The politics of land use conversion in china case study of a guangdong county 2

2 Explaining Land Use Conversion Several hypotheses have been advanced in explaining the conversion of agricultural land to non-agricultural use in China.. Analyses that pinpoint large-s

2 Explaining Land Use Conversion

Several hypotheses have been advanced in explaining the conversion of agricultural land to non-agricultural use in China Analyses that pinpoint large-scale processes of urbanization and industrialization, institutional flaws in China’s land use regime, and the political weakness of peasants are insightful in throwing light on land use change from different perspectives.1 However, while existing literature has shown that these diverse factors account for land use conversion in one way or another, there has yet

to be a study that employs a coherent framework to systematically analyze the interplay of the various determinants, including general and local-specific variables,

in influencing the patterns of land use conversion An understanding of how problems

in China’s land management and peasants’ vulnerability are institutionalized is useful but whether local state agents choose to exploit these institutional weaknesses is dependent on norms and conditions at the collective level Local-specific factors – the fiscal situation and requirements, path of development or industrialization, and the availability of land and other resources – affect local state agents’ decision and action to supply agricultural land for conversion

This brings us to another problem with most existing studies: the lack of sufficient attention on the central actor in the process, i.e local officials, and their incentives in effecting land use change Local state agents play a decisive role in land use

conversion Although national policies are enacted by the central government, local agents exercise considerable power and discretion in implementing them They do not necessarily act in the interest of the principal and may distort or selectively

implement central policy.2 Furthermore, in the absence of upper-level guidance, local

1 Refer to the works cited under the next section

2 For a general discussion of China’s policy implementation, see Kenneth G Lieberthal and David M

Lampton (eds.), Bureaucracy, Politics, and Decision Making in Post-Mao China (Berkeley: University of

governments may also make and implement their own policy that contravenes central policy Local state agents’ motivations, therefore, serve as a useful point of departure

in understanding land use conversion From this platform, regional variation in land use patterns may be explained through the further analysis of how officials’

motivations interact with local-specific structural and institutional conditions

The following sections explore existing literature for the variables that promote land use conversion before articulating an approach to the problem that addresses the micro-macro, agency-structure connection

Alternative Explanations

The Demands of Urbanization

Scholars have analyzed statistics at the national and regional levels to propose that the trends of urbanization and industrialization, drive the conversion of land to non-agricultural use from the 1980s to the 1990s.3 This study, however, proposes that the concept of urbanization, broadly understood as the shift from rural-agricultural activity

to urban-industrial activity and measured by different indicators, has a more

ambiguous relationship with non-agricultural land use in China than what scholars perceive

First, some common indicators of urbanization, such as the size of the urban built-up area and industrial land, are not appropriate for analyzing the causes of

non-agricultural land use Lin, for one, suggests that “a city-centred urban sprawl at the top and a dispersed rural-based industrialisation at the bottom appear to be the two

California Press, 1992); Melanie Manion, “Policy Implementation in the People’s Republic of China:

Authoritative Decisions versus Individual Interests,” The Journal of Asian Studies, Vol 50, No 2 (1991),

pp 253-79.

3 See Lin and Ho, “China's Land Resources”; Ho and Lin, “Converting Land to Nonagricultural Use,” pp 81-112; Lin, “Reproducing Spaces,” pp 1827-55; Tan Minghong, Li Xiubin, Xie Hui, and Lu Changhe,

“Urban Land Expansion and Arable Land Loss in China: A Case Study of Beijing-Tianjin-Hebei Region,”

Land Use Policy, Vol 22, No 3 (2005), pp 187-96.

concurrent processes of urbanisation that have contributed to the recent expansion

of non-agricultural land use” in Guangzhou, Hefei and Wuxi.4 However, it seems tautological to suggest that industrialization, indicated by the area of industrial land and development zones, caused the expansion in non-agricultural land use

