Land transactions and corrupt Chinese officials often go hand in hand, leading to widespread discontent and a loss of people's trust in the government, according to an expert.

In the latest issue of People's Tribune there is an article by Zhu Lijia, the director responsible for public administration research at the China National School of Administration.

"We must not underestimate the harm caused by corrupt land transactions," Zhu insists.

The loss of earnings from corrupt land transactions is at least 10 billion yuan (1.25 billion U.S. dollars) each year, according to land resource experts.

But the economic losses pale into insignificance compared with the impact on belief in government.

In the first three quarters, the area of land purchased in China reached 241 million square meters, down three percent or 6.1 percentage points, and land developed reached 163 million square meters, up 34 percent year-on-year, according to the latest report released by the People's Bank of China, the country's central bank.

The central government has adopted several policies in an endeavor to strengthen land transaction supervision.

In October 2004, the State Council issued new land administration regulations; in January 2005, the central government issued guidelines on combating corruption, stipulating open bidding on construction projects and intensifying the supervision of land transactions; last July, two more documents were issued regarding bids for state-owned land and transfer of ownership of state-owned land.

"Regardless of these rules and regulations, local governments or some local officials still colluded with businessmen on land deals," said Zhu Lijia.

Land development is a "power intensive" and "capital intensive" area and a breeding ground for corruption, Zhu said.

"Land transaction is the most effective way for local governments to boost economic returns," he said.

"Local governments are the source of supply of both land and commercial residential buildings. They make the rules and arbitrate the land game," he said.

In 2005, total revenues from transfer of land ownership amounted to 550.5 billion yuan (68.8 billion U.S. dollars), accounting for one third of the total revenues of local governments, official statistics show.

Despite the rules on open bidding, public bidding accounted for only 14.57 percent of land ownership transfers in 2002. The figures rose to 26.81 percent, 28.86 percent and 35.06 percent in 2003, 2004 and 2005, but that still means that two thirds of land is transferred far from public scrutiny.

"These figures show that the market is not playing the role it should," Zhu said.

China will boost inspection of land transactions and launch a full-scale onslaught on corruption arising from land transfers, according to Linghu An, deputy head of the National Audit Office.

In a Nov. 21 notice, China doubled land use fees for new construction sites from January 1, 2007.

The notice requires that 30 percent of land use fees be paid into central government coffers, while 70 percent is retained by the provincial-level government.

"To curb corruption arising from land transactions, we must implement central government policies more forcefully," he said, stressing that "implementation of the policies needs to be supervised by the people's congress, the media and local people, or else the policies will have no effect."

Source: Xinhua