Towards Equitable Compensation: Unraveling China’s Regional Comprehensive Land Price System from Legal Connotation to Practical Implementation

Abstract

The Regional Comprehensive Land Price System (RCLPS) in China serves as the compensation standard for land expropriation, as established by the new Land Management Law in 2019. Its primary objectives include safeguarding the legitimate rights and interests of expropriated landowners and promoting social fairness and justice—critical components for achieving Sustainable Development Goal 10. Despite its significance, the existing literature lacks a comprehensive exploration of the RCLPS’s legal connotation and implementation challenges. This study first analyzes the research background and legal connotation of China’s RCLPS. It provides a comprehensive compensation standard for land expropriation, aiming to ensure consistent compensation levels within the same “expropriated districts”. Then, an empirical study examines the practical implementation of the RCLPS in Wuhan City, China. Through a comparative analysis of the 2020 Regional Comprehensive Land Price (RCLP) and state-owned land transfer fees in Wuhan, several deficiencies in the city’s RCLPS are identified. First, the distribution of land value-added benefits lacks reasonableness. Second, the district-level delineation of “expropriated districts” inadequately captures variations in land value. From a sustainable development perspective, specific countermeasures can be proposed, including re-evaluating the allocation of land value-added benefits and incorporating them into the RCLP assessment. Additionally, enhancing the precision in delineating “expropriated districts” within the administrative region is necessary. This study provides valuable guidance for achieving equitable compensation in land expropriation and improving the RCLPS.

1. Introduction

China has witnessed the world’s most rapid urbanization process in recent decades. As urbanization progresses, the gap between urban and rural regions has widened, with urban areas experiencing a concentration of population and resources that drive rapid economic growth, while rural areas struggle with poor infrastructure and a swift outflow of talent. Moreover, the process of urban development inevitably involves the transformation of rural collective land into urban state-owned land, known as land expropriation. In the process of land expropriation, the government usually acquires land at a price far below market value and then leases it out to the highest bidder at a high price, creating inequality between the government and the expropriated landowners. This practice is essentially a ‘unilateral acquisition’ by the government, leading to numerous disputes due to low compensation standards and challenges in the lives of land-loss farmers. As a disadvantaged group, expropriated landowners do not benefit from land appreciation. Additionally, they lose their original employment opportunities and must re-enter the labor market. The livelihoods of these land-lost farmers become marginalized and precarious [1], which could significantly affect China’s socio-economic development and political stability. Therefore, there is an urgent need to improve the compensation and resettlement system for land expropriation, to foster urban–rural integration and develop a harmonious society.

To tackle the serious issue of unbalanced and inadequate development between urban and rural areas, China implemented a series of policies to promote the shift in urban–rural relations from separation and antagonism to integrated development [2]. This includes the reform of the land expropriation system. In 2019, the Regional Comprehensive Land Price System (RCLPS) was officially proposed and designated as the compensation standard for land expropriation in the new Land Management Law. The RCLPS aims to protect the benefits of land-loss farmers by increasing the compensation price for land expropriation, ensuring fairness through consistent compensation standards for expropriated land within the same region, avoiding the phenomenon of ‘different prices for the same land’, and considering the expected appreciation of land to some extent. Under this system, the delineation and measurement of districts are mainly based on factors such as the quality of land in the ‘expropriated area’, its geographical location, local land supply and demand, and the level of local economic development.

The standard of compensation for land expropriation is a matter of social concern [3,4]. How to provide equitable compensation to landowners facing expropriation is a fundamental issue addressed by land-related laws, regulations, and policy guidelines across different countries [5,6]. Establishing a reasonable compensation standard for land expropriation not only compensates for the losses incurred by expropriated landowners [7,8], but also lends legitimacy to the state’s compulsory land expropriation practices [9]. Most of the existing literature on land expropriation compensation standards focuses on economic or political analyses [10,11,12,13], without a detailed examination of the issues arising from the implementation of the comprehensive land price of land expropriation. To fill this gap, this paper first analyzes the development history of China’s land expropriation compensation system and the legal connotations of the RCLPS. Then, using Wuhan City as a case study area, it discusses the strengths and weaknesses of the RCLPS from the perspective of economic theories and offers relevant suggestions accordingly. This study could provide a crucial reference for the government to improve the comprehensive land value for expropriated areas and contribute to the practical implementation of sustainable development theory.

2. Contextual Background

2.1. Evolvement of China’s Land Expropriation System

In 2002, the Zhejiang Provincial Government first introduced the concept of the Regional Comprehensive Land Price (RCLP) in its Circular on Strengthening and Improving Land Expropriation Work. The RCLP is a comprehensive compensation standard for the land expropriation of the same level and price in the same “expropriated districts”. “Expropriated districts” refer to areas with relatively similar land conditions. Within the same district, the RCLP ensures uniform pricing for compensation.

In 2004, the State Council issued the Decision of the State Council on Deepening Reforms and Strict Land Management, stipulating that ‘the people’s governments of provinces, autonomous regions and municipalities directly under the Central Government shall formulate and promulgate uniform annual production value standards for land expropriation in each city and county, or the RCLP’. Subsequently, in order to expedite the work of formulating and publishing comprehensive area land prices, in 2005, the former Ministry of Land and Resources (now reorganized as the Ministry of Natural Resources) implemented the dual-track compensation system, combining the RCLP with the annual production value multiplier [14]. The RCLP involves assessing the value of the land comprehensively, considering factors such as location, land quality, and local economic conditions. The annual production value multiplier method calculates compensation based on the agricultural productivity of the land, often using a multiplier to determine the total compensation amount. The dual-track system thus combines these two approaches to determine a fair compensation amount for expropriated land. Legally, the old Land Management Law (2004) [15] still stipulated that the annual production value multiplier method is the compensation standard for land expropriation. However, in practice, at the central level, great importance has been attached to improving the compensation and resettlement system for land expropriation, and pilot reforms have been carried out in a long-term, classified, and stable manner. At the local level, many regions gradually explored the implementation of the RCLPS.

