Securitization Research On The Rural Land Of China

In the process of industrialization, the developing countries usually have to solve the problemof rural economic reform. In most cases, the development of rural economy must base itself onthe rules of rural land, including its rights assigned between the government and the peasants.However, the rights system of rural land usually adjusts itself according with the reform ofeconomic system in the society.In the market system, the economic development in rural area must concentrate on land fromindividual peasant in an appropriate scale. Unfortunately, we have to face the fact of the absenceof the entity of ownership in nature, the failure in protecting the benefit of either the governmentor the peasants, and the shortage of funds on land. Hence, we must first of all define the rights ofrural land property, and establish rights property system in the rural land.According to the nature of the rural land, the structure of the system should be arranged likethis: the country holds the terminal disposed rights and the peasants hold the long-term rights ofutilization in order to afford their lives themselves. Although there is no unconditional fights onany property system, that's to say, common-property rights exist in many cases, including in thefield of the rural land, the rights system of the rural land should offer enough preparation toprotect the benefits belonging to the country and the peasants, reduce the possibility ofcommon-property rights to avoid the loss as possible as it can.As for the fair principle and cost principle, the market is the best way to protect the rightsrather than the government. An efficient capital market can not only protect the rights fairly, butmaximize the value of property. Securitization of the rural land is a good way that benefits boththe protection of rights on the rural land and the finances for rural development. Furthermore, italso offers an approach to control the risks coming from agriculture loan from the bank.When we securitize the rural land, we attach importance to securitize the long-term fixedrights of utilization formed in the past days and the benefit rights of utilization in the future. Thegovernment is the best choice as the actor who audits and gives the security of long-termutilization on the rural land. In order to increase the credit level, the rural formal financial agencyauthorized by government should undertake the role of the special purpose vehicle (SPV) for thesecuritization on the benefit rights of utilization in the future. If we want to securitize the rural land, the problem of accounting measure on the rural landasset must be solved in no time. Following the theory of accounting measure, and taking fullconsideration of the nature of rural land, we can make use of the fair valve method to estimatethe long-term fixed rights of utilization. As for the estimate of the benefit rights of utilization inthe future, expected cost method is a reasonable choice.