China turns rural land into rental housing for the first time to stabilise property prices

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Analysts say they fear the expropriation process will be abused by corrupt village chiefs

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China is opening up rural land for residential property development in 13 cities that will provide rental housing to ease the pressure on urban accommodation brought about millions of workers that move to the cities. Photo: Justin Jin

Zheng Yangpengin Beijing

Published: 8:00am, 30 Aug 2017Updated: 11:09pm, 30 Aug 2017

In a pilot scheme introduced to 13 Chinese big cities, farmers will for the first time be allowed to develop their collectively owned land into residential properties for leasing, in another government move to stabilise housing prices and bolster the rental market.

The pilot scheme, announced on Monday evening by the Ministry of Land and Resources and Ministry of Housing and Urban-Rural Development, will cover cities like Beijing, Shanghai, Hangzhou and Guangzhou where the sizable population inflows due to Beijing’s long-term urbanisation drive have put a squeeze on infrastructure and accommodation.

“The scheme is introduced to mainly address the living problem of the massive populations of migrant workers in big cities, including the 200 million who now live in inner-city slums or suburban villages, and the six to seven million who live on construction sites,” said Tao Ran, a Renmin University professor of China’s rural land issue studies.

China has projected that 100 million migrant workers, including graduates, would have moved to the cities to take up jobs by 2020.

Scholars who have long studied China’s land system said the biggest breakthrough of the reform was that it would tentatively open the door for rural land to be included in the mainstream land market, which until recently, has been monopolised by the state.

The vast rural land cannot be sold to developers unless it was first expropriated by the state, usually at a low price, and sold to developers at a huge gain. Now the barrier could be eroding.