The Political Economy of Land Acquisition in China

China’s rapid economic growth is a popular topic in many economic forums and debates. Some people argue that China’s growth in GDP is superficial while some expect China to be the leading economy in the coming years. Behind this boom in economic growth is increased urbanization. In the past, China introduced land reforms where large tracks of privately owned land were redistributed to peasants and farmers. Peasant communities collectively owned part of the land and used it for agricultural activities. The country then introduced decollectivization where collectivized farming was abolished. Collective land was redistributed to farmers amid controversies. Today, the government is buying land from peasant farmers and leasing it to investors. This repossessed land has turned into urban areas, which act as political, cultural and economic hubs.

The rate of urbanization in China has fueled the country’s economic boom. However, the international community has questioned the authenticity of the urbanization process. China’s laws allow the state to repossess land from agricultural communities and use it for economic development. This allows the government to earn revenues by leasing the land to private investors and increase production. Private investors have been using the leased land to set up industries, which are more profitable than agriculture. The major concern with China’s land politics is that more and more peasant farmers are becoming landless as the country’s economy grows. The compensation that the government offers to these farmers is insufficient for them to start long-term income-generating activities. In addition, the government has not offered alternative locations to some of the farmers.

While the international community raises concerns about the process, most peasant farmers welcome the move by their government. Many are comfortable with the compensation and alternatives that the government offers. Some move to the newly created urban centers and find jobs in industries. The income from industrial wages is higher than income from peasant farming for some farmers. One of the concerns about the political economy of China’s urbanization process is that the government does not allow farmers to sell land directly to private investors. The state acts as the middleman in all land transactions. While this move protects farmers from greedy buyers, it deprives farmers of possible high returns from reselling their land. Farmers could also earn high amounts of income from leasing the land directly to investors.

Another aspect in China’s land politics is the current campaign to transform all cities into global hubs. Urban planners have ambitious plans to transform all Chinese cities into political and economic centers. They aim at creating an urban environment that attracts domestic and foreign investors. This plan has also fueled the rate of urbanization in rural areas. Local governments in China have been developing plans and relocating some of the industries in their cities. The urbanization process has also involved residential estates, which have been transformed into economic centers. However, some local governments do not have such elaborate plans for their cities. Some urban planning projects have stalled while some are out of control. The local governments have failed to keep proper records and establish economic centers as planned.

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