Study On China's Land Reserve System

Douglass C ?North is the main representative of New Institutional Economics, whose outstanding contribution to New Institutional Economics is to reveal the origin of institution and the regulation of institutional change. North thoroughly studies the condition of causing institutional change and completing it .He considers that the expectation for acquiring the maximum potential profit, which can't be obtained in current system, is the reason causing institutional change. When anticipated net profit is more than anticipated costs, an institutional innovation willoccurs.North's theories of Institutional Change can goodly explain the establishment of China's land reserve system. Land reserve early originates from the West, in order to guarantee the land for public use and the development of key industry. China's land reserve begins in late 1990s.After the bubble economy in real estate in 1992 and 1993, China's government begins to strongly regulate and control real estate market, drawing lesson from the abroad experience, and then establish land reserve system. Hangzhou city issue the first land reserve regulations in China in March 10,1999.The establishment of land reserve system is an institutional change, which cause is maximizing the land effect, and the innovation body who cause institutional change are local government and land reserve organization. The consumers who purchase building bear the costs of the change. The main contents of China land reserve system include unified purchasing, renovating and providing the urban and collective land, and the land reserve organization do it. Now there are four land reserve models in China, including Shanghai model; Hangzhou model; Tianjin model and Nanjing model.China's land reserve system obtains some profit, and some problems exist in the system. The profit include:1.high increasing city revenue; 2.repressing the land speculations and regulating the land market ;3.making the land circulate and providing funds for state-owned enterprise when it change businessfield;4.improving the city environment and people's standard of living. The following are problems. First, some defects exist in law concerning China's land reserve system. Second, the institutional change practice deviates from the goal of China's land reserve system. Third, China's land reserve system is shortage of funds. Forth, the system has negative effect on real estate exchange. Fifth, land reserve organization lead by government play dual role.After analyzing the effect of China's land reserve system, this paper puts forward some suggestions for perfecting the system, which contain: first, amplifying laws and regulations of land reserve; second, making use of funds from various channels to support China's land reserve system; third, scientific reserve and strict supply which goal is avoiding excessively pursuing the short-term income from city land; fourth, perfecting the system concerning land evaluation and land auction; fifth, the principle of combining government regulation with market mechanism ; sixth, building standard distribution system concerning land income.