Analysis on Capitalization of Rural Land Ownership in China by Law and Economics

To find solutions for legal system for capitalization of rural land ownership in China, this paper studied and analyzed existing problems in rural land system and legal environment using legal theory and transaction cost theory. Results indicated that (i) the restriction of institutional condition upon property right and transaction is more essential, and key points include the relationship of entities of right formed jointly by the state, collective and farmers, accurate positioning of property right structure, and security for land appreciation income right and allocation mechanism; (ii) the land property right structure should select a legal structure with minimum transaction cost. It is concluded that entitling the ownership to a single entity is an economical method to eliminate current conflict of rural land right.