IDEAS home Printed from https://ideas.repec.org/a/eee/lauspo/v115y2022ics0264837722000230.html
   My bibliography  Save this article

Can China's unified construction land market mitigate urban land shortage? Evidence from Deqing and Nanhai, Eastern coastal China

Author

Listed:
  • Wen, Lanjiao
  • Chatalova, Lioudmila
  • Zhang, Anlu

Abstract

The continuing growth in demand for construction land in China along with the lagging capacity of government-controlled land supply call for solutions that could benefit both urban and rural development. The study analyzes whether opening up the rural construction land market in the course of establishing a unified land market can reduce shortage of urban construction land and associated urban land conflicts. Supply and demand functions of rural and urban construction land are estimated based on the first-hand and the second-hand data on official land transactions in Nanhai district and Deqing County, Eastern coastal China. The optimal land supply of local governments and rural collectives is determined assuming a Cournot-Nash duopoly equilibrium. The results show that a unified construction land market can improve efficiency of land transactions and substantially increase construction land supply. This effect is due to the complementary and substitutional relationship between the urban and rural land supply, where the former was found to be much stronger, especially in economically advanced areas. The observed substitution effect reflects along with the impact of the duopoly market the concurrent monopoly of local governments in coupon trading. The findings point out the relevance of establishing of the land market in different regions with different modes and inform other transition economies that are in the process of preparing or implementing land market reforms.

