(Updates with Guangdong land proposal in fifth paragraph.)
Oct. 16 (Bloomberg) -- Citic Trust Co. set up China’s first trust to invest in rural land, offering farmers a way to cash in on their usage rights as the world’s second-largest economy continues property reforms and speeds up urbanization.
The investment product will lease 5,400 mu (360 hectares) from rural residents in the northern part of Anhui province, Citic Trust, part of the state-controlled holding company led by Citic Group Corp., said in a statement on its website yesterday. The trust will then transfer the rights to a farming company, according to the statement, which said this is the first such vehicle in the country.
Under Chinese law, farmers own rights to use land collectively and can’t sell directly to developers. That’s sparked protests by residents who accuse local officials of paying below-market prices for plots that they then sell to developers at a profit.
The establishment of the trust follows a government pledge last month to speed up ownership verification for collectively owned rural land. The country may push land policy reforms forward after a Communist Party meeting in November, China Securities Journal reported on Sept. 4, citing an unidentified person.
The southern province of Guangdong in August published draft rules that propose allowing farmers to sell their land rights on a limited basis as more of the nation’s rural population migrates to cities.
A rebound in home prices pushed up average residential land values in the first eight months of the year by 43 percent from the same period in 2012, according to China Investment Securities Co.
--Bonnie Cao and Zhang Dingmin. Editors: Nathaniel Espino, James Gunsalus