Alerting the Restoration of Planned Economy in the Field of Land Allocation / Sheng Hong


My eyes are surprised by Spring's coming,
There is no perfume left when she goes;
The nest of Spring in my wish only,
Will attract Spring back years and years.

Recently, we have seen the regulations on the implementation of the land management law (Revised Draft) issued by the Ministry of natural resources. After a rough look, it is found that this is another typical example of “departmental legislation”. The core issue is to use the emphasis on planning right and land use management, fight for and increase the power of administrative departments, weaken citizens’ land rights and related housing rights and property rights, and weaken the decisive role of market in land resource allocation.

The so-called “land planning” is the government’s plan for the allocation of land resources. This is the same as the planned economy, assuming that the government or its appointed “experts” are fully aware of all the information about land allocation, they can make a perfect land layout arrangement. This is the philosophical logic as the same as that of the planning authority in the period of planned economy, that is to say, its members are supposed to be some people with infinite rationality, farsightedness and insight, who can formulate a perfect production plan that can provide timely supply for hundreds of millions of people’s needs at a specific time and place. We know that the history of planned economy tells us that it is impossible at all. In my article “Plan and Market under Epidemic in Wuhan”, I have made the following discussion on how the planned economy survived.

“By reducing the variety, rationing and shortage of commodities, the planning authorities have managed to keep the general public on the edge of food and clothing. In the early stage of the formation of the planned economic system, including the transformation of industry and commerce, the number of commodity varieties in China continued to decrease. According to the data of Tianjin quoted in the new China business history draft, the commodity varieties of Tianjin Culture Station decreased from more than 600 in 1957 to more than 300 in 1960; Tianjin Department Store reduced from more than 300 varieties with 3700 design-and-color to more than 200 varieties with 1300 design-and-color (compiled by the Institute of commercial economy of the Ministry of commerce, 1984, P. 159). In 1957, a large number of commodity varieties were reduced on the original basis. People who have experienced this period are most impressed by the fact that the color of our clothes is mainly blue, so they are called “blue ants”. In the ten years of the Cultural Revolution, people in the North could not see bananas and oranges. The great reduction of commodity varieties and designs is obviously far away from the complex utility needs of consumers, which greatly reduces the quality of life of the people, but it can reduce the complexity of distribution of commodities to close to the ability of planners.

Even so, the planning authorities could not meet the needs of consumers, so they took a further step, namely, rationing. For example, food stamps, oil stamps, meat stamps, non-staple food quotas, quotas for peanuts and melon seeds, radio, sewing machines, watches, bicycles and other so-called “four big pieces” also need to be purchased by tickets, and so on. At the peak of the planned economy, around the time of the Cultural Revolution, there were more than 100 kinds of commodity quota tickets. Even so, it is often unable to reach the balance of supply and demand, so we often have to line up. For example, every year, people line up to buy rationed cabbage. In the fields of investment goods, raw materials and intermediate products, there are more shortages, so that Hungarian economist J’anos Kornai wrote a book “Shortage Economics” to analyze the planned economy. ” (Sheng Hong, 2020)

China’s reform and opening up is to abandon the planning authority’s national production plan, let the market play a basic role in allocating resources, and let all people make their own decisions about producing how much, what and for whom, based on market prices, the market forms a dynamic structure of production and consumption, then we can have the Chinese miracle and our income and wealth today. It cannot be ignored that in the process of market-oriented reform, in addition to the market’s allocation of resources for production commodities, there is the market’s allocation of land resources, the rapid growth of China’s economy has been jointly formed. In this regard, I also discussed in the article “Why Can’t the Xiangtang be demolished?”

