STUDY ON LEGAL ISSUES OF THE URBAN AND RURAL CONSTRUCTION LAND REPLACEMENT: FROM THE PERSPECTIVE OF NEW-TYPE RIGHTS

Sun Jianwei

TABLE OF CONTENTS

I. INTRODUCTION

II. DEFINITION OF URBAN AND RURAL CONSTRUCTION LAND REPLACEMENT SYSTEM

A. The Concrete Connotation of Urban and Rural Construction Land Replacement System

B. Discrimination of Relevant Systems

III. POLICY-BASED PRACTICES OF THE URBAN AND RURAL CONSTRUCTION LAND                             REPLACEMENT SYSTEM

A. Connotations of Policy-based Practices

B. Revision of Chinese Land Legal System Made by Policy-based Practices

C. Institutional Resources in Policy-based Practices

IV. LAND EXPLOITATION RIGHTS OF THE REPLACEMENT SYSTEM

A. Characteristics of Land Exploitation Rights

B. The Relationship between Land Exploitation Rights and Land Indicators

C. Ownership of Land Exploitation Rights in the Replacement

D. Contents of Land Exploitation Rights in the Replacement

V. LAND DEVELOPMENT RIGHTS OF THE REPLACEMENT SYSTEM

A. The Connotation of Land Development Rights

B. Land Appreciations in the Replacement

C. The Construction of Land Development Right System in the Replacement

VI.  THE LAND USAGE OF THE REPLACEMENT SYSTEM

A. The Relationship between the Homestead Tenure and the Collective Ownership

B. The Nature of the Homestead Tenure

C. Involved Rules of the Homestead Tenure in the Replacement

VII. CONCLUSION

Faced with the needs of farmland protection and urbanization, many areas have carried out urban and rural construction land replacement under the existing land system, which gives birth to land exploitation rights and land development rights. Land exploitation rights belong to landowners and they are sources of changes of land use. Based on that, land development rights determine the attribution of relevant appreciation. Appreciation of homestead where indicators are delivered belongs to homestead users while appreciation of other construction land is shared by local government, collective and all members. In areas where indicators are received, collective members have priority in homestead exploitation rights. The local government can enjoy the appreciation. Appreciation from other rural construction land should be shared by the collective, collective members and local government. Asset gains from collective resources belong to the collective. After replacement, homestead users’ rights on land remain constant or turn into rights to use urban construction land which can renew automatically and freely. Non-collective members can only be assignees of superficies whose term is shorter than construction lands for urban housing.

I. INTRODUCTION

As China is making overall plans on urban and rural development, urban and rural construction land replacement is carried out to balance farmland protection and urban development as a test reform. It means that at peasants’ willingness, the local government will put rural construction land and farmland into intensive use in order to obtain indicators of urban and rural construction land and propel the reform of the rural land system. Although the reform has rocked the system of rural collective construction land, which is regulated by the Law of Land Administration of the People’s Republic of China (hereinafter referred to as the Law of Land Administration), it is not a subversive reform but rooted in our traditional system of rural collective land. It just adjusts the existing system gradually. Only when we notice the strong internal connection among urban and rural construction land replacement and the traditional system of rural construction land and land expropriation system as well as going through the historical background of the system from the perspective of path dependence, can we grasp the content of the system from the overall view. Unfortunately, existing researches ignore the organic connection between the reform and the traditional system. As a result, they fail to grasp the system fully and comprehensively, which leads to some misunderstandings. However, the author thinks that urban and rural construction land replacement is designed to deal with the intensive use of the construction land, farmland protection, supervision of the local government’s behavior, guarantee of peasants’ rights and other issues under the existing system of rural collective land. The reform deepens and develops the existing system rather than deny it completely.

According to relevant regulations, China’s collective construction land can only be used as urban construction land after the state has converted it into state-owned land through the expropriation and transferred it. With the development of the revenue-sharing reform, the local government begins to use the land for profits. On the basis of coercive land expropriation, different strategies are formulated for assignment according to the usage of the land and the fees are used to build cities. As a result, the scale of Chinese cities has expanded dramatically and the pressure on farmland protection has intensified. At the same time, the demand for housing land of rural residents in China never decreases. Under the extrusion of urban exploitation and rural construction, the farmland acreage declines sharply. Although China has adopted strict measures on farmland protection, it still did not reverse the declining trend of farmland acreage. The effectiveness of traditional system of farmland protection is not significant, and the situation of farmland protection is disappointing.

In consequence, the central government employs multiple channels to standardize the land expropriation for the purpose of protecting farmland effectively and preventing the local government from illegally occupying land. For example, the Law of Land Administration revised in 1998 has improved the management system of land indicators, managing the total amount of land indicators and the specific space of land usage. Moreover, farmland requisition-compensation balance is established. It requires subjects who occupy farmland to reclaim farmland with the same amount and quality as the occupied land. According to that, indicators of construction land and farmland requisition-compensation balance become preconditions for the local government to expropriate farmland, and both are indispensable. Although the Law of Land Administration imposes strict restrictions on the land expropriation, it still reserves a certain space for the local government. According to relevant regulations, the local government can use rural construction land intensively and use saved land indicators to offset relevant indicators needed for the land expropriation in urban construction. The provision links indicators of urban construction land with that of rural construction land, and in essence, the main target of rural land expropriation is transformed from farmland to rural construction land.

The deviation and transformation from urban construction land indicators to rural construction land stem from the central government’s guidance on the land expropriation for the purpose of farmland protection as well as the conscious and interest-oriented choice of the local government in the land expropriation. Since the revision of the Law of Land Administration in 1998, the local government must own both indicators of construction land and that of farmland requisition-compensation balance when it expropriates farmland on the basis of the overall plan of land usage. In some areas, there is no doubt that indicators of construction land and farmland requisition-compensation balance are pretty rare and precious. Besides, rural construction land represented by land in rural residential area also has problems such as low utilization rate. It requires intensive and effective utilization. It objectively opens up new space for the local government to take advantage of rural construction land reform to obtain land indicators needed for urban construction. The testing reform of rural collective construction land has softened the traditional system of construction land indicators. Comparatively speaking, it is difficult for the traditional system of distributing construction land indicators from top to bottom to reflect the various demands for land usage in different areas. The testing reform enables the local government to invest construction land indicators during urban and rural construction land replacement into urban construction so that the demand for land in urban construction can be satisfied. What is more, since rural construction land does not belong to farmland, it is not necessary to obtain indicators of farmland requisition-compensation balance when it is expropriated. Therefore, the system has broadened the space for the local government to expropriate land to a certain extent, so that the supply and demand of land resources are flexibly matched, and thus it is favored by the local government.

From this point of view, the testing reform of rural collective construction land responds to the central government’s policy of farmland protection, and at the same time satisfies the needs of the local government for indicators of construction land and farmland requisition-compensation balance during land expropriation. It deepens and develops the traditional system of land expropriation. However, measures of the testing reform have certain problems in safeguarding peasants’ rights and interests on collective construction land and protecting peasants’ land appreciation. All those problems call for solutions provided by relevant regulations. Based on that, this paper starts with relevant policy practices of urban and rural construction land replacement, and tries to clarify relevant legal relations and main rights involved in the replacement system in order to answer relevant questions properly.

II. DEFINITION OF URBAN AND RURAL CONSTRUCTION LAND REPLACEMENT SYSTEM

A clear conception of urban and rural construction land replacement is the prerequisite for the in-depth study of the system. This paper attempts to define the system clearly from the inherent logic and mechanisms of the system. Referring to the system of urban and rural construction land replacement, many areas have formed a series of systems such as land arrangement, homestead replacement, and connection between urban construction land increase and rural construction land decrease. This paper will also sort out the connotation of relevant systems and explore the relationship between urban and rural construction land replacement and related systems.

A. The Concrete Connotation of Urban and Rural Construction Land Replacement System

The special problems in the urbanization process in China do not lie in the shortage of urban construction land, but the enormous pressure on land resources with the simultaneous expansion of urban and rural construction land. With advance of urbanization, the rural population floods into cities. Rural construction land does not decrease, but shows an increasing trend instead. However, the increasing rural construction land has not been used efficiently. Rural construction land has a low utilization rate. Hollow villages, idle homesteads are found in abundance. There is a lack of management of rural construction land, which leads to multi-house on one household and excessive homestead. Unreasonable layout of rural construction land also results in the waste of land. That is the heart of the contradiction between people and land, which is caused by urbanization. In response to the problem, linking the increase of urban construction land with the reduction of rural construction land is of great benefit to farmland protection and urbanization development.