Suggested Citation

  • Wen, Lanjiao & Chatalova, Lioudmila & Zhang, Anlu, 2022. "Can China's unified construction land market mitigate urban land shortage? Evidence from Deqing and Nanhai, Eastern coastal China," Land Use Policy, Elsevier, vol. 115(C).
    • Handle: RePEc:eee:lauspo:v:115:y:2022:i:c:s0264837722000230
    DOI: 10.1016/j.landusepol.2022.105996
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264837722000230
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.landusepol.2022.105996?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zoomers, Annelies & van Noorloos, Femke & Otsuki, Kei & Steel, Griet & van Westen, Guus, 2017. "The Rush for Land in an Urbanizing World: From Land Grabbing Toward Developing Safe, Resilient, and Sustainable Cities and Landscapes," World Development, Elsevier, vol. 92(C), pages 242-252.
    2. Ray Yep, 2015. "Filling the Institutional Void in Rural Land Markets in Southern China: Is there Room for Spontaneous Change from Below?," Development and Change, International Institute of Social Studies, vol. 46(3), pages 534-561, May.
    3. Wen, Lan-jiao & Butsic, Van & Stapp, Jared R. & Zhang, An-lu, 2020. "What happens to land price when a rural construction land market legally opens in China? A spatiotemporal analysis of Nanhai district from 2010 to 2015," China Economic Review, Elsevier, vol. 62(C).
    4. Thorsten Beck & Luc Laeven, 2006. "Institution building and growth in transition economies," Journal of Economic Growth, Springer, vol. 11(2), pages 157-186, June.
    5. Kong, Xuesong & Liu, Yaolin & Jiang, Ping & Tian, Yasi & Zou, Yafeng, 2018. "A novel framework for rural homestead land transfer under collective ownership in China," Land Use Policy, Elsevier, vol. 78(C), pages 138-146.
    6. Chen Shi & Bo-sin Tang, 2020. "Institutional change and diversity in the transfer of land development rights in China: The case of Chengdu," Urban Studies, Urban Studies Journal Limited, vol. 57(3), pages 473-489, February.
    7. Liang Peng & Thomas Thibodeau, 2012. "Government Interference and the Efficiency of the Land Market in China," The Journal of Real Estate Finance and Economics, Springer, vol. 45(4), pages 919-938, November.
    8. Olha Zadorozhna, 2020. "Clientelism and Land Market Outcomes in Ukraine," Eastern European Economics, Taylor & Francis Journals, vol. 58(6), pages 478-496, November.
    9. Hanushek, Eric A & Quigley, John M, 1990. "Commercial Land Use Regulation and Local Government Finance," American Economic Review, American Economic Association, vol. 80(2), pages 176-180, May.
    10. Patrick Meyfroidt & Florian Schierhorn & Alexander Vladimirovich Prishchepov & Daniel Muller & Tobias Kuemmerle, 2016. "Drivers, Constraints and Trade-Offs Associated with Recultivating Abandoned Cropland in Russia, Ukraine and Kazakhstan," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 2, pages 55-103.
    11. Du, Jinfeng & Peiser, Richard B., 2014. "Land supply, pricing and local governments' land hoarding in China," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 180-189.
    12. Heyuan You & Xiaowei Hu & Chenmeng Bie & Deshao Zhou, 2019. "Impact of Livelihood Assets on Farmland-Transferred Households’ Willingness to Urbanism and Policies Implications for Farmland Transfer: Evidence from Zhejiang, China," Discrete Dynamics in Nature and Society, Hindawi, vol. 2019, pages 1-13, March.
    13. Klaus Deininger & Songqing Jin, 2008. "Land Sales and Rental Markets in Transition: Evidence from Rural Vietnam," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(1), pages 67-101, February.
    14. Na, 2019. "How Horizontal Integration affects Transaction Costs of Rural Collective Construction Land Market? An Empirical Analysis in Nanhai District Guangdong Province, China," 2019 Conference (63rd), February 12-15, 2019, Melbourne, Australia 285093, Australian Agricultural and Resource Economics Society (AARES).
    15. Cheng, Wenli & Xu, Yuyun & Zhou, Nan & He, Zaizhong & Zhang, Longyao, 2019. "How did land titling affect China’s rural land rental market? Size, composition and efficiency," Land Use Policy, Elsevier, vol. 82(C), pages 609-619.
    16. David A. Newburn & Peter Berck, 2006. "Modeling Suburban and Rural-Residential Development Beyond the Urban Fringe," Land Economics, University of Wisconsin Press, vol. 82(4), pages 481-499.
    17. Zhang, Jixiang & Da, Qingli & Wang, Yanhua, 2007. "Analysis of nonlinear duopoly game with heterogeneous players," Economic Modelling, Elsevier, vol. 24(1), pages 138-148, January.
    18. Zhou, Yang & Guo, Liying & Liu, Yansui, 2019. "Land consolidation boosting poverty alleviation in China: Theory and practice," Land Use Policy, Elsevier, vol. 82(C), pages 339-348.
    19. David L. Chicoine, 1981. "Farmland Values at the Urban Fringe: An Analysis of Sale Prices," Land Economics, University of Wisconsin Press, vol. 57(3), pages 353-362.
