Although urban land remained state-owned, a 1987 land-use-rights auction in Shenzhen and a 1988 amendment to the constitution permitted the transfer of use rights for a term in exchange for payment. This created a market in leasehold land where none had legally existed, allowing developers to acquire sites and local governments to sell long leases. It made land a tradable asset and a primary source of municipal revenue. The reform underpinned the property-led building boom of the following decades.
By commodifying use rights to state land it created the financial engine of Chinese urban expansion and the basis of "land finance".
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