Income from Land Transfers Plunges

The sluggish property market and plunging investments last year led to a sharp fall in government income from land transfers nationwide, China's top land official has said.

Income from land-use right transfers across the country totaled more than 960 billion yuan (140 billion U.S. dollars) last year, a year-on-year decrease of nearly 20 percent, figures from the Ministry of Land and Resources have showed.

The deepening global financial crisis could also mean a continuing slump in land transfers this year, Land and Resources Minister Xu Shaoshi said on Friday.

However, Xu spoke of a possible rebound in land transfers, triggered by a new wave of infrastructure construction as part of the 4-trillion-yuan economic stimulus package the central government announced in November.

Land resources had been declining in the first three quarters of last year, but the amount has since been rising due to the stimulus package, which requires vast areas for construction projects, Xu said.

The construction projects of the stimulus package include ongoing building works, those slated to start from 2010 and 2011, and those that are still in the pipeline, Xu said.

Due to the huge fund injections from the central and local governments in construction over such a short time, the ministry is also reportedly facing severe challenges to check the misuse of arable land.

But the bleak outlook for income from land transfers, which is one of the most important sources of income for local government coffers, could actually protect the country's diminishing arable land bank, Xu said.

"Local governments will depend less on the income from land transfers, which is good for the protection of arable land." Xu said.

Source: China Daily