Abstract:Although the existing scholarship on the capitalist transformation of Chinese agriculture uses the concepts of the Marxist political economy to analyze class differentiation, it has not systematically analyzed the role of the Chinese state (as manifested in the current semi-private land system) in this transformation with reference to Marx’s theory of agricultural rent. Capitalist transformation of Chinese agriculture in the context of continuing strong government control over farmland provides a unique opport… Show more
“…This does not mean that the village collective has greater power than local authorities in negotiation. The experience of Mengke village is the same as what Gürel (2019) observes:Local government acts as the main agent in land deals, including the acquisition of rural land, without having to deal with each and every property owner in order to convince them to give up their land for a development project.…”
Section: The Shareholding Cooperative Companymentioning
confidence: 85%
“…However, this does not mean the village collective holds absolute control over the land deals. In reality, Gürel (2019) found that, even though shareholding companies that own land are not SOEs (stated‐owned enterprises) by law, government officials are heavily involved in their foundation and daily management in some villages. This is because the critical feature of the Chinese land system is that “local government bodies above the village level in terms of hierarchy usually have greater power than the village collective in every aspect of land deals” (Gürel 2019: 659).…”
Section: Institutional Transformations Village Corporatism and Shareholding Companies In Chinamentioning
confidence: 99%
“…In reality, Gürel (2019) found that, even though shareholding companies that own land are not SOEs (stated‐owned enterprises) by law, government officials are heavily involved in their foundation and daily management in some villages. This is because the critical feature of the Chinese land system is that “local government bodies above the village level in terms of hierarchy usually have greater power than the village collective in every aspect of land deals” (Gürel 2019: 659). Additionally, the absence of a complete property title over land ensures that local governments do not need to negotiate with all of the property owners to give up their land for development projects (Gürel 2019).…”
Section: Institutional Transformations Village Corporatism and Shareholding Companies In Chinamentioning
confidence: 99%
“…This is because the critical feature of the Chinese land system is that “local government bodies above the village level in terms of hierarchy usually have greater power than the village collective in every aspect of land deals” (Gürel 2019: 659). Additionally, the absence of a complete property title over land ensures that local governments do not need to negotiate with all of the property owners to give up their land for development projects (Gürel 2019). In fact, “the villagers, as landowners, have no grounds to negotiate with government, the land‐taker” (Po 2008: 1607).…”
Section: Institutional Transformations Village Corporatism and Shareholding Companies In Chinamentioning
Since the economic reforms of the 1970s, local Chinese urban authorities have requisitioned rural land near cities. To protect their land from these practices, many urban village collectives have established a cooperative shareholding system, but their motives remain unclear. Neoclassical economics suggests that such enterprises seek to maximize profits. Guided by the original institutionaleconomics approach, I investigate this question empirically by interviewing residents of Mengke village in Chaoyang city, Liaoning Province, northeast China. These data reveal four startling findings about the motives behind the shareholding system. First, collective economic organizations do not simply seek the maximization of profit. Second, the shareholding cooperative system adopted by village collectives helps villagers resist external threats such as land loss. Third, the collective economic organization is not merely a firm or a single market; it may work as a firm and a market simultaneously. Finally, managing of common property contributes to maintaining the identity of the collective. These findings suggest that the theories of neoclassical urban economics and new institutional economics fundamentally mischaracterize urban cooperatives.
