The Current State and Debate on the Land Contract System in Rural China and A Proposal for Its Reform

Since the 1990s, the guiding principle of “maintaining land allocations regardless of changes in population” 增人不增地、减人不减地 has gradually slowed the allocation of contract land in rural China and resulted in a new generation of rural residents without land contract and management rights. This article places the evolution of this policy in the context of the global expansion of neoliberal property rights theory, systematically reviewing the theoretical debates and practical issues arising from the rigid allocation of land contract and management rights. After reviewing the current situation, this article argues that there is an immediate need for reform of the land contract system based on the principle of “allocating land in accordance with changes in population” 增人增地、减人减地. To address concerns about protecting investments in agricultural land, this study recommends combining insights from local experiences in the practice of the land system with the Harberger Tax mechanism, proposing a new model for the allocation of land contract and management rights. This innovative model builds upon the new practices of rural land allocation since the introduction of the “separation of the three rights” 三权分置 approach in China’s collective land tenure system. It aims to promote the fair allocation of land and protect investments in the same, thereby achieving an organic unity of equity and efficiency. This study shows that an in-depth analysis of the institutional practices involving the land tenure system in local rural areas can help us reassess the theories underlying national policies and provide insights for further improvements in the land system in rural China.