GeoJournal 49: 257–267, 1999.

© 2000 Kluwer Academic Publishers. Printed in the Netherlands.

257

Diminishing farmland and urban development in China: 1993–1996

Sun Sheng Han & Chun Xing He

School of Building and Real Estate, National University of Singapore, 10 Kent Ridge Crescent, Singapore 119260,
e-mail: bemhanss@nus.edu.sg; e-mail: bemp7004@nus.edu.sg

Received 17 August 1999; accepted in revised form 26 February 2000

Key words: China, farmland loss, land policy, regional development, urbanization

Abstract
Farmland conservation is a new perspective in China’s development policy making. In this paper, we seek to explore
the distribution patterns of farmland loss between regions and among city-size groups, and to examine the factors and
institutional background that influence on farmland conservation. A random sample of 179 out of 666 cities in 1996 was
selected. Data were collected from various sources for the period 1993–96. Descriptive statistics, correlation analysis and
nonparametric tests were used to analyze the data. Three-dimensional maps were plotted to present the distribution patterns
of farmland loss, urban population growth and real estate development. The empirical results reveal that regional and
hierarchical variations did exist in farmland loss, so did in urban population growth and real estate development. Farmland
loss was more severe a problem in cities along the coast, especially cities with a nonagricultural population over two
million. Urban population growth and real estate development were two main factors causing farmland loss in cities. Poor
legal ground for land administration, weak law enforcement, and the drive towards fast revenue making were the underlying
problems that prevented effective farmland conservation. In China’s current transition from a planned to a market economy,
farmland conservation can succeed only if government officials were no longer to trade off sustainability of development
with short-term, fast revenue making.

