Mobility

China~s Land Market Auctions: Evidence Of Corruption

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Executive Summary

This paper studies the urban land market in China in 2003 - 2007. In China, all urban land is owned by the state. Leasehold use rights for land for (re)development are sold by city governments and are a key source of city revenue. Leasehold sales are viewed as a major venue for corruption, prompting a number of reforms over the years. Reforms now require all leasehold rights be sold at public auction. There are two main types of auction: regular English auction and an unusual type which the authors call a "Two stage auction". The latter type of auction seems more subject to corruption, and to side deals between potential bidders and the auctioneer.

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