“In fact, if we think that only government approval can build houses, there will be no miracle in China since the reform and opening up. The rapid economic growth brought about by the market-oriented reform is reflected in the rapid urban growth in space. But its speed far exceeds the foresight of the government, the construction of urban infrastructure and the growth of planned housing. A large number of migrant workers entering the city cause excessive demand for housing. The rural collective in or on the edge of the city respond quickly, build a large number of housing to meet the demand, provide housing for the “out of plan” influx of population, and silently solve the urban expansion Can’t keep up with the demand for cities. This is the so-called “village in the city”. The houses above are all so-called “small property houses”. Although there are such and such problems in urban villages, and the main reason is that the government does not provide public services for them. If there is no urban village, just waiting for the government’s “planning” and “approval”, the city will not be able to accommodate so many labor force from other places, nor can it talk about rapid economic development. Because of the common existence of villages in the city and the low rent, the wage cost is also greatly reduced. This is particularly important at the beginning of China’s economic takeoff, and it cannot be ignored now. “My conclusion is that “the institutional reason for China’s miracle is that the market plays a decisive role in allocating both commodity production and land”. (Sheng Hong, 2019)

The advantage of market system to allocate land resources is not only to provide a large number of migrant workers with “small property houses” and “villages in the city”, but also to provide conditions for urbanization. Urbanization is one of the two pillars of modern economy that Lewis, the Nobel Prize winner, said. The other is industrialization. From 1996 to 2017, the urbanization rate of Chinese mainland increased from 30.5% to 58.5%, and about 20000000 rural residents entered the city every year. This has brought a huge investment demand for urban infrastructure and municipal public utilities. I have estimated that in 2015, the investment in municipal construction, including counties and towns, is about 2.3 trillion Yuan; if we consider infrastructure in a broad sense, including transportation, communication, health, education and culture, the investment in urbanization in 2014 is about 13 trillion Yuan. More in the future. Investment in any industry is far from that scale. Therefore, the investment demand of urbanization is the important driving force of modern economic development. In addition to investment, every year more than 20 million rural residents entering the city will increase their income substantially due to the transfer from the primary industry to the secondary industry or the tertiary industry, and because of the dense commerce in the city and the convenience of purchase, they will also increase their permanent demand substantially due to the change of purchase habits.

Market-oriented urbanization is not only the main driver of economic development, but also brings about land conservation and optimization of land resource allocation. The definition of town is that the population density is significantly higher than that of rural areas; for example, the definition of the United States is more than 386 people per square kilometer. Urbanization means that the population flows from the place with low population density to the place with high population density. High population density means that the per capita land area will be less, so it is equal to saving land. In addition to the military fortress or political center, the core function of the town is trading, and the city is the tangible form of the market system. As long as the market system is implemented, more businessmen will gather at the trade nodes, and the transactions between them create transaction dividends, so as to attract more people to gather in this place. The aggregation of population will bring about the so-called “market network externalities”, that is, the growth of trading opportunities and trading dividends is faster than the growth of population. So the process repeats again and again. The more important nodes will attract more people, the less important nodes will attract less people, and the regions not on the trade nodes may also have population outflow. This is a market-oriented process of optimizing the allocation of land resources.

The allocation of land resources is a complex system. Towns, in particular, are more complex organisms. The process of urbanization is the evolution of complex system. In fact, human beings with limited rationality can’t fully understand complex systems, let alone “plan” complex systems. If they really think it can, it’s what Hayek called “Fatal Conceit”. People who have done “planning work” in the period of planned economy all know how ridiculous their so-called “planning” is. At that time, there were only 400 kinds of products managed by the central government (Cheng Liansheng, 2016, P. 231), while in 2019, there were more than 100 million kinds of green goods in Jingdong alone (Jingdong Big Data Research Institute, 2019), which was much less than Taobao. In the period of planned economy, the varieties of commodities are less than one hundred thousandth of today’s varieties, with low quality, high price and frequent shortage. Do they really think their “plan” is superior to the market? Land planning is more difficult than commodity production planning. Not only is the allocation of land, especially the allocation of urban land, far more complicated than the allocation of production system, but also because the production plan is generally only formulated for one year, while the land plan is formulated for the next ten to twenty years. For the future, there is a large gap in human rationality. They are not clear about the current complex system, let alone the future.