Based on that, this paper defines urban and rural construction land replacement as the reform and exploration of transferring land or land indicators from land arrangement balance to the urban planning area by improving the utilization efficiency of the rural construction land with the homestead as its mainstay. Regulating and reorganizing rural collective construction land lead to the balance of some lands. These lands are resources generated by opening up the source in addition to land indicators issued by the central government. Using them does not take up extra land indicators. For the land in the planned area, after deducting the resettlement housing required by peasants and the land for public facilities, the remaining land or land indicators can be directly used for urban construction. The land out of the planned area should be reclaimed as farmland, and land indicators without resettlement housing required by peasants shall be used to expropriate land in the planned area. In this way, farmland requisition-compensation balance can be achieved at the time of saving indicators of the construction land. 

With the help of the government’s visible hand, urban and rural construction land replacement transfers rural construction land and changes the way peasants live in essence. The system revitalizes rural construction land and contributes to the efficient use of land resources. In terms of specific ways of the land allocation, allocating land resources by administrative means becomes a feature of the system. The local government adopts urban and rural construction land replacement under the impelling force of the relevant land system and regional development in economy and society. The primary purpose is to obtain indicators of urban construction land that are indispensable for urban development and construction. Therefore, the system is a little administrative since its birth.

B. Discrimination of Relevant Systems

Related to urban and rural construction land replacement, land arrangement, homestead replacement and connection between urban construction land increase and rural construction land decrease are all systems which use the land efficiently, increase indicators of urban construction land and protect farmland. Sorting out concepts and interrelationships of these systems will help to further study and explore relevant issues.

1. Land Arrangement. — Land arrangement, also known as land remediation and land adjustment, has a very rich connotation. Some scholars believe that land arrangement is the measure to re-plan and adjust the way, structure and relationship of land usage in order to achieve goals of land usage in accordance with requirements of social and economic development. Its denotation covers the arrangement of agricultural land and construction land, and the focus is on the arrangement of agricultural land. The arrangement of agricultural land includes the comprehensive construction of farmland structure adjustment, the merging of rural settlements, the reclamation of abandoned land, the determination of land ownership, environmental improvement, ecological maintenance and so on. In this sense, land arrangement is an extremely broad concept. The arrangement of agricultural land covers almost all contents of the current and future systems of rural land arrangement in China, and contains the rural land, especially the main content of rural construction land reform.

The Law of Land Administration begins with objective needs of farmland protection and makes clear provisions on the land arrangement system.The land arrangement in the provision includes the arrangement of agricultural land and rural construction land. However, according to the provision, the arrangement of two types of land should be subject to the goal of farmland protection. The urban and rural construction land replacement system discussed in this paper also undertakes the mission of farmland protection. In this regard, the two have the same institutional goal. However, provisions of the Law of Land Administration focus on the value of farmland protection. Its basic idea is protecting farmland not ensuring construction while the latter focuses on obtaining land indicators that are urgently needed for urban construction. Although the urban and rural construction land replacement system contains the value of farmland protection, its driving force for the reform is nothing in comparison of the motivation brought by the actual demand for land indicators.

Agricultural land arrangement is the beginning of China’s rural land arrangement system. Since then, the system has gradually extended to the arrangement of rural construction land and rural construction land replacement. The Law of Land Administration revised in 1998 improves the management system of construction land indicators and establishes the system of farmland requisition-compensation balance to achieve farmland protection. Under the urgent need for land in urbanization construction, relevant normative documents stipulate the policy of construction land indicator replacement and the offset policy of agricultural land arrangement indicators clearly. The former allows land indicators from the arrangement balance of rural construction land to be offset of construction land indicators with the same area, while the latter allows the local government to obtain indicators of farmland requisition-compensation balance within 60 percent of the vacant land after arranging the agricultural land. In addition, according to documents of the former Ministry of Land and Resources, obtaining construction land indicators through land arrangement within the offset policy of agricultural land arrangement indicators is allowed. According to that, the agricultural land arrangement is put into practice widely in many areas. However, the agricultural land arrangement has caused many problems in practice. For example, the local government expands the offset standard of indicators of homestead replacement and arrangement during the agricultural land arrangement arbitrarily. Faced with problems arising in practice, the General Office of the State Council issued a document to prohibit obtaining construction land indicators through agricultural land arrangement. As a result, the local government only can achieve farmland requisition-compensation balance through agricultural land arrangement.

2. Homestead Replacement. — The object of rural land arrangement turns into rural construction land from agricultural land, and homestead replacement can be regarded as the general name of rural construction land arrangement. Homestead replacement is the key to the replacement of urban and rural construction land. To catch the key, the system of rural construction land replacement can be revitalized. The homestead is the place where peasants settle down and live. The homestead system shoulders the important function of housing security. The homestead tenure has two possible aspects. One is housing security, focusing on the usage value and social attributes of the land. The other is the property transfer, focusing on the exchange value and economic attributes of the land. Historically, the most important goal of China’s homestead system is to provide housing security for peasants. Even with the development of social economy, the housing security of the homestead system weakens, but as for the function of the homestead system, it still tilts toward social security attributes rather than property attributes of the homestead. Therefore, the legal system of the homestead is significant to the protection of peasants’ rights and interests, the development of agricultural economy and the stability of rural society. The homestead replacement is the main form of urban and rural construction land replacement.

However, as for Chinese law on rural land, regulations of the homestead are comparatively extensive, and there is no systematic and clear legal basis for the homestead replacement. In fact, the homestead replacement has only stayed at the level of the local governmental practice so far. Its legitimacy remains questionable. It should not be overlooked that problems such as ‘pushing peasants to high rise’ and unfairness in the compensation and distribution of benefits never end in the process of the homestead replacement practice. For this reason, after the introduction of the connection between urban construction land increase and rural construction land decrease, the homestead replacement practice has been incorporated into the institutional framework of the connection between urban construction land increase and rural construction land decrease. The homestead replacement and other related practice are standardized and adjusted by the connection between urban construction land increase and rural construction land decrease.

3. Connection between Urban Construction Land Increase and Rural Construction Land Decrease. — The former Ministry of Land and Resources has defined the system of the connection between urban construction land increase and rural construction land decrease in normative documents. The system is based on the overall plan of land usage, pegging out a certain area of rural construction land as a demolition area and reclaiming it as farmland. At the same time, it pegs out part of the land with the same area as the former as a new construction area for the urban construction. The two types of land jointly form a project area for demolition and construction. On the basis of ensuring the balance of various types of land in the project area, the system will reorganize and reclaim the land in the demolition area. What is more, the system will carry out urban construction in the construction area to improve the usage efficiency of construction land, expand the area of available farmland, improve the quality of farmland finally optimize the spatial layout of urban and rural land and achieve urban and rural balance.

Historically, the relationship between the urban and rural construction land replacement and the connection between urban construction land increase and rural construction land decrease is pretty complicated. The two have a sequence of time, and relevant practices vary from place to place. According to scholars’ investigation, the system of the connection between urban construction land increase and rural construction land decrease mainly comes from the creative application of the system of construction land indicators in small towns, which is achieved by the government in Pi County, Chengdu. However, the author’s research shows that as early as the 1990s, Shanghai began to balance indicators of urban and rural construction land through the arrangement of rural construction land. In addition, various explorations are carried out in many provinces such as Zhejiang and Tianjin. Although there are many forms of urban and rural construction land replacements in different places, they have the same purpose. In essence, they are all designed to resolve conflicts between the food security and needs for land during the urban construction. There exists an organic connection between the urban and rural construction land replacement and the connection between urban construction land increase and rural construction land decrease.

The practice of homestead replacement is a prelude to the connection between urban construction land increase and rural construction land decrease. The connection between urban construction land increase and rural construction land decrease is the product and summary of practical experiences of homestead replacement in various places. On the basis of the local practice, the former Ministry of Land and Resources has processed the replacement policy of construction land indicators and the offset policy of agricultural land arrangement indicators as the core content of the homestead replacement, laying a solid institutional foundation for the connection between urban construction land increase and rural construction land decrease. The connection between urban construction land increase and rural construction land decrease develops from relevant policies on the basis of the local practice in many places gradually. In 2005, the former Ministry of Land and Resources issued a document to launch a test project of the connection between urban construction land increase and rural construction land decrease, confirm and standardize institutional innovations of local governments about rural construction land reforms.

