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China adopts dual land tenure system, i.e., land ownership is independent of land use rights. All land in China is either owned by the state or rural collective economic organizations. Natural persons, legal persons or other organizations may only acquire land use rights. The first tier market of land refers to the market on which the government on behalf of the state grants, allocates or leases land use rights to land users. In China, only the land use right in state land can be transacted in the first tier market. In other words, except for few pilot projects, the land use right in collective land may not be transacted at the first tier market. After acquiring land user rights at the first tier market from the government, land users are permitted to further transfer land use rights to other land users if certain requirements are met. The market on which land use rights are transacted among land users is the second tier market of land.

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What is the first tier market for land in China?

China adopts dual land tenure system, i.e., land ownership is independent of land use rights. All land in China is either owned by the state or rural collective economic organizations. Natural persons, legal persons or other organizations may only acquire land use rights. The first tier market of land refers to the market on which the government on behalf of the state grants, allocates or leases land use rights to land users. In China, only the land use right in state land can be transacted in the first tier market. In other words, except for few pilot projects, the land use right in collective land may not be transacted at the first tier market. After acquiring land user rights at the first tier market from the government, land users are permitted to further transfer land use rights to other land users if certain requirements are met. The market on which land use rights are transacted among land users is the second tier market of land.


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