Research On Land Finance Compensatory Mechanism In The Process Of New Urbanization

Land finance appeared in the 1990s in china. As a kind of fiscal mode, it is mainly refers to local government achieve disposable income, as a result of land ownership and management through the transfer of land use, land tax, land financing ways, etc. The development of China’s existing land financial pattern evolution is a process of institutional change, there are profound reasons in system and mechanism. Among them, fiscal and taxation systems causes the urbanization construction fund shortage, monopoly land system creates conditions for land finance, officials achievements appraisal system boosters land financial behavior.Public problems such as rational allocation of resources, fair distribution of income and steady development of the economic, are closely related to the public finances. As the government’s "second fiscal", land finance plays a unique role and has periodic contribution in the process of China’s urbanization construction. But the risks emerging in process of the model is running. Rigid supply of land resources limits urbanization construction funds sustainability, land finance-real estate price spiral reduces the quality of urbanization,Incomplete land transfer mechanism exacerbates the inequitable inter-generational distribution of resources, land fiscal path dependence evokes potential risks of local government finance.The formation of local government finance land is mainly effected by external factors and path-dependent of self-reinforcing. Paper analysis the main factors of local government land financial behavior based on inter-provincial panel data of 31 provinces and cities from 2000 to 2011 through co-integration test, GMM dynamic panel data model. Degree of taxation imbalance, land market level, GDP tends of performance appraisal, level of urbanization, industrial structure change are external causes that local governments obtain land revenue by transference; reliance on land finance increase will lead to a further increase in the next fiscal year, then form a path to self-reinforcing dynamic process.Building land finance compensatory mechanisms is necessary and feasible in theory and practice. Insufficient supply of an effective system is the bottleneck that constraints current land finance model transformation. Making institutional arrangements in policy and practice is the key to guide the current land finance paradigm shift. Therefore, the end-result study of land finance compensatorymechanisms should be building land finance compensatory mechanisms system, institutional system and operating environment. Among them, mechanism system construction includes adding taxation of the land finance mechanism, creating land Trust Fund mechanism, creating municipal bond financing mechanisms and improving the infrastructure in terms of asset securitization mechanism. Institutional system creation includes forming a standardized modern tax system, designing scientific land supply system and implementing an effective performance appraisal system. Optimization of operating environment should be carried out mainly from economic base environment, financial support environment, legal protection environment.