The replacement policy of construction land indicators and the offset policy of agricultural land arrangement indicators speed up the development of land arrangements in numerous places, establishing the institutional basis for the introduction of the system of the connection between urban construction land increase and rural construction land decrease. However, due to many problems in the implementation of these policies, the state denies the practice of obtaining construction land indicators through agricultural land arrangements. As a system supported by the state, the connection between urban construction land increase and rural construction land decrease has gradually become the legal basis for the urban and rural construction land replacement. However, the implementation and development of the connection between urban construction land increase and rural construction land decrease do not replace the homestead replacement in the present stage. On the contrary, local governments are still carrying out homestead replacements while implementing the connection between urban construction land increase and rural construction land decrease. They even carry out related practices of homestead replacements under the cloak of the connection between urban construction land increase and rural construction land decrease. The reason why local governments are so biased towards homestead replacements is that land indicators saved within the framework of the connection between urban construction land increase and rural construction land decrease are difficult to meet the needs of some provinces and cities for construction land indicators, which prompts them to open up a way to homestead replacements. Meanwhile, the land acquired through the connection between urban construction land increase and rural construction land decrease can only be used in the project area, but cannot be flexibly deployed in the province. During the implementation, the approval procedure for land enlargement makes it difficult to resolve problems in practice quickly. In this regard, the system of the connection between urban construction land increase and rural construction land decrease is correspondent with the law, but the legality of the homestead replacement system is questioned. As mentioned earlier, problems that occur in the practice of the homestead replacement system infringe peasants’ rights and interests on the land, so that relevant departments are more inclined to integrate it into the system of the connection between urban construction land increase and rural construction land decrease. Compared with the land arrangement and homestead replacement, the connection between urban construction land increase and rural construction land decrease provides a more solid legal basis for the urban and rural construction land replacement. The purpose to employ the urban and rural construction land replacement in this paper is to regulate various forms of the construction land replacement in different places by the system of the connection between urban construction land increase and rural construction land decrease. However, there are also many defects in the system of the connection between urban construction land increase and rural construction land decrease. In particular, many places obtain construction land indicators besides non-agricultural construction land indicators that are allocated by the state from top to bottom in the name of the connection between urban construction land increase and rural construction land decrease in reality. Therefore, the author calls this kind of practice as the urban and rural construction land replacement generally.

III. POLICY-BASED PRACTICES OF THE URBAN AND RURAL CONSTRUCTION LAND REPLACEMENT SYSTEM

The policy, as the substantive origin of Chinese civil law, plays an important normative role in civil legal relationships. In the current evolutionary process of the reform in our country, the policy-based practice is an important way and valuable institutional resource for the birth of land legal systems. After exploring connotations of policy-based practices, identifying the role policy-based practices play in Chinese land legal systems and clarifying the specific content of policy-based practices, we can fully understand the formation mechanism of the urban and rural construction land replacement system and provide appropriate solutions for specific problems in reality.

A. Connotations of Policy-based Practices

Policy-based practice is the behavior pattern that refines practical experiences into policies and further promotes them to become legal systems. It makes a tentative or gradual breakthrough of current legal systems to solve problems brought by existing systems in practice according to specific circumstances. In China, the most typical policy-based practice is the formation of the household contract responsibility system. Under the people’s commune system with the land collectively owned and used, peasants in Xiaogang Village of Anhui Province were forced to carry out the practice that the land was owned by the collective but used by peasants for their livelihoods, which eventually broke the original pattern and led to the local and central policy of the household contract responsibility. The policy finally evolved into a legal system of the rural land across China.

Generally speaking, China is experiencing double transformations: in terms of the social production, China must realize the leap from the agricultural society to the industrial society and in terms of the economic system; we must achieve the transition from a planned economy to a market economy. In the social and economic context, Chinese democratic government by law faces precious opportunities. However, we cannot ignore that the transformation not only contributes to our democratic government by law, but also limits the process of Chinese democratic government by law to some extent. Since the realization of the transformation must meet certain conditions and overcome various obstacles at the institutional level, Chinese democratic government by law must be carried out step by step, and cannot be done overnight. The gradual path of democratic government by law determines that China needs to take advantage of existing institutional resources or systematical resources to promote institutional reforms or innovations, but such an institutional innovation itself may break through existing provisions. Chinese democratic government by law is undergoing the negation of process constantly under the influence of the contradiction. 

B. Revision of Chinese Land Legal System Made by Policy-based Practices

The legal system of the land management is in the framework of Chinese traditional political systems. Existing political systems have a far-reaching impact on land systems. As overall characteristics of Chinese system reforms, tentativeness and gradualness are also distinctive features of the land management system. Urbanization requires a large amount of lands, and since the founding of the country, China has been employing land expropriation systems to meet the needs of urbanization for lands. According to relevant regulations, after being expropriated and transferred, the collective construction land can be used for the urban construction. A system of paid use of urban land allows local governments to obtain large amounts of income from the land. Influenced by the nature of the economic man, local governments are more motivated to expand the scope of cities, and it is difficult for the original approval system of land expropriations to restrain it effectively. At the same time, there are no clear provisions about the transfer of the collective construction land and the non-agricultural land. The development of the urban land market and the interest gap between urban and rural land drive the rural land to flow into the urban land market spontaneously. In the absence of specific rules for transfer, the transfer is processed in disorder through multi-house on one household, fewer approvals and more constructions and illegal sales.Under the dual pressure of urban and rural construction land expansion, the farmland area in China drops dramatically. On the one hand, in order to solve the above problems and protect food security, the central government tries to reform the legal system of the land management, preventing local governments from occupying farmland blindly by issuing ‘freezing orders’. On the other hand, in response to requirements of the urban construction, the central government allows many places to conduct institutional explorations in terms of saving the construction land and protecting farmland. Guided by the central government, some local governments begin to try to obtain indicators of the urban construction land through the land management. That attempt is recognized by the central government. Subsequently, at the time that relevant documents freeze the farmland occupation of non-agricultural construction projects, local governments are also encouraged to revitalize the stock of land resources on the basis of realizing the dynamic balance of total farmland. At this point, the exploration of local governments changes to the policy from the practice. During the revision of the Law of Land Administration in 1998, relevant practical experiences were further raised to a national law, achieving a leap from the policy to the legal system.

It can be seen that faced with the lack of regulations on the expansion of the construction land, local governments’ practices and explorations have revised the traditional land system, having a profound impact on the future land legal system and practice. The most important point is that the urban and rural construction land replacement can provide land indicators for urban constructions on the premise that the total amount of the farmland is fixed. The subsequent question is how to put the system into practice. As mentioned above, the Law of Land Administration in 1998 strengthened not only the control of the total used land, but also the management of land usage space by the indicator management system. It also required subjects who occupied the land to maintain the balance between the occupied farmland and the reclaimed farmland through the system of the farmland requisition-compensation balance. Given that the urban and rural construction land replacement follows the traditional management model, it still manages the land usage by indicators. At the same time, the system has innovated the traditional system to a certain extent, concentrating on the acquisition and trading of construction land indicators and indicators of farmland requisition-compensation balance. Specifically speaking, local governments can increase existing resources of the construction land, especially the utilization rate of the rural construction land, and invest the remaining indicators in the process into the urban construction. The intensive use of the construction land will further expand the source of non-agricultural construction land quotas or indicators while complying with requirements of farmland requisition-compensation balance. The resulting indicators of the construction land and farmland requisition-compensation balance can also be traded in the province. In short, framed by spirits and principles of the traditional land management system, relevant practical explorations of the urban and rural construction land replacement are innovations and breakthroughs of traditional systems on the basis of specific problems in practice.

C. Institutional Resources in Policy-based Practices

The policy-based practice of the urban and rural construction land replacement becomes the foundation of the future system of the urban and rural construction land replacement. Its practices, institutional ideas and set rules that have political implications may also be absorbed by the future legislation. This paper tries to list some examples from relevant policy-based practices and explore the specific content and logic.

