Property Rights, Land Values and Urban Development

Property Rights, Land Values and Urban Development

Betterment and Compensation in China

Li Tian

This book presents an analysis of betterment and compensation issues under the Land Use Rights (LURs) System in China since 1988. The topic originates from the observation of widening inequity and increasing uncertainty associated with the failure of government to adequately address betterment and compensation issues. An analytical framework of institutions and property rights is employed to examine socio-economic impacts under the LURs system, in particular, the role of the state is analyzed to explore the effects of government intervention in land markets.

Chapter 5: Urban land reform and the evolution of the land market in China

Li Tian

Subjects: asian studies, asian economics, asian urban and regional studies, development studies, asian development, economics and finance, asian economics, institutional economics, urban economics, urban and regional studies, urban economics, urban studies


In ancient China, where an agriculture-based economy was dominant, land management was always a political rather than an economic issue, and most land was controlled by a powerful landed class. One of the interesting phenomena that can be observed from the evolution of land management is that when new dynasties came to power, there was an attempt to reintroduce a public land ownership system, but once a dynasty had become established, state-allocated land tended to return to private hands by one means or another (Li, 1998). Throughout history, however, land belonged to the emperor and was allocated to members of the royal family and ministers who showed loyalty to the emperor or contributed to the empire under the feudal society. ‘Over the nation, there are only Crown lands; over the land, there are only subjects of the King’ was the famous cry of the ruling class. The 1911 revolution changed China from a monarchy to a republic, but land concentration remained almost unchanged. President Sun Yet Sen proposed the idea of ‘equalization of land rights’ in order to promote equity in the land market.

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