Baidu’s encyclopedia Baike (百科, cached version of July 5, 2011, 04.16 GMT) describes the trade of rural land certificates ((地票交易, dipiao jiaoyi, another translation may be derivatives as follows:
Rural land derivatives are indicators for rural living spaces and facilities, land used by rural enterprises, rural public welfare and public utilities, other collectively-used land, etc.. These standards are issued when land has been recultivated, and after strict examination by the land management authorities. Certificates bought by companies can be brought into new construction projects, thus increasing the amount of land for urban use1). For example, abandoned outlying suburban areas used by rural enterprises can, by recultivation and following examination [by land management authorities], be turned into main cities. On the one hand, this solves the problem of waste of rural construction space, and on the other, it solved the conflict between urban and rural construction, according to which construction came at the cost of arable land2). It is mainly carried out in index-trading rural land, and mainly indexes the use-rights of arable and forest land, or rights of private-operation rights [chengbao operation – JR].
While the chengbao system, officially in place since the late 1970s, had been highly successful in increasing agricultural productivity, the Baike article argues that it hadn’t been a completely systematic reform, and hadn’t solved the question of land ownership. There had been no clear aproach to find a price that mirrored the value of the landuse rights. To elminate poverty, to establish comprehensive modest prosperity (小康, xiǎokāng), and harmony, and to achieve basic justice in society, the state council [i. e. Beijing] approved Chongqing as a testing zone (or pilot area) for comprehensive urban and rural reforms, in February 2008.
Besides detailing as to how control over the trade system is exercised, the Baike article also touches on the context of developing tools and institutions of rural finance. It also contains referrals to many regulations issued by Beijing and Chongqing’s bureaucracies respectively.
Reading and understanding the entire article would go beyond this blogger’s skills, and time budget. But the first half of it, as far as it isn’t about technical details, comes across as highly supportive of the concept. It does, however, list a number of problems towards the end, too, such as the formalities’ complexity, the lack of an appropriate distribution system for the certificates, and not least the decreasing value of farmland, in the light of long-standing urbanization and industrialization. Recultivating a rather small piece of land wouldn’t lead to trading values with a potential to make a big difference in the farming population’s living standards. Nothing came closer to something a farmer would practically own, than the land he farmed, the Baike article points out. Income from trading certificates for recultivated land would only have a non-recurring effect, and this was likely to affect supply of such certificates [i. e. negatively, as not too much recultivated land would be on offer].
In general, the Chinese press has frequently broached the issue of urbanization – and the rights migrant workers, as the drivers of urbanization and modernization should enjoy – in recent years. But the certificate trading system isn’t about urbanizing migrant workers by making them permanent urban residents, which, at least in some circles3) and areas, is a stated goal. The certificate trade is meant to help still rural areas to become themselves urban areas. If the rural land certificate trade should take off – it apparently hasn’t yet, and is both still work in progress, and viewed with suspicion by Beijing (even though approved by the state council itself, more than three years ago), it could lead to more efficient land use, it could add to farmers’ incomes, and it could avoid some or many of the de-facto land confiscations which frequently lead to rural unrest.
In 2010, Chengdu’s land certificate market – the only other testing ground besides Chongqing – was suddenly closed down without explanation, and only reopened in April this year, according to the Economist (June 25, 2011, China Special, page 10). Central officials reportedly feared that the first step and actual goal envisaged, the recultivation of arable land, wouldn’t happen at all, wrote the paper. And while Chongqing may not be subject to central government intervention as easily as Chengdu (given Chongqing’s status as one of China’s five national central cities, and its party secretary’s connections, only ten per cent of the annual sales of undeveloped rural land conducted by Chongqing’s government are subject to the certificate trading system, according to the Economist.
1) 城镇化 (chéngzhènhuà) stands for urbanization. The opposite of chengzhen (urban) would be 乡镇 (xiāngzhèn), i. e. rural. This line about “increasing the amount of land for urban use” (增加相同数量的城镇建设用地) seems to mirror a rural town’s legal or political potential to become urban by economic and social development, i. e. by a growing degree of industrialization, and with the primary sector’s role decreasing. As described in a paper by Anthony G. O. Yeh (Department of Urban Planning and Design, The University of Hong Kong) and Jiang Xu (Department of Geography and Resource Management, The Chinese University of Hong Kong), in a draft paper presented at a ‘IIED‐UNFPA Research on Population and Urbanization Issues’ meeting in London, September 9 & 10, 2009, a rural place’s status can change into urban, if it develops in accordance with criteria defined by the State Council (page 2 ff).
2) 也解决了城市建设用地紧张的矛盾，城市建设用地增加和农村建设用地减少挂钩，保证了 城乡的建设用地总量不增加、耕地总量不减少.
3) When eleven or thirteen papers, in March 2010, published a joint editorial calling on the “National People’s Congress” to scrap the hukou system as soon as possible, Zhang Hong, a deputy chief editor of the Economic Observer (经济观察报), reportedly lost his title, even if not his job, for helping to organize the editorial.