Because technology, institution and natural environment will change in the future, people can’t predict how to allocate land in the future. For example, the dry and cold climate led to the southward shift of farming society; the implementing of market rules across Eurasian Continent  led to the emergence of the Silk Road and surrounding cities; the development of navigation technology will lead to the rise of coastal cities; the improvement of transportation and communication technology will form and develop the network city system; the popularization of private cars will bring the suburbanization; the emergence of Internet and e-commerce is reshaping the urban pattern. But these environmental changes, institutional and technological innovations could not be foreseen ten or twenty years ago. “Innovation” means “unforeseeable”. Therefore, there is absolutely no perfect land planning. The land planning we can see now is actually one with serious problems. Needless to say, there are still problems in the preparation process of land planning, the legal participation of the public has not been implemented, and the compilers themselves still have motivation problems. Some studies have pointed out that “the will of the chief governs the urban planning” (Baidu knows, 2017); in the planning, “the land used by government agencies and large-scale public facilities is over occupied”, “the construction density of ordinary residential areas is too high”, and “the function of urban public services is missing” (prospective industrial planning, 2017).

However, such a “plan” has been over emphasized in recent years. Although the new Land Management Law passed in 2019 has been improved, there are still many problems. One of the serious problems is the improper over emphasis on the “master plan of land use”. It is full of such “planners” language: “strict land use control”, “overall arrangement of urban and rural production, life, ecological land”, “the overall planning of land use of township (town) should Determine the purpose of each piece of land, and “people’s governments at all levels shall The total amount of construction land shall be controlled, and the construction of township enterprises, public facilities, public welfare undertakings and houses of rural villagers shall be carried out in accordance with the planning of villages and market towns Construction land shall conform to the general plan for land use and the annual plan for land use of townships (towns), and shall go through the examination and approval procedures in accordance with the provisions of articles 44, 60, 61 and 62 of this law” and so on. “Planning” is everywhere, and any move to build a house must be “approved”.

We also know that “determining the use of each piece of land” correctly almost a dream. It is impossible for the planning authority to make a perfect plan. It should even be said that compared with the layout of land resources determined by the market, the planning of the planning authority is many times crude. But the “Land Management Law” requires people to give up the decision-making right depended on the market signal, and follow the rough planning, people can only be restricted by the rough planning and cannot carry out effective construction, or even the rough planning is not available, and cannot carry out any construction. The latter is a more serious distortion of land resource allocation. However, the so-called “land use indicators” stipulated by the administrative departments at all levels can only be roughly distributed evenly according to the administrative divisions, but cannot understand and foresee the actual imbalance of urban development under the guidance of market mechanism, and cannot foresee that a certain place is a new growth space driven by the next technological innovation. If such planning power appeared 150 years ago, there would be no rise of Shanghai at all, because at that time Shanghai was only a village level unit. If such planning right appeared 40 years ago, there would be no rise of coastal cities such as Shenzhen, Guangzhou, Pudong, Xiamen and Qingdao, because it seems they should develop synchronously with the administrative regions at the same level.

Is there any evidence of that? In the 30 years before the reform and opening up, the allocation of urban land resources was completely controlled by the central planning authority, and citizens had no right to build their own houses. As a result, the urbanization rate increased from 12.46% to 17.92% in the 26 years from 1952 to 1978. The average annual increase is only 0.2%. As early as 1936, according to the China Yearbook, the population living in the settlements with more than 2500 people accounted for about 28% of the total population (Gaolu, 2014). As a contrast, the urbanization rate in Chinese mainland has increased by about 1 percentage points per year since 1978, and then accelerated to 2 percentage points after 1996. This shows that in the period of planned economy, the level of urbanization is actually backward. In 1978, the average housing area in Chinese mainland city was only 3.6 square meters, not as good as 4.5 square meters in 1950. 8.69 million households were short of housing, accounting for 47.5% of the total number of Urban Households at that time (Huang Xiaofan, 2017). At the same time, urban infrastructure and municipal construction are even more dilapidated. In many cities, there is no tap water to enter the household, and only a few cities have pipeline gas, let alone overpass and subway. The reason for this is the same as the reason for making production plans and depressing economic development, that is, planners use their limited rationality to limit the decision-making and efforts of the people in housing and urban construction under the guidance of market signals.