Similarly, the use of “urban built-up area” as an explanation for the increase in non-agricultural land use is also flawed.5

In another study, Ho and Lin have used a multivariate regression analysis to suggest that non-agricultural land use in three coastal provinces – Shangdong, Jiangsu and Guangdong – is positively related to population density (population divided by land area), level of development (real GDP per capita) and urbanization (ratio of non-agricultural population to total population) Results of the analysis show that “the relative importance of land allocated to non-agricultural use are 75.1 percent for population density, 17.8 percent for urbanization and 7.1 percent for per capita real GDP” together which explains 74 percent of the variations in non-agricultural land use.6 Likewise, Tan et al suggest that GDP per capita and rural-urban migration have contributed to urban land expansion in the Beijing, Tianjin and Hebei region.7

Demographic changes cited above create greater demands for housing, roads and other urban infrastructure to accommodate the needs of a larger population, which ultimately encroaches upon rural or agricultural land While this correlation between demographic changes and non-agricultural land use seems straightforward, the same cannot be said of the relationship between GDP levels and non-agricultural land use As with their explanation on how demographic changes lead to urban land expansion, Tan et al.’s theory on how GDP growth has stimulated urban land

expansion also boils down to the demand for land They suggest that growing

4 Lin, “Reproducing Spaces,” pp 1847.

5 Ibid., pp 1829; pp 1845-47.

6 Ho and Lin, “Converting Land,” pp 774

7 Tan et al., “Urban Land Expansion.”

affluence leads to greater demand for more living space per capita, in the emergence

of “high-class suburban residential areas in some large cities.”8 This is a valid

argument but there is also another perspective – centring on the supply of, instead of demand for, land – to interpret the relationship between GDP levels and

non-agricultural or urban land

Some scholars have suggested that local governments manipulate land and its supply in order to stimulate growth Liu et al., for instance, observe that “In the

process of intensifying regional competition for investment, a ‘race to the bottom’ type

of game pushed local governments to offer low-cost land to attract industrial

investment in order to boost future GDP and revenue growth.”9 In other words, land is

a means through which local governments draw investment, which in turn drives up GDP levels.10

Furthermore, the flourishing of extravagant but underutilized construction projects – such as luxurious village bungalows, oversized shopping malls, massive squares, stadiums and palatial government buildings – also does not arise out of a growing population’s demand for more space.11 Instead, these “white elephants,” which often result in the wastage of land and other resources, are more reflective of the

governments’ indiscriminate supply of land to conjure up “projects to boost one’s

political achievements” (zhengji gongcheng) To perceive these image-engineering

projects as a government’s response to the demands of urbanization would have

8 Tan et al., “Urban Land Expansion,” pp 191-92.

9 Liu et al., ´“Instrumental Land Use,” pp 314.

10 This refers to the measurement of GDP by the expenditure method, which includes the components of gross investment, government spending, consumption and net exports.

11 See Sima Long, “Toushi zhengji gongcheng” (“Surveying political achievement displays”), Zhongguo

jiancha (China Surveillance), No 15 (2002), pp 52; Zhou Wenshui, “‘Zhengji gongcheng’,” pp 34-35;

Qu Jingyao and Qi Haishan, “Bierang ‘xingxiang gongcheng” qinshi xinnongcun” (Prevent ‘image

projects’ from corroding the New Village), Liaowang xinwen zhoukan (News Watch Weekly), March

(2006), pp 46-47; Renmin luntan diaoyanzu, “Zhengji gongcheng bie zai nongcun raomin” (Do not let

political achievement projects perturb villagers), Renmin luntan (People's Forum), No 191 (2007), pp

12-13; Cartier, “‘Zone Fever’,” pp 454-57.

missed the point Rather, they represent the externalities of “urbanization”

engineered by local governments

The preceding discussion suggests that although there is a correlation between the non-agricultural land use and GDP level, the causal direction is equivocal Besides, because land converted to non-agricultural purposes has frequently resulted in the misallocation or wastage of resources, it is doubtful if sustainable growth is attainable through an expansionary land policy As some experts point out,

