A Comparative Study of Land Economy under Different Ownerships in China

China Economist - - Articles - Zhou Yan ( ), Chen Kunting ( ) and Lei Xintu ( ) College of Economics and Management, Zhejiang University of Technology, Hangzhou, China * Corresponding author: Chen Kunting, College of Economics and Management, Zhejiang University of Technology, No. 288


This paper creates a land economy model under the framework of the consistent growth theory to investigate the impacts of different forms of ownership on longterm economic equilibrium. As demonstrated under the model, in an economy of private ownership that allows the free transfer of land, land gradually becomes concentrated in the hands of a few; income growth deriving from technological progress merely contributes to the wealth and consumption of landowners; landless workers will struggle at the level of subsistence. An economy of public or collective ownership that forbids the transfer of land can ensure basic social equity. However, in a collective economy without a contract system, population is likely to grow excessively and thus requires external restraint. The conclusions of our model suggest that the long- term welfare and growth effect under collective ownership with a contract system is superior to those under private ownership and pure public ownership.


陈昆亭 雷新途

ownership structure, long-term growth, land economy model JEL Classification Code: E02, P26, P21, P14

1. Introduction


In the context of China’s rapid urbanization, which surpassed 50% in 2011, the daunting yet imperative reform of the rural land system is a major topic of discussion. Most existing studies have focused on the operational level of this issue, involving such questions as the transfer of land rights, the livelihood restoration of landless farmers, and whether industries are able to provide jobs to urbanized farmers. These discussions, though meaningful, do not touch upon deeper issues of the land system itself.

Over t h o u s a n d s o f y e a r s , C h i n a ’s countryside repeated the history where under the system of private ownership, land was initially allocated to the majority of farmers before gradually becoming concentrated to the landlord class, turning many into landless

laborers. The inevitability of this process is obvious: under private ownership, polarization is inevitable given individual heterogeneity. But the critical question is whether the result of such polarization is positive, i. e. whether

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