1. The Classified Distribution and Offset of Construction Land Indicators. — Under the background of principles of the farmland dynamic balance and the system of the land usage control, China has gradually established an indicator management model for land usage since the 1990s. Until now, the model is still feasible. The system of the land arrangement and replacement solves the problem of insufficient land for the local construction. Its practical significance is very obvious. However, the problem of the system is whether land indicators resulting from the land arrangement or replacement can be classified according to their nature and offset into construction land indicators.

There is no doubt that indicators brought by the construction land arrangement balance can be directly offset into construction land indicators without the farmland requisition-compensation balance. Nevertheless, the central policy has changed on whether farmland indicators obtained by the agricultural land arrangement can be offset to construction land indicators. At the beginning of the implementation of the farmland requisition-compensation balance system, land indicators from the agricultural land arrangement balance can be offset into indicators of the farmland requisition-compensation balance or the construction land. Due to the high cost of the construction land arrangement, the local government is not willing to the arrangement of the construction land and it is more inclined to obtain construction land indicators through the agricultural land arrangement. However, due to serious problems exposed by the system in practice, the General Office of the State Council issued normative documents to prevent local governments from offsetting non-agricultural construction land indicators with land indicators from the agricultural land arrangement in 2007. The regulation aims to guide local governments to regard the rural construction land rather than the agricultural land as the object of the land replacement in order to meet the demand for land for urbanization. It can be seen that in the process of the urban and rural construction land replacement, the central government and the local government hold different value positions and concepts respectively. The reform and collision of such a system also provide institutional resources for the urban and rural construction land replacement and the rural construction land development.

2. Conflicts on Land Nature and Solutions. — The urban and rural construction land replacement may involve the homestead tenure and the construction land tenure of peasants’ housing. The former is an indefinite right, while the latter has a statutory time limitation. How can these two kinds of lands with totally different nature be replaced? In particular, after indigenous rural residents replace the original homestead tenure with urban houses, should the residents pay land transfer fees for their housing bases if their construction land tenures expire? There are two methods to solve the problem in practice: the first method focuses on the attribute of the homestead tenure, and advocates turning it into the right with a fixed term and determining the term with reference to provisions on the construction land tenure of urban commercial housing. The second method is from the perspective of property rights. It holds that the housing base tenure of indigenous rural residents can be considered as the extension of the original homestead tenure in right bundle and the spatial scale after the replacement, thus provisions on the term of the land tenure can be canceled after the replacement under the premise that the dual pattern of the land ownership is maintained. In this regard, we can make experiments within a specific time and space. After the conditions are ripe, they can be further raised into law. These two methods are reflected in practice everywhere.

3. The Role and Regulations of the Local Government.— In the process of the urban and rural construction land replacement, local governments play an important role, but there also exist dangers of infringing on peasants’ rights and interests on the land at the same time. As for the role of local governments, we should make a correct judgment based on the rational analysis and evaluation. At present, there is a view that China should completely rule out the control of the land system by local governments and fully implement the private ownership of the land in the scholastic circle. That proposal does not capture the key to the issue.

First of all, the leading role of local governments is determined by the way of Chinese institutional reforms. It is because China pursues a government-orient reform model that China’s reform and opening up can achieve remarkable results. The reform of the rural collective construction land system without the government may be eroded by capitals, and the achievements may also be captured by the elite or the class in power. Secondly, from the perspective of economics, the urban and rural construction land replacement is the strategic public goods that relates to interests of all parties. Its cost is relatively high. It is difficult for rural collective economic organizations and peasants to obtain corresponding capitals. Rural collective economic organizations lack motivations to launch the urban and rural construction land replacement. Therefore, the government should coordinate country sides and cities to achieve a balance of interests of all parties. Thirdly, in terms of the allocation of rights on the collective land, the subject of collective ownership of the rural land is uncertain and ambiguous. If the local government renounces the dominance of the collective construction land replacement, it will be difficult to prevent the collusion between the capital and the elite of rural collective economic organizations, and infringements or disguised infringements of rights and interests of collective members on the land through various channels. Today, as traditional social relationships commercialize continuously, we should be more vigilant about that. Finally and most importantly, the rural collective construction land replacement only attempts to solve negative influences of the traditional land expropriation system, and it is the result of the evolution of the existing land expropriation system through the path dependence model. The policy-based practice of the rural collective construction land replacement is inextricably linked with the original land expropriation system, which is an acceptance and abandonment of the traditional land expropriation system. Therefore, the role of local governments in the policy-based practice of the collective construction land replacement cannot be ignored.

Nevertheless, it does not mean that local governments can violate the law arbitrarily in the policy-based practice of the collective construction land replacement. Promoting reforms should not go out of the track of the democratic government by law. Legislation, law enforcement and judicature should follow requirements of the democratic government by law. Certain restrictions should be imposed on the behavior of local governments in accordance with the law. In particular, it is necessary to investigate and stop the practice of the collective construction land replacement of local governments which is obviously illegal and carried out for the purpose of obtaining construction land indicators. It is particularly important to strictly regulate the behavior of local governments by summarizing practical experiences, especially in the process of the collective construction land management or reforms. In this regard, the central government has begun to strengthen the administrative control and guidance on local governments. Above all, the central government should regulate the illegal behavior of local governments through the reform of the management system, such as implementing the vertical leadership of competent departments on territorial resources below the provincial level, creating a land supervision system, emphasizing the administrative accountability system,  regulating testing projects of the homestead replacement in various places by the policy of the connection between urban construction land increase and rural construction land decrease and so on.

IV. LAND EXPLOITATION RIGHTS OF THE REPLACEMENT SYSTEM

In the process of the construction land replacement, it is often necessary to transfer land indicators cross regions. The academic community usually regards that as a land exploitation right transaction in a theoretical sense. Land exploitation rights are gradually divested from the ownership in the process of the national control on the land usage, generated, developed and shaped as a new type of usufructs. They are closely linked with land planning rights and land indicators, and there are also differences. In this paper, it is believed that in the process of the replacement, peasant collectives and all members enjoy land exploitation rights, including prior exploitation rights, rights to transfer the balance of the land after the arrangement and so on.

A. Characteristics of Land Exploitation Rights

The so-called land exploitation rights are the rights to diversify characteristics of the land and then use the land. In the process of the urban and rural construction land replacement, the author mainly defines the right according to changes of land characteristics when the rural land is turned into the urban construction land and improvements in using the land intensively. There are many debates in the academic circle about characteristics of land exploitation rights. Some think that they are private rights while others consider them as the public power. There is also a compromised view that they have dual attributes. This paper contends that land exploitation rights should be defined as a new type of usufructs.

First of all, although the land exploitation right system has some factors of the state management, it does not prevent the land exploitation right from becoming an independent private right. Land ownership is the source of land exploitation rights, and the social obligation of the ownership is the theoretical background of land exploitation rights. In modern times, many countries gradually recognize the theory of the socialization of the ownership and regulate the usage of the land space by legal systems such as planning. But owners’ social obligations also have a certain scope and boundary. The limitation provides the space for the formation and development of land exploitation rights. Land exploitation rights arise and develop in the context that the state controls the land usage and exercises land planning rights. But land planning rights are not origins of land exploitation rights. Land planning rights are restrictions on the ownership. Only when planning rights are combined with the ownership, can land exploitation rights arise. The essence of land exploitation rights does not come from land planning rights, but from the ownership. In the legal sense, the land exploitation right is the justified basis of the land planning right. Land planning rights contain restrictions on the land ownership, and the object of the restriction is what land exploitation rights involve. Regarding the land exploitation right as an independent property right helps to protect rights of land owners and provide an adequate and justified basis for land planning rights.