Introduction
A drastic change in China’s development is the addition of
a new policy perspective towards land resources. Tradition-
ally, the Chinese leadership took China as dida wubo renkou
zhongduo (i.e., a huge territory with variety of resources
and with a large population), which meant a strong point
of the country. This was true especially under the centrally
planned economic system in which the collective strength
of the economy as measured by sizes of land and popu-
lation meant more resources for manoeuvre by the central
government, driven by the development goal of equity. To-
day, however, China is pursuing economic efficiency by
introducing economic reforms, which, together with eco-
nomic globalization, have placed more weight on individual
contribution and initiatives. Not only absolute volume of
production but also per capita input and output have be-
come important measures of economic performance. The
incorporation of the population factor, thus, changed the
government’s perception on China’s land resources. Now,
China is perceived as dishao wuxi (i.e., tiny land with scarce
resources). Land scarcity is seen as a constraint to national
development, which calls on better policies to deal with the
limited resources (Johnson, 1997).
Indeed, China occupies about 7% of the world land area
but supports almost a quarter of the world population. The
vast territory of China becomes tiny when it is divided by
the huge population size, more so if the nonarable land ar-
eas are excluded. On average, every Chinese had 1.17 mu1
arable land in 1996, which was far below the world average
of 3.75 mu per person (Zhang 1998). Even worse, China’s
arable land has diminished at an alarming rate since 1949.
Between 1949 and 1989, there was an average annual loss of
10 million mu arable land, or, about 12 mu per 1000 people.
In 1992, the loss of arable land registered 20 million mu,
or, 17 mu per 1000 people (China Real Estate Information,
1997, p. 52).
Land conservation, thus, has been put on the priority
list of the government agenda. Laws and regulations were
issued to provide legal ground for land use planning, trans-
action, and administration. The date of 25 June was set to
be a ‘Land Day’ in order to raise public awareness of land
conservation. High-ranking government officials, including
the Prime Minister, addressed the importance and policy
issues in resolving land problems. The speech delivered
by former Prime Minister Li Peng, on the sixth Land Day
in 1996, which also celebrated the tenth year of the Land
Administration Act, was an important statement to show
the commitment of the central government towards land
conservation (China Real Estate Information, 1996, p. 4).
Studies on the diminishing farmland have accumulated
quickly for the last five years. Land scarcity, as measured
by the average land area per person, is a problem widely
recognized by researchers (Xu, 1999; Jiang, 1998; Liu,
1998). This scarcity is even more severe when the distrib-
258
ution of land is taken into account, as more than 60% of
the arable land is in the area north of the Huaihe River,
where water shortage presents a further constraint on the
productivity of the land (Zhang, 1998). Deforestation and
desert encroachment are two of the reasons for farmland
loss (Chen X, 1996). Construction in both cities and coun-
tryside is another source encroaching farmland (Lu, 1997;
Ru, 1995; Liu, 1995). In many cities, such as Beijing and
Dongguan, Guangdong Province, arable land was acquired
by developers but was kept vacant for a long time (Chen YQ,
1996; Ye and Li, 1999). Real estate speculation, which is a
new phenomenon in China, is a cause for fast reduction of
farmland.
Despite the large number of articles published on the
subject, there is little systematic study on the diminishing
farmland on a national scale. What spatial pattern can one
discern in farmland loss between cities along the coast and
noncoastal regions? Is there any difference among various
city size groups in farmland loss? How does urban devel-
opment influence on the size of arable land? What is the
institutional background relevant to farmland conservation?
Objectives of study
In this paper, we seek to answer the above questions with
three objectives in mind:
(1) to explore the distribution pattern of farmland loss in
terms of location of cities and the size distribution of
cities;
(2) to examine the relationship between farmland loss and
urbanization; and
(3) to investigate the institutional background relevant to
farmland loss.
The location of cities is grouped into coastal and noncoastal
regions. Coastal cities are those cities found in the coastal
provinces (viz., Liaoning, Hebei, Beijing, Tianjin, Shan-
dong, Jiangsu, Zhejiang, Fujian, Guangdong, Guangxi, and
Hainan). Noncoastal cities are those located in the rest of the
provinces, which are sometimes further divided into western
and central regions.2 The size categorization of cities follows
the official five statistical groups.3 Urbanization is discussed
in terms of nonagricultural population growth and real estate
development. The institutional background relevant to farm-
land loss refers to the legal ground of land use control, and
the official and nonofficial channels through which farmland
is converted into urban use.
Data and methods
This study is based on a random sample of 179 Chinese
cities, out of the 666 national total, representing 27% of the
population in 1996.4 The sample cities spread over 28 of
the 31 provincial administrative units under the communist
government (Figure 1). In the coastal region, the sample
represents 34% of the population, whilst in the noncoastal
region, 21% of the population is represented (Table 1). In
terms of size groups, there are 9 extra-super large, 12 super
large, 19 large, 67 medium, and 72 small cities, representing
82%, 52%, 43%, 34%, 18% of the populations, respectively.
The period for study focuses on a three-year span, from
1993 to 1996, though discussions are extended to the period
1978–1998. The broad coverage of the period for discussion
from 1978–1998 is to provide a context for the study in the
three year period. The year 1992 witnessed Deng Xiaop-
ing’s Southern Tour, during which he re-confirmed China’s
commitment to the reform and open policy. In 1993, eco-
nomic activities resumed to a normal level after the cool-off
induced by the 1989 student demonstrations and the conse-
quent crackdown. The year 1996 is selected because this is
the latest year for which data can be gathered for this study.
Data are collected from various city almanacs, China
Statistical Yearbooks, China’s Urban Statistical Yearbooks,
China Real Estate Yearbooks, China Land Price, collections
of land laws and regulations, and journal articles in Chi-
nese language. Farmland loss is the difference between the
amount of farmland in 1993 and that in 1996. The growth
of nonagricultural population is measured by the difference
between the nonagricultural population in 1996 and that in
1993. Real estate development is represented by the price
level of first grade commercial land parcels. Parametric and
non-parametric statistics, as well as ArcView GIS, are used
in data analysis and presentation.
Patterns of urbanisation and farmland loss
Urban population growth
Since 1978, Chinese urbanization has proceeded at a phe-
nomenal rate. The number of cities increased from a mere
193 cities in 1978 to 668 in 1998, registering a growth of
246% in 20 years. The size of nonagricultural population,
which is often used to represent the size of urban popu-
lation, grew from 80 million to 200 million in the same
period, recording a 150% increase. The level of urbaniza-
tion, measured by the proportion of urban population out of
the total population, grew from 18% to 30% in the period
1978–1998.5
The distribution of cities has changed drastically in the
last two decades. In 1978, 36% of the cities were in the
coastal region, whilst the majority, about 64% of the cities
were in the noncoastal provinces. By 1998, 300 cities,
or about 45% out of the 668 cities, were found in the
coastal provinces. The increase of cities in the coastal region
reflected the influence from the unbalanced regional devel-
opment policy, which granted promotional measures and
generated favorable environment for rapid economic growth
along the coast (Fan, 1995; Hayter and Han, 1998).
The summary statistics of the sample cities in non-
agricultural population growth confirm the uneven distribu-
tion of urban growth (Table 2). On a national scale, analysis
of the sample cities reports changes in nonagricultural popu-
lation a range of 370,000 people, with the highest of 310,000
increase and the lowest of almost 60,000 decrease. Nega-
tive growth in nonagricultural population was attributable to
the relocation of state enterprises in the resource extraction
 259

Figure 1. Distribution of the 179 sample cities.

