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Chinese rural land expropriation law: problems, prescriptions and obstacles

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Abstract

Extensive rural land expropriation has been a source of social deprivation and contention in contemporary China. This article provides a comprehensive state-of-art analysis of the Chinese law of rural land expropriation and demonstrates the multiple problems it faces now. It first reveals the definitional, structural and procedural challenges embedded within the existing legal framework to the constitutional public interest prerequisite enshrined in Article 10 of the 1982 PRC Constitution. It shows that not only is the prerequisite itself legislatively and judicially under-defined, it is also in effect made structurally redundant by the relevant constitutional and statutory prescriptions. The second part moves on to explain the current legal standard of compensation for rural land expropriation and the critique against its unfairness, both substantively and procedurally. It shows that the existing statutory standard of compensation is unfair not because it falls under the “true” value of the peasants’ use-rights over rural land but because it denies them any share in the increased land value as a result of expropriation. The peasants have no institutionalized channel to challenge the standards either. The third part turns to a series of proposals made in the existing literature on reforming the Chinese rural land expropriation law, all of which intend to boost the capacity of the law to check the state’s takings power and protecting land rights. The concluding part briefly discusses the socio-political reasons why these reform proposals have yet to roll out in China, despite the lengthy groundswell of support for an overhaul of the law in this field, and why a broader reform is needed.

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Notes

  1. Porteous and Smith 2001. The Chinese manifestation of domicide in Shanghai is documented by Shao 2013.

  2. Hsing 2010, Chap. 7.

  3. The most cited finding is from Yu Jianrong who estimated that 65 % of rural “mass incidents” were triggered by governments’ forceful and violent land expropriation. See Yu 2011, pp. 45–48.

  4. Ho and Lin 2004.

  5. Lichtenberg and Ding 2006.

  6. For a detailed analysis of land market in China, see Ho and Lin 2003.

  7. The Land Administration Law was initially enacted in 1986 and subsequently revised in 1988, 1998 and 2004. The term first appeared in Article 19 of the 1986 and 1988 versions of the law and then in Article 58 of the 1998 version.

  8. For instance, after the contentious 2005 Kelo v. City of New London case in which the US Supreme Court ruled in favour of eminent domain for the sake of economic development, there was a widespread backlash among many state legislatures which amended the state law on eminent domain to provide more stringent definition of public purpose of eminent domain. See The Castle Coalition 2009.

  9. It is not implied here that the US is the only or even the most appropriate comparator in this respect. In fact, other countries such as France, Germany and the UK have been chosen in comparative studies of takings law. Yet the takings laws of all these countries share the common ground where the judiciary is able to define or interpret the public purpose of land takings.

  10. Cheng 2006, p. 72.

  11. Pils 2010, p. 142.

  12. Liu 2005, pp. 6–7, 2008, pp. 318–320; Chen 2008, pp. 115–116; Kim 2009.

  13. Lu 2003, p. 46.

  14. Kennelly 2008.

  15. Bryceson 1996, p. 99.

  16. 1982 PRC Constitution, art 10; 2004 LAL, art 4.

  17. 土地管理法 (Land Administration Law, hereafter 2004 LAL) August 28 2004, art 14.

  18. 2004 LAL, art 43. Peasant household residential plots are the land allocated by the collectives to their member peasant households to build family houses on. This is a legacy of China’s collectivization campaign starting from the 1950s and was first enshrined in a 1962 Central Party document. In the post-reform era, it became formally recognized by law. See (Revised Draft Regulations on the Work in the Rural People’s Communes) September 27 1962, art 21; 2004 LAL, art 8; 物权法 (Property Law) March 16 2007, Chapter 13.

  19. 2004 LAL, art 60.

  20. 2004 LAL, art 63.

  21. 2004 LAL, art 44. For what is worth, it is further stipulated in Article 41 of the 城乡规划法 (Urban and Rural Planning Law) that the rural collectives ought to obtain planning permission from the government when initiating the permissible conversion of their agricultural land.

  22. 2004 LAL, art 44.

  23. 2004 LAL, art 43.

