Balanced Benefit And Justice:Land, Property And Governance

Centered on the questions of ’what, why and how’ the homestead system is, this research examines the transformation of the homestead system, problems it confronts, and further reformation. The homestead institution is comprehensive rather than single-sided, which includes land constitution system, land management system and homestead governance system. The transformation of homestead institution consists of the change of homestead use system and the government land requisition system. The transformation of the homestead system should both be consistent with the constitutional statement, and be adjustment with the homestead use realities.The homestead institution, first established in the collective period within the land system characterized as ’three-layer ownership, production team as basis’, has realized the efficiency and equity in homestead self-governance. The upward transfer of land management power and the deregulation of the rural-urban migration since the reform and open-up have made the homestead use directly related to the rural livelihood. In this study, China’s countryside is distinguished as ordinary villages and better off coastal villages/suburban villages, in terms of the opportunity to become’ household assets’.Homestead in ordinary villages is less likely to be turned to ’household assets’. Rather, it plays an important role in peasants’ daily life and agricultural production. In this regard, it is more similar to farmland than to assets. The pulling force of the urban economy is so limited that most of the rural migrants could not afford to settle down in cities. Consequently, the seasonal idle of rural homestead becomes the normal case. The use of rural homestead has realized institutional efficiency, in terms that the institution has promised a stable life in the countryside, and also has guaranteed the stability of China’s economic transition. If the governors could make plans in the light of local conditions-which means the new settlements locate nearby villagers’ farmland with comprehensive public facilities, and then encourage villagers to return the old homestead, the rural homestead could be gradually returned to the collective at low cost. However, the problem is that the institution transition of the rural homestead governance, as well as the tax reform and the rural reform, has reduced the governing capacity of grass-roots organizations.Homestead in better off villages in the coastal regions and suburb area are of more property attribute. The usage of such kind of homestead also confronts two main problems:First, rural grass-root organizations make use of the vulnerability of the land management system for rent seeking; Second, the non-return of old homestead lead to shortage of the new homestead land. The reform of the homestead approval system and strengthening of governmental supervision are administrative issues, which could be solved step by step. But the fundamental problem is how to improve the utilization efficiency of old rural homestead. Compared to the strong negative externality of the government-dominated practice and the market-oriented solutions, the’partial updates’strategy in homestead governance dominated by the rural collectives is more worthy of popularizing, in the sense that it reduces the transaction costs, integrates the fractal homestead property, increases the homestead land use efficiency, and improves the living conditions of old villages.The change of homestead land system dominated by the central government has two targets. The first involves rural residents’ property rights considering the impracticability of rural construction planning both in ordinary villages and in better off villages in the coastal regions and suburban area, and the poor governance of the illegal buildings, have resulted in increasing land disputes involving the homestead transfer. The second target is to ensure the dynamic balance of total farmland regarding the fast shrinking of farmland that resulted from the failure of local governments to control over the rapid increase of nonagricultural land.The rising price of homestead land results from two reasons:the urban developmentincreases the price of land in specific regions, and the governmental policy of limited supply of construction land, which aims to protect farmland. The development of regional economy is unbalanced in China, and95per cent of the Chinese villages should be classified as’ordinary villages’. Only villagers in the5per cent of the better off villages in coastal regions and suburban area would be benefited, if the government encourages homestead land to enter the market. It would cause negative effects on the national development and affect the general social equity. The confirmation of homestead land in accordance with the Property Law would not only reduce the homestead land use efficiency, but also go against the homestead land use system, and it even contradicts with the land constitutional order.The various goals of rural homestead system should have been balanced, however the emphasis on the strategic role of farmland protection would cause land management problems. After establishing the integrated urban-rural land use quota system, the central government claims to strictly restrict the increase of non-agricultural land area so as to protect the farmland on the one hand, but allows the local governments to earn the construction land use quota via the’increasing-and-decreasing-linking’strategy. It results in the misjudgment of the characteristics and problems of the on-going change of land use system. Also, the operation possibility of the homestead land use system has been confined.The collapse of the homestead land governance system, the arrogation of the land management practice, and the over-hastiness of the land reform could not match the different situations in two types of villages (i.e. the ordinary villages and the better off villages in coastal regions and suburban area), resulting in the predicament in the homestead land system transition. In the sense that the constitutional order remains unchanged, and China has not avoided the’middle-income trap’, we should follow a reality-based, progressive homestead land system predicated on the principle of ’balanced benefit and justice’.