The cabinet yesterday announced a string of measures to rein in rampant illegal land use, restrict the transfer of farmland for construction, and prevent the overheating of the economy.

According to the State Council notice:

The onus on scrutiny of land use lies with the provincial governments, which will submit cases to the State Council for approval on an annual basis, instead of case by case now.

Local leaders will be penalized if they fail to stop or investigate illegal land sale cases. Officials who violate land supply rules face disciplinary action and prosecution.

To stop local governments from giving land to investors free or at throwaway prices, the central government will set a minimum price, which will vary according to what it is used for.

Officials who sell land at prices lower than the minimum will be prosecuted.

The government will raise taxes from investors for the use of land, which will be used for the protection and development of farmland.

There will be a ban of leasing land from farmers for construction purposes, a back-door tactic increasingly used by some local governments and investors to dodge taxes on land sales and approvals by higher authorities.

To protect the interests of farmers, revenues from farmland sales must first be used to pay for their resettlement and compensation for crops.

If the sale price of any piece of land is not enough to cover the cost of resettling farmers, local governments must pay from their land sale revenues.

Local governments should ensure that farmers who have lost their land are properly trained for new jobs and provided with means to make a livelihood.

Land sale revenues must be incorporated into local budgets so that they can be scrutinized by higher authorities a major departure from the current practice where local governments have total freedom to spend the money as extra-budget revenue.

Zhang Xinbao, a senior official with the Ministry of Land and Resources, said reining in local governments is a major target of the new policy, as "they are actually behind almost all the major cases of illegal land use."

Land sale revenues have become a major source of income for many local governments, Zhang said.

"The new policies are more 'concrete' and 'operational' than ever," said Yan Jinming, a professor with Renmin University of China.

The Ministry of Supervision, in collaboration with the Ministry of Land and Resources and other central departments, will soon launch a nationwide crackdown on irregularities in land supply.

China's economy grew 10.9 per cent in the first half of this year on the back of a 30-per cent growth in fixed asset investment, both the highest in recent years.

In a bid to prevent a possible overheating of the economy, the central bank twice raised the benchmark interest rate this year and the government has clamped down on unauthorized investment projects.

The government believes that illegal land supply is a leading cause of runaway investment.

A survey of 16 cities by the Ministry of Land and Resources last year showed that nearly 50 per cent of new land under development was acquired illegally.

The figure was as high as 90 per cent in some cities.

Xinhua - China Daily

(China Daily 09/06/2006 page1)