Securing a Rural Land Market: Political-Economic Determinants of Institutional Change in China’s Agriculture Sector

The dimension of China’s farm economy that has been least altered since the onset of the reforms in the early 1980s is the rural land system. However, in the face of mounting rural social tension and concerns over the impact of heightened trade liberalization on the domestic agricultural sector, Chinese authorities have recently undertaken a reform program to fundamentally alter the nature of agricultural land rights in the country. In the name of protecting farmers’ rights and interests, new institutions are being established to certify rural land use rights and strengthen enforcement of these rights; facilitate the trade of these land use rights according to market principles; and settle disputes over tradable land use rights. These institutional reforms in the agricultural land management system are giving rise to a rural land market in China, based not on private land ownership but on a two-tiered rural land system that combines public ownership with the private leasing of user rights. These reform measures strengthen adherence to the rule of law in rural society and the market orientation of the rural economy, while at the same time reflect efforts to preserve China’s state socialism.