In other words, the land exploitation right belongs to a new type of usufructs in real rights. First of all, as the subject of land exploitation rights, the land exploitation capacity meets requirements of the law on the object of property rights. In the traditional property law, the real estate ownership is a kind of flattening rights. Pegging out the plane scope of the ownership is enough to settle the dispute. However, the development of technologies and people’s increasing demand for the land usage lead to the expansion of the land space usage and three-dimensional land rights. Land exploitation rights are set according to land exploitation capacities. Land exploitation capacities can be independent and specific by means of certain measurement and calculation techniques, which makes the establishment of property rights possible. At the same time, land exploitation capacities indicated by exploitation rights are scarce and valuable. Land exploitation rights come from the compensation to the right holder after restricting the land ownership. The existence and strength of exploitation rights are directly related to the income obtained by the land owner. The transaction of exploitation rights may also create the appreciation space for the corresponding land ownership or the construction land tenure. In this regard, land exploitation capacities meet requirements of the law on the object of property rights. Land exploitation rights are rights to govern and control exploitation capacities exclusively. Rights of the land exploitation right holder on specific land exploitation capacities can be known through the registration system and other systems, and the exploitation right holder can defend against the unspecified third party. Therefore, land exploitation rights are absolute rights and should be attributed to the realm of property rights.

In addition, land exploitation rights have essential elements of usufructs. The core content of usufructs points to the use value of the subject matter. Land exploitation rights are highlighted through systems of the real estate usage in China, such as the land usage control and urban and rural planning. They involve the usage intensity and the actual usage of the real estate, and can adjust the land usage. Right holders are entitled to use exploitation capacities on the specific land, obtain benefits and independently dispose land exploitation rights without transferring the land ownership. As a result, land exploitation rights have the essential core of usufructs which is targeted to objects’ use values and specific competences such as possession and use. Land exploitation rights should be regarded as rights to use and earn benefits in usufructs. At the same time, it should be noted that as usufructs, land exploitation rights have unique attributes, which are different from traditional usufructs. Traditional usufructs emphasize their functions of restricting the ownership to realize the usage and appreciation of objects while land exploitation rights are highlighted in the overall context of land usage control. They are mainly results of social obligations of land right holders.

In the process of the urban and rural construction land replacement, the introduction of land exploitation rights has special significance. The urban and rural construction land replacement requires the centralized usage of the rural construction land and the replacement of indicators generated by the land balance with construction land indicators to achieve the goal of protecting farmland and saving land resources. In the process, traditional ownership theories are not enough to solve new problems of allocating land space resources. The introduction of land exploitation rights will enrich Chinese systems of rural land rights and provide a right basis for land usage changes in the replacement process.

B. The Relationship between Land Exploitation Rights and Land Indicators

In the process of the urban and rural construction land replacement, demands of all parties are centered on land indicators. It can be said that the land indicator is the core issue in the reform of the urban and rural construction land replacement. Theoretically, legal issues of land indicators are usually categorized into land exploitation rights in the academic circle, and relevant legal issues about land indicator transactions are studied from the perspective of land exploitation rights. The author believes that the opinion and idea are appropriate from the overall view, but we should also notice that there is a realistic difference between land indicators and land exploitation rights.

It is undeniable that the practice of the urban and rural construction land replacement is similar to land exploitation right transactions. From the perspective of land indicators, in the process of the urban and rural construction land replacement, we use land indicators of the rural construction land balance intensively, and convert them into construction land indicators required by urban constructions. The object involved in the transaction process is not the specific land, but similar to quotas of the exploitation and construction or exploitation capacities. In fact, land indicators in the urban and rural construction land replacement and land exploitation capacities in the exploitation right transaction can correspond to each other. From the perspective of land exploitation capacities, land indicators can be used as the source of exploitation capacities to some extent. The system of the urban and rural construction land replacement enables local governments to take a different approach beyond allocated indicators in the national plan, and provide construction land indicators for the urbanization by using the existing rural construction land economically. The system of the urban and rural construction land replacement gives land exploitation capacities in China dual sources: one is the indicated indicator in the national plan and the other is the land indicator of the rural construction land balance after the arrangement. Consequently, land indicators are closely related to land exploitation rights.

However, there are also differences between China’s land indicator system and land exploitation rights abroad. Both are subject to their respective historical backgrounds and have completely different connotations. The land indicator management system is a policy adopted by the state to cope with the situation in which urban and rural construction lands increase and occupy the farmland meanwhile, protect the farmland and balance the contradiction between the urbanization and the farmland protection. Land indicators in the urban and rural construction land replacement system have become regulatory tools for local governments to explore potential construction land resources under the pressure of the farmland protection. Due to differences in the land exploitation intensity, the land exploitation right system abroad is designed to compensate landowners whose rights are restricted.

In essence, above differences between land indicators and land exploitation rights reflect diverse modes of exploitation right allocations respectively. China’s present land indicator management model belongs to the administrative allocation mode of exploitation rights, while the land exploitation right system abroad embodies the market allocation model of exploitation rights. Therefore, the land indicator system in the process of the urban and rural construction land replacement in China is different from the land exploitation right system abroad. Turning the administrative allocation of exploitation rights to the market allocation will face many difficulties. However, the practice of the urban and rural construction land replacement has shown the marketization tendency of the development right allocation to varying degrees. It helps to achieve the convergence and integration of indicator and development right transactions and the goal of the indicator transaction marketization in the process of the urban and rural construction land replacement.

C. Ownership of Land Exploitation Rights in the Replacement

Recognizing landowners’ rights to exploit and utilize the land is the premise of the national management on the land exploitation and utilization of private entities. In the comparative law, the United States, Germany and other countries all adopt the legislative model in which exploitation rights belong to owners. Since land exploitation rights are results of limited land ownership, in order to fully protect interests of right holders, the author believes that land exploitation rights should be attributed to land owners.

China’s urban and rural construction land replacements mainly involve the rural construction land. According to relevant provisions of the Constitution, peasants collectively enjoy the ownership of the rural construction land. About the ownership and utilization of the land, the collective and its members establish a legal structure which is similar to the co-ownership of the village community in the Germanic law. Collective members enjoy the collective land ownership in the collective name, and their rights are gathered to form the overall collective ownership of the land. Therefore, determined by the ownership structure, we should insist that the collective and its members enjoy land exploitation rights in the process of the urban and rural construction land replacement.

However, China’s present Law of Land Administration restricts the exploitation and utilization of the rural land. According to its regulations, the rural land can only be used for agricultural productions or construction activities of collective members out of agricultural production or living needs. Except those, the rural land cannot be used for non-agricultural constructions. It almost negates land exploitation rights of peasants and the collective. Nevertheless, the regulation has already been broken through by the practice of the urban and rural construction land replacement. For example, in the process of the rural homestead replacement, people begin to try to dispose land indicators of the replacement balance by open bidding in practice, and then attribute the income of open bidding to the collective and its members. The practice actually recognizes land exploitation rights of the collective and its members. Relevant systems of the urban and rural construction land replacement are becoming closer to exploitation right transactions in the common international practice. Attributing land exploitation rights to the collective and its members has become the development trend of the urban and rural construction land replacement system. The urban and rural construction land replacement will inevitably change the nature of the rural construction land which is based on homesteads. It may limit land rights of peasants and their collective. Recognizing that the peasant collective and its members enjoy land exploitation rights not only links with the current land right system of the rural collective in China, but also consolidates the right basis of the urban and rural construction land replacement.

D. Contents of Land Exploitation Rights in the Replacement

As mentioned above, as an independent usufruct, the land exploitation right can provide a legitimate basis for the land planning and other activities and a legal basis for justified interests of the collective and its members. The author believes that in the process of the urban and rural construction land replacement, China can learn from relevant experiences of the US and France, and give the collective and its members a certain land exploitation rights on the rural construction land. During the replacement, the state needs to impose some restrictions on exploitation rights of the partial collective and its members, and replace land indicators in land blocks where exploitation rights of the collective and its members are involved with specific land blocks that meet the planning requirements. It should be noted that restrictions on rights of the collective and its members do not fundamentally exclude exploitation rights. They merely replace and displace the specific space in which exploitation rights of related subjects are located. This limitation is within the scope of the adjustment of exploitation rights. After the completion of the replacement, it should be considered that a protective easement has been established on the land in the demolition area that is used for the reclamation. The servient tenement can only be used for agricultural productions, and the praedium dominan that accepts the indicators will be developed. In the construction area, the collective and its members can exploit the land according to the law. When their exploitation rights conflict with developers’ exploitation rights after the land replacement, it should be guaranteed that the collective and its members enjoy prior exploitation rights. Due to various limited conditions, when the collective and its members are unable to exploit and use the rural collective construction land such as homesteads, they should be allowed to put exploitation rights on the land after the homestead arrangement balance into the market for the transfer on the basis of recognizing their exploitation rights.

