Over the past year, China has promoted the coordinated development of urban and rural areas, continuously optimized the economic layout, strengthened agricultural production and promoted rural revitalization.

Premier Li Keqiang proposed in his government work report on March 5 that we should solidly promote common prosperity and constantly realize the people’s yearning for a better life. Vigorously grasp agricultural production and promote the all-round revitalization of rural areas. We will steadily promote rural reform and development. We should further promote a new type of urbanization with people at the core and constantly improve the quality of people’s life.

Cai Jiming, deputy to the National People’s Congress and director of the political economy research center of Tsinghua University, plans to submit “suggestions on narrowing the property income gap between urban and rural residents and promoting common prosperity” this year. He believes that to revitalize rural industries, improve the income of rural residents and narrow the income gap between urban and rural residents, we must change the traditional thinking of simply talking about the basis of agriculture, talking about revitalization in rural areas and getting rich in farmers, lead agricultural modernization with industrialization, eliminate rural poverty with urbanization, realize the integrated development of urban and rural areas and promote common prosperity.

He also believes that the important reason for the low agricultural labor productivity is the small scale of rural household land. Therefore, we should deepen the reform of the land system and realize the equal ownership of urban and rural land property rights and the marketization of resource allocation. In an exclusive interview with the 21st Century Business Herald, Cai Jiming explained in detail the space for accelerating the process of urbanization and large-scale management of rural land, how to promote the reform of equal ownership of urban and rural land property rights, and how to establish and improve a unified urban and rural construction land market.

There is a lot of room for the development of urbanization in China

21st century: China’s rural areas have been exploring land circulation. Large grain growers and professional cooperatives have been engaged in large-scale agricultural management for decades, but the overall situation is still as you said. Is the average household land management scale too narrow? What are the main reasons for the slow process of land scale centralization?

Cai Jiming: there are four main reasons why the average household land management scale in China is too narrow and the process of land scale centralization is not fast.

First, it is bound by the traditional concept of small-scale peasant economy. The technical cause of China’s low agricultural labor productivity is that the average household land management scale is too narrow: according to the data of the Ministry of agriculture and rural areas, there are about 210 million farmers with less than 10 mu of cultivated land in rural areas, and the average household management scale of farmers is only 7.46 mu. In 2020, the circulation area of contracted cultivated land nationwide was 532 million mu, accounting for 34.1% of the total contracted cultivated land area of farmers. By September 2021, there were 3.8 million family farms nationwide, with an average operating scale of 134.3 mu, and less than 2% of farmers with an operating scale of more than 50 mu. An important reason for the slow process of agricultural land scale centralization in China is that the traditional concept of small-scale peasant economy binds people’s minds and believes that China’s agricultural development cannot be separated from the basic national conditions of small-scale peasant economy, and even does not hesitate to spend a lot of energy to explore how to connect small-scale peasant economy with modern agricultural production.

But what is a small-scale farmer, and can small-scale farmers never become large-scale agriculture? The large-scale agriculture of developed countries initially developed from the small-scale peasant economy of agricultural countries with the improvement of industrialization and urbanization and the reduction of agricultural population. Therefore, from the perspective of the dynamic development of industrialization and urbanization, we must abandon the traditional concept that China’s agriculture can only take the road of super small farmers or micro farmers. 210 million farmers rely on 7.46 mu of land per household, which is impossible to achieve rural revitalization and agricultural and rural modernization.

Second, compared with China’s industrialization process and economic development level, the process of urbanization is slow. In 2020, the urbanization rate of urban resident population reached 63.89%, though higher than the world average level, but lower than the average level of middle and high income countries. The rate of urbanization of registered residence population was only 45.4%, and the difference between the two was 18.49 percentage points, which means that 261 million of the population transferred to urban resident population could not enjoy the same treatment as the permanent registered residence in urban areas. This semi urbanization leads to the reluctance of farmers working in cities to give up the land contract right in rural areas, which hinders the circulation and concentration of agricultural land.

Third, the three rights of rural collective land are divided. Only the members of the collective economic organization can obtain the contracted management right of the collective land. The management right can be transferred outside the collective economic organization, but the contracted right can only be transferred within the collective economic organization, which makes the rural collective economic organization a closed economic organization. Farmers who are migrant farmers are like urban migrant workers, It cannot be integrated into rural social and economic development, and rural collective land cannot be optimally allocated on a larger scale between different collective ownership systems in accordance with the requirements of market economy.

Fourth, the agricultural land contract period is too short and changeable, the subcontracting fee is too high, and the income from grain planting is too low, which limits the long-term investment of urban industrial and commercial capital in land and the expansion of land management scale.

21st century: expanding the scale of land management per household is bound to allow more rural people to enter the city. How much space is there for further urbanization in China?

Cai Jiming: as mentioned earlier, China’s current agricultural population is still 500 million. There are about 210 million rural households with less than 10 mu of arable land in China. The average household operation scale of farmers is only 7.46 mu, and the labor productivity of agriculture is only one fifth of that of manufacturing industry. From these data, there are still a large number of agricultural labor force to be transferred in China. If the average land area of rural households reaches 50 mu, only 40 million rural households need to be retained, and the labor force of the remaining 170 million rural households must be transferred to non-agricultural industries for employment; If the average land size of rural households reaches 100 mu, the labor force of 190 million rural households needs to be transferred to non-agricultural industries for employment. In line with the requirements of the above two kinds of agricultural land intensification, the agricultural transfer population should reach at least 400 million. From this perspective, there is still a lot of room for China’s urbanization development: from 2021 to 2025, the urbanization rate can be set to reach about 70% according to an annual increase of one percentage point. From 2025 to 2035, considering that the population over 50 years old in rural areas will gradually age, and the urbanization rate is likely to increase rapidly, it is relatively conservative to set the urbanization target at 80%, which may reach the level of 85%. Japan reached an urbanization rate of about 90% at the end of last century. China’s 85% level is about 40 years late, which is in line with the law of economic development.

Whether from the reduction of urban and rural housing