Establishing The Government-Oriented Land Reserve Model

Guided by Marxist land economics and borrowed from the successful experience of land banking in western countries, this article analyzes the evulution of China's land use system and reviews the background and current situation of China's land reserve system. In the course of implementing land reserve system, models of such reservation differentiate largely among cities due to the relative flexibilities for local governments. There are mainly three types of models of land reservation known as Shanghai's market-oriented model, Hangzhou's government-oriented model and Nantong's model cooperated by both the government and the market. This paper concludes that the government-oriented land reserve model is more suitable for China today.The government-oriented land reserve model requires that all lands flowing into the city should only be purchased by the government. On the base of this unified land acquisition, the government turns to be the sole land supplier in the primary land market, which can be described as "water comes from one channel, gets into one pool and goes out of one outlet". This model thoroughly overcomes the difficulty brought by more than one supplier in the primary land market and in accordance with the city planning, the local governments are able to provide proper quantities of land at proper times in the land market in order to fully carry out its macro-control policy.The government-oriented land reserve model has achieved some good results, but it is still going under way and some problems do exist, which can be listed as follows: 1) The legal rights of the people whose land has been purchased may be infringed upon because of the government's monopoly over the land purchase price; 2) Aimed at increasing land remise income, the local government reduces land supply for the purpose of raising land price, which arouses people's suspicion upon land reserve system. 3) The government-oriented land reserve model needs large funds and it is difficult to meet the demand for funds mainly by bank loans, which results in more risks in the operation of land reserse funds.In order to solve the problems, this article gives the following suggestions: When land is purchased, the purchase price must be precisely defined and land income must be reasonably distributed by the government and the purchased. When land is supplied, the quantities of land must be added and the ways to provide land must be improved. And after the land supply, great importance must be attached to supervision and management to change the local governments' "land financing" by reforming the management of land remise funds and perfecting local public finance system. Land reserve funds may be raised by land securitization and the state-owned land funds.