Chinese Government Restricts Use Of Land Resources

The Chinese Ministry of Land and Resources introduced a new circular aimed at avoiding waste and the overdevelopment of land resources. Effective as of 1 September 2014, this circular will change the current Chinese land use regime in various important aspects. The use of land in China for commercial purposes is likely to become more expensive and, at the same time, less secure. Companies for which real estate is important should keep track of these developments and engage with local authorities on this.

Land in China can either be owned by the State or by farmers' collective organisations. The State-owned land plots can be developed and used by governmental agencies for the public interest, or by private parties for housing or commercial purposes based on land use rights ("LUR"). Land resources owned by farmers' collective organisations are for their farming or residential use only, and they are restricted from using the land for other commercial purposes.