“…This does not mean that the village collective has greater power than local authorities in negotiation. The experience of Mengke village is the same as what Gürel (2019) observes:Local government acts as the main agent in land deals, including the acquisition of rural land, without having to deal with each and every property owner in order to convince them to give up their land for a development project.…”
Section: The Shareholding Cooperative Companymentioning
confidence: 85%
“…However, this does not mean the village collective holds absolute control over the land deals. In reality, Gürel (2019) found that, even though shareholding companies that own land are not SOEs (stated‐owned enterprises) by law, government officials are heavily involved in their foundation and daily management in some villages. This is because the critical feature of the Chinese land system is that “local government bodies above the village level in terms of hierarchy usually have greater power than the village collective in every aspect of land deals” (Gürel 2019: 659).…”
Section: Institutional Transformations Village Corporatism and Shareholding Companies In Chinamentioning
confidence: 99%
“…In reality, Gürel (2019) found that, even though shareholding companies that own land are not SOEs (stated‐owned enterprises) by law, government officials are heavily involved in their foundation and daily management in some villages. This is because the critical feature of the Chinese land system is that “local government bodies above the village level in terms of hierarchy usually have greater power than the village collective in every aspect of land deals” (Gürel 2019: 659). Additionally, the absence of a complete property title over land ensures that local governments do not need to negotiate with all of the property owners to give up their land for development projects (Gürel 2019).…”
Section: Institutional Transformations Village Corporatism and Shareholding Companies In Chinamentioning
confidence: 99%
“…This is because the critical feature of the Chinese land system is that “local government bodies above the village level in terms of hierarchy usually have greater power than the village collective in every aspect of land deals” (Gürel 2019: 659). Additionally, the absence of a complete property title over land ensures that local governments do not need to negotiate with all of the property owners to give up their land for development projects (Gürel 2019). In fact, “the villagers, as landowners, have no grounds to negotiate with government, the land‐taker” (Po 2008: 1607).…”
Section: Institutional Transformations Village Corporatism and Shareholding Companies In Chinamentioning
Since the economic reforms of the 1970s, local Chinese urban authorities have requisitioned rural land near cities. To protect their land from these practices, many urban village collectives have established a cooperative shareholding system, but their motives remain unclear. Neoclassical economics suggests that such enterprises seek to maximize profits. Guided by the original institutionaleconomics approach, I investigate this question empirically by interviewing residents of Mengke village in Chaoyang city, Liaoning Province, northeast China. These data reveal four startling findings about the motives behind the shareholding system. First, collective economic organizations do not simply seek the maximization of profit. Second, the shareholding cooperative system adopted by village collectives helps villagers resist external threats such as land loss. Third, the collective economic organization is not merely a firm or a single market; it may work as a firm and a market simultaneously. Finally, managing of common property contributes to maintaining the identity of the collective. These findings suggest that the theories of neoclassical urban economics and new institutional economics fundamentally mischaracterize urban cooperatives.
“…With the rapid development of urban land marketization and town and village enterprises (TVEs), the land, especially urban land became more and more scarce [3,4]. In order to meet demand of urban economic development and TVEs, the local government legally or illegally converted farmland at the rural-urban fringe or superior location to absorb the investment of foreign capital, China's Hong Kong, China's Taiwan, or joint venture [5][6][7]. The strategy of substitution of capital for land on one hand booms China's eastern coastal area, on the other hand gives rise to huge stock construction lands in rural and urban areas [8].…”
The high transaction costs due to the incomplete information and transaction rules of the rural collective construction land (RCCL) market indicate that the government must improve the rural collective construction land market. Transaction rules are an important means for the government to intervene in the market and promote the development of market order, to secure land tenure, and to improve the disclosure of information. Vertical integration may reduce enterprise transaction costs but will increase the governance cost of internal organizations in enterprises. Land commercialization and corporate governance restructuring is a considerable challenge worldwide. Using a field survey in Nanhai district, Guangdong province, China, we estimated how the transaction costs of the RCCL are influenced not only by three dimensions of transaction rules—openness, equity, and justice—but also by the human asset in EC or EJC. Tobit models were constructed, and the results show that (1) the greater number of collective leaders, the higher the enterprise transaction cost (human asset in EC or EJC increases transaction costs of enterprises) and (2) the transaction rules are not sufficiently open or fair, which leads to high costs of market information searching, opportunism, and corruption. The transaction information is not transparent and the lag in transaction supervision mode gives rise to unfair transactions, in which the formation mode of land price is unreasonable. Therefore, we suggest that the transaction rules of RCCL market should be further improved in the three dimensions of openness, equity, and justice. Chinese authorities should strengthen their current efforts to build a more open and fair market by reducing the transaction costs of enterprises and improving the transaction efficiency. Our work provides some insights into the improvement of market efficiency which will contribute to the development of the RCCL market in other areas of China and worldwide.
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