    20. Klaus Deininger, 2003. "Land Markets in Developing and Transition Economies: Impact of Liberalization and Implications for Future Reform," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1217-1222.
    21. Gwendoline Promsopha, 2015. "Land Ownership as Insurance and the Market for Land: A Study in Rural Vietnam," Land Economics, University of Wisconsin Press, vol. 91(3), pages 460-478.
    22. Timothy R. Hodge & Gary Sands & Mark Skidmore, 2017. "The Land Value Gradient in a (Nearly) Collapsed Urban Real Estate Market," Land Economics, University of Wisconsin Press, vol. 93(4), pages 549-566.
    23. Xie, Xiangxiang & Zhang, Anlu & Wen, Lanjiao & Bin, Peng, 2019. "How horizontal integration affects transaction costs of rural collective construction land market? An empirical analysis in Nanhai District, Guangdong Province, China," Land Use Policy, Elsevier, vol. 82(C), pages 138-146.
    24. Cao, Yu & Zhang, Xiaoling & Zhang, Xukun & Li, Heng, 2020. "The incremental construction land differentiated management framework: the perspective of land quota trading in China," Land Use Policy, Elsevier, vol. 96(C).
    25. Lian, Hongping & Li, Hui & Ko, Kilkon, 2019. "Market-led transactions and illegal land use: Evidence from China," Land Use Policy, Elsevier, vol. 84(C), pages 12-20.
    26. Han, Wenjing & Zhang, Xiaoling & Zheng, Xian, 2020. "Land use regulation and urban land value: Evidence from China," Land Use Policy, Elsevier, vol. 92(C).
    27. Wu, Yuzhe & Mo, Zhibin & Peng, Yi & Skitmore, Martin, 2018. "Market-driven land nationalization in China: A new system for the capitalization of rural homesteads," Land Use Policy, Elsevier, vol. 70(C), pages 559-569.
    28. Miguel Vargas, 2016. "Tacit collusion in housing markets: the case of Santiago, Chile," Applied Economics, Taylor & Francis Journals, vol. 48(54), pages 5257-5275, November.
    29. You, Heyuan & Hu, Xiaowei & Wu, Yizhou, 2018. "Farmland use intensity changes in response to rural transition in Zhejiang province, China," Land Use Policy, Elsevier, vol. 79(C), pages 350-361.
    30. Gwendoline Promsopha, 2015. "Land Ownership as Insurance and the Market for Land: A study in Rural Vietnam," Post-Print hal-01189580, HAL.
    31. Konstantin A. Kholodilin & Jan Philip Weber & Steffen Sebastian, 2018. "Rental Market Regulation over the Last 100 Years in an International Comparison," DIW Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 8(45), pages 453-464.
    32. Yuzhe Wu & Wendan Jiang & Jiaojiao Luo & Xiaoling Zhang & Martin Skitmore, 2019. "How Can Chinese Farmers' Property Income Be Improved? A Population–Land Coupling Urbanization Mechanism," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 27(2), pages 107-126, March.
    33. Wang, Yuan & Hui, Eddie Chi-man, 2017. "Are local governments maximizing land revenue? Evidence from China," China Economic Review, Elsevier, vol. 43(C), pages 196-215.
    34. David A. Newburn & Peter Berck, 2006. "Modeling Suburban and Rural-Residential Development Beyond the Urban Fringe," Land Economics, University of Wisconsin Press, vol. 82(4), pages 481-499.
    35. Xuemei Bai & Peijun Shi & Yansui Liu, 2014. "Society: Realizing China's urban dream," Nature, Nature, vol. 509(7499), pages 158-160, May.
    36. Tramontana, Fabio, 2010. "Heterogeneous duopoly with isoelastic demand function," Economic Modelling, Elsevier, vol. 27(1), pages 350-357, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lin Meng & Wentao Si, 2022. "The Driving Mechanism of Urban Land Expansion from 2005 to 2018: The Case of Yangzhou, China," IJERPH, MDPI, vol. 19(23), pages 1-14, November.
    2. Zhuo Wenjun, 2023. "Circulation Expectations, Farmer Trust, and Farmers’ Contract Choice Behavior," Land, MDPI, vol. 12(8), pages 1-15, August.
    3. Xiao Zhu & Di Yao & Hanyue Shi & Kaichen Qu & Yuxiao Tang & Kaixu Zhao, 2022. "The Evolution Mode and Driving Mechanisms of the Relationship between Construction Land Use and Permanent Population in Urban and Rural Contexts: Evidence from China’s Land Survey," Land, MDPI, vol. 11(10), pages 1-44, October.
    4. Fei Bao & Zhenzhi Zhao, 2022. "“Takeover” and “Activation” Effects of National Strategies for Industrial Relocation—Based on the Perspective of Marketisation of Land Elements," Sustainability, MDPI, vol. 14(20), pages 1-23, October.
    5. Zihao Li & Xihang Xie & Xinyue Yan & Tingting Bai & Dong Xu, 2022. "Impact of China’s Rural Land Marketization on Ecological Environment Quality Based on Remote Sensing," IJERPH, MDPI, vol. 19(19), pages 1-21, October.
    6. Peng Yao & Qi Jia & Jianxu Liu & Woraphon Yamaka, 2022. "Reform of Collective Land for Construction and Rental Housing and the Growth of Farmers’ Property Income: Evidence from China," Land, MDPI, vol. 12(1), pages 1-19, December.
