This year, in order to cool down the overheated economy, the central government has called a halt to 4,150 land development projects nationwide. About 70 percent of plans to construct commercial and industrial development zones have been cancelled, saving 64.5 percent of land scheduled for occupation, according to official statistics.

The situation has led the Tianjin Economic-Technological Development Area (TEDA) administration to increase land efficiency by implementing a policy of "developing without new land."

As early as 1991, TEDA met a target of 1 yuan worth of land attracting 2 dollars of investment for industrial projects that should produce 3 dollars of output value annually.

Since its establishment in 1984, the area has continued to expand investment density and increase the number of technology-intensive projects to ensure stable economic growth, according to Li Yong, director of TEDA Administration.

"TEDA regards every inch of land as gold," he said.

Land prices are set according to average per-unit investment and industry.

Proposed projects must meet strict requirements before gaining approval. Preference is given to those involving high investment, high scientific and technological content, high profit potential and low pollution.

All land-use plans must be examined by the administration to avoid the waste of resources.

TEDA regulations also require construction to start within six months after the land-use transfer contract is signed, and it must be completed within two years.

Land users are not allowed to change the use of the land without permission from authorities.

The regulations don't merely exist on paper: during the first half of this year, the area administration confiscated 300,000 square meters of idle land or land on which construction had stopped.

"Combining industrial structural reform and land use adjustment is the key to TEDA's success," Li said.

Projects that occupy large areas but have not used the land efficiently and are unprofitable have been gradually closed or downsized. Their land has been or will be transferred to more cost-effective projects.

Li indicates that this method sets the scene for the greatest economic returns on limited land while spurring industrial structural adjustment.

During the early years, many projects in the zone were of small or medium size. Most of them have gone bankrupt in the past 20 years and their mortgaged land turned over to the banks.

The second round of the TEDA land development program is in its trial phase. At present, the administration is establishing procedures for changing ownership to enable the land to be repossessed for new projects.

The new, strict land-planning controls have increased investor confidence in the zone's future.

Twenty-two of the projects approved by the administration in the first half of this year were large ones, each involving investment of more than US$10 million. Another 37 are starting up with investments of at least US$5 million.

Two projects with investment exceeding US$100 million each have also been approved. About 97 percent of the funding will come from abroad.

TEDA's efforts are paying off. The zone has met its target of attracting US$500 million of industrial investment per square kilometer of land, with industrial output per square kilometer reaching 8.0 billion yuan (US$967 million). In both areas, TEDA has taken the lead among development zones in China.

The area's total industrial output reached 125.0 billion yuan (US$15.1 billion) last year, and its financial income totaled 9.3 billion yuan (US$1.1 billion).

TEDA, built 20 years ago on 33 square kilometers of salt flats and wasteland, has developed into a new industrial zone of international standard. The area was the first development zone to use the transfer method of land allocation, a daring experiment in a time when the government still distributed land free of charge In July 1985, the area issued the TEDA Land Management Regulations which concentrated on amortized payments for land.

(China Daily October 8, 2004)