  24. Zhou 2004.

  25. A reviewer of this article insightfully points out that “without the definition or scope of public interest, it is not determined whether an action is unconstitutional in the legal sense”. This is undoubtedly true. Nevertheless, one can still meaningfully talk about the unconstitutionality of certain expropriations that are not for public interests defined in a reasonable way. In this sense, the paradox here is not a legal paradox for the time being, but one likely to emerge once a (reasonable) definition of public interest is supplied.

  26. The 2005 Kelo case is but one of the most famous and controversial examples in the US.

  27. 2004 LAL, art 21, 44, 45.

  28. 关于深化改革严格土地管理的决定 (Decision on Deepening Reform and Enhancing Land Administration) October 21 2004.

  29. Ibid, Point 14; 关于完善征地补偿安置制度的指导意见 (Guiding Opinions on Improving Compensation and Resettlement System in Land Expropriation) November 3 2004, Point 11.

  30. Liu 2007a, b.

  31. Ibid.

  32. Total resettlement fee per hectare = average yield × 4–6 × number of people resettled per hectare. If 4–6 × number of people resettled per hectare >15, the resettlement fee will still be 15 × average yield. The number of people resettled per hectare is determined, regardless of the actual number, by determined by dividing the quantity of land expropriated by the amount of land per capita of that particular collective. This means that the scarcer land is in a particular location (i.e. low amount per capita and higher number of people per hectare), the higher the total compensation per hectare is.

  33. In practice, the provincial governments in China typically delegate such rule-setting powers further down to prefectural and county governments within their respective jurisdictions.

  34. Qu and Zhou 2009, p. 169.

  35. As the maximum of land compensation fee is set at 10 times the average yield, at most the provincial governments may increase the resettlement fee from 15 to 20 times the average yield.

  36. Ding 2007, p. 8.

  37. See e.g. the survey done by Zhejiang provincial government in 2002. Zhejiang Province Rural Investigation Group 2002. Empirical research has shown that the amount of compensation paid for land to be used for public purposes is estimated to have been significantly lower than land to be used by private investors. See Deininger and Jin 2008.

  38. Washburn 2011, pp. 86–88.

  39. 农村土地承包法 (Rural Land Contracting Law) August 29 2002, art 20. Note that the tenure terms for grassland and forest land are longer at 30–50 and 30–70 years respectively. A 30-year term is used for the sake of convenience.

  40. Washburn 2011, p. 87. It generously assumes that the annual rate of growth of the yield will suffice to cancel out whatever the appropriate discount rate is, and that the 30-year term of the present use-rights holder has just begun. It should be noted though that in 2008, the central authority declared that the peasants’ rights to contract management would “remain unchanged for a very long time”, understood by many as to extend the term of such rights from 30 years to infinity. This change does not affect calculating the ownership value through dividing annual net return by the capitalization rate. See 关于农村改革发展若干重大问题的决定 (The Decision on Major Issues on Promoting Rural Reform and Development) October 12 2008, Part 3, Point 1; 关于促进农业发展农民增收若干意见 (Opinions on Promoting Agricultural Development and Peasants' Income Increase) February 1 2009, Point 17. For relevant analysis, see Dean and Damm-Luhr 2010, pp. 138–139.

  41. Washburn 2011, pp. 86–87, citing testimony of Roy Prosterman in Davis S and others 2004.

  42. Average yield × 30 ÷ 85 % = Average yield ÷ 2.8 %.

  43. If the local government choose, in a fully lawful manner, the lowest ends of the compensation scale, i.e. six times of annual yield for land compensation fee and four times for resettlement fee, the total compensation for rural land ownership stands at ten times the average yield, which is merely one-third or one-fourth of the true fair value.

  44. Ding 2007, pp. 5–7.

  45. If the local governments choose the lowest ends of the compensation scale at 10 times the average yield, it will be lower than the true value. But if a compensation worth over 20 times the average yield is paid, it is higher than the true value.

  46. Washburn 2011, pp. 84–88.

  47. More detailed discussion will appear in the Part 4 of this article.

  48. Washburn 2011.

  49. Zhu et al. 2006, pp. 782–783.

  50. The famous Wukan protest in 2011 was an example in point. See Bristow (Wukan Unrest: Why do Chinese Farmers Riot? December 15, 2011). http://www.bbc.co.uk/news/world-asia-china-16193089 (Accessed March 15, 2014).

