LIU Zhengshan | Progress and Challenges in China’s Land Reform

       LIU Zhengshan   Vice President of the China Research Society of Urban Development

l  The following views are compiled from LIU Zhengshan’s remarks at the 13th Biweekly Policy Analysis Meeting.

LIU Zhengshan, Vice President of the China Research Society of Urban Development, stated that land reform in China primarily refers to the reform of the rural land system. Its complexity lies in the involvement of departmental interests and the fundamental legal framework. Scholars generally agree that rural land reform in China has undergone four major phases of transformation.

The first phase was the land reform movement following the founding of the People’s Republic of China, marked by the promulgation of the Land Reform Law of the People’s Republic of China in 1950.

The second phase began with the 1954 Constitution of the People’s Republic of China, which redefined land as a means of production and established the principle of public ownership of means of production. This system applied only to means of production, while living necessities remained privately owned.

The third phase started in 1983 with the introduction of the household contract responsibility system. However, land property rights remained tightly restricted, continuing under the collective ownership framework. Farmers had only the rights to use and benefit from the land. At that time, urban residents could still apply for rural homestead plots, a practice prohibited only after the 1998 revision of the Land Administration Law of the People’s Republic of China.

The fourth phase began in 2014 with the implementation of the “separation of ownership rights, contractors’ right and land management rights” reform system.        Compared with earlier reforms, this phase introduced significant changes:

It allowed collectively owned rural construction land to enter the market directly, as stipulated in Article 63 of the 2019 revision of the Land Administration Law.

It formalized operational land rights by registering and confirming their property status, though homestead land remains under a closed circulation model.

It restructured the land expropriation system, with the 2019 amendment to the Land Administration Law for the first time clearly defining the scope of public interest in land takings.

Despite these institutional breakthroughs, the reform still reflects internal contradictions: on one hand, it aims to promote market-based allocation of production factors; on the other hand, it reinforces administrative control. This dual-track approach highlights local governments’ dependence on land-related revenue and the influence of various departmental interests. According to research estimates, between 1979 and 1994, the agricultural sector experienced an average annual capital outflow of 82 trillion yuan (based on cost-adjusted data from 1982 to 2019). The lag in land factor marketization has seriously hindered the release of economic growth potential.

The push for reform faces multiple obstacles: First, the difficulty of defining the boundary between government and market. Second, misconceptions about land, such as viewing it as a fallback for farmers’ social security or fearing that land transfers will lead to land consolidation—perspectives rooted in outdated agricultural-era thinking that no longer align with the realities of modern society. Third, departmental interest constraints, including questions about the scientific basis of the “redline” for arable land protection and the institutional peculiarities of the land leasehold system. This system not only overdraws development potential and drives local debt accumulation, but also creates institutional conflicts with property tax reform objectives.

To address these systemic challenges, it is recommended to return to a traditional dual-rights property structure, replacing the current “separation of ownership rights, contractors’ right and land management rights” reform model with a two-tiered system distinguishing between filed Surface Right and Subsoil Right. By strengthening farmers’ land use rights and enabling free circulation mechanisms, farmers can be empowered with more complete land rights. The government’s role should shift toward clarifying property boundaries, rather than overregulating them—this is the key to effective land system reform.

（This article is based on LIU Zhengshan’s speech delivered on March 27, 2025. It is intended solely for academic exchange and does not represent the position of the National Academy of Development and Strategy at Renmin University of China.）