China: New Measures On Disposal Of Idle State Owned Land

Last Updated: 23 July 2012
Article by Ulrike Glueck

New Measures On Disposal Of Idle State Owned Land

On June 1, 2012 the PRC Ministry of Land and Resources issued the amended version of the Measures of Idle Land Disposal ("New Measures"). They took effect on July 1, 2012 and provide a more precise definition of both what idle land is and also the consequences of its presence.

Adjusted Definition of Idle Land

The definition of idle land has become much clearer and more precise. In the previous law there was a degree of ambiguity as to how long construction would have to be delayed to render the land "idle", using the phrase "failing to commence... within prescribed time limits." Such time limits were usually stipulated in the land use right granting contract. The New Measures now provide that once construction has not begun one year after it was due according to the land use right granting contract, the land is deemed as idle land. As in the past, construction or development that does not reach a certain scale (25% of the proposed total investment or one third of the proposed development area) one year after commencement was due, land will likewise be deemed idle.

Commencement of Construction

In the past, statutory law did not provide clear criteria as to what works constituted commencement of construction. Frequently, especially when construction was delayed, land use right owners were faced with the question of whether it is sufficient to start the piling works or to just build a garage or shack on the land. The New Measures now define the following dates as commencement dates of the construction after the construction permit has been obtained:

  • if the construction project needs deep foundation pits, the work for the deep foundation pits has been completed;
  • if piling is necessary, all foundation piles have been installed;
  • for all other construction projects, one third of the foundation works have been finished.

The New Measures further stipulate that when calculating the actual investment and the proposed investment amount, the land use right granting fee and taxes shall not be included. This is in contrast to the current practice of some local authorities.

Process of Investigation and Identification

The New Measures provide that should local land and resources authorities suspect that they have discovered what could constitute idle land, they shall conduct verification and investigation within 30 days. The owner of the land use right shall be issued with a notice of investigation and upon receipt of this, must provide all documents and materials so as to assist the authorities in their investigation.

Methods of Disposal

Previous measures only had one article containing possibilities for disposal of land that has been deemed idle. The New Measures distinguish between land becoming idle due to government behaviour or unforeseeable circumstances on the one hand and conduct of the land use right owner on the other hand.

1. Where the land has become idle due to the behaviour of the government, the remedies are flexible and include extensions of commencement deadlines, adjustment of land planning conditions, temporary use by the government, recovering the right to the land in exchange for compensation, replacing the land or any other suitable remedy.

Behaviour of the government includes failure to transfer land parcels within agreed time limits, changes in the planning that entail that commencement of construction is not permitted, disposal of a mass petition related to the land, military activity preventing commencement or any other behaviour of a government department that prevents the commencement of development.

To prevent such situations occurring, the New Measures also provide for requirements that must be included in the land use right granting contract, prior to the land use right being granted;

(i) The land rights are clear and there are no economic or legal disputes with regard to the land;

(ii) Resettlement compensation is made correctly; and

(iii) Clear planning conditions, including express agreements on the dates of project commencement and completion, along with liabilities for breach.

Failure to provide the owner of the land use right with the fulfillment of these requirements will result in the local authorities bearing liabilities for breach of contract.

2. Where land has become idle due to the fault of the owner of the land use right, as in the past, there are two possible sanctions dependent on the length of time that the land has been idle. If the land has been idle for over a year, the owner of the land use right will be imposed with a fine of 20% of the original granting fee. The owner has 30 days to choose to pay the charge or simply forfeit the land use rights. If the status of the land remains idle for over 2 years, the authorities are entitled to confiscate the land use right with no compensation. The authorities must concurrently issue the owner with notice of the right to apply for a hearing.


Land is an important resource in China and - especially in the economic centers - is becoming increasingly scarce. At the same time, land is an important source of revenue for local governments, that therefore sometimes tend to be rather generous by not strictly implementing the statutory regulations on land use and timing of construction. The New Measures are an indication that the central government intends to impose stricter controls. It now remains to be seen how the New Measures will be implemented by local authorities in practice.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 16/07/2012.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.