Research On Problem Of Land Finance

Since the reform of tax distribution system in 1994, the revenue distribution structure between central government and local finance had changed. Simply, central government centralize financial power and decentralize which causes lack of local financial resources. Because the "Budget Law" does not allow local government to issue bonds itself and transfer payment system is not perfect in our country, so is difficult to solve local financial problems soon which only rely on existing policies in the short term. Meanwhile, Under the influence of downturn of international economic downturn and complex trading environment a few years ago, an effective means of stimulating economic growth——the export utility greatly reduced, the development of real economy depressed, local finance became more worse. After our country adjusted the economic development strategy and shifted the development focus to rely on stimulating domestic demand and domestic investment, but household savings still maintained a higher amount under the impact of traditional habits, the change rate of domestic demand did not achieve the expectation. Then investment became an important means of promoting economic development by its coefficient effect on economic development, and in the investment boom, the local government is actually playing a guide in the regional investment; but due to the impact of regional division and blind comparison of local government, which caused sizeable duplicate construction and wasted a lot of material and financial resources, so the industry of high energy consumption and investment had became adjustment focus of national macroeconomic policy, then through rectification to satisfy the healthy economic development. Under the impact of U.S. subprime crisis, the amount of investment reduced in real economy in our country which generate lots of hot money. On the one hand, local government who hold administration authority of land bear the pressure of finance and economic development, and find solutions; on the other hand, the real estate industry of high profits provide investment channel for hot money. When local finance pressure meet hot money, so there arise the scene of the real estate market boom naturally. Local government obtain a huge amount of revenue from the land transfer and circulation, local finance increasingly rely on the land revenue, land financial problems arise.Land Finance is called "land sale finance" in a number of articles, because its source is the usufruct transfer of state land. Land is a non-reproducible resource itself, which fundamentally determines non-sustainability of this source, also decide that finance operation mode which based on land is non-sustainability. Currently, increasing land transfer is not necessary for economic development, but it is an unhealthy way of economic development which overdraw resources and social wealth of the future. Land financial develop rapidly, but the negative effect is also spreading. To a community as a whole, income and expenditure should be basic correspondence. When local government revenue increase which caused by land finance, social spending will increase, so high prices of house become a heavy burden on the residents, and distribution of social wealth is unfair; specific operation mode of land finance doom its implication in many other industries, but also bring huge potential risks, such as financial risks. Considering these factors, in the analysis of land finance we should combine historical background, find cause in the present financial system, and the normative analysis; we should combine present policies, domestic and international environment to make empirical analysis; we attempt to clarify the system root of land financial, and explore a long-term mechanism to solve this problem.This article analyzes the current land system in China, including land ownership system, land transfer system and land compensation system, combined with the new financial system which formed after 1994, trying to find the cause of land finance from angle of financial system and the possible risk. Then we try to establish a method of improving the existing system in order to achieve the ideal of solving land financial problems form theory angle. Because my theoretical level is limited, knowledge is not accumulated enough, reference data don't prepare plenty, so the depth of theoretical analysis of the article is not enough, the design of new system framework is not systemic, wishing experts and scholars criticize and correct.