So why do some people go back to planning for land like they did in the planned economy? This is because, in the present political structure of our country, the government administrative department has the impulse of seizing power. The so-called power is the ability that the people give the government to protect their rights and improve public governance. But when the officials of these administrative departments deviate from the wishes of their clients, they will find that these powers can also be used for their own benefit. This is the so-called power rent-seeking. If we want to seek rent, we must first set up rent; if we want to set up rent, we must first have power. As long as we can set limits on the price, quantity of resources or products, the entry of production enterprises and even the purchase of consumers, there will be rent. For example, food is rationed, food tickets can be exchanged for money; at the beginning of the reform, the Administration for Industry and Commerce had the power to approve the establishment of enterprises, and those leaders of the Administration became rich. So power is interest. Government officials, like others, are economic men who seek benefits and avoid disadvantages, so they naturally fight for power for their own interests. There are also various levels of power struggle, the lowest is probably to fight for the existing power. For example, for the management of agricultural vehicles, the agricultural machinery management department and the public security traffic management department competed with each other only because of the management fee. The highest level is “departmental legislation”.

In 2010, I pointed out in my article, Criticism of the Land Management Law and its” revised draft “, that the” revised draft “proposed by the Ministry of land and resources at that time was a” departmental legislation “. I pointed out that “the administrative department is too strong, and the government departments are involved in more economic fields, thus becoming a party of transaction or conflict of interest. It is impossible to hold a neutral and detached position in legislation, while the people’s Congress is relatively weak, which can not effectively restrain the tendency of the administrative department. The executive branch usually carries out the actual legislative power through the departmental ‘regulations’ or even’ opinions’. Because the departmental officials are also the actual law enforcers, and they are not perfect. They may use the ‘actual legislative power’ to seek rent for themselves. It is the greatest practical legislative power to provide “draft” for law revision, and the best opportunity to set up rent for department rent-seeking. And “departmental legislation” often takes the form of secrecy. Before it is submitted to the National People’s Congress for deliberation, most Chinese people, especially those who are related to the interests, do not know about it, and there is no pressure of public opinion supervision, which leads to the adoption of wrong legislation. ” (Sheng Hong, 2010)

We know that the “departmental legislation” of the Ministry of land and resources that time ended in failure. However, the “departmental legislation” can also take advantage of the opportunity of drafting the detailed rules for the implementation of the law, once again cramming the departmental private goods into the law. The implementation regulations of Land Management Law (Revised Draft) proposed by the Ministry of natural resources is a typical “departmental legislation” operation that takes advantage of the opportunity of drafting the implementation rules. Originally, the elevation of planning right in the new land management law was a serious mistake, but in the “revised draft”, the “planning right” was once again elevated. As mentioned in the third article, all kinds of “land development, protection and construction activities should be based on land space planning.” If there is no plan, nothing can be done. First, this meaning does not exist in the land management law, which actually reduces the rights of citizens or organizations and increases the power of administrative departments. This is prohibited by the Legislative Law. Second, this article puts “planning” in a supreme position, which eliminates the decisive role of the market system in the allocation of land resources, and also deprives all citizens of use of land through the obtaining of property rights or use rights of land. This of course also violates the “market economy” principle of the Constitution and the “land ownership” and “housing rights”.

Who will plan? As the main body of the draft, the Ministry of natural resources has written its own power scope and position in the revised draft. This is “the national land and space planning shall be organized by the natural resources department of the State Council in conjunction with relevant departments”; if someone violates the planning, “the natural resources department of the people’s government at or above the county level shall order…” “,” those who obstruct the staff of the competent department of natural resources from performing their duties according to law shall be given administrative penalties for public security or investigated for criminal responsibility according to law. “It plans, it implements, it checks, it punishes. Thus, the weakening and deprivation of the land rights of citizens has become the power of the Ministry of natural resources and its interests. These are the only ones that combine legislation, justice and law enforcement. They are not only a great power, but also a kind of compulsive power, which becomes murderous. According to legal theory, a department can’t stipulate its own power in the detailed rules for implementation, which is equivalent to self-authorization. And self-authorization is the behavior that an administrative department should not do, which is to overstep the legislative power. Its power can only be defined by its superior administrative organ (such as the State Council) or legislature. Therefore, it is illegal for the Ministry of natural resources to draft such a “revised draft” at one stroke.