V. LAND DEVELOPMENT RIGHTS OF THE REPLACEMENT SYSTEM

The urban and rural construction land replacement can revitalize existing land resources effectively and use land resources efficiently. That process will bring considerable appreciations to all parties. Therefore, how to allocate the appreciation generated by the replacement becomes another problem that needs to be solved urgently in the process of the urban and rural construction land replacement. This paper will start from the perspective of land development rights and try to propose specific rules for the allocation of land development rights and the distribution of appreciations according to specific situations by clarifying different sources of appreciations and their practical problems in the replacement process.

A. The Connotation of Land Development Rights

Land development rights mainly involve the distribution of appreciations caused by the transformation of the land nature in the urban and rural construction land replacement. They have very close relationships with land exploitation rights, but there are also significant differences. The main difference between the two lies in the distinction of adjustment targets. Land exploitation rights mainly involve the change of the land nature and the adjustment of the development intensity while land development rights solve the problem of how to allocate appreciations caused by the change of the land nature and the development intensity. Chinese law does not explicitly stipulate land exploitation rights and land development rights, but substantive norms of the two can still be noticed from China’s existing systems and practices. The substantive and normative content of land exploitation rights is expressed as indicator transactions in the urban and rural construction land replacement. Some scholars contend that indicator transactions are nearly similar to land exploitation right transactions. The relevant content of land development rights essentially manifests itself as the system and practice of appreciation allocations during the replacement process. In consequence, although land exploitation rights and land development rights are linked as independent rights, they have their own connotations and solve different problems. But scholars often get confused about these two concepts with completely different connotations. It will inevitably bring troubles to academic researches and practical operations, not only affecting the direction and judgment of academic researches, but also causing the disconnection between theories and legal practices, which will lead to misunderstandings in practice. In order to clarify research ideas, the above concepts should be distinguished, and on that basis, relevant legal systems should be studied in depth.

B. Land Appreciations in the Replacement

The amount of appreciations in the process of the urban and rural construction land replacement determines the scope of land development rights. Therefore, in order to study land development rights in depth, we should first confirm the source of land appreciations in the replacement. The project areas for the urban and rural construction land replacement can be divided into indicator sending areas (demolition areas) and indicator receiving areas (construction areas). In indicator sending areas, original buildings need to be demolished, and rural residential yards or residential quarters where peasants gather will be re-planned and constructed according to standards. The surplus land in the process will be converted into the farmland, and corresponding indicators will be purchased by indicator receiving areas. After indicator receiving areas obtain relevant indicators, the land can be expropriated and then be transferred for urban constructions after compensating peasants with their lands expropriated. From this point of view, the urban and rural construction land replacement will lead to the accumulation and intensification of land resources, thus releasing huge differences in the income. As the object of land development rights, the land appreciation in the replacement is derived from indicators themselves and increased collective resource assets in the project area. The former can be further divided into the indicator income of the indicator sending area and the indicator income of the indicator receiving area. The formation mechanism of the three is different, and each faces various problems.

Firstly, the land indicator sending area can obtain a large amount of incomes in indicator transactions. The national management of land indicators and the strong demand of the urbanization for the land make land indicators scarce items. In the replacement process, indicator sending areas are generally located in outer suburbs, and the land price is relatively low. However, the urban and rural construction land replacement enables indicator sending areas to sell remaining indicators to indicator receiving areas, which relatively alleviates disadvantage of indicator sending areas in the location and helps to revitalize land resources in those areas. Nevertheless, due to the limited marketization of China’s current land indicator transactions, the price of land indicators in sending areas has not been fully explored. It reduces the amount of revenues that relevant subjects can obtain and adversely affects their development rights.

Secondly, after purchasing indicators and expropriating the land, indicator receiving areas will definitely transfer the land and obtain high land transfer fees. Land transfer fees become sources of appreciations in indicator receiving areas. But as property owners, the collective and its members can only obtain expropriation compensations or housings on the urban land, and fail to share land transfer fees. After the land is transferred, appreciations of land development and utilization are all attributed to the developers. Moreover, land exploitation rights of the collective and its members in indicator sending areas and receiving areas cannot be guaranteed in the replacement, and their development rights also cannot be fully realized.

Thirdly, with the realization of land exploitation rights and the rediscovery of land values in the replacement process, the value of collective resource assets such as the land and housing reserved during the replacement process rises and becomes an important part of appreciations. Due to factors such as the lack of the income distribution mechanism and the weakening of collective organizations, problems such as unfair distributions of incomes and loss of collective assets occur from time to time.

C. The Construction of Land Development Right System in the Replacement

In the process of the urban and rural construction land replacement, we should consider interests of all parties and make fair and reasonable judgments in the replacement process while identifying and allocating attributions of land development rights. There are many participants in the urban and rural construction land replacement, including the collective and its members as property owners, local governments, and developers who are transferred the land after the replacement. Some scholars believe that interests of landowners should be emphasized in the replacement based on the land nature and attributions of property rights. Returning land appreciations in the replacement to rural areas is also in line with requirements of relevant central documents. As a result, we should consider interests of all parties comprehensively according to specific circumstances such as the land nature on the basis of safeguarding interests of property owners when determining the attribution of land development rights. As mentioned above, in the replacement process, the occurrence mechanism and specific problems of incomes of land indicators and collective resource assets in indicator sending areas and receiving areas are diversified. Therefore, the analysis should be carried out according to specific issues on various occasions. In addition, corresponding property right structures and other factors are different because of the diverse land nature, affecting the distribution pattern of interests of all parties. Hence, the allocation of development rights should also be typed and analyzed according to the land nature.

1. The Land Development Right System in Indicator Sending Areas. — The fees that indicator receiving areas pay indicator sending areas for obtaining land indicators are the basis for the distribution of appreciations in indicator sending areas. But China’s current land indicator transaction mechanism is limited in the marketization, and the price of land indicators is not be fully explored. The reduction of land indicator appreciations affects the long-term livelihood of peasants and jeopardizes peasants’ development rights. In order to ensure development rights of related entities, we should first promote the market-oriented allocation of land exploitation rights and discover the price of land indicators through the market.

Allocating the appreciation of land indicators should refer to the land nature. The author believes that if the land in indicator sending areas belongs to the homestead, relevant appreciations should be attributed to homestead tenure holders. We should take into account interests of local governments, the collective and its members when allocating other rural construction lands besides homesteads. Homesteads and other rural construction lands belong to collective lands, and the collective enjoys the ownership of the relevant land. However, the homestead tenure of collective members is attached to the homestead. That right shoulders the major tasks of rural social housing security and has a distinct welfare attributes. Although the collective enjoys the ownership of China’s homesteads and peasants only enjoy rights to use, the homestead tenure is unpaid and permanent in the current legislation and its legal status is similar to that of the ownership. In order to realize the intensive use of the rural construction land, it is necessary for the homestead tenure holder to give up certain rights, such as abandoning rights to develop and utilize partial lands. Accordingly, homestead tenure holders enjoy development rights and obtain appreciations of land indicators, which are based on the abandonment of their homestead tenure. It is justified and reasonable. For other rural construction lands, we can refer to relevant rules of the appreciation distribution in the construction land transfer. If the collective is the land tenure holder, the collective should enjoy appreciations and develop the collective economy and related welfare undertakings. When collective members are land tenure holders, they are entitled to receive the main appreciation. Taking into account costs and services provided by local governments to promote the replacement, local governments should be allowed to enjoy certain appreciations of the replacement of the construction land except homesteads. In this regard, we can learn from the adjustment payment system of the collectively-operated construction land. Out of needs to balance interests of all parties, the government is allowed to receive no more than 30 percent of land indicator appreciations.

2. The Land Development Right System in Indicator Receiving Areas. — After obtaining land indicators, the rural construction land and the agricultural land will be expropriated and developed according to the law in indicator receiving areas. In the process, land indicator appreciations obtained by indicator receiving areas are mainly represented by land transfer fees and other related development income. The right attribution and the interest status of the parties will have certain differences because of diverse land nature, affecting development right attributions and the scope of appreciation distributions of the parties. Therefore, the development right attribution of homesteads, other construction lands and agricultural lands should be studied separately.

