Opinion | How reforming rural land rights can aid China’s common prosperity push

Since the inception of China’s “reform and opening up” policy, the nation has introduced landmark reforms every decade or so. These major reforms in pursuit of national development and economic modernisation include the household contract responsibility system in 1982, the urban housing reform in 1994 and China’s entry into the World Trade Organization in 2001.

By 2021, having achieved the goal of creating a moderately prosperous society and lifting hundreds of millions of people out of poverty, China set its sights on “common prosperity” as its next grand objective.

Nevertheless, two decades into the new millennium, a reform of comparable scale remains conspicuously absent and the road to common prosperity is fraught with hurdles, particularly the urban-rural divide. According to the National Bureau of Statistics, in 2022, the per-capita disposable income of rural areas was only about 40 per cent of that in the urban areas.

This chasm – coupled with a persistent shortfall in domestic demand, a stagnating real estate sector and diminishing economic confidence – highlights the pressing need for China to chart innovative pathways to bolster productivity.

Among the most promising of these pathways is the efficient use of under-utilised rural land and aiding farmers’ transition to more economically productive urban roles. An ambitious reform eagerly anticipated nationwide could invigorate public confidence and urbanisation while addressing the dire need for domestic demand in China’s economy.