Background

 

The "Land Administration Law of the People's Republic of China," implemented on January 1, 2020, allows collectively-owned construction land for business purposes to enter the market on an equal footing with state-owned construction land. On July 2, 2021, Premier Li Keqiang signed State Council Decree No. 743, promulgating the newly revised "Implementation Regulations of the Land Administration Law of the People's Republic of China," which came into effect on September 1, 2021, clarifying the specific rules for the entry of collectively-owned construction land for business purposes into the market. As the biggest highlight of the new Land Administration Law, the entry of collectively-owned construction land for business purposes establishes a system for the entry of such land into the market at the legal level, thereby removing legal obstacles and representing a major achievement in comprehensively deepening reform. It can effectively promote the economical and intensive use of land, revitalize rural collective land assets, and solve the problem of land element guarantees for rural revitalization.

 

On January 30, 2022, the People's Government of Guangxi Zhuang Autonomous Region issued the "Opinions of the People's Government of Guangxi Zhuang Autonomous Region on the Division of Responsibilities of Key Work Departments in the 2022 Autonomous Region 'Government Work Report'." This opinion clarifies that carrying out the renovation of old houses in border counties (cities, districts), building a number of new villages along the border, and steadily promoting the entry of rural collective commercial construction land into the market are among the measures to consolidate and expand the achievements of poverty alleviation and effectively connect with rural revitalization. The Autonomous Region Department of Agriculture and Rural Affairs, Housing and Urban-Rural Development Department, Development and Reform Commission, Natural Resources Department, Transportation Department, Rural Revitalization Bureau, Civil Affairs Department, Ethnic Affairs Commission, Culture and Tourism Department, Department of Justice, Department of Education, Radio and Television Bureau, and the Autonomous Region Women's Federation are responsible for their respective duties, and will continue to promote this work throughout the year.

 

 

I. Policies and Laws and Regulations on Collectively-Owned Construction Land for Business Purposes

 

According to the relevant provisions of China's "Constitution" and "Land Administration Law," China implements a public land ownership system (i.e., ownership by the whole people and collective ownership) and divides land into three categories according to land use: agricultural land, construction land, and unused land. Collectively-owned construction land for business purposes can be understood as construction land owned by collectives and designated for industrial, commercial, and other business purposes. Since the founding of the People's Republic of China, it has been forbidden for rural collective land to directly enter the market. If collective land needs to be used for public interest projects, the general approach is to legally expropriate it into state ownership before it can enter the market. According to the author's inquiry, some policies and laws regarding collective land over the years are as follows:

 

 

In March 2015, the Ministry of Land and Resources issued the "Notice on Issuing the Implementation Rules for Pilot Projects on Rural Land Expropriation, Entry of Collectively-Owned Construction Land for Business Purposes, and Homestead System Reform" (国土资发[2015]35号), clarifying that Beiliu City would undertake the pilot reform of allowing rural collectively-owned construction land for business purposes to enter the market, thus commencing the rural land system reform pilot in Beiliu City. Beiliu City subsequently introduced 14 policies related to this market entry:

 

 

On April 6, 2021, the General Office of the Department of Natural Resources of Guangxi Zhuang Autonomous Region issued the "Notice on Issuing the 2021 Guangxi Rural Collective Commercial Construction Land Entry Plan" (桂自然资办〔2021〕128号), clarifying that, in accordance with the requirements of "grasping the new stage of development, implementing the new development concept, and building a new development pattern," the entry of agricultural collective commercial construction land into the market in Guangxi should be promoted prudently and steadily. A select number of counties (cities, districts) with concentrated demand, a solid work foundation, and a high level of land management should be chosen to spearhead the entry of collective commercial construction land into the market.

 

 

 

II. The Role of Collectively-Owned Construction Land for Business Purposes Entering the Market

 

(I) The entry of collectively-owned construction land for business purposes into the market is an important measure for the rural revitalization strategy, and enterprises that understand the entry policy will share the policy dividends. The "Law of the People's Republic of China on Promoting Rural Revitalization" was officially implemented on June 1, 2021. Article 67 in Chapter 8 "Support Measures" of the law clearly states that existing rural construction land should be revitalized, and collective commercial construction land should be handed over to units or individuals for use through transfer, lease, etc., and should be given priority for the development of collective ownership economy and rural industries. The new "Implementation Regulations of the Land Administration Law," which came into effect on September 1, 2021, further clarifies the specific implementation rules for the entry of collective commercial construction land into the market at the regulatory level. At the same time, Article 37, Paragraph 2 of the regulations clearly stipulates that the use of collective commercial construction land for key rural industries and projects should be encouraged. It can be seen that the entry of collective commercial construction land into the market is an important measure for the rural revitalization strategy. This measure activates rural land resources, encourages the entry of collective commercial construction land into the market, and also creates conditions for enterprises to invest in township revitalization and emerging industrial projects. Enterprises that understand the policy of collective commercial construction land entering the market will occupy a place in the process of participating in rural revitalization projects, and will eventually obtain policy dividends.

