(Economic Observation) China's urban-rural relationship has undergone major adjustments: Trillions of yuan of land sales revenue will feed back agriculture

　　China News Service, Beijing, September 24 (Reporter Ruan Yulin) The expenditure structure of China’s land transfer income is facing major reforms. During the "14th Five-Year Plan" period, the status quo of land appreciation income "taken from agriculture and mainly used in cities" will become history.

Chinese officials pointed out that this is a major adjustment in China's urban-rural relations and will change the structure of local fiscal expenditures to a certain extent.

　　The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council recently issued the "Opinions on Adjusting and Improving the Use Scope of Land Transfer Income to Prioritize Rural Revitalization", making arrangements for steadily increasing the proportion of land transfer income used in agriculture and rural areas and centrally supporting key tasks for rural revitalization.

　　The "Opinions" require that, starting from the first year of the "14th Five-Year Plan", all provinces (autonomous regions and municipalities) will steadily increase the proportion of land transfer income used for agriculture and rural areas.

By the end of the "14th Five-Year Plan" period, accounting for provinces (autonomous regions, municipalities directly under the Central Government) as a unit, the proportion of land transfer proceeds used in agriculture and rural areas will reach more than 50%.

　　Land transfer revenue is an important part of the budget revenue of local government funds.

For a long time, land value-added income has been derived from agriculture and mainly used in cities, which has strongly promoted the rapid development of industrialization and urbanization. However, the proportion of directly used in agriculture and rural areas is low, and the supporting role of agricultural and rural development is not enough.

　　After the end of the 1980s, land markets were gradually established in major cities across the country.

From 1992 to 2003, the country received a total of more than 1 trillion yuan (RMB, the same below) of land transfer fees.

Significant changes occurred in China's land transfer method in 2004, and operating land was transferred through bidding, auction, and listing.

Since the core of "recruiting, auctioning, and listing" is "the higher the price gets," land income across the country has soared.

　　According to statistics, from 2013 to 2018, the total revenue from the transfer of state-owned land use rights across the country reached 28 trillion yuan. After deducting cost expenditures, the land transfer revenue was 5.4 trillion yuan, accounting for 19.2% of the total land transfer revenue.

Among them, the land transfer income was used for agricultural and rural capital expenditures totaling 1.85 trillion yuan, accounting for only 6.6% of the land transfer income.

　　"With the acceleration of urbanization, the scale of land acquisition and land transfer has continued to expand, and the proportion of land transfer revenue in local fiscal revenue has also greatly increased." Han Jun, deputy director of the Central Rural Work Leading Group Office and deputy minister of agriculture and rural areas, 24th In a press conference held by the Information Office of the State Council, it was stated that for a long time, land value-added proceeds were mainly used in cities, and urban construction was heavily dependent on "land finance".

　　In 2019, China's urban permanent population has increased from 172 million in 1978 to 848 million, and the level of urbanization has increased from 17.9% to 60.6%. It can be said that it has experienced an unprecedented urbanization process.

　　Han Jun pointed out that the level of urbanization in China has now exceeded 60%, and it has reached the stage where industry feeds back agriculture and cities support rural development, and the land value-added proceeds should be used more for the "three rural areas."

To solve the problem of unbalanced and inadequate development, and to promote the formation of a new development pattern in which the domestic and international dual cycles are the mainstay and the mutual promotion of the domestic and international dual cycles, it is necessary to accelerate the comprehensive revitalization of rural areas.

It can be said that rural development is an important strategic fulcrum for expanding domestic demand, and it must be determined to solve the long-standing problem of land value-added income "from agriculture and mainly used in cities".

　　Since the 19th National Congress of the Communist Party of China proposed the implementation of the rural revitalization strategy, the central government has continuously strengthened the top-level design and established and improved the rural revitalization institutional framework and policy system.

　　"To promote rural revitalization in an all-round way requires'real work and investment'," Han Jun said. Therefore, it is necessary to establish a long-term mechanism for stable growth of financial investment.

Increasing the proportion of land transfer income used in agricultural and rural areas is an important funding channel and an important institutional arrangement.

　　Wu Hongyao, a member of the Party Group of the Ministry of Agriculture and Rural Affairs and Director of the Secretariat of the Central Rural Work Leading Group Office, said that increasing the proportion of land transfer revenue for agriculture and rural areas is a major adjustment in urban-rural relations and may change the structure of local fiscal expenditures to a certain extent.

　　In this regard, Wu Hongyao said: First, reforms must be implemented step by step.

All provinces (autonomous regions and municipalities) can determine annual targets and implementation steps, reasonably grasp the pace of reforms, and achieve the target requirements by 2025.

The second is to strictly guard against local government debt risks.

　　The third is to clarify the policy orientation that favors the county level.

The "Opinions" stated that the funds used for agricultural and rural land transfer revenues are mainly arranged and used by the city and county governments, with a focus on the county level, giving the county government the initiative to use funds rationally.

　　Wu Hongyao believes that in the past, local land transfer income was mainly invested in cities, and now it is required to invest more in rural areas. Therefore, the total amount of local capital use has not decreased, but the scope and structure of use have changed. It can also be said that it has been taken from the "left pocket". "Right pocket", so there is no new burden on local governments. Through the above measures, this reform will not have much impact on local fiscal revenue and expenditure.

　　Han Jun said that currently, at the central level, farmland water conservancy construction funds are accrued from the land transfer proceeds, as well as the paid land use fees for new construction land paid by the city and county governments. In these aspects, the central government will coordinate a certain percentage of funds.

In the future, the central government will continue to coordinate a certain amount of funds in accordance with current regulations and standards. This ratio will remain unchanged and will not increase the local burden.

(Finish)