China's tough measures to regulate its land market have paid off
with the cancellation of more than 4,800 development zones.
According to incomplete statistics from Ministry of Land
and Resources, 70 percent of 6,866 development
zones across the country were found to have illegally acquired
land or were left unused.
Plans to build the zones on a total of 24,900 square kilometers
of land have been axed, accounting for 64.5 percent of the total.
More than 1,300 square kilometers of land have been returned to
agricultural use.
The MLR is stepping up project reviews and inspections to ensure
the nation's policies are carried out. A total of 4,150 projects
have been suspended.
The campaign to stop the real estate sector from overheating and
protect arable land was launched in February last year by the
Ministry of Land and Resources (MLR), the National Development and
Reform Commission, the Ministry of Construction and the Ministry of
Supervision.
Over-development of industrial zones may lead to financial risks
since many are built depending on bank loans, according to Shu
Kexin, vice director-general of the MLR's Department of Land Use
and Management. More importantly, many development zones either
under construction or in the pipeline hold no attractions for
investors.
Shu estimated that 200 million yuan (US$24 million) is needed to
develop 1 square kilometer of an industrial zone. This means that
more than 600 billion yuan (US$73 billion) will be needed to
develop around 10 percent of the planned areas.
"If there is no return on the investment in the development
zones, these large sums of money will be buried in the soil," he
said.
In late 1984, the central government approved the first group of
development zones in 14 coastal cities to provide preferential
policies for foreign investors. Their success has led many local
governments to attempt to repeat the experience on their home
turf.
Responding to worries that correction of the land market will
curb the interest of foreign investors, an unnamed ministry
official said that a decrease in the number of development zones
will not have a lasting negative impact on investment. Potential
investors consider the overall environment to be more important,
and with the nation's land market stabilizing, international
investment should rise.
The People’s Daily reported that some analysts forecast
actual real foreign investment to increase a moderate 10 percent
from last year.
The nation's rapid economic growth has created development
potential for foreign investors, but government departments should
develop specific preferential policies to attract capital, insiders
say. The land management system should be reformed and a long-term
land utilization system should be formulated.
Investigations into land prices in urban areas are also under
way in 50 major cities to supervise land price changes.
(
China Daily August 24, 2004)