China Says More Than Half Of Recent Land Deals Are Illegal

Move to curb illegal land use aimed at cooling red-hot construction market.

By Elaine Kurtenbach
Associated Press

SHANGHAI, China (AP) - More than 60 percent of recent land acquisitions for construction in China are illegal, with the figure rising to 90 percent in some cities, the government said in a report demanding investigations of such deals.

The increase in violations comes despite repeated calls by the central government for local officials to stop selling land use rights for unauthorized construction, often for industrial parks, luxury housing and showcase projects such as convention centers.

In a warning posted on its Web site Wednesday, the Ministry of Land and Resources said any land deals lacking its formal approval are invalid.

The ministry, which oversees all land use, reported that more than 60 percent of new land deals since September 2004 were illegal, the official Xinhua News Agency and other state media reported Wednesday.

An investigation conducted in 2005 found that the number of illegal land use cases accounted for 64 percent of all such deals, with the total area accounting for 53 percent of total land involved. The survey covered new construction projects in 15 major cities.

Provincial governments must disclose at least three ''illegal cases'' in June and more than eight by the end of the year, the ministry said.

Local land and resources departments that fail to do so may be deprived of their right to ratify new land acquisitions, it said.

The belated move to curb unauthorized land use followed a ban announced last week on use of new land for luxury villas and repeated orders from the land ministry to supply more land for smaller, affordable housing.

The moves are aimed at cooling a construction boom that has helped keep economic growth at more than 10 percent for several years running and raised worries over the potential for a financial crisis if borrowers fail to repay loans for ill-considered projects.

They also reflect growing concern over soaring supplies of housing priced far beyond the means of most ordinary citizens, and over the use of fertile farmland for non-agricultural purposes.

Local officials keen to pocket profits from land use sales and boost tax revenues have a strong vested interest in disregarding land use limits.

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