Securitization Legal Issues Of China's Rural Land Research

As a usufructuary right to land reform, household contract responsibility system is not a complete change in the reform of property rights and there is no difference before and after the reform. Its biggest drawback is that the property rights are not clearly defined. Now to solve the serious problems about agriculture,rural areas and peasantry, what is more needed is a system innovation in addition to the regular increase of investment. And farmers must be liberated from the original farming methods. Undoubtedly, a preferred choice is to intensify and demutualize the contractual rights of the farmers, and then to carry out land securitization.In this paper, the principle of the structure of the security market (also called primary market and secondary market) holds that land securitization has two aspects. First, to establish a primary market, that is, to demutualize land into part of corporate assets, and on this basis to obtain financing opportunities in the market. Second, to sell the mortgage securities or equity securities from land securitization in the secondary market to make them liquid. So based on such concept, four chapters will be followed to illustrate the relevant law issues with China's rural land securitization. The first chapter reviews the practice of securities on rural land in the United States, Germany, Japan and Taiwan. From the comparison of the studies, we find that the development of land securitization is based on the intensiveness, demutualization and financialization of rural lands.Obviously, the traditional agricultural production can not produce the securities in modern sense, so it is hard to extend the rural land securitization to the secondary market. Besides, land securitization requires legislation and government to protect and promote the establishment of special financial institutions for rural lands.In the second chapter a brief introduction is made firstly about the practice of rural land securitization in our country, including jiangjin model in Chongqin province and nanhai model in Fushan City. Then, some ideas about rural land securitization put forward by scholars are analyzed. On the basis of the above research, in this chapter a conception is put forward on the rural land securitization, which is divided into two steps. The first step is the primary market, namely, the primary securitization of rural land; the second step is the secondary market, namely, the issuance and circulation of land-backed securities.The following third chapter and fourth chapter separately elaborate some legal issues on rural land securitization from a view of point of primary market and secondary market. Currently, the legal obstacles faced with the primary rural land securitization in our country mainly includes the following aspects: unclear property rights, indefinite legal status in stock cooperation, unsmooth transfer of land shares, closed equity and welfare problems, low-priced land use rights, imperfect security system and risk mechanism, etc. The fourth chapter mainly studies the legal issues related to land-backed securities'SPV in the secondary market. To develop the land-backed securities'SPV in China, there are some legal obstacles such as, decentralized operation, barriers of SPV's organization form, tax and assets transfer.The fifth chapter proposed some countermeasures, which argues that system should be innovated in the process of rural land securitization to solve the legal barriers. Solutions are: to clear the structure of property rights and guarantee the farmers'land usufruct; to define the legal status in the land stock cooperation, to optimize the transfer mechanism of equity; to improve the evaluation mechanism in the form of contracted management rights of rural lands; to perfect the governance structure and risk security mechanism of rural land securitization cooperations; to standardize exit mechanism; to make preferential policies to support the development of land share cooperation; to improve the relevant legal systems and to create conditions for the land-backed securities'SPV. Finally, the rural credit cooperatives should undertake the role of SPV.