The collective peasants enjoy the homestead ownership and the collective members enjoy the tenure. In practice, after the local government expropriates the homestead, it will provide the housing for the original homestead tenure holder and a certain amount of money as compensation. The author believes that given that the real right nature of the homestead and needs to protect exploitation rights of relevant entities, original rural residents should be admitted to have prior development rights and allowed to develop and utilize their land resources within the permission of the law. Original rural residents can give the local government some gains yearly or a certain percentage of their gains. The project is compatible with the right structure of homesteads, so that peasants have places to live in. It also takes into account long-term development interests of peasants, so it is reasonable.

The ownership of the rural construction land except homesteads belongs to the collective. In view of the fact that the collective land ownership in China presents characteristics of the co-ownership, the collective and its members should be considered as development right holders, and the two share appreciations arising from the land usage. At the same time, the local government coordinates and manages the whole process in the replacement uniformly, invests a large amount of costs for the demolition and construction, and provides public services, playing an important role in the replacement process. Hence, the local government can also obtain a certain percentage of appreciations.

As for the agricultural land in indicator receiving areas, its non-agricultural development and utilization are subject to many restrictions. However, after relevant entities obtain indicators required for urban constructions in the urban and rural construction land replacement, this part of the land can be put into urban constructions. When allocating appreciations gained from the development and utilization of this part of the land, we should pay attention to the balance of funds. First, we should pay the indicator price with appreciations to indicator sending areas and then pay relevant compensations. Next, specific allocations will be made.

3. The Land Development Right System of the Collective Resource Assets. — After the completion of the urban and rural construction land replacement, land resources in relevant areas can be optimally allocated and the land price gets rediscovered. At the same time, collective resource assets such as collectively reserved lands and houses during the replacement process are activated, which generates huge profits. How to allocate the above incomes becomes a problem to be considered. Since there is no effective income distribution system in practice, the distribution of collectively operated assets creates certain problems. In order to deal with these problems, in the process of promoting the urban and rural construction land replacement, we should establish and improve relevant management systems of rural collective three-assets, and clarify relevant subjects’ status, the ownership of property rights, distribution rules and other matters, so as to implement and protect legitimate rights and interests of the collective members on collective assets.

As for specific distribution rules of appreciations of collective resource assets, this paper holds that at this time, the collective peasants are development right holders of relevant assets, and incomes should be attributed to the collective, which are used for production activities and collective economic undertakings by collective economic organizations. If there are surpluses after appreciations are used for collective undertakings, they can be distributed proportionally among the collective members. For specific problems of appreciation distributions of collective resource assets in the replacement process, such as collective economic organizations of new country sides in the replacement, the identification and distribution rules of appreciations and related supervision methods, it is still necessary to conduct researches and discussions in depth in combination with practices.

VI. THE LAND USAGE OF THE REPLACEMENT SYSTEM

The homestead replacement is the main form of the urban and rural construction land replacement. In the practice of the urban and rural construction land replacement, it is possible to resettle the collective members by directly constructing houses on original homesteads, or to build houses for the collective members on the state-owned construction land after homesteads are expropriated and transferred. After the collective members obtain the ownership of the resettlement house and other related real estate rights through the replacement, they still can transfer corresponding real estate rights. Under these complicated circumstances, how to realize the connection of related land rights of homestead tenure holders before and after the replacement becomes another thorny problem. In theory, this issue involves the interrelationship of the homestead ownership, the homestead tenure, the construction land tenure and other rights. To solve this problem, it is necessary to conduct an in-depth analysis of attributes and functions of the homestead tenure, and then to clarify specific problems and corresponding rules in different situations. This paper will examine the relationship between the homestead tenure and the collective ownership and the nature of the homestead tenure, making a typed research on relevant issues of the land usage before and after the homestead replacement on that basis.

A. The Relationship between the Homestead Tenure and the Collective Ownership

The key to solving the problem of the right connection after the homestead replacement is to clarify the nature of the homestead tenure. In China, the collective enjoys the homestead ownership and homestead tenure holders enjoy the homestead tenure with possession and usage as the content on the collectively owned land. Therefore, to explore the nature of the homestead tenure, we must first clarify the relationship between the collective ownership of the homestead and the homestead tenure. Regarding the issue, there are mainly several viewpoints in the academic circle, such as the shared ownership theory, the corporate ownership theory and the new co-ownership theory. The shared ownership theory can be divided into tenancy in common theory and joint tenancy theory. The former believes that the collective ownership in China should be recognized as tenancy in common to clarify the right relationship, while the latter argues that the collective ownership in China should be recognized as an inseparable joint tenancy of members of the village collective. Different from the shared ownership theory, the corporate ownership theory contends that the peasant collective or its organization should be regarded as the legal person, and on that basis, the collective ownership is considered as the corporate ownership. Varying from the above, the new co-ownership theory draws on the co-ownership theory in the Germanic law and interprets the collective ownership as a new type of co-ownership.

This paper holds that the new co-ownership theory appropriately reflects the positioning and function of the homestead tenure. Firstly, although there are certain differences between the theory of tenancy in common and joint tenancy, they all take the private ownership as a theoretical premise, which is a clear violation of China’s land system of the collective ownership and fails to reflect the social security function carried by the collective ownership in China. As a result, they should not be adopted. Secondly, based on current situations of the rural society in China, the corporate ownership theory cannot fully explain the system of the homestead ownership and tenure in Chinese country sides. The new co-ownership theory matches the reality of the rural society in China and characteristics of the homestead ownership and tenure. In terms of right attributes, the legal structure of co-ownership is related to the membership of the group, and the homestead tenure in China is also closely related to the identity qualification of the right holder. As for right attributions, homestead tenure holders are restricted to the collective members. The membership is a necessary prerequisite for the acquisition of the homestead tenure. The homestead tenure will no longer exist with the loss of the collective membership. For the exercise of rights, the collective members jointly exercise the indivisible ownership on the homestead in the name of the collective, and relevant matters in the exercise of the homestead ownership shall be jointly decided by the collective members. Furthermore, the spirit of emphasizing collective interests in the co-ownership system can also be consistent with the rationale of the collective ownership in China. At the same time, it should be noted that the homestead tenure system in China is not a simple copy of the co-ownership system and it presents a new look and characteristics. The tenure in the co-ownership relationship has characteristics of the identity qualification. Under the premise that the collective enjoys the homestead ownership, the collective members enjoy the homestead tenure. With the development of the modernization of the homestead system in China, the homestead tenure can generate a series of new types of property rights, thus enriching the system content of the homestead tenure in China. For example, homestead tenure holders should bear certain social obligations, and their rights are subject to some restrictions. That creates a space for the introduction of land exploitation rights and provides a right basis for the reform of the homestead expropriation system. It can be seen that the new co-ownership theory has a strong explanatory power for theoretical and practical issues of the collective land ownership in China, and can provide a theoretical basis for the determination of the related legal relationship of the homestead and the development of the homestead system.

B. The Nature of the Homestead Tenure

The homestead tenure is under the legal framework of the new co-ownership of the collective land, and it has legal characteristics of the new co-ownership relationship. At the same time, the homestead tenure itself has some unique attributes. Regarding the nature of the homestead tenure, there are some main theories in the academic circle at present, such as the special usufruct theory, superficies theory and dominium and quasi-ownership theory. Based on provisions in the Real Right Law of the People’s Republic of China, the special usufruct theory incorporates the homestead tenure into usufructs and argues that the homestead tenure is a usufruct that only exists in China. The superficies theory compares the homestead tenure in China with superficies in the traditional civil law from the standpoint of the substantive interpretation, holding that the homestead tenure is essentially a superficies. Moreover, after the dominium and quasi-ownership theory makes a systematic interpretation on relevant provisions in the Real Right Law of the People’s Republic of China, it considers that the homestead tenure of the collective members in Chinese law can exist for a long time. According to that, the homestead tenure has achieved a status similar to the ownership.

This paper believes that the nature of the homestead tenure is not completely static and it should be typed according to specific circumstances in various legal relationships. Within the rural collective, the relationship between the homestead tenure and the collective ownership is governed by the legal structure of the new co-ownership. The homestead tenure has special institutional values of the housing security in the rural community and should maintain its stability. In the legal structure of the new co-ownership, the homestead tenure also has independent competences such as possession and usage in addition to the homestead ownership. Therefore, in the relationship between homestead tenure holders and homestead owners, we should maintain the stability of the homestead ownership and tenure and consider the homestead tenure as the usufruct with dominium characteristics on the premise that the homestead ownership belongs to the collective.