Construction land affects investment, which in turn affects capital stock and economic growth The expansion of construction land in China from the end

of the 1990s led to a decreased quality of investments [because] (i) the excess growth of land supply has resulted in excess investments; (ii)

investments have been focused on construction instead of equipment; (iii) investments have focused on external and expansionary construction; and (iv) local governments have supplied land at low cost, reducing the resource allocation efficiency of the land market.12

Land Management: Institutional Flaws

Another often cited reason for the rise in non-agricultural land use is China’s flawed

land management system In her study on development zones or kaifaqu, for

instance, Cartier suggests that “contradictory domestic political and economic

policies of land development, land management, and land conservation” have

promoted the proliferation of such zones.13 This line of argument centring on inherent flaws in land policies is echoed by Lichtenberg and Ding, who suggest that “the existing institutional and policy structure create incentives for both insufficient

farmland retention and excessive farmland conversion, resulting in significant

inefficiencies in land use.”14

12 Li Huizhong, Yin Feng and Li Jialun, “China’s Construction Land Expansion and Economic Growth: A

Capital-Output Ration Based Analysis,” China & World Economy, Vol 16, No 6 (2008), pp 15.

13 Cartier, “‘Zone Fever’,” pp 445.

14 Erik Lichtenberg and Ding Chengri, “Assessing Farmland Protection Policy in China,” Land Use

Policy, Vol 25, No 1 (2008), pp 59.

On top of these works, there is a legion of others that may not address land use change directly but nonetheless provide insights on various land institutions that contributed to land use conversion, namely land ownership, land acquisition and its approval, and the land market.15 These investigations, which point out inherent problems and contradictions in China’s land system such as ambiguous

landownership rights, low rates of compensation for expropriated land, incomplete land markets, incompetent enforcement of law against violations and so on, enhance the understanding of how such flaws inadvertently provide openings for the relative ease of converting land to non-agricultural use.16

Yet in reality, perfectly-designed institutions are elusive: “Since people have limited capacities to acquire and process information, uncertainty and asymmetric

information must exist, and these conditions represent unavoidable obstacles to

‘perfect’ institutional design.”17 Attributing excessive land use conversion to inherent deficiencies in land institutions does not explain why repeated reforms to land

institutions and the correction of flaws only manage to halt or slow down land use change temporarily On 20 May 1997, for instance, a moratorium on non-agricultural construction taking up cultivated land was imposed and its one year duration was subsequently extended in 1998 till the revision of the Land Administration Law was complete.18 However, not long after the tightening of control over the approval of land use conversion, land requisition and others in the revised law, the area of arable land

used for construction began to rise again, soaring to 3.4 million mu in 2003 from 2.4

15 See, for instance, C W Kenneth Keng, “China's Land Disposition System,” Journal of Contemporary

China, Vol 5, No 13 (1996), pp 325-45; Yeh and Wu, “The New Land Development Process,” pp

330-53; Peter Ho, “Who Owns China's Land? Policies, Property Rights and Deliberate Institutional

Ambiguity,” China Quarterly, No 166 (2001), pp 394-421; Ding Chengri, “Policy and Praxis of Land Acquisition in China,” Land Use Policy, Vol 24, No 1 (2007), pp 1-13 For a review of other relevant

journal articles, see Zhang Sumei and Kenneth Pearlman, “China's Land Use Reforms: A Review of

Journal Literature,” Journal of Planning Literature, Vol 19, No 1 (2004), pp 16-61.

16 Refer to Ding Chengri, “Land Policy Reform,” pp 109-20; Ding Chengri, “Policy and Praxis,” pp 1-13; Cartier, “‘Zone Fever’”; Lin and Ho, “The State, Land System,” pp 411-36; Peter Ho, “Who Owns China's Land?,”pp 394-421.