 

(II) The entry of collectively-owned construction land for business purposes into the market provides new legal ideas for solving the problems of urban villages, villages on the edge of cities, village-level industrial parks, and other issues of legal and compliant rectification, as well as the historical legacy of "small property rights housing." The "Decision on Several Major Issues Concerning Comprehensively Deepening Reform" clarifies that a unified construction land market should be established in urban and rural areas, and that rural collective commercial construction land should be allowed to be transferred, leased, or invested in shares, subject to compliance with planning and land use control, and that it should be allowed to enter the market on an equal footing with state-owned construction land, with the same rights and the same price. The same rights and the same price clearly mean that collectively-owned construction land for business purposes and state-owned construction land should have the same powers and the same price formation mechanism. With the development of urbanization, the demand for more people and less land in rural areas and the improvement of comprehensive urban functions contradict the state's strict control over new state-owned construction land. The regularization of urban villages and villages on the edge of cities on collective construction land and the issue of "small property rights housing" are of concern to people's livelihoods, and solving these problems is an inherent need to promote integrated urban and rural development. Beiliu City, Guangxi, as one of the 33 national pilot cities for the reform of allowing collectively-owned construction land for business purposes to enter the market, boldly used the entry of collectively-owned construction land for business purposes for commercial and residential projects in its pilot work, and achieved good results in diverting the illegal "small property rights housing" problem. The newly issued "Land Administration Law" and "Implementation Regulations of the Land Administration Law" do not explicitly stipulate whether commercial housing other than industrial and commercial housing can enter the market, but they do not explicitly prohibit it either. From the perspective of the same rights and the same price in the above-mentioned decision, the realization of equal powers between collective construction land and state-owned construction land, and the permission for collective construction land to enter the market as commercial housing will eventually be realized. At the same time, allowing collective construction land to enter the market as commercial housing provides a good way to solve the problems of urban villages, villages on the edge of cities, village-level industrial parks, and other issues of legal and compliant rectification, as well as the issue of "small property rights housing."

 

 

 

 

Concluding remarks

 

The system of allowing collectively-owned construction land for business purposes to enter the market is a major achievement in comprehensively deepening reform, and promoting the entry of collectively-owned construction land for business purposes into the market is a major decision of the Party Central Committee and the State Council, which concerns rural revitalization and is the general trend. On January 4, 2021, the "Opinions of the CPC Central Committee and the State Council on Comprehensively Promoting Rural Revitalization and Accelerating the Modernization of Agriculture and Rural Areas" were issued at the national level, proposing to actively explore the implementation of the system of allowing rural collective commercial construction land to enter the market, improve the policy of revitalizing existing rural construction land, and give priority to ensuring the development of rural industries and rural construction land. The provisions of the new "Land Administration Law" and "Implementation Regulations of the Land Administration Law" have removed legal obstacles for collectively-owned construction land for business purposes to enter the primary market and be re-transferred. It can be seen that, whether from the policy level or the legal level, the entry of collectively-owned construction land for business purposes into the market is imperative. After the establishment of the system of allowing collectively-owned construction land for business purposes to enter the market, government agencies, project enterprises, and owners of collectively-owned construction land for business purposes have encountered various problems in the practice process, such as inaccurate grasp of the entry policy and unclear entry process. Providing legal support and guarantees for entry into the market and solving legal problems in the entry process has become the focus of attention for legal professionals. The author will interpret the key issues in the entry process from several aspects, such as the entry process, conditions, fees, and contracts, in separate topics, so stay tuned!

 

 

 

He Caibin   Lawyer

 

Deputy Director of the Government Legal Counsel and Administrative Legal Affairs Department of the Law Firm

 

Master of Laws from Guangxi Normal University, focusing on legal services for government legal advisors and administrative legal affairs. Expert in legal policy research in the Guangxi Natural Resources Expert Database, and expert in real estate registration system construction in the Guangxi Natural Resources Expert Database. Has served as a legal advisor to several enterprises and government departments, and has conducted several special lectures on administrative legal affairs.