Study On The Transition Of Land Finance In China

Since the reform of tax distribution system in1994, the revenue distribution structure between central and local finance had changed. Simply, central government centralize financial power and decentralize which causes local government lack of financial resources."Budget Law" does not allow local government to issue bonds and transfer payment system is not perfect in our country. So it is difficult to solve local financial problems which only rely on existing Policies in the short term. By the U.S. sub-prime mortgage crisis, Chinese real economy is being challenged to reduce the amount of investment in real economy, society had a lot of hot money. On the one hand, with permission of Land Management and the development of finance economic pressure to bear, local government need find a solution; on the other hand, the real estate industry of high profits provide investment channel for 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 increasing rely on the land revenue, land financial problems arise.Finance is called the "land finance" in a number of articles, because 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 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 after1994, 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 idea of solving land financial problems form theory angle.This paper is divided into five parts.The first part of writing article mainly discusses background, meaning and purpose to study the content and basic framework set out at home and abroad on land and financial status of the study were summarized and concluded.The second part of our land and financial status are described, through the presentation of the financial implications of land, the land forms of finance, land development and financial status, the financial realities of the land to do a more detailed elaboration.The third part of our land of the root causes of the financial analysis, mainly from the land system of internal defects, shortcomings of internal financial system, as well as officials in government loans and other reasons such as performance evaluation of several aspects of the analysis, to solve problems paving the way.The fourth part of our present financial problems of land are described, the land rent-seeking of government, inefficient allocation of resources, and the issue of unfairness caused many problems to reduce the local financial sustainability and stability, increased the financial risks of local fiscal and financial risk.The fifth part of the financial restructuring of Chinese land to promote countermeasures and suggestions mainly by improving the land system, reform of property taxes, adjustment of the central and local powers and financial authority to strengthen the supervision of local finance, reconstruction officials to make recommendations in five areas of performance appraisal attempts to deposit into the financial restructuring of Chinese land.