A Study on the Legal Implementation Mechanism for the “Separation of Three Rights” of Rural Homesteads in China

Abstract

Thanks to China’s rurally focused reforms, “Three Rights Division” on rural homesteads came by – dividing collective ownership, household qualification and flexible use rights – an important policy meant to tackle inefficient problems within the rural system and make economic value come out of the land. This reform is about invigorate the sleeping rural assets, raise up the farmers’ property income and make the rural-urban integration possible. But the fact is that its success is seriously limited because there is an incomplete and unclear legal environment. This paper makes a critical review on the legal realization mechanism for this reform. It starts from explaining the theoretical and practical significance of separated ownership, qualification, and use rights to build a concept foundation for the following analysis. Then, it probes into the current legal landscape of land expropriation and acquisition and determines some prominent problems like vague property right conceptions, excessive constraints on market circulation, non-unified or ineffective registration systems, and unscientific valuation and dispute settlement. In view of the results from all the national pilot programs, the paper synthesizes practices and lessons. According to this exhaustive analysis and puts forth a systematic legal implementation mechanism: Key recommendations are to improve existing laws on the content and boundaries of each right, to develop an integrated and unified national registration and certification system, which provides legal certainty for such exchange transactions, to develop a hierarchical and regulated secondary market for the transfer of use rights (e.g., the stock and option exchanges), as well as an open and transparent system for valuing assets and distributing profits. The paper holds that to build a strong legal architectural system is not just a technical must do, it’s also a primary pre requisite to guarantee the reform success, protect farmers’ interests and realize the goal of rural revitalization strategy.