Research On The Selections Of Land Sale Pattern By Local Goverment

Since the late 90’s,Chinese GDP rate has maintained more than 8%.The urbanization rate has increased from 18%in 1978 to 53%in 2012,the high growth of China’s industrial output and the fixed asset investment of the whole society maintain average of 12.89%and 19.11%,a series of data show that China has entered a rapid industrialization,urbanization,rapid development period.With rapid development of industrialization,the city needs a large number of city construction land to support,but in our country,city land which can be used for construction is limited by central goverment,therefore,a large number of land is expropriated to construction land.Chinese urban construction has expropriated 456 square kilometres of land from 1997 to 2000.16097 square kilometres of land is expropriated in the years of 2001 to 2010.According to the regulations "land management law" the relevant provisions of the state,the land expropriation to change for the city construction land should be permitted by local goverments,therefore,in Chinese political centralization system,local goverments become the exclusive monopoly of land supply market,directly determines the quantity,price and land sale pattern.In terms of land leasing,the central government advocates the market way,however,a large number of expropriated land transferring to industrial uses is sold by agreement pattern,and parts of expropriated land transferring to commercial uses is sold by marketing pattern.What’s the reason for the local government selling the expropriated land in segmented market?What is the relationship between the way of local governments transferring land and our political performance appraisal system and tax system?How about the trend for local government selling the expropriated land in segmented market?In order to answer these questions,we establish the theory of monopoly of Neoclassical Microeconomics in market segmentation pricing as the analytical framework,aiming to reveal the behaviour for the local government transfering in industrial land by agreement pattern,transfering in commercial land by market pattern,so as to analyze the related factors of the mechanism of local government land leasing market segmentation differential pricing,then predicting future trend for local government selling the expropriated land in segmented market.In the end,we discuss the impacts between the segmented market pricing with local finance,the sustainability of economic’ growth.Content one:the land elastic demand and the effects of selections of land sale pattern.Theoretical analysis shows that the industrial land demand elasticity is more than commercial land demand elasticity,the local government can obtain higher monopoly profits when they sell industrial land at lower price,and commercial land at higher price.The empirical study shows that,the early stage of industrialization,capital is more scarce resource than the land,the land elastic demand is higher,so the local government uses agreement pattern to transfer the land can obtain higher monopoly profits;In the industrial capital accumulation stage,the land became more scarce resource than capital,the land elastic demand is lower,the local government investing land in commercial use can obtain higher marginal outputs and higher rate of GDP growth.Content two:"wealth","political" incentive and the effects of expropriated land selling by agreement pattern.The empirical study shows that land sold at lower price pattern can achieve both purposes at the same time.For political purpose,local governments selling land by agreement pattern can increase development of manufacturing industry,and the the empirical data support the relationshiip.The number of land selling by agreement pattern in the eastern regions is higher than the central and western regions.Those areas with abundant industrial resources have higher growth rate in land selling by agreement pattern,such as Inner Mongolia,Xinjiang,Shanxi,sichuan.For financial purpose,the empirical results show that the local government using price agreement transferring land will loss the short-term income,but can obtain long-term value-added tax income;Long-term effects of VAT revenue can balance local government short-term loss.Because the price for the eastern region is higher than other areas,even the net loss in eastern areas is higher than the central and western areas,but the eastern region can balance it with the long-term taxes.Content three:"wealth","political" incentive and the effects of expropriated land selling by auction pattern.The empirical study shows that land sold at higher price auction pattern can achieve both purposes at the same time.For political purpose,the more land sold by marketing pattern is,the higher rate of GDP growth is.The exception is the areas with the performance of extreme level of economic development selling land by marketing way is less.One explanation is the most economically developed areas such as Shanghai,Beijing have completed urbanization,for the sale of land quantity is fewer;and less developed areas such as Gansu,Qinghai,because of their remoteness,less population,the demand for commercial land investment is lower,thus granting by auction pattern is less.For financial purpose,the expropriated farmland sold by high-priced auction way can increase the local government budgetary and extra-budgetary revenue.It can bring higher short-term business tax,and the empirical data support the view that land leasing by high-priced pattern can relieve the pressure of local goverment fiscal expenditure.The expenditure of finance in eastern regions is higher than the central and western regions,because the central and western regions obtain more central transfer payments.The demand elasticity of commercial land in eastern region is less than the central and western regions,so the eastern areas gain more budgetary and extra-budgetary revenue than the central and the western regions.Content four:the factors analysis for segmenting land market and predicting the treand of market pricing effect.The empirical study results show that the well developed industrial area is,the less damand for industy is,the market segmentation differential pricing will be reduced,such as Shanghai,Beijing,Tianjin,Zhejiang,Jiangsu,Guangdong,Shandong,Liaoning,Fujian;Those areas with abundant industrial resources have brisk industrial demand,the pricing gap will expand,such as Inner Mongolia,Hebei,Jilin,Heilongjiang,Xinjiang,Hubei,Shanxi,Henan,Chongqing,Hainan,Hunan,Anhui,Sichuan;the higher per capita income level is,the more population is,the commercial service demand is more briskly,the demand for commercial and residential land is rigid,the price for commercial land is more higher,the pricing gap will expand.The higher fiscal pressure is,the higher motivation selling at auction pattern is.The trend for pricing disparity will be inverted U shape,firstly the pricing gap expand with the economic development,then narrowed in the future.The trend for the segmented pricing gap is that economic developed regions in the segmentation market pricing will be gradually reduced with the development of economic level,and the land demand elasticity will be more less,the industrial land price will be more and more higher,the gap will gradually shrink.The future of moderately developed regions,less developed regions segmentation market pricing gap will toward to the trend of the developed areas.Content five:the segmentation market pricing and the effects of local finance,the sustainability of economic growth.Empirical data shows that high-priced auction pattern cause the local government financial dependence on land.The land tax system arrangement determines the current land finance is "heavying extrabudgetary income(land leasing income),lighting budgetary revenue"(sold directly related to the budget revenue),"heavy use,light retain" feature,the result is to increase the land sales incentive of local government,forming on the requisition of land,land incremental expansion of financial growth mode.Once the policy regulation and control of land supply,may bring serious fiscal crisis.Market segmentation differential pricing analysis of the social,the sustainability of economic growth shows that high-priced auction income distribution effect between the housing and the purchase of property buyers,the utility for the house owner is improved,but for the buyer is reduced.Local governments rely on auction revenue as promoting the process of city public investment capital source,the mode of development and promoting the economic growth can’t continue to support the land finance in the future,limitting to the amount of land resource constraints.The economic development relying on land,capital investment(non-technological progress)may be difficult to continue.In the end,we can conclude that Chinese current system of land transferring,local officials performance assessment system and tax system,the selections of land sales pattern is rational choice.The current system of land transferring determines the local government segmenting land market for monopoly profit maximization,the growth of GDP as the main performance evaluation index system is difficult to avoid some areas selling land at lower price,and local fiscal expenditure pressure will cause the local government to expropriate more land for the "money" target.Therefore,changing a single GDP performance evaluation system,expanding the local authority,reducing the local authorities will have impact on Chinese land market.