Global Economics

China's National Property Registration Will Spook Corrupt Officials


Hot on the heels of the third plenum, China’s State Council has announced plans for a unified property registration system, a seemingly simple measure, but one that is expected to create great consternation among corrupt officials.

Much graft revolves around China’s overpriced and murky real estate and land markets. Corrupt officials nabbed in cases involving property have gained national notoriety. That was true of “House Sister,” the nickname given by Chinese netizens to Gong Aiai, a former banking official from Shaanxi province. She was sentenced to three years in prison in September for official document forgery that allowed her to amass more than three dozen properties in Beijing.

“Currently, different properties are managed by different government departments, and information is not shared,” said Ma Baocheng, a research fellow at the Chinese Academy of Governance in Beijing, reported the English edition of the Global Times on Nov. 21. “The authorities can do nothing about officials who may illegally own dozens of properties, as they have no idea how many properties are really under the official’s name.”

The Ministry of Land and Resources will manage the new system, which will include “land, buildings, grasslands, forests and sea waters,” according to the Global Times. Under a “basic platform,” real estate project approvals, transactions, and registration will be shared across different agencies, ending the present system of “isolated information islands,” said the State Council’s official statement, as reported by the China Daily.

Efforts to link the fragmented registration systems have previously faced strong resistance from government officials, Liao Ran, who runs programs in Asia combating graft for Berlin-based Transparency International, said in an interview with Bloomberg Businessweek earlier this year.

Why push property registration forward now? Other than exposing corrupt officials, the creation of the national database will aid two important policy goals, both raised at the plenum. First is the plan to expand a still-nascent property tax. That is aimed at weaning local governments off their excessive reliance on revenue from land sales, as well as at deflating the overheated real estate sector.

A nationwide reporting system is seen, too, as a prerequisite for rolling out reforms that allow farmers more rights to rent, sell, and mortgage the land they live on—another priority for the leadership under Xi Jinping and Li Keqiang.

That last effort has been complicated by the fact that title to farmland is particularly opaque, a legacy of China’s collectively-owned rural land system. “Less than half of farmers hold the correct land use rights documents,” wrote economists at London-based Capital Economics in a Nov. 20 report on Chinese land reform.

The national registration system is an important move, no doubt. The question is whether China will actually pull it off this time. “The Party has tried several times before,” in previous years, pointed out Transparency International’s Liao in the interview. If China opens a national housing registration system and “makes it accessible to the public, that will create a revolution.”

Dexter_roberts
Roberts is Bloomberg Businessweek's Asia News Editor and China bureau chief. Follow him on Twitter @dtiffroberts.

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