Do I exaggerate in saying this, or do I judge a gentleman with a villain’s heart? No. Not necessary to say that the Ministry of natural resources is an administrative department, in this structure, there is an internal impulse for it to fight for power, its predecessor is mainly the Ministry of Land Resources. In all the “departmental legislation” opportunities, it shows this characteristic. It has such a “tradition”. For example, in the “revised draft” of the land management law proposed by the Ministry of Land Resources in 2009, there are many its departmental interests. The most important thing is to give the Ministry of land and resources comprehensive power on land resources. I pointed out in the article, Criticism on Land Management Law and its “revised draft”, “since the land management law and its’ revised draft’ have a strong color of departmental legislation, although the land management department is given too much power, there is no description of the positioning of the land management department in the whole article, which implies that the land management department is the main body of legislation and enforcement of the law; among them it is even less likely that there will be provisions to limit and supervise the land administration. This makes the Department a ‘de jure’ Department of the Land Management Law. ” (Sheng Hong, 2010)

Later, some functions of the Ministry of land and resources and other departments were merged into the Ministry of natural resources, and its behavior, even before the implementation regulations were not passed, was already frightening. In the current large-scale illegal demolition campaign, we can often see the figure of the Ministry of natural resources. In my article “an important lesson of property right theory”, I mentioned that “in response to the letter from the residents of the Old Beijing Courtyard in the Water Great Wall, the Beijing Municipal Commission of planning and natural resources said,” according to the spirit of the document of the Ministry of natural resources, the house is within the scope of river management, and the area belongs to the state-level forbidden construction area. It is forbidden to build all facilities unrelated to water conservancy and should be demolished.” In the absence of any legal basis, the system of the Ministry of natural resources actually used the secret “spirit of documents” within the Ministry as the legal basis for sentencing the death penalty of “old Beijing courtyard of the great wall of water”. It can be seen how urgent the Department is to seize power and fight for power, so that it can neither be cited as laws and regulations nor taken as evidence in court regardless of the “spirit of documents” Na, however, uses it against the “housing right” and “property right” protected by the Constitution, and against other legal settings safeguarding the Constitution.

The forced demolition of Xiangtang cultural new village was also endorsed by Beijing Municipal Commission of natural resources and planning. It identified the residence of Xiangtang cultural new village as “illegal construction” on the grounds that it did not “obtain (temporary) construction project planning license, rural construction planning license” (Beijing Municipal Commission of planning and natural resources, 2019). However, Article 41 of the urban and rural planning law, which was implemented in 2008, stipulates that “rural construction planning license” is only required when using agricultural land; this obviously does not apply to most Xiangtang cultural new village houses that do not occupy agricultural land. Even if it is applicable, according to the legislative law, it is “not retroactive”, because the houses in Xiangtang new village were basically built and sold before 2008. In the case of illegal demolition of banshanyunju, Nankou town government is “in accordance with the application of Beijing Planning and Natural Resources Commission and the ruling of the people’s court”. And Banshan Yunju was sold in 2010, and it can’t be forcibly demolished according to Article 65 of the urban and rural planning law, because it’s not the “project under construction”. At present, the basic mode of large-scale illegal demolition is that the Ministry of natural resources determines “illegal construction” systematically, and then the local government departments carry out illegal demolition. When questioned by the forced demolition owners, the agency of the Ministry of natural resources said “I only identify the illegal construction”, and the forced demolition local government said “it’s not what I identify”. They cooperate with each other skillfully, do not want to bear legal responsibility, and will accomplish such evil deeds. Can we allow such an institution to regain the power conferred by its own draft implementing regulations?

In fact, the Ministry of natural resources (the Ministry of land and resources) has been standing behind the large-scale demolition campaign for many years. In the process of market-oriented land allocation to achieve China’s miracle, it has no achievements, but often provides public opinion support and specific operation for forced demolition. Among all kinds of public opinions it produces, “illegal house with small property rights” and “no house building planning license” are more prominent, which are also the main reasons for illegal forced demolition. In fact, the so-called “small property right house” is a house built on collective land. The property right of collective land is the complete property right stipulated in Article 10 of the constitution. Including the right to use, the right to income and the right to transfer. In many speeches, I said, “the officials of the Ministry of land and Resources said that the so-called” house with small property rights “was illegal, but they never said which law it violates. Their so-called “law” is their own view. So I put forward in a speech in Shenzhen, “all property rights should be protected no matter it is small or big.”. However, in practice, many local governments have explicitly said that “small property right houses” are illegal, saying that “as long as the real estate certificate is not a red copy, but a green or blue copy”, it should be demolished. This has misled many people into thinking that “small property right houses” are illegal and will be demolished.

