Can China's rural construction land market mitigate the constraint of urban conflict in the rapid urbanization？--Evidence from Deqing and Nanhai

Abstract

China is urbanizing at an unprecedented way. Along with the continuous urban expansion, comes out the urban conflicts between supply and demand and substantive value capture between rural and urban areas. The purpose of this study is to examine whether the open access of rural construction land market can mitigate the urban conflicts above. Taking Nanhai and Deqing, the typical areas of rural construction land transaction, as our study area, this work has gathered data both from transaction record and field investigation, estimated the supply and demand function and calculated the optimal supply allocation between governments and collectives based on the theoretical analysis of duopoly market and cournotnash equlibrum. The results indicates that (1) the admission for rural construction land market shifts the construction land market from monopoly to duopoly can improve the market efficiency theoretically.(2) the rural construction land market mitigates the constraint of urban conflict by providing more construction lands and sharing the land incremental value to rural areas.(3) there exists a substitution relationship between government and collective at cournot-nash equilibrium;(4) the local government with land coupon and rural-urban land transactions can occupy greater market share.