17 Erik G Furubotn and Rudolf Richter, Institutions and Economic Theory: The Contribution of New

Institutional Economics (Ann Arbor: The University of Michigan Press, 1997), pp 15.

18 Guojia tudi guanli ju and Guojia jihua weiyuanhui, document no 6 (1997); “Guojia jiang jixu dongjie feinong jianshe zhanyong gengdi” pp 2; “1998: tudi guanli dashiji,” pp 9.

million mu in 2000.19 On 18 July 2003, the State Council issued a notice to suspend the approval of all development zones, together with complementary measures to remove illegal development zones.20 Yet again, the arable land used for construction increased unrelentingly after the moratorium was lifted, rising over 70 percent from

2.2 million mu in 2004 to 3.9 million mu in 2006.21 Hence it appears that problems in China’s land management system are not sufficient in accounting for land use

change

Instead of institutional flaws, therefore, this study proposes that selective

implementation or agency costs, incurred as the agent fails to act in the full interest of the principal, is a more potent explanation Some scholars have touched on the principal-agent problem in their analysis of land institutions For instance, Keng, in his overview of China’s land disposition system, alludes to the discretionary power of local state agents in implementing central policies He observes that since local economic development takes precedence among the concerns of local governments, they may not conform to the orders and regulations imposed by their superiors.22 Xu also highlights the “contradictory roles” of governments that contribute to the loss of agricultural land: “Whereas the governments have made a series of policy initiatives

to protect agricultural land, they have, however, been the most important players in destabilizing the land base for agricultural production.”23

Specifically, local officials’ discretion in supplying agricultural land for construction within the limits imposed by central regulations is pivotal to explaining local variations

in the patterns of land use conversion Through an investigation of the incentives and disincentives that structure agents’ behaviour and how these interact with other

19 “Zhongguo guotu ziyuan gongbao,” 2001-2006

20 Guoban faming dian document no 30 (2003).

21 “Zhongguo guotu ziyuan gongbao”; Guotuzifa document no 45 (2003).

22 Keng, “China's Land Disposition System.”

23 Xu Wei, “The Changing Dynamics of Land-Use Change in Rural China: A Case Study of Yuhang,

Zhejiang Province,” Environment and Planning A, Vol 36, No 9 (2004), pp 1595-615.

macro-level factors beyond their control, this study shall analyze in greater depth the problem of selective implementation with a focus on the supply of land by local governments

Political Weakness of Peasants

Yet other researchers begin their investigation at the village level where land is taken away from its rightful owners These studies illustrate the political weakness of peasants vis-à-vis local officials, which accounts for the relative ease of the latter in depriving the former of either land use rights through illegal transfers or ownership rights through state requisition

By delving into the root of the problem, case studies by Guo and Cai illustrate how land expropriation is carried out by village cadres, township and county officials often

at the expense of villagers, leading to peasant resistance.24 They observe that

income disparities among villagers, their degree of economic or social dependence

on village cadres, and the difficulty in organizing preventive ex ante action often

render peasant resistance futile.25 Hsing, on the other hand, focuses on how the township government acts as a broker between higher level governments and the village.26 Together, these studies reveal the ways in which institutional and

hierarchical structures, such as the one-level-down cadre management system, bind together the interests of these lower level state actors, who often jointly exploit villagers to maximize their self-interests

The political weakness of peasants does not serve as a direct motivation for the conversion of agricultural land to non-agricultural use As with imperfect land

24 Guo Xiaolin, “Land Expropriation and Rural Conflicts in China,” China Quarterly, No 166 (2001), pp

422-39; Cai Yongshun, “Collective Ownership or Cadres’ Ownership? The Non-agricultural Use of

Farmland in China,” China Quarterly, No 175 (2003), pp 662-80.