  51. 招标拍卖挂牌出让国有土地使用权规定 (Public Tender, Auction and Listing of State-owned Land Use Rights) April 3 2002, art 4–5, 7–10, 15; 土地管理法实施条例 (Implementation Regulation of Land Administration Law) January 8 2011, art 25; 2004 LAL, art 45–48.

  52. 国土资源听证规定 (Rules on Public Hearings of Land Resources) January 9 2004, art 34.

  53. (Rules on Issues of Hearing Administrative Cases related to Rural Collective Land) August 7 2011, art 10.

  54. Mo 2011.

  55. Pils 2006, pp. 263–264.

  56. 关于执行中华人民共和国行政诉讼法若干问题的解释 (Interpretation on Several Questions regarding the Implementation of the PRC Administrative Litigation Law) March 10 2000, art 2.

  57. Pils 2006, p. 264; Cheng 2004, p. 52. In reality, there were cases concerning compensation that were amenable. See for example Wang Zhanqun v. Dengzhou Municipal People's Government and Dong Yonghua v. Chongqing Municipal People's Government. I sincerely thank the anonymous reviewer for pointing out these cases to me.

  58. Yang 2014.

  59. Implementation Regulation of Land Administration Law, art 25.

  60. Qiu 2004.

  61. 关于深化改革严格土地管理的决定 (Decision on Deepening Reform and Enhancing Land Administration) October 21 2004, Points 8 and 11; 2004 LAL, art 49; 2007 Property Law, art 42.

  62. 关于深化改革严格土地管理的决定 (Decision on Deepening Reform and Enhancing Land Administration) October 21 2004, Points 15.

  63. (Urgent Notice on Further Tightening the Administration of Expropriation and Demolition and Effectively Protecting Legal Rights and Interests of the People) May 15 2010, Point 2; 关于进一步做好征地管理工作的通知 (Notice on Further Improving Administration of Expropriation) June 26 2010, Point 3.

  64. In a most recent violent expropriation-led dispute in Pingdu City of Shandong costing the life of one peasant, delayed and incomplete payment of compensation was one of the causes. Luo and Qin 2014.

  65. Hu and Xin 2004; Wang 2005; Hu and Wang 2005.

  66. Wang 2005; Hu and Wang 2005.

  67. Yang 2005a, pp. 582–583, b; Chen and Tian 2004.

  68. Wang 2008, p. 17.

  69. Liao 2006.

  70. Liang 2000, pp. 191–193.

  71. Article 8 reads: “Where, for public interests such as safeguarding the national security and promoting the national economic and social development, it is necessary to expropriate a building under any of the following circumstances, the people’s government at the city or county level shall make a decision to expropriate the building:

    1. 1.

      necessary for national defense and foreign affairs;

    2. 2.

      necessary for the construction of energy, transportation, water and other infrastructures as organized and implemented by the government;

    3. 3.

      necessary for a public cause such as science and technology, education, culture, health, sports, environment and resource protection, disaster prevention and mitigation, protection of cultural relics, social welfare or municipal utilities as organized and implemented by the government;

    4. 4.

      necessary for the construction of a social housing project as organized and implemented by the government;

    5. 5.

      necessary for the redevelopment of old cities where dilapidated buildings concentrate and infrastructure lags behind as organized; and implemented by the government according to the relevant provisions of the Urban and Rural Planning Law; or

    6. 6.

      necessary for any other public interest as prescribed by law or administrative regulation.”

  72. See The Process of Amending the Land Administration Law is Started but the Difficulty lies in Defining Public Interest in Land Expropriation. http://news.sina.com.cn/c/2011-04-20/014722322126.shtml (Accessed March 6, 2015).

  73. Zhang 2005a, b, c; Tang and Wen 2006.

  74. Liu 2008, p. 332. See Kelo v. City of New London 545 U.S. 469 (2005).

  75. Zhang 2005a, b, c; Yao 2006; Liu 2007a, b; Wang 2007.

  76. Cheng 2004. It is argued that decisions of expropriation are not abstract administrative acts but specific administrative acts that are judicially reviewable.

  77. Zhao 2006.

  78. Cheng 2011, p. 20.

  79. Demsetz 1988, pp. 18–19.

  80. As China does not have a civil code, the general provisions remain to be the most comprehensive rules of civil law to date.