Table 1. Distribution of sample cities among the regions and city-size groups

City size group Coastal region Noncoastal region All China

Total Sample Total Sample Total Sample

Extra-super large cities 6 6 5 3 11 9

Super large cities 11 8 12 4 23 12
Large cities 21 11 23 8 44 19
Medium cities 90 36 105 31 195 67
Small cities 170 40 223 32 393 72
Sum 298 101 368 78 666 179

Note: In the column Total are the numbers of cities in 1996.

sector, and to the re-definition of city boundaries. Nat-
ural increase and migration to the cities brought in positive
growth.
Table 2 also presents the distribution of non-agricultural
population growth among the sample cities in the coastal and
the noncoastal regions. The coastal region accommodated
cities with both the highest and the lowest population in-
creases. According to the value of coefficient of variance,
coastal cities were more diverse than noncoastal cities in
nonagricultural population change. Although the mean value
of nonagricultural population increase of coastal cities was
higher than that of noncoastal cities, the Mann-Whitney Test
yielded no significant difference between the coastal and
noncoastal regions.6Indeed, as we can discern from Figure 2,
cities in the noncoastal provinces but close to the coastal
region also demonstrated huge increases in nonagricultural
population.
Hierarchical distribution of cities among various city-
size groups represents another facet of Chinese urbanization.
For years, China applied an urban policy ‘to contain the
development of large cities, to grow medium-sized cities rea-
sonably, and to encourage the development of small cities,’
with the long-term goal of rural-urban integration (Han and
Wong, 1994). Small cities grew fast especially in terms of
the number, as more and more large towns and county seats
were converted to cities. In terms of population, however,
the small cities were a losing group in attracting migrants.
Evidence from the sample cities show that extra-super large
cities, with a nonagricultural population of two million and
above, had a mean increase of 168,000 people over the three
years from 1993 to 1996. The mean values of nonagricul-
tural population increase decreased over the city-size groups.
Small cities only registered a mean increase of 13,000 people
(Table 3).
260
Table 2. Summary statistics of the sample cities in urban population growth, 1993–1996
N Minimum Maximum
Nation-wide 179 −5.99 31.40
Coastal 101 −5.99 31.40
Noncoastal 78 −1.25 21.56
Notes: Urban population growth is measured by the difference between the size of nonagri-
cultural population in 1996 and that in 1993.
c.v. stands for coefficient of variance.
Figure 2. Regional distribution of non-agricultural population growth in the sample cities (in 10,000 people)
Further examination of Table 3 reveals that the lower
level the city-size group, the more diverse of population
change. Small cities demonstrated a 1.38 coefficient of vari-
ance, medium sized cities 0.83, whilst the larger groups were
below 0.55. The nonuniform growth of nonagricultural pop-
ulation was confirmed by the Kruskal–Wallis Test, which
yielded a highly significant χ 2 value.7
Real estate development
Rapid increase of the number of cities and urban popula-
tion have led to the expansion of urban areas. Between 1985
and 1998, the built-up areas of cities expanded from about
9000 km2 to 21,000 km2 . The expansion of urban built-up
areas was particularly fuelled by real estate development. In
the 1990s, most of the Chinese cities introduced the concept
of land-user right and land-use fees.8 Housing reform also
spurred the commercial housing market. An understanding
of the pattern of real estate development among Chinese
cities is an indispensable part to understand farmland loss.
Studies on China’s regional property markets reveal wide
variations between the coastal and the noncoastal regions
(Han, 1998). Using the total volume of property transaction
as a yardstick, Han (1998) found that the coastal provinces
developed a much more active property market than the
noncoastal provinces did. An active coastal property market
was largely attributable to the regional development policy,
which allowed some selected coastal cities and provinces to
introduce market forces ahead of other provinces.
Range Mean Std. Dev. c.v.
37.39 4.35 5.14 1.18
37.39 4.94 5.93 1.20
22.81 3.59 3.79 1.06
Figure 3 shows a three dimensional map of the first grade
commercial land prices of the sample cities. Apparently, the
coastal region accommodated all the high commercial land
prices. Shanghai, Beijing, Tianjin and Wenzhou were among
the highest. Evidently, cities formed groups as we discern in
Figure 3, in areas of the Beijing-Tianjin area, the Yangtze
River Delta, and the Pearl River Delta.
Summary statistics of commercial land prices by region
show that the coastal cities rendered a mean value of com-
mercial land price almost three times as high as that rendered
by noncoastal cities (Table 4). However, the values of coeffi-
cient of variance reveal more variations among the coastal
cities than that among the noncoastal cities. The coeffi-
cient of variance was 1.37 for coastal cities, while for the
noncoastal cities, it was only 0.76.
Table 5 shows commercial land price variations among
the five city-size categories. By the mean value, it is clear
that larger cities had higher commercial land prices. The
extra-large group was especially outstanding, as its mean
value was two times higher than that of the super large group,
and was almost six times higher than that in small cities.
However, commercial land prices were more varied among
the extra-large cities than that in other city-size groups.
Commercial land price in Shanghai showed the highest, with
a value of 35,192 RMB yuan per m2 (about $4240 USD per
m2 ).
 261

