Financial Risk Analysis And Prevention Of Urban Land Banking

The current urban land reserve system of China was established in 1996, when the first Chinese urban land banking organization, Shanghai Land Development Center, was founded. After that, Hangzhou and Nantong also established their urban land banking organizations and issued relevant statutes for land banking. Nowadays, the urban land banking system has been applied around China. As a system of innovation, the land banking system is still in transition. Studies on both its theory and its practice have just started, with numerous problems left to be solved. Research on the financial risk management of urban land banking system is especially limited for the lack of systematic and instructive studies. Consequently, this thesis attempts to study the financial risk management of urban land banking through the integration of theoretical and empirical analyses. It also tries to provide some policy implications for the decision making of land banking.This thesis consists of seven chapters. Chapter 1 includes the introduction, background, and significance of research, as well as research approaches and the project framework. Chapter 2 is the literatures review. In Chapter 3, the impact factors and the extent of land banking are analyzed respectively. Risks are analyzed by analytic hierarchy process considering the prevention cost, frequency, and extent of the loss. The result is that financial risk has the largest weight and should be prevented first. Chapter 4 selects Wenzhou City as a study case and analyzes the land market status and problems. Moreover, the thesis also predicts the trend of the land market and funds demand for land banking in 2010, providing basic information for further research. Chapter 5 measures the financial risk of Wenzhou Land Banking Center and analyzes the greatest loss within a month, based on VaR model. In conclusion, this thesis suggests that there are several financial risks in land banking for a non-profit institution in Wenzhou City. Chapter 6, according to the above analysis, proposes a financial risk preventive system mainly based on the multi-channel financing, to reduce the risk of land banking. Finally, the conclusions and prospects for future are provided in Chapter 7.