Land pricing and its impact on land use efficiency in post-land-reform China: A case study of Beijing

a r t i c l e i n f o Keywords: Land use efficiency Land use productivity Land pricing Beijing China This paper analyzes how the newly introduced land pricing system affects urban land productivity in China, taking post-land-reform Beijing as an example. China has been developing its urban land market by building an effective pricing system. This study indicates that the effects of such pricing system on urban land productivity have evolved with the progress of land reform. It is only since 2004, when land granting by negotiation was at last totally prohibited for profit-oriented developments, that the land pricing system has started to positively and significantly improve urban land productivity; the land pricing system also promotes more productive urban land usage by stimulating more intensive investment and better business management. Improving the efficient use of land is commonly recognized as of paramount importance in balancing the protection of farmland and the accommodation of socioeconomic development, especially for a country like China with intense human-land relationship and rapid urbanization (Choy, Lai, and Lok, 2013; Meng et al., 2008). During the planned economy era, land was free of charge for development in China. Land users tended to occupy more land than they actually needed, leading to massive loss of cultivated land in rural areas and inefficient land usage in urban areas. From 1956 to 1978, the area of cultivated land shrank 12.44 million ha nationwide and the annual loss amounted to 5652 km 2 (Li, 2000). An urban land reform based on the paid-to-use 1 principle was initiated in the late 1980s with the expectation that land pricing would improve the cost of land use. More accurate land use cost would compel land users to utilize land more economically, and therefore, help improve urban land use efficiency, 2 preserve cultivated land, and raise capital for development it remains unclear whether the market mechanism has helped improve land use efficiency as anticipated. With the expansion of urban land, land use efficiency can increase or decrease depending upon the relative rates of change between land consumption and socioeconomic output. Existing studies have looked critically at the massive magnitude of urban development by analyzing the dynamics of urban expansion and the institutional roots of " losing control " of urban sprawl in China (Zhou, 2006). However, incorporating more land to accommodate a growing population and to support urban economic growth is inherent …