    7. Shenjie Yang & Lanjiao Wen, 2023. "Regional Heterogeneity in China’s Rural Collectively Owned Commercialized Land Market: An Empirical Analysis from 2015–2020," Land, MDPI, vol. 12(2), pages 1-15, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jiao, Man & Xu, Hengzhou, 2022. "How do Collective Operating Construction Land (COCL) Transactions affect rural residents’ property income? Evidence from rural Deqing County, China," Land Use Policy, Elsevier, vol. 113(C).
    2. Li, L. & Bao, Helen X.H. & Robinson, Guy M., 2020. "The return of state control and its impact on land market efficiency in urban China," Land Use Policy, Elsevier, vol. 99(C).
    3. Zhou, Yang & Li, Xunhuan & Liu, Yansui, 2020. "Rural land system reforms in China: History, issues, measures and prospects," Land Use Policy, Elsevier, vol. 91(C).
    4. Ayala-Cantu, Luciano & Morando, Bruno, 2020. "Rental markets, gender, and land certificates: Evidence from Vietnam," Food Policy, Elsevier, vol. 94(C).
    5. Quanfeng Li & Zhe Dong & Guoming Du & Aizheng Yang, 2021. "Spatial Differentiation of Cultivated Land Use Intensification in Village Settings: A Survey of Typical Chinese Villages," Land, MDPI, vol. 10(3), pages 1-18, March.
    6. Jia Chen & Jingwen Xu & Hongxiao Zhang, 2022. "Impact of Relationship Governance and Third-Party Intervention on Farmland Transfer Rents—Empirical Evidence from Rural China," Land, MDPI, vol. 11(5), pages 1-16, May.
    7. Luciano Ayala-cantu & Bruno Morando, 2018. "Rental markets, gender, and land certificates: Evidence from Vietnam," WIDER Working Paper Series 96, World Institute for Development Economic Research (UNU-WIDER).
    8. Man Jiao & Hengzhou Xu, 2022. "Does Rural Construction Land Marketization Inhibit State-Owned Industrial Land Transactions? Evidence from Huzhou City, China," Land, MDPI, vol. 11(9), pages 1-17, September.
    9. Meie Deng & Anlu Zhang & Congxi Cheng & Canwei Hu, 2022. "Are Villagers Willing to Enter the Rural Collective Construction Land Market under the Arrangement of Transaction Rules?—Evidence from Ezhou, China," Land, MDPI, vol. 11(4), pages 1-11, March.
    10. Li, Jing & Lo, Kevin & Zhang, Pingyu & Guo, Meng, 2021. "Reclaiming small to fill large: A novel approach to rural residential land consolidation in China," Land Use Policy, Elsevier, vol. 109(C).
    11. Cheng, Jing, 2022. "Analysis of the factors influencing industrial land leasing in Beijing of China based on the district-level data," Land Use Policy, Elsevier, vol. 122(C).
    12. Fei Bao & Zhenzhi Zhao, 2022. "“Takeover” and “Activation” Effects of National Strategies for Industrial Relocation—Based on the Perspective of Marketisation of Land Elements," Sustainability, MDPI, vol. 14(20), pages 1-23, October.
    13. Meie Deng & Anlu Zhang, 2020. "Effect of Transaction Rules on Enterprise Transaction Costs Based on Williamson Transaction Cost Theory in Nanhai, China," Sustainability, MDPI, vol. 12(3), pages 1-16, February.
    14. Lijing Zhang & Mingyong Hong & Xiaolin Guo & Wenrong Qian, 2022. "How Does Land Rental Affect Agricultural Labor Productivity? An Empirical Study in Rural China," Land, MDPI, vol. 11(5), pages 1-19, April.
    15. Tan, Rong & Wang, Rongyu & Heerink, Nico, 2020. "Liberalizing rural-to-urban construction land transfers in China: Distribution effects," China Economic Review, Elsevier, vol. 60(C).
    16. Fan, Xin & Qiu, Sainan & Sun, Yukun, 2020. "Land finance dependence and urban land marketization in China: The perspective of strategic choice of local governments on land transfer," Land Use Policy, Elsevier, vol. 99(C).
    17. Ma, Xianlei & Heerink, Nico & van Ierland, Ekko & Lang, Hairu & Shi, Xiaoping, 2020. "Decisions by Chinese households regarding renting in arable land—The impact of tenure security perceptions and trust," China Economic Review, Elsevier, vol. 60(C).
    18. Benoît A. Delbecq & Todd H. Kuethe & Allison M. Borchers, 2014. "Identifying the Extent of the Urban Fringe and Its Impact on Agricultural Land Values," Land Economics, University of Wisconsin Press, vol. 90(4), pages 587-600.
    19. Zhou, Yang & Li, Xunhuan & Liu, Yansui, 2021. "Cultivated land protection and rational use in China," Land Use Policy, Elsevier, vol. 106(C).
    20. Feng Deng, 2022. "Local governments as land monopolists in Chinese cities: a natural experiment of Coase Conjecture in urban land," Asia-Pacific Journal of Regional Science, Springer, vol. 6(1), pages 159-189, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:lauspo:v:115:y:2022:i:c:s0264837722000230. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joice Jiang (email available below). General contact details of provider: https://www.journals.elsevier.com/land-use-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.