The new co-ownership mainly involves the relationship between homestead tenure holders and homestead owners. The housing security function of the homestead tenure only aims at the collective members, having a certain space and scope of effects on persons. In the context of the homestead reform, homestead tenure holders may also transfer the homestead or set rights with real right characteristics for others on the homestead. When homestead tenure holders transfer their rights to non-collective members under statutory conditions, if the assignee is not a member of the collective economic organization, his housing rights and interests do not need to be specifically protected and he also does not meet prerequisites to obtain the homestead tenure under the framework of the new co-ownership. Therefore, rights acquired by the assignee cannot be equated with the homestead tenure acquired by the collective members with dominium characteristics. From the perspective of the assignee of the homestead tenure, the right had better be defined as a superficies with real right characteristics accordingly. Traditional civil law usually solves the problem of the ownership of houses built on others’ lands by the system of superficies. Under normal circumstances, the ownership is the right basis for superficies. Comparatively speaking, the homestead tenure has certain features of the dominium and property characteristics and has the content of the land utilization. In order to respond to the call of the age that peasants should be granted more property rights, the author believes that under the premise of insisting that the collective enjoys the homestead ownership, the homestead tenure can be regarded as the basis for the establishment of superficies and homestead tenure holders can set superficies for others on their homesteads. Defining the right acquired by the assignee as the superficies not only considers needs of homestead tenure holders to set property rights for others, but also helps to protect the homestead ownership of the collective and the homestead tenure of the collective members. It is a strategy that satisfies both sides.

C. Involved Rules of the Homestead Tenure in the Replacement

Before the urban and rural construction land replacement, the collective members have the homestead tenure on the homestead. After the completion of the urban and rural construction land replacement, homestead tenure holders will obtain the ownership of houses and the homestead tenure. Due to different operation modes in the replacement process, the right of homestead tenure holders on the land may still be the homestead tenure, or turn to the urban construction land tenure. The homestead tenure has different attributes in various legal relationships because of differences in the nature of the homestead tenure and the urban construction land tenure. Relevant rules of the homestead replacement should be determined according to the nature of the homestead tenure in specific situations.

In the relationship between homestead owners and tenure holders, the homestead tenure should be the usufruct with dominium characteristics based on the special institutional function of the homestead tenure. Accordingly, it should be considered that the homestead tenure is the right without a time limit and rights of homestead owners and tenure holders are permanent. In the case where the homestead is used for the construction of resettlement houses without the expropriation after the replacement, the relevant land is still the homestead and the ownership of the collective on the land remains unchanged. On that basis, the tenure of homestead tenure holders will also remain unchanged. When original homestead tenure holders are the collective members, the collective members still enjoy the homestead tenure on bases of relevant houses after the replacement and are entitled to share the income from the development and utilization of the land based on that. When the collective enjoys the ownership and tenure of the relevant land before the homestead replacement, the collective remains the owner and tenure holder of the land after the homestead replacement. For the income from the development and utilization of the land, certain collective public welfare expenses should be reserved. If there is still the remaining after collective public welfare expenses are reserved, the rest of the income is distributed by the collective members.

In the homestead replacement, there are not only situations in which houses required for the resettlement of the collective members are directly built on the homestead without the expropriation but also cases where the homestead is converted into the urban construction land through the expropriation and transfer procedures. As mentioned earlier, the construction land tenure is a usufruct with a clear time limit. When the homestead is converted into the urban construction land; rights enjoyed by the collective members on housing bases after the replacement shall be subject to the time limit and rules of the automatic renewal of the urban construction land for housing since the land nature is turned into the construction land tenure. However, the homestead tenure before the replacement is a usufruct with dominium characteristics and has the important value function of the housing security in the rural society. In order to realize that value function and protect interests of the collective members effectively, it is necessary to make certain refinements and adjustments to time limit rules of the construction land tenure for the urban housing after the replacement. After the expiration of the construction land tenure for housing, requirements for the payment of land transfer fees shall be further exempted on the basis of the automatic renewal of the construction land tenure to protect peasants’ residential rights.

In the relationship between homestead owners and homestead tenure holders, since the homestead tenure is the usufruct with dominium characteristics, rights on the land should also be permanent after the replacement. When original homestead tenure holders transfer their houses acquired after the replacement, rights acquired by the assignee are essentially a kind of superficies. The construction land tenure acquired by the assignee who is a non-collective member does not have some institutional functions, such as the social security. At the same time, for the purpose of protecting rights of homestead tenure holders, superficies enjoyed by those who are non-collective members should have a limited period after the transfer. In principle, that period should not be longer than that of the construction land for the urban housing.

In addition, the urban and rural construction land replacement system intends to save indicator resources required for the urban construction by intensively utilizing the rural construction land. Under the premise of meeting living needs of the collective members, the smooth development of the urban and rural construction land replacement requires the collective members to vacate some homesteads under the policy of ‘one house on one household’. In order to guarantee peasants’ tenure in the new type of co-ownership and ensure that peasants’ rights and interests cannot be damaged, certain compensations should be provided for the collective members. In this respect, as for multi-house on one household and other occasions out of historical reasons, relevant central policy documents have explored the implementation of a paid exit system of homesteads. Many places have carried out various explorations about the system during the pilot process. Relevant exploration results are also reflected in the current revision of the Law of Land Administration. The exploration highlights the value orientation that peasants should be granted more property rights and helps to implement the homestead tenure of the collective members in the new co-ownership structure.

VII. CONCLUSION

The urban and rural construction land replacement is a Chinese reform exploration of transferring the surplus land or land indicators after the rural construction land is managed to urban planning areas in part within the institutional framework of the existing land indicator management. Faced with severe situations of the farmland protection and urgent needs for the urbanization, local governments carry out various policy-based practices under the guidance of central policies. These practical explorations have played a role in amending Chinese legislation. Relevant practices such as the classified offset of construction land indicators, the resolution of land nature conflicts, and regulations on local governments’ behavior, institutional ideas and rules will also provide resources for the development of involved systems.

The core problem in the urban and rural construction land replacement is the change of the land usage, which specifically covers who has the right to change, land appreciation attributions after the change, the connection of peasants’ land rights and the security of residential rights and interests before and after the change. From the perspective of rights, these issues aim to land exploitation rights, land development rights, and the homestead tenure.

As a new type of usufructs in the replacement, land exploitation rights offer a right basis for the change of the land usage. Land exploitation rights are closely related to indicator transactions in the urban and rural construction land replacement, but there are also differences between the two. They suggest different allocation modes of exploitation rights respectively. In the replacement, we should admit that landowners enjoy land exploitation rights and protect rights of the collective members in the replacement while realizing the function of the replacement system through prior exploitation rights, protective easement and the homestead transfer system.

Different from exploitation rights, land development rights deal with the appreciation attribution in the replacement. In the replacement, land indicators themselves in indicator sending areas and receiving areas and collective resource assets in the project area all generate appreciations. In indicator sending areas, homestead appreciations should be attributed to homestead tenure holders. When allocating the rural construction land other than homesteads, we should take into account interests of local governments, the collective and its members. In indicator receiving areas, the collective members have prior development rights on the homestead, so obtained incomes can be handed over to the government in part or yearly. For other rural construction lands, the collective and its members should share appreciations arising from the land usage and submit them to the local government at a certain percentage. In addition, appreciations of collective resource assets should be attributed to the collective for production activities and collective economic undertakings. If there is still a surplus, it can be distributed proportionally among the collective members.

During the homestead replacement, original tenure holders of the homestead will obtain the ownership of the homestead or houses on the urban construction land and other related land rights. It is also possible to transfer acquired rights again. Within the collective, since the ownership and tenure of the homestead are under the framework of the new co-ownership, original tenure holders of the homestead enjoy land rights without time limitations. For the homestead after the replacement, original tenure holders of the homestead still enjoy the homestead tenure without time limitations. When the land nature is turned to the urban construction land, although the right has a time limitation, it should be renewed automatically and with no costs after the expiration. When the collective members transfer their real estate rights out, relevant rights are superficies with a time limit and the period of the assignee’ rights shall not be longer than that of the urban construction land for housing.