And if the so-called “no construction planning license” is illegal, almost all houses have become “illegal houses”. Article 41 of the urban and rural planning law, which came into effect in 2008, says that in order to occupy agricultural land for rural housing construction, it is necessary to apply for a rural construction planning license. And the real occupation of agricultural land for building houses only accounts for a small part of “small property right houses”. However, from the perspective of the systematic behavior of the Ministry of natural resources, it has extended the article of the law to all urban and rural housing construction; it is applicable to both the buildings before the entry into force of 2008 and the buildings built on non-agricultural land at all times. As long as there is no “construction planning license” as it said, it will be listed as “illegal construction” and will be illegally forced to demolish. In this way, no house can escape the fate that the system of the Ministry of natural resources determines “illegal construction”. You can tear it down wherever you want. This is not only a general distortion of the interpretation and use of the law. It is what one cannot do without an extremely malicious motive, unscrupulous means, the arrogance towards the Constitution and the law in minds. We can imagine what kind of disaster would happen if the Ministry of natural resources got the power it put into the implementation regulations of the Land Management Act (Revised Draft).

In fact, it is against the principles of the constitution as long as it is stipulated that the construction of houses by citizens should be approved by the government. The constitution confirms that Chinese mainland is a country that implements market economy system. Its basic principle is resource allocation, including land resource allocation to be determined by the market. The so-called “market decision” is a decision made by citizens or organizations based on the cost-benefit judgment of market signals. So the so-called “market decision” is the citizen decision. At present, many people may not understand why land allocation cannot be decided by the government. In fact, we can only understand if we look at the allocation of resources for commodity production determined by the market. Today, no one can think that the goods produced by a company are illegal without the approval of the government. On the contrary, the production of goods without the approval of the government can form today’s abundant supply of goods and quantities, and the emergence of new products and services with constant innovation. Why worry about house building without the approval of the government? We only need to look at the strategic contribution of “village in the city” and “house with small property rights” to China’s miracle after 40 years of reform and opening up, and we will know the great significance of market allocation of land resources.

On the other hand, let’s imagine what a commodity would look like if it was illegal without government approval. For example, there is a kind of computer case or mobile phone fuselage that is not approved by the government, so a government department says that it is a kind of case or fuselage that is “illegally produced”, so it is necessary to “forcibly dismantle” these cases or fuselages. As a result, all citizens’ computers or mobile phones will be destroyed. Not only the CPU and other parts in the chassis or the fuselage will be destroyed, but also the main storage and accumulated information will be destroyed. What kind of consequences will this have? How similar is the situation that the Ministry of natural resources wants to demolish citizens’ homes with the so-called “no permission”! A residential unit is a “case” or “fuselage”. The decoration and installation of furniture and electrical appliances carried out by the owners or residents, as well as the trees and flowers planted in the courtyard are “CPU” and “parts”. The lifestyle, family culture, courtyard aesthetics and life memory they form inside are the software and information in the “case” or “fuselage”. Illegal demolition destroys more valuable things just like the hardware and software destroyed when “case” or “fuselage” is dismantled.

Some people will misunderstand me and think that I have any personal grievances with the Ministry of natural resources (the Ministry of land and resources). In fact, I am full of love for it. I can’t bear to see it make mistakes or hurt itself. Why do it hurt itself? In fact, any person or institution, as long as it competes for power that does not match its own responsibilities, will hurt itself. Not the greater the power, the better. I pointed out in my article “Criticism of the Land Management Law and its’ Revised Draft ‘”, “due to the lack of institutionalized supervision over the land management departments and the government departments that expropriate and expropriate land, the relevant land departments abuse their power, set up rent-seeking and rent-seeking, which has become a serious disaster area of corruption.” As early as the beginning of the 21st century, the land sector has been “one of the three major disaster areas of corruption”. So far, two ministers of the Ministry of land and resources became prisoners, several directors of local land and resources bureaus were sentenced, and several department and bureau level officials were jailed. In 2018 alone, five department level officials were convicted (Zhou Chao, 2019). This is because the greater the power, the more deviated from the public power given by the constitution, the more likely to form a violation of civil rights. In order to avoid the so-called “legal harm”, many citizens have to use other means to avoid it. Professor Steven Cheung said that the government’s intervention in the market price will generate rent, which also creates rent-seeking space for officials.