25 Ibid.

26 Hsing You-tien, “Brokering Power and Property in China's Townships,” The Pacific Review, Vol 19,

No 1 (2006), pp 103-24

institutions such as ambiguous land ownership rights and low compensation for dispossessed peasants, the vulnerability of peasants ensures that land use change can be carried out with relatively few obstructions Yet the bargaining power of

peasants against local cadres also varies with local conditions, some of which are mentioned in the preceding paragraph Other local factors that may affect villagers’ capacity for contention and the outcome of contention are lineage or kinship ties, the type of resistance such as lodging petitions, ousting village cadres or civil

disobedience.27

Arguments and Framework

The core of this study revolves around institutional arrangements that underpin land use conversion in China Institutions, defined as “the formal or informal procedures, routines, norms and conventions embedded in the organizational structure of the polity or the political economy,” are integral to this analysis.28 However, it is also recognized that institutions are not the sole cause of outcome Instead, they “act as filters that selectively favour particular interpretations either of the goals toward which political actors strive or of the best means to achieve these ends.”29

The operation of institutions, moreover, is not immune to social relationships Power relations – between the central state and local governments, between domineering local officials versus politically weak peasants – underlie this investigation on why and how much land is supplied for conversion to non-agricultural uses In its analysis

27 Refer to the literature on peasant resistance such as Cai Yongshun, “Managed Participation in

China.” Political Science Quarterly, Vol 119, No 3 (2004), pp 425-51; Kevin J O'Brien and Li Lianjiang,

Rightful Resistance in Rural China (New York: Cambridge University Press, 2006); Zhou Xuegang,

"Unorganized Interests and Collective Action in Communist China." American Sociological Review, Vol

58, No 1 (1993), pp 54-73; Li Lianjiang and Kevin J O'Brien, "Villagers and Popular Resistance in

Contemporary China." Modern China, Vo 22, No 1 (1996), pp 28-61; Lucien Bianco, “Peasant

Resistance in the PRC” in Peasants without the Party: Grass-roots Movement in Twentieth-Century

China (Armonk, NY: M E Sharpe, 2001).

28 Peter A Hall and Rosemary C R Taylor, “Political Science and the Three New Institutionalisms,”

Political Studies, Vol 44, No 5 (1996), pp 938.

29 Ellen M Immergut, “The Theoretical Core of the New Institutionalism,” Politics & Society, Vol 26, No

1 (1998), pp 20.

of institutions, the study also foregrounds the dynamism of power struggles between the central and local governments as the former continually seeks to assert its

dominance over the latter in land processes while the latter devise strategies to evade central control, often under the guise of compliance

Institutions are, therefore, “ligatures fastening sites, relationships, and large-scale processes to each other.”30 They serve as mediations between the microfoundations

of agency and the macro-environment At the same time, intermediate-level

institutions themselves are also embedded in a larger milieu with political, economic

and social conditions that are beyond individual control This study thus incorporates

macro-level contextual factors into the rational choice model in its analysis of factors that contribute to disparities in regional trends of land use conversion

A Model of the Determinants of Land Use Conversion

Drawing from the hypotheses outlined in the foregoing literature and other relevant studies, a model of the determinants of land use change may be derived The extent

to which agricultural land is converted for non-agricultural purposes is determined by

an array of structural, institutional and agential factors described below:

1) Fiscal resources: The government’s overall fiscal situation affects its capacity in effecting land use change as well as the extent to which it needs to turn to land use change for revenue Before leasing land for industrial or commercial purposes, the government has to finance the developing of raw land, incurring expenses in the levelling of land and the provision of basic infrastructure like electricity, water, roads and others According to Chiu et al., the ability to provide infrastructure is one reason why land may not be readily supplied by governments Infrastructure provision relies

30 Ira Katznelson, “Structure and Configuration in Comparative Politics” in Mark Irving Lichbach and Alan

S Zuckerman (eds.), Comparative Politics: Rationality, Culture, and Structure (Cambridge, UK:

Cambridge University Press, 1997), pp 103.