Table 3. Summary statistics of sample cities in population growth, by city-size group,

1993–1996

City size group N Minimum Maximum Range Mean Std. Dev. c.v.

Extra-super large 9 6.28 31.40 25.12 16.85 8.93 0.53

Super large 12 2.64 14.68 12.04 9.70 4.01 0.41
Large 19 1.40 15.56 14.16 6.07 3.95 0.65
Medium 67 0.40 22.75 22.35 4.46 3.69 0.83
Small 72 −5.99 10.12 16.11 1.34 1.85 1.38

Notes: Urban population growth is measured by the difference between the size of nonagricul-
tural population in 1996 and that in 1993.
c.v. stands for coefficient of variance.

Figure 3. Regional distribution of commercial land prices of the sample cities (RMB yuan/sq.m).

Table 4. Summary statistics of commercial land prices, by region, 1996

N Minimum Maximum Range Mean Std. Dev. c.v.

Nation-wide 176 126 35,192 35,066 2,055 3,033 1.48

Coastal 98 500 35,192 34,692 2,812 3,839 1.37
Noncoastal 78 126 4,000 3,874 1,105 842 0.76

Notes: Land price is in RMB yuan/sq. m.. $1 US dollar was about 8.28 RMB yuan as in
October 1999.
c.v. stands for coefficient of variance.

Table 5. Summary statistics of commercial land prices, by city-size group, 1996

City size group N Minimum Maximum Range Mean Std. Dev. c.v.

Extra-super large 9 1,014 35,192 34,278 8,706 10,817 1.24

Super large 12 975 5,250 4,274 2,800 1,330 0.48
Large 19 330 5,500 5,170 2,330 1,399 0.60
Medium 67 126 8,226 8,100 1,761 1,312 0.75
Small 69 140 4,035 3,895 1,269 869 0.68

Notes: Land price is in RMB yuan/sq. m.. $1 US dollar was about 8.28 RMB yuan as in October
1999.
c.v. stands for coefficient of variance.
262
Farmland loss
Farmland loss in the period 1993–1996 was very much
influenced by the drastic changes in the establishment of
economic development zones in 1992, when farmland loss
reached a phenomenal peak.9 A total of 20 million mu of
arable land were converted to nonfarm use. The reason be-
hind this large-scale farmland loss was the overheated trend
towards setting up economic development zones. According
to statistics from the Land Administration Bureau, there was
a total of 117 economic development zones in 1991. After
the Southern Tour of Deng Xiaoping in the Spring of 1992,
however, the total number of economic development zones
increased to 2700 by the end of 1992. Tough measures to
eliminate most of the economic development zones were
introduced in 1993, leading to a drastic reduction of the
development zones to about 500 nation-wide. Farmland loss
was subsequently controlled. In 1994, about 6 million mu
of arable land was converted to urban use, whilst in 1997,
farmland loss was contained to about 2 million mu.
Figure 4 shows farmland loss in the sample cities across
the nation. Apparently, coastal cities, especially the larger
ones such as Beijing and Shanghai, lost more farmland. In
Beijing, where farmland loss was a severe problem, a total of
200 km2 arable land was encroached by urban development.
The same amount of arable land was encroached in Heyuan,
a small city with 140,000 people in Guangdong Province. In
Zhuhai, about 150 km2 of arable land was lost in the period
of 1993–1996, whilst in Shanghai, 80 km2 arable land was
converted to urban use (Figure 4).10
There were a few cities that showed increase in farm-
land. These cities included Jiamusi, Heilongjiang Province,
Xuzhou, Jiangsu Province, Chongqing, Akesu, Xinjiang Au-
tonomous Region, among others. There are two reasons for
urban farmland increases. First, farmland increase in such
cities as Jiamusi and Xuzhou was the result of new develop-
ment of uncultivated land, which exceeded farmland loss by
urban encroachment (Statistical Yearbook of Xuzhou, 1998;
Economic Statistical Yearbook of Jiamusi, 1997). Second,
farmland increase in Chongqing was caused by changes in
the administrative boundary. In 1996, i.e., one year before
Chongqing was designated the fourth municipality directly
under the Central Government in 1997, five urban districts,
one county level city and 16 counties were added to its ad-
ministrative area. Chongqing’s land territory increased from
23,113.95 km2 in 1995 to 82,403.00 km2 in 1996.11
Table 6 shows the summary statistics of farmland loss by
region. The mean value of farmland loss in cities along the
coast was a positive 1.11, whilst the mean value for non-
coastal cities was negative 1. These mean values indicated
that farmland loss was a problem of coastal cities, less so to
noncoastal cities. Indeed, the overheated real estate develop-
ment was observed in coastal cities, especially the southern
coastal cities, rather than in noncoastal areas.
The mean values of farmland loss, as tallied by city-size
groups, showed that the extra-super large cities were the
cities where large amount of farmland disappeared (Table 7).
In the groups of medium, large and super large cities, there
were average increases in the size of farmland. However,
there were wild variations in farmland loss in medium cities,
as represented by the high coefficient of variance.
Influential factors
Correlation analysis
On a national scale, the correlation coefficients between
farmland loss and real estate development, and between
farmland loss and urban population growth were both sig-
nificant at a high confidence level.12 These results sug-
gest that farmland loss was closely related with real estate
development and the growth of nonagricultural population.
The same was true among coastal cities. Both non-
agricultural population growth and real estate development
was significantly correlated with farmland loss. For the non-
coastal cities, however, no significant correlation can be
detected between either farmland loss and real estate de-
velopment, or farmland loss and urban population growth.
The lack of close relationship between farmland loss and
urban development in noncoastal areas was attributable to
the conversion of farmland to other agricultural use, such as
housing for the villagers, or developing fruit farms.13 The
latter did occur in Heilongjiang province in 1996 (Yearbook
of the Land of China, 1997).
In order to analyze the hierarchical characteristics of
farmland loss, the sample cities are conveniently grouped
into big and small groups, which include the extra-super
large, super large and large cities in the former, and medium
and small cities in the latter. Farmland loss was signifi-
cantly correlated to real estate development in both big and
small groups. However, urban population growth showed no
significant correlation with farmland loss in the same two
groups.
The impact of urban population growth
Urban population growth influenced farmland loss because
larger population size led to the expansion of the built-up
areas in providing more housing and employment opportu-
nities (Li and Zhang, 1998). In Beijing, urban construction
was responsible for only 37% of farmland loss in the period
1993–1995. The remaining 63% of farmland loss was at-
tributable to conversion to other agricultural uses, including
fruit farms, and also to natural losses caused by sandstorm
and flooding (Chen X, 1996; Wang and Zhang, 1996).
Housing construction was one of the main activities that
occupy farmland on the fringe areas of cities. Again, in
Beijing, housing construction has quickly expanded to the
fringe areas beyond the fifth ring road for the last five or
ten years. In addition, migrants settled in the fringe areas,
further pushed up the conversion rate of farmland towards
non-farm use. Due to the high price level in the city, which
can go as high as 8000 RMB yuan per m2 for the building
area of an apartment, the municipal government is seriously
looking at the far suburbs for housing the low and middle in-
come residents. This may lead to more construction projects
in the far suburbs.14
 263

Figure 4. Regional distribution of farmland loss of the sample cities (in 1,000 ha).

Table 6. Summary statistics of farmland loss, by region, 1993-1996 (in 1000 ha)

N Minimum Maximum Range Mean Std. Dev. c.v.

Nation-wide 179 −33 20 53 0.19 5.06 26.63

Coastal 101 −29 20 49 1.11 4.81 4.33
Noncoastal 78 −33 5 38 −1 5.17 5.17

Notes:
Farmland loss is measured by the difference between the size of farmland in 1996 and that in
1993.
c.v stands for coefficient of variance.

Population pressure called for rapid economic devel-
opment. City governments were keen to attract foreign
investors by setting up numerous development parks in the
urban fringe.15 In Shanghai, development parks were estab-
lished by not only the municipal government, but also by
district governments and county governments. Even town-
ships had their own development parks. On a national scale,
development parks occupied 15,000 km2 in 1992 (Tian,
1994). A great portion of these development parks was set
up by local governments without the required approvals. In
1993, 78% of 2804 economic development parks, which
were under investigation, were set up illegally. These de-
velopment parks occupied 11.43 million mu (or 7620 km2 )
of land, which were virtually farmland (Yang, 1996).
The impact of real estate development
China’s real estate market is still in its infant stage. Most
of the transactions of land were being made under arranged
prices rather than free market prices.16 Further to the small
proportion of land that were transacted under free market
prices, an active land market presented only in the first tier
property market, i.e., the transfer of land from government
to users with user-rights attached.
As land could be acquired at a price far below free market
price, through negotiation with the government, it became
a shortcut towards fast revenue making for those who had
good connections with government officials. Thus, illegal
approval of farmland conversion and illegal occupation of
farmland was common among provinces and cities all over
the country (Yang, 1993; Tian, 1994; Lu, 1997). Accord-
ing to the China State Land Administration Bureau (1997),
the total registered cases of land use without approval in
1996 were 240,111, in which 296.23 km2 of land, includ-
ing 118.49 km2 of farmland, was involved. 154,850 of these
cases, which involved 186.40 km2 including 89.02 km2 of
farmland, were unauthorized occupation. 8,587 cases in-
cluded unauthorized approval, i.e., the approving authority
did not have the power and should not have made such an
approval. Illegal land approval and occupation were found
264
Table 7. Summary statistics of farmland loss, by city-size group, 1993–1996 (in 1000 ha)

City size group N Minimum Maximum Range Mean Std. Dev. c.v.

Extra-super large 9 0. 20 20 4.44 6.27 1.41

Super large 12 −29 3 32 −2.42 8.81 3.64
Large 19 −33 3 36 −1.58 7.73 4.89
Medium 67 −18 15 33 −0.03 4.23 35.25
Small 72 −13 20 33 0.76 3.38 4.45

Notes: Farmland loss is measured by the difference between the size of farmland in 1996 and that
in 1993.
c.v stands for coefficient of variance.

Figure 5. The channels of transfer for land collectively-owned from farmland to construction sites.

in all provinces with a minimum of 3 cases in Tibet and a
maximum of 42,962 cases in Shaanxi Province.
Another problem in real estate development that had a di-
rect bearing on farmland loss was ineffective use of the land
converted. A survey of 55 cities in the mid-1990s revealed
that on average, industrial land areas accounted for 27.5%
of the built-up areas. This is much higher than the plan-
ning standard of 15% industrial land use currently applied in
many cities around the world (Real Estate Periodical, 1996
(26), p. 13). Even land was tagged as industrial development
zones or residential development districts, a large propor-
tion of the parcels were left vacant for a long time period.
Idle construction land accounted for 20–30% of the total ur-
ban construction land in 1996 (Real Estate Periodical, 1996
(23), p. 15). According to Mr. Zhou Yongkang, Minister
of Land and Natural Resources, 40% of urban construction
land was utilized ineffectively. There were 1.74 million mu
(or, 1160 km2 ) of converted land parcels left idle after being
acquired (Real Estate Periodical, 1998 (31), p. 19).
Institutional background relevant to farmland
conservation
The land law systems
Laws and regulations for transfer of collectively owned land,
including farmland were vague. According to ‘The Land Ad-
ministration Act in PRC,’ which was first endorsed in 1986
and subsequently revised in 1988, urban land was owned
by the state. Collectives were owners of land in suburbs of
cities and in the countryside, unless for those parcels spec-
ified otherwise. User-rights of state-owned and collectively
owned land could be transferred according to the Act. User-

rights of collectively owned land can be used as shares for
investment in collective enterprises. With the approval from
the authorities at county level or above, enterprises owned
by townships or by village councils could convert farmland
into nonfarm use.
Based on the above, ‘The Temporary Regulations for
User-Rights Transfer of Urban State-Owned Land in PRC’
(1990) and ‘Urban Property Administration Act in PRC’
(1994) outlined the rules for land use and transaction in ur-
ban area. The Urban Property Administration Act made it
clear that ‘collectively owned land in urban planning areas
should be acquired by the state before being released for
development.’ However, there are no detailed regulations for
user-rights transfer of collectively owned land in rural areas.
Without a clearly defined legal bound, collectively
owned land parcels entered the land market for real estate
development directly. Planning and control over farmland
conversion into urban land were out of the question, as it
was vague whether the state had to acquire the parcels before
they were released to the market. Thus, collectively owned
land parcels entered the land market through a variety of
channels, being investment shares in collective enterprises,
production sites of rural enterprises, and parcels for sale or
for lease. In fact, collectives in towns and villages were big
suppliers of land parcels only second to the state. It was very
difficult to differentiate legal from illegal transactions on the
basis of the current laws and regulations. As a result, state
control over farmland conversion was severely undermined.
Direct provision of collectively owned land to the real estate
market caused loss of government revenue from land and
distorted land allocation of market mechanism.
Land use control in rural areas
Illegal occupation of farmland for nonfarm use was intensi-
fied by weak control and the lack of supervision on land use
in suburban and rural areas. Land administration authorities
did not have the means to stop illegal land use, reflecting
the weak legal system and poor law enforcement practice
in China today. In some cases land administration author-
ities violated land laws intentionally, driven by the desire
to reap profit from land sales for the local community and
in many cases for the officials involved. They set up by-
laws to encourage illegal transfer of collectively owned land
to construction land (Qian, 1996). The weak control over
farmland conversion was largely a reflection of the poor legal
system and law enforcement measures nation-wide. China
has been transforming herself from ren zhi (government by
man) to fa zhi (government by law) for the last 20 years. A
nation-wide legal framework is only evolving recently. Fur-
ther, economic and political liberalization have motivated
local officials to seek rapid economic growth of their ar-
eas/regions, at the expense of national interest and interest
of other areas/regions.
Channels of farmland loss
In accordance with the current land laws and regulations in
China, farmland owned by collectives within the planning
265
areas can only be converted to nonagricultural construction
land after state requisition. The state acquires farmland from
collectives based on a standard requisition fee-schedule for
compensation. The state then releases the land to developers
or end-users at a price that can be accepted by both parties.
This is the only legal way to convert farmland owned by
collectives to nonfarm use.
In practice, however, there were several more or less
illegal channels through which farmland owned by collec-
tives was converted to nonagricultural construction land in
suburban and rural areas (Figure 5). First, some towns and
villages used their farmland as shares to set up joint venture
enterprises. Their partners could be state-owned enterprises
or foreign investors. In return the towns and villages received
dividends from the joint venture enterprises. Second, since
rural enterprises and farmland were both collectively owned
by towns or villages, some farmland parcels were directly
converted for the construction of rural industries. The town
or village was better off by so doing, as rural industries
yielded higher return to the collective than the farmland
could do. Third, in some towns and villages, the people in
charge simply ignored the laws and regulations. They sold or
leased farmland to real estate developers for a quick return.
In such transactions, the town or village obtained cash from
the sale or lease.
Profit maximization was the root cause for illegal conver-
sion of farmland owned by collectives in suburban and rural
area. As shown in Figure 5, collective economic units can
receive only compensation premium from the state, when
their farmland is acquired by the state. By eliminating state
involvement, collectives can get revenue in the forms of
dividends, profits or sales and rents, which are significantly
greater than the compensation premium from the state. The
state, however, lost not only revenue but also control over
farmland conversion by this exclusion.
Summary and conclusions
Land scarcity has become a new policy perspective to Chi-
nese leaders in making up policies for national development.
In the 1990s, attention was especially given to the conserva-
tion of farmland, as rapid economic growth led fast devel-
opment of cities, which encroached considerable amount of
farmland in almost all provinces across the country.
The purpose of this paper is to examine the spatial
dimension of urbanization and farmland loss, and to ex-
plore the factors and institutional background that influence
on farmland conservation. By using random sampling and
statistical techniques, findings of this paper confirm that
farmland loss has been a problem nation-wide. However,
coastal cities registered more cases of farmland loss than
noncoastal cities. The three-dimensional map shows that
mega cities along the coast, as well as the cities surround-
ing those mega cities, were the cities where farmland loss
was severe. Further to the regional variations, we detect
that cities with a nonagricultural population of two million
and over were definitely in heavy demand of farmland for
urban expansion. Cities below the two million mark were
266
very diversified in farmland encroachment. Indeed, quite a
few cities even gained more farmland through cultivation of
nonarable land, not mentioning those having increased their
farmland stock through boundary adjustment.
Regional concentration of great farmland loss along the
coast was closely related to urban population growth and real
estate development. Not only the three-dimensional maps
show similar patterns among farmland loss, urban popula-
tion growth and commercial land prices between regions, the
correlation coefficients also demonstrate close ties. Large
population size of cities demanded expansion of the built-
up areas by housing construction and industrial growth. The
overheated real estate market in the early 1990s led to a large
amount of conversion of farmland into nonagricultural use.
Yet in most of the cities, utilization rates of the converted
farmland were low.
The weak legal system of land laws and regulations,
and poor law enforcement explain the root cause of farm-
land loss in China. Procedures for conversion of farmland
into nonagricultural land-use are defined vaguely in nonur-
ban planning areas. Even for the areas falling in the urban
planning boundary, collectives may ignore the procedures of
land requisition, that is, being acquired by the state before
releasing the land to the market. No severe penalties are
attached with violation of the land requisition procedures.
Thus, it was quite common that land parcels were transferred
through channels other than those defined by the law, such
as investment shares, sites for rural industries, and sale or
lease.
Farmland loss in China is by and large a problem typical
of the development of a transitional economy. In the current
transition, China’s legal framework is evolving but remains
in its infant stage. Regulative details are lacking in the exist-
ing laws and regulations. Even some of the regulative details
present, mechanisms for law enforcement are absent. The
weak legal ground of land use control is further undermined
by the desire of officials to achieve rapid economic returns.
It is possible to resolve the farmland loss problem only if a
sound legal basis is made available, and corrupt practices are
minimized. People in charge at various government authori-
ties must make their minds clear that farmland conservation
is critical to China’s sustainable development, which cannot
be traded off by any high-speed economic leap forward.
Acknowledgements
The authors wish to thank the two anonymous referees for
their constructive comments on an early draft of this paper.
Notes
1 1 mu equals 666.67 m2 .
2 For details of regionalization in China, see Han and Wong (1994).
3 These five groups are extra-super large (2 million and over), super large
(1–1.99 million), large (0.5–0.99 million), medium (0.2–0.49 million), and
small (<0.2 million) cities according to the size of nonagricultural popula-
tion.
4 Cities refer to officially designated cities by government classification
standards. Criteria in evaluation for granting city status include the number
of nonagricultural population, the amount of GDP per annum, and the per-
centage of population working in the agricultural sector. For more details,
see footnote number 2 in Han and Yan (1999).
5 Based on data from China Statistical Summary (1999, p. 31). The calcula-
tions of Chinese urbanization level are always confusing. For a discussion
on the various population categories in China, see Ma and Cui (1987), Chan
and Xu (1985).
6 The Mann–Whitney U of 3497.5 was computed, with a z value of −1.28.
7 The χ 2 value was 98.42, which was significant at 0.01 level of signifi-
cance.
8 With the land user right and fee schemes, land is no longer used free of
charge. Rather, tenants have to pay for their use of a piece of land.
9 Economic development zones refer to jinji kaifa qu. The essence of these
economic development zones was to set up enclaves where preferential
policies and tax breaks could be offered to investors, both domestic and
foreign, in the hope of promoting local development.
10 For the purpose of this paper, absolute values of farmland loss in 1000 ha,
rather than per capita values, were used in discussions.
11 After adjustment for the change of administrative area, total agricultural
land in urban and rural areas still decreased by 39.53 km2 in 1995 and
70.50 km2 in 1996 (Statistic Yearbook of Chongqing, 1997).
12 The table below presents the correlation coefficients of farmland loss with
real estate development and urban population growth, grouped by region
and city-size categories. Only the positive values of farmland loss (i.e.,
GD3_6) are included in computation in order to limit the distortions that
farmland increase may bring in. Farmland increase was caused by either
changes of administrative boundaries, or conversion of nonarable land into
arable land, or by a combination of both. Correlation between farmland
loss and real estate development (COMLP) and between farmland loss and
urban population growth (FN6_3)
Data groups COMLP FN6_3
Nation-wide 0.410∗∗ 0.304∗∗
(150) (153)
Coastal cities 0.389∗∗ 0.317∗∗
(89) (92)
Noncoastal cities 0.113 0.226
(61) (61)
Big cities (i.e., extra- 0.357∗ 0.294
super large, super (40) (40)
large and large cities)
Small cities (i.e., 0.236∗ 0.019
medium and small (116) (119)
cities)
Notes:
Numbers within parentheses are the number of cases.
∗ Correlation is significant at the 0.05 level (2-tailed).
∗∗ Correlation is significant at the 0.01 level (2-tialed).
13 The accounting methods used in China Statistical Yearbooks exclude
pure fruit or tea farms (i.e., farms specialized in fruit or tea production
only without involving other agricultural plants such as grain or cotton),
or forestry land, from farmland.
14 As in 1996, 70% of the construction projects were in the suburban areas
in Beijing.
15 This is another name of economic development zone, or kaifa qu. In many
cases, development parks could be smaller than economic development
zones in size of the area.
16 The arranged price of land is usually much lower than free market price.
The two parties involved, i.e., the party such as local government agency or
state enterprise representing landowner and the buyer, negotiate for an ac-
ceptable price, which is not determined by the market conditions of demand
and supply.
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