The central authority has sent a series of clear signals that it intends to tighten macro control on national land resources and regulate the deal process. On August 24 the Ministry of Land and Resources added another 22 cities to the list of 84 cities whose land use plan must be reported to and approved by the State Council once a year.

The State Council must approve the requisition of farmland in the area included in the 22 cities' master plan of land use. The 22 cities, made up of affluent coastal cities, tourist resort cities and important industrial hubs in the Pearl River and Yangtze River deltas, have become the hottest real estate markets in China after land deals in first and second-tier cities slowed as a result of a series of tightening measures.

The Ministry of Land and Resources will also pilot online land-use transactions for one year in several cities at various levels. It is hoped that this will help make land sales more transparent and put an end to the lucrative corruption and black box deals that have plagued land sales.

The new online trading system covers all stages of the process, from application and auction to confirmation of sale. More transparent and open to third party supervision, this system will replace the traditional auction process, removing the systematic obstacles that prevent effective implementation of the central authority's policies.

With rigorous control of land use approval and the land-sale process, it will be easier for the central government to effectively control the macro economy and housing prices by increasing or reducing land supplies and tightening control on land transfers.

It will also force local governments to find other sources of revenue rather than relying on land sales for economic development.

However, the government should take this opportunity to standardize its management of home demolitions and protect farmers' rights and interests. And the limited land that is still available should be guaranteed for the construction of affordable housing.

Having a bigger say in land use and sales, the central government can integrate its macro economic policies with its arable land protection, which was highlighted by President Hu Jintao in his speech on August 23, when he said that China should implement a land-saving strategy and continue to adopt strict regulations regarding the protection of arable land.

The use of land is of vital importance for the nation's economic development, national security and social stability. Only comprehensive regulation by the central government can address the issue.

But it should bear in mind that while satisfying our needs for development, we should also take the needs of future generations into consideration.

(China Daily 08/26/2011 page8)