On the other hand, if a department has too much power and thus too much interest, someone will covet the position of the Department. When I wrote “the theory of partial property rights and the illusion of state-owned enterprises”, I found that after state-owned enterprises obtain more preferential policies and monopoly rights through “lobbying in house”, the positions of management in state-owned enterprises are more unstable and their political risks are greater. This is because the benefits gained by the state-owned enterprises due to their political operation are not attributed to a certain individual, but only to a group. When other individuals in the group find this benefit, they can take various means to squeeze into the state-owned enterprises. One of them is to frame up the existing managers of state-owned enterprises. According to the analysis of some data, the probability of senior executives of state-owned enterprises getting a crime is 94 times that of private entrepreneurs. Moreover, the higher the position is, the more likely to be punished; the crime probability of the top leaders of state-owned enterprises (Chairman, general manager or secretary of the Party committee) is 207% higher than the average level of senior executives; the greater the monopoly interest of the industry, the more senior executives will be jailed; for example, Sinopec’s three consecutive general managers were jailed. This includes the problem of the lack of self-discipline of the executives of these state-owned enterprises, and some of them may be framed by others who prefer for their positions.

There is a similar situation in the executive branch. Departments expand their power by means of “departmental legislation”, but it is impossible to clearly define it to some individual, which attracts others to obtain power by seizing the position of the Department. And the current officials working in the Department may be in a high-risk situation. Most tragically, the tragedy of the executives of the state-owned enterprises is just caused by this group’s striving for too many improper interests through a series of “in house” lobbying; the same reason is that the administrative departments obtain too many improper powers through “department legislation”, which leads to their own officials in a high risk situation. That is to say, the corruption trap or conspiracy trap that led to the fall of officials was just dug by themselves. The process of fighting for power and infringing citizens’ constitutional rights through “departmental legislation” is a process of digging up traps. People who are short-sighted will be lost in the illusion of the present power, and those who have received more education and have relatively rich knowledge structure will be able to see the logical chain clearly. In the government administration, there should be not a small number of such people, and the higher the position, the more such people should be. If one can not yet find that “departmental legislation” is to dig a trap for ourselves in competing for power and infringing civil rights, it seems inexcusable.

Finally, some people will say that in the field of land resource allocation, does the government not need to intervene at all? Of course not. First of all, the government should provide confirmation and protection for the land property rights of citizens or organizations, record the land property rights transactions, and make fair decisions on land disputes. That is to use public power to consolidate the land property rights system. Secondly, the market can remedy the failure of land resource allocation. Including national security, environmental protection, natural and cultural landscape maintenance. Of course, these are very special circumstances. Therefore, we should emphasize that market allocation of land resources is a general constitutional principle, while government involvement in land resources allocation is a special case. General principles should play a role in all areas of land allocation. If we want to deviate from the general principles due to special circumstances, we must go through special legal due process, explain the special circumstances and get the consent of the legislature. The public land management departments should be defined and limited, so that they can not exaggerate the authority of the government and harm the land property rights under the banner of intervention. However, due to the special circumstances, it is better to adopt the way of behavior rules, that is, to implement it through judicial adjudication, and to use administrative means with caution.

Then, is planning worth nothing? Of course not. What I am against is improper promotion of “planning right”, which is used to negate the land property right, housing right and property right of citizens. I think effective planning can help. The so-called “effective planning” is to predict the future development of a region or city according to the market mechanism based on the market system hypothesis. According to this general development outline, we can predict the mature scale of the region or city, foresee the general structure of the industry, and provide reference for the layout and investment of infrastructure in the early stage. In my opinion, most of the current regional and urban planning is not “effective planning”. The planners must follow the opinions of government officials. Many planning figures do not come from planning methods, but are decided by discussing between the planners and officials. Over the years, I have also participated in some planning preparation, and we have developed the “spatial economics and institutional economics planning simulation model” (SIEM). I think we are very ahead in the way. Even so, I often remind our local government customers that the planning we have prepared is just for reference, not as a hard indicator.