In 2019, the new Land Management Law formally established the RCLP as the “new” standard for land expropriation compensation, confirming its legal status. Since then, the RCLP has completely replaced the original annual production value multiplier method. The RCLP, representing the compensation per unit of land in “expropriated districts” (in form), fundamentally serves as the compensation standard for land expropriation (in substance). According to the Constitution and the Land Management Law, the state is obligated to offer equitable and reasonable compensation when expropriating land for construction [16]. The core compensation is the direct compensation for land value, with the RCLP as the legal standard for compensation payments. After implementing the new law, all regions have formulated or supplemented corresponding standards and policies to improve the compensation and resettlement system for land expropriation.

Looking back at the development history of the RCLPS, we can see that although the RCLPS was formally incorporated into the new Land Management Law in 2019, it is, in fact, only “new” in form rather than “new” in substance. The RCLPS has been in operation for more than ten years in several regions of China, providing valuable empirical data for institutional research.

2.2. The Legal Connotation of RCLPS

When the state expropriates land for public purposes, it assesses the land’s value and provides compensation to the affected landowners in accordance with the law [17]. This compensation typically includes social security compensation and monetary compensation. Diversified compensation methods are adopted to maintain the original standard of living for expropriated landowners and safeguard their long-term livelihoods. Social security compensation, such as proper resettlement, serves as a safeguard for expropriated landowners. Meanwhile, monetary compensation is a specific amount provided for land expropriation, including the land expropriation fee, resettlement subsidy, and compensation for ground attachments [18]. The current method of calculating compensation for land expropriation is based on the RCLP. The RCLP within the same “expropriated districts” is uniform. Thus, the delineation of “expropriated districts” is a crucial procedure for designing equitable and reasonable compensation standards.

Typically, the delineation of “expropriated districts” is based on four key indicators. The first indicator is the quality of land, including land category, grade of agricultural land, and land production value. Since most of the expropriated land is agricultural land, its land quality is often externally characterized by its agricultural output capacity. The second is the geographical location of the land, which is mainly related to its potential qualification for non-agricultural development and use. The third indicator is the local supply and demand for land, which indicates the amount and scarcity of local land resources. The fourth indicator is the level of local economic development. To safeguard the local survival needs of expropriated landowners, the compensation for the expropriated land should match the level of local economic development. The RCLP embodies the natural, social, and economic attributes of land resources, and its delineation of indicators integrates multiple factors such as regional land supply and demand. In practice, it is not only concerned with the compensation package received by the expropriated people but also with the cost of land expropriation and the price of land supply. The clarification of the RCLP and the implementation of the requirements for its enforcement have effectively promoted the rational use of rural land resources and the sustainable development of the rural economy. This major reform of the annual value multiplier method addresses the objective need to safeguard the legitimate rights and interests of expropriated farmers. As soon as it appeared, the concept of the RCLP was characterized as a “comprehensive compensation standard for land expropriation”. The defining feature of the RCLP lies in its comprehensiveness, setting it apart from other land expropriation compensation methods. China’s trajectory of land expropriation compensation standards has evolved from the gross production value method to the annual production value multiplier method, and has now settled in the RCLP method. In the past, land expropriation standards were based on the output capacity of the land as a critical indicator of land value. However, this approach often overlooked the non-agricultural development potential of expropriated land. In contrast, the RCLP is a comprehensive land expropriation compensation standard that combines multiple relevant factors, ensuring that expropriated landowners benefit equitably from industrialization and urbanization development while upholding both formal and substantive fairness.

The United Nations’ Sustainable Development Goal 10 advocates for achieving greater equality through a multifaceted approach. This includes promoting appropriate legislation, policies, and actionable measures (Target 10.3), as well as monitoring financial markets and institutions to enhance the implementation of these regulations (Target 10.5). However, amidst urbanization, urban renewal, and infrastructure development, conflicts persist among stakeholders—government entities, land developers, and landowners. The central challenge lies in fairly allocating the benefits arising from these processes. The emergence of the RCLP is of great significance to the realization of the principle of equality advocated for by Sustainable Development Goal 10. The RCLP appropriately raises the compensation standards for land expropriation and broadens the scope of compensation costs to appropriately resettle landless farmers and ensure overall fairness.

3. Empirical Study

Concurrently with the enactment of the new Land Management Law, the Ministry of Natural Resources issued a document requesting localities to actively formulate the RCLP [19] to achieve a complete transition of compensation standards for land expropriation. Guided by the new law and departmental regulations, the Hubei Provincial Government revised the RCLP within the provincial jurisdiction in November 2019. This revised system has been in effect since that time.

Adopting empirical and normative analyses, this study takes the comprehensive land price data of Wuhan as the object of empirical research, aiming at identifying the problems in the implementation of RCLPS and putting forward suggestions for improvement. It also applies the Marxist theory of land rent and land price theory to analyze the land value-added benefits normatively, and puts forward the problems faced by the collective land value-added benefits at the present stage, along with corresponding suggestions.

Wuhan is the capital of China’s Hubei Province, a sub-provincial city located in the center of China’s hinterland. The city has a population of more than 10 million people, with an area of 8569.15 square kilometers. It consists of seven central city districts (Jiangan, Jianghan, Qiaokou, Wuchang, Hongshan, Qingshan, and Hanyang Districts) and six distant city districts (Jiangxia, Caