Does the Land Price Subsidy Still Exist against the Background of Market Reform of Industrial Land?

Abstract

In 2007, China started the market reform of industrial land, with the aim of establishing a more effective industrial land market and promoting the effective allocation of land. For this study, we want to explore what strategic choices local governments and enterprises will make under the background of market-oriented reform, and whether there are still some implicit land price subsidies. In this context, based on matching micro land transfer data (2007–2013), we examined the policy effect in the seven years since the reform. Then, we further analyzed the land transfer strategies of local governments and the differences they made to enterprises’ land purchasing decisions against the background of the reform. The following were found: ① With the deepening of market reform, the effect has gradually become clear. The proportion of industrial land transferred through market modes increases year by year. Furthermore, due to marketization, the price of industrial land has increased significantly, and land purchases among enterprises have become more competitive. ② Against the background of the reform, local governments tend to adopt listing as an alternative to negotiation, so as to attract investment from preferred enterprises. ③ Local governments tend to give state-owned and large or medium enterprises more subsidies by way of listing, which reduces the land purchase price for these enterprises. Based on the results, the market-oriented reform of land should be adhered to, and the selection mechanism of tender, auction, and listing transfer methods should be further standardized and refined. Besides, a variety of ways to meet the needs of enterprises for land use (such as lease first and then transfer) should be proposed to compensate for the existing insufficiency.