The Puzzle of Land Reform in Shenzhen

Within two decades, Shenzhen has become the new Chinese Eldorado, attracting millions of workers and investors, and witnessing an exploding demand for housing and buildable space. Rights to the use of rural land remain clouded by legal chaos as reforms have yet to be finalized.

Who are the real owners of the land in Shenzhen? By declaring 110km2 of the 150 km2 of unused Shenzhen land to be “unfit for construction”, the local government has perhaps unintentionally submitted the land issue to debate, demonstrating an urgent need to unravel the current legal confusion with appropriate reforms.

Following this announcement, local authorities, who officially hold all urban land (rural land being collectively owned by farmers), turned their attention to the 400 km² of rural land surrounding Shenzhen city. The local government plans on “re-appointing” the land, which will essentially mean taking ownership of it. The problem is that the laws regulating property title have been superimposed over the years based on both the policies pursued by both the central government and authorities at lower levels (province, city, district…). The result is a mosaic of land titles issued by various authorities, operating on different principles – for e.g. securities, shares in an organization’s farmland, and/or collectively held property. The farmers are determined not to concede anything, and some even advocate the establishment of private property, arguing that it would end the thriving black market in property titles in Shenzhen.

Local authorities, who earn income from the land they own, do not consider farmland profitable enough, and therefore see it as necessary to reevaluate the land by giving it a new function. Unfortunately, this also often means giving it new owners.