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In May 1996, the Shanghai Municipal Government promulgated measures on the use of land by foreign-invested enterprises that stand in basic conflict with the land use regime that has existed in China since the early 1990s.
Shanghai's Measures on the Administration of Land Use by Foreign Invested Enterprises (the Measures), which came into effect in July 1996, are aimed at providing immediate relief to Chinese state-owned enterprises and local governments that have found that the land they have used and developed is not theirs to contribute to proposed Sino-foreign joint ventures.
While the Measures can be seen as another example of aggressive local interests enacting legislation in conflict with national norms in order to remedy a local crisis, they may be an early indication of how the national system itself will be changed in the near future.
Before analyzing the new Measures and the rationale behind a local system so clearly at odds with national norms, this article describes the development of land use rights law in China over the past eight years and the problems that the Measures attempt to address. (A translation of the Measures appears in the Texts section of this issue.)
Land Use Rights after 1988
Since the late 1980s, the People's Republic of China has made great strides in creating a coherent system of law to govern the acquisition and use of rights in real property.
Before 1988, the state owned all urban land in China and had the exclusive right to designate the use of the land it owned. In April and December 1988, however, amendments made respectively to China's Constitution and Land Administration Law allowed for the creation and recognition of rights to use certain types of land owned by the state, and legalized the transfer for value of such land use rights.
The next key step was taken in May 1990, with the promulgation of the Provisional Regulations of the PR.C. Concerning the Grant and Assignment of the Right to Use State-Owned Land in Urban Areas (the Grant Regulations), which distinguished between two kinds of stateowned urban land use rights:
- grand use rights, which are long-term leasehold inlests acquired from the state for value equivalent (Cm theory) to the present value of the leasehold interest...