A Study On Current Pattern Of China’s Land Finance

In1994, the tax system reform of great importance took place in China–TaxSharing System Reform, for which the core is to establish the division of tax revenuebetween the central and local government. Therefore, the central governmentre-centralizes the fiscal revenue. Meanwhile, the local government falls into trouble dayby day, in which the responsibility doesn’t match with the authority and the capacity.What’s more, with the housing system reform, land system and the official evaluationmechanism, the local government explores a new way to increase fiscal revenue–landfinance. As time goes by, it culminates in the relatively stable pattern. There is no doubtabout the contribution on the revenue increase, economic growth and urbanization fromland finance. However, the hidden danger, the huge risk and the various problems alsohold our attention. This paper thereby makes a research on the concept, causes, pattern,scale, impact and problems of the current land finance pattern with the use of thequalitative and quantitative analysis. Then, the related policy recommendations ontransformation are brought out.The paper has been written as follows. Firstly, the definition of land finance isdiscussed. Secondly, the causes of it including the fiscal reform, the housing system, theland system and the evaluation mechanism are stated. Thirdly, through qualitative andquantitative analysis, the status quo of the current pattern is much more understood.Then, the three main issues of the current pattern are analyzed and summarized. Finally,on the basis of the points above, the relevant policy recommendations are presented.