Land Finance Of County On Pressure-Type Administration System

Land Finance refers to the local finance operation mechanism in which the local government acquires land revenue, land administrative fees, land rent (the governmental funds) and Land reserve mortgage loans as the main financial revenues by selling the right to use state-owned land on the basis of the law which provides that land is state-owned. This thesis tries to take a systematic, rigorous and academic analysis of the establishing, roles and reasons of the land Finance and the economic and social problems it brings, using the theory framework of Pressure-Type Administration System, combined with the change of financial status, the exact structure of finance at the county level and its implementation ways of the county B in Fujian province.The analyses of the composition and characteristics of land finance. This thesis defines the concepts related to the research on land finance, and puts forward the theoretical analysis tool for studying the land finance-the Pressure-Type Administration System. Combined with the basic situation of the county B, this thesis investigate the financial conditions in three periods of financial systems, that is, the unified collection and allocation of funds, the contract system on fiscal revenue and expenditure and the tax-sharing system. Affected by the Pressure-Type Administration System, in order to realize the economic and social target assigned by the superiors and the effective operation of itself and provide a variety of public services, the county B has achieved balance for its financial fund by selling the right to use its state-owned land to get huge land rent despite the decreasing tax revenue. In order to analyze the characteristic of land finance, this thesis reveals the bid and auction of state-owned land from2007to2010in the form of statistical tables and analyzes it. The county B has started to sell the right to use its stated-owned land to get huge land rent in small scale to offset the financial deficits since2000to2006. The county B executed the central government’s decision to unify land transferring mode and enhance the administration for land rent. It began to sell the land with the bidding and auction system and manage its land rent in two lines-accepting and spending, establishing specific fund account to manage fund budget. The land the count B transferred is mainly the collective land in rural area, the residential land in the village-in-downtown under demolition and the public land for construction. By2010, the land rent it got had been over times as much as local fiscal revenue. Its financial ability in county level improved greatly but all the land rent was spent out in the way within the budget in that year.The land finance can play positive role, however, it also brings out a variety of economic and social problems. On the one hand, the huge land rent can offset the big gap in county’s finance to realize the balance between charging and spending. Therefore, it can enable the county government to increase investment in many people’s livelihood project such as public infrastructure, education, medical treatment, social security, etc. Thus it plays a positive role in boosting the county’s economic development and promoting the living standards of people. On the other hand, the land finance brings out many economic and social problems such as the extensive economic development, the rising house prices, the clash between the officials and people in the course of land acquisition and demolition, the risks of food security resulting from the decreasing agricultural acreage, local finance and banking, corruption caused by rent-seeking for power.The analyses of the causes of land finance and its trend under the Pressure-Type Administration System. The financial system, transition of the land administrative system and the loose credit policy have made the land finance take shape and continue. Considering that the extensive economic development which only pursuit quantity under the Pressure-Type Administration System is unsustainable and must suffer from the scarcity of land, the limitation of city dimension, the land finance must be unsustainable, which will trap local finance again. In order to solve the dilemma of local finance, the central government needs to make a balance between right of property and right of affairs through decentralization, set up fairer and more transparent public financial system, change the Pressure-Type Administration System which takes political achievements of catching up the economic quantity as the index for officials’assessment, build a more thorough legal government to reinforce supervision among powers and promote the process of democratization to make the power work under sunshine.