China has established a new system to keep track of land use in a bid to curb runaway investment and protect the interests of farmers.

The State Council, China's cabinet, has authorized the Ministry of Land and Resources (MLR) to supervise and overhaul land use and management by local governments, Vice-Premier Zeng Peiyan told a national conference on land control.

The cabinet also decided to set up a national office to oversee land use, as well as nine regional bureaux, said the official.

"A major problem this year in land management is the excessive expansion of low-cost industrial land," said Gan Zangchun, the newly-appointed deputy state superintendent-general of land.

China recorded an economic growth of 10.9 per cent in the first half of this year on the back of a 30-per cent growth in fixed assets investment, the highest figures in recent years.

The government and many land experts believe that illegal land supply is a leading cause of the runaway investment, reports said.

A survey of 16 cities by the MLR last year showed that nearly 50 per cent of the new land under development was acquired illegally. What's worse, the figure was as high as 90 per cent in some cities.

To stop the trend, the State Council released an urgent notice on controlling land supply in September.

The new rules warn local leaders that they will be penalized if they fail to stop or investigate illegal land sales in areas under their jurisdiction, he said.

Officials who sell land for lower than the minimum price will be prosecuted according to the new rules, Gan said.

Reining in local governments is a major target of the new policy, because "local governments are actually behind almost all the major cases of illegal land use," said Zhang Xinbao, an MLR official in charge of supervision, in a previous interview.

Thanks to land control measures in recent years, the total supply of land in 2005 has dropped 17.9 per cent year-on-year, Gan said.

"At the same time, China's economic increase has remained above 9 per cent year-on-year. This shows the nation's economic development pattern has begun to change (in a positive way)," he noted.

Another focal point of the new system is to seek better protection of the interests of farmers whose land is sold by local governments, said the official.

"Farmers are the group who will benefit most from the new policy," Gan said.

Revenues from land sales must first be used to pay for the resettlement of farmers and compensation for their loss of crops, according to the new rules.

"And more money will be invested in infrastructure in rural areas, as well as for city residents with low incomes in the future."

The notice made clear for the first time that if the sale price of any piece of land is not enough to cover the cost of resettling farmers, local governments must pay from its pool of land sale revenues.

Local governments should make sure that farmers who have lost their land are properly trained for new jobs and provided with new means to support themselves in a sustainable way, the notice said.

China faces the extremely difficult task of retaining 120 million hectares of arable land by 2010, officials said. Statistics indicated that the nation's farmland area stood at 122 million hectares last year, 8 million hectares less than 10 years ago.

(China Daily 10/02/2006 page1)