On the other hand, I would also like to stress that although we are against the “planned economy”, we are not against the “plan”. Any economic organization or even family can have its own plan. As long as the plan is not monopolized by a central planning authority and there is competition between plans, the plan may be a good thing. Similarly, as long as the planning is independently formulated by each city, region, township or village, and the opinions of most members are solicited during the formulation process, it may be beneficial to the group. In particular, rural planning, as long as it is not prescribed to be approved by the higher authorities, as long as it is not subject to administrative intervention, is an autonomous planning, which may be a good planning. Why is it good? Today, we are very keen on ancient village tours or ancient town tours. The reason why these places are beautiful is that there is no land management department and no “plan” they worship. Everyone is a center of wisdom, and a village is full of talents. They were born and grew up there, and they most care about the beauty and comfort of their village. Of course, this does not exclude them from inviting outsiders to participate. They not only benefit the present age, but also love their descendants. Let tourists praise and let residents benefit. And those “planning fetishists” who think they are smart should not leave the “blue ants” of villages and towns to later generations to spit and scold.

Hannah Arendt said that “in constitutional, limited and rule of law governments, the power of the so-called rulers that are constrained is not actually power, but violence” (2011, P. 135). That is to say, any extra force beyond the scope of serving the public does not deserve to be called power. Therefore, the “power” that the Ministry of natural resources wants to fight for through “departmental legislation” is not actually power, but the violence against citizens temporarily without punishment. To connive at it is to put departmental interests above social interests. In addition, this ministry, which has not made any contribution in the process of reform and opening up, has been fed by the wealth created by the market. Today, it is breaking the foundation of the market system by using these resources generated in market, it can be called “eating the rice of reform and opening up, smashing the pot of reform and opening up”. However, it knows well where there are cracks in the constitutional body, and keeps to pry up the crack skillfully in stealing the civil rights that the system is intended to protect, even at the expense of destroying the constitution itself. Therefore, if our society (including the officials of the Ministry of natural resources) allows it to make “departmental legislation” by using the opportunity of the amendment of the implementation regulations of the land management law, it not only shows that we do not have a clear vision of “stealing rights”, even watch more administrative departments, which should serve the people, but carve up these rights, do we allow ministries destroy the public power and violence run rampant?


Baidu Knowledge, “The Problems Existing in China’s Urban Planning at This Stage”, May 16, 2017.

Beijing Municipal Commission of planning and natural resources, “Dispute on the Determination of Illegal Construction of Xiangtang village, Cuicun Town, Changping”, website of Beijing Municipal Commission of planning and natural resources, December 19, 2019.

Cheng Liansheng, Planned Economy in China, party history press of the Communist Party of China, 2016.

Gao Lu, “A Review of the Research on the Level of Urbanization in China in the First Half of the 20th Century since the Republic of China”, Journal of Jianghan University (SOCIAL SCIENCE EDITION), Vol. 31, No. 6, December 2014.

Hannah Arendt, On Revolution, Yilin Press, 2011.

Huang Xiaofan, “From house splitting to house buying: the residential revolution in New China”, Sohu, “Looking at History”, February 20, 2017.

Jingdong Big Data Research Institute, Development Report on 2019 Green Consumption Trend, December 27, 2019. (quoted from Telegraph, December 27, 2019)

Forward Looking Industrial Planning, “Analysis of Current Situation and Existing Problems of Urban Planning Development in China”, November 14, 2017.

Commercial Economy Research Institute of the Ministry of Commerce, New China Commercial History, China Finance and Economics Press, 1984.

Sheng Hong, “Criticism on Land Management Law and its” Revised Draft “, Review of New Political Economy, November 1, 2010.

Sheng Hong, “Why can’t Xiangtang be Demolished”, FT Chinese, November 2, 2019 (published under the title of “Economic and Legal Issues in Xiangtang’s” Small Property Right Housing “).

Sheng Hong, “Plan and Market in Anti-epidemic in Wuhan”, Micro blog in Wordexpress: Professor Sheng Hong, March 23, 2020.

Zhou Chao, “Before the” Disappearance “of this department, five cadres at the department level were defeated”, Beijing Youth Daily, January 6, 2019.

May 11, 2020, Forget-talk Hill Study

Author: flourishflood

Economist, Confucianist

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