing, this year’s released
as unsustainable (Urban China (World Bank and DRC, Government Work Report encouraged farmers to
2014)). Rigid land policies have effectively tied half the voluntarily transfer contracted land for compensation in
population to rural areas that produce only 10 percent of accordance with the law, and to enter into land stakes,
GDP. Rural land is held in small parcels, making it difficult to partnerships or joint-custody agreements (Yicai 2016).
assemble economically sized farms, increase agricultural
productivity, and raise rural incomes. The 2008 global Reuters reported that the Ministry has recommended
economic crisis and the subsequent accommodative separating various rights to rural land, which they
fiscal policy stance have had a dramatic effect China’s say would improve land circulation, increase farmers’
land-based economic growth model through accelerated incomes, and contribute to the development of modern
land taking and conversion, bringing the inefficiencies agriculture. China’s Agriculture Minister Han Changfu,
of current land tenure arrangements and the need for in a November 2016 news conference, stated that the
reform into even clearer focus” (World Bank 2014). separation of rural land ownership rights, contracted
rights and operating rights is a “key reform step”. He said:
However, it also cautions that reforms to land, public “This helps guide the orderly transfer of land operating
finance and the hukou system “require a carefully rights and lays a system foundation for appropriate-scale
coordinated approach”. Reforms need to recalibrate agricultural operations for development and modern
the use of land, improve land governance, and reduce agriculture.” The step will help improve land and labor
the government’s dependence on revenue from land efficiency in the farm sector, he said, but he added that
conversions and land leases. They could facilitate the farmers will not be forced to transfer their land rights
transition from land asset sales to a modern tax system (Glenn and Yao 2016).
aligned better with China’s new economic structure. They
could also deepen land markets, clarify rural citizens in While the Chinese leadership have been discussing
their property rights and land assets at home, and boost the need to attract business investments into agriculture
their opportunities and entitlements for integrating for years, and have even initiated measures to lure
into cities. Thus to increase the efficiency of land use, it international agriculture investment and companies
is necessary to ensure the security of agricultural land into carefully selected and pre-approved specialized
tenure, including introducing the transferability of land zones, the Voice of America (VOA) opines that this latest
rights and reforming land acquisition and compensation move by the Ministry is the first attempt to create a legal
practices. This action includes rolling out the recent policy process that could affect rural farms, collectively owned
decision to grant indefinite land use rights to farmers, to but individually operated by farmers as per Chinese law,
expand land registration, and to strengthen rural land across the entire country (Dasgupta 2016). VOA observed
markets (World Bank 2014). that Chinese state media say that there is popular support
for a switch to corporate farming. “There has been a
Welcome to China Farm, Inc. - R.I.P. growing demand from rural residents for transferring
Collective Farming? farmland to others for management and production,”
Xinhua stated, adding, “The new policy will lead to the
China is hoping to entice foreign and private capital formation of mechanisms that will make the transfer
to invest in its tightly-controlled agricultural sector by more standardized, while land owners’ rights will be
opening up the industry, shifting from a decades-long better protected.”As for foreign investment opportunities
172
