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What Will China Do When Land Use Rights Begin to Expire?

49 Pages Posted: 18 Feb 2015 Last revised: 28 Jun 2017

Gregory M. Stein

University of Tennessee College of Law

Date Written: June 21, 2017

Abstract

China does not permit the private ownership of land. Instead, private parties may obtain the right to use property for up to seventy years. These parties own the structures on the land but not the underlying real estate. China’s recent economic boom hinges on the success of its real estate market, but the government has not yet addressed three critical questions it must answer soon: Does the holder of a land use right have the ability to renew that right when it expires? If the holder has this ability, must it pay to renew the right? And, if the holder must pay, how much?

While it is always perilous to guess how the Chinese government will act, it is instructive to examine how the government has behaved in similar situations in the past. To begin with, the Chinese government expends great effort to avoid social unrest and upheaval. In addition, the government frequently sidesteps new problems and waits to see how the private market responds, later endorsing and officially implementing the most successful outcomes. Finally, both government bodies and individual government officials are heavily invested in the real estate market and thus care personally about the answers to these renewability questions. By keeping these facts in mind, it becomes somewhat less hazardous to forecast how China will act as the first land use rights approach their expiration dates.

This Article addresses the renewability of Chinese land use rights. Part II describes the different paths the government might follow as land use rights begin to expire. Part III assesses how the government has acted in the past in an effort to predict which of these different options the government is mostly likely to choose. Part IV pulls back and seeks to locate the resolution of these important questions in the broader context of China’s uncertain movement toward the rule of law.

Keywords: China, real estate, land use rights, renewals

JEL Classification: K10, K11, K33, O17, P3, P31

Suggested Citation

Stein, Gregory M., What Will China Do When Land Use Rights Begin to Expire? (June 21, 2017). Vanderbilt Journal of Transnational Law, Vol. 50, p. 625, 2017; University of Tennessee College of Law Legal Studies Research Paper No. 266. Available at SSRN: https://ssrn.com/abstract=2565563 or http://dx.doi.org/10.2139/ssrn.2565563

Gregory M. Stein (Contact Author)

University of Tennessee College of Law ( email )

1505 West Cumberland Avenue
Knoxville, TN 37996
United States
865-974-6812 (Phone)

HOME PAGE: http://law.utk.edu/people/gregory-stein/

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