  81. This is an extremely popular argument which still holds much currency today. Searching “ownership truncation” (所有权/产权残缺) on China’s main search engine Baidu will yield a large number of results. The above-mentioned paper by Zhou Qiren seems to be the first academic work that deploys the term to describe the collective land ownership in China.

  82. Huang 1996.

  83. The secondary land market is the market where the use-rights of state-owned land can be exchanged.

  84. Liu 2008.

  85. The most prominent spokesmen for land privatization in China are economists like Mao Yushi, Sheng Hong, Chen Zhiwu, Wen Guanzhong, Wen Guanzhong and Yang Xiaokai.

  86. This is a minority view. See e.g. Li 2010.

  87. Liu et al. 2007.

  88. Zhang 2009; Liu 2012; Zou 2011.

  89. Liu 2007a, b; Zhang 2005a, b, c; Zou 2009; Davis et al. 2004.

  90. Development Research Center of the PRC State Council and World Bank 2013, p. 136.

  91. See e.g. United States v. Miller 317 US 369, 374 (1943).

  92. Merrill 2004, pp. 116–117.

  93. Pils 2006, p. 250; Van Rooij 2007, pp. 220–221; Washburn 2011, pp. 106–107.

  94. Van Rooij 2007, p. 219.

  95. Cheng 2004, pp. 53–54.

  96. Merrill 1986, p. 77.

  97. Ibid, p. 80.

  98. Michelman 1967, pp. 1214–1215.

  99. 划拨土地使用权管理暂行办法 (Interim Measures for the Administration of Allocated Land Use Right) March 8 1992, art 4; 2004 LAL, art 54; 城市房地产管理法 (Urban Real Estate Administration Law) January 1 1995, art 23.

  100. 城镇国有土地使用权出让和转让暂行条例 (Interim Regulations concerning the Allocation and Transfer of the Use Right of the State-owned Urban Land) May 19 1990; 2004 LAL, art 54. N.B. Different English translations have been adopted to stand for churang, the paid transfer of land use-rights from the state to non-state users, such as land grant and conveyance.

  101. It should be noted that local governments are not permitted to pledge urban land use-rights directly. Yet since the 1990s they have set up arm-length legal entities, usually by the name of Land Reserve Centre or Land Development Centre, to pledge the expropriated land to obtain bank loans. For an in-depth examination of this process, see Lou and Jin 2009.

  102. Another way to transfer the use-rights over state-owned land is non-public negotiation. In order to guarantee that the state-owned land is transferred at a fair price, the central authority demanded since the early 2000s that all state-owned land transfer for for-profit projects must go through public competitive tender, auction and listing. (Rules of Public Tender, Auction and Listing of State-owned Land Use Rights) April 3 2002, art 4; 招标拍卖挂牌出让国有建设用地使用权规定 (Rules of Public Tender, Auction and Listing of State-owned Construction Land Use Rights) September 21 2007, art 4.

  103. 2004 LAL, art 55. For more detailed rules on management of land transfer revenue, see (Measures of Administration of Receipts and Disbursements of Revenues from State-Owned Land Use-Rights Transfer) December 31 2006. For a historical analysis of the evolving central-local distribution of land transfer revenue, see Zhang 2008.

  104. Wong 2013, p. 292.

  105. It was suggested that in 2010 land transfer revenues accounted for 70 % of total local revenue for Beijing and 60 % for Shanghai. Wu et al. 2013, p. 143.

  106. Zhou 2010.

  107. Tao et al. 2010, pp. 2224–2228.

  108. Liu and Sun 2013.

  109. A recently published report surveying 23 provinces across the country demonstrates the astonishing extent to which Chinese local governments have between from slightly over 20 % and more than 66 % of their bank loans backed up by future land transfer revenue. See Liu 2014.

  110. Liu and Jiang 2005; Liu et al. 2010, pp. 266–268; Research Centre of China Land Survey & Planning Institute 2006.

  111. Qi 2014. For an introduction to this topic, see Man 2012.

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  1. Postdoctoral Fellow, Peking University Law School, China

    Chun Peng

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Peng, C. Chinese rural land expropriation law: problems, prescriptions and obstacles. China-EU Law J 4, 173–199 (2015). https://doi.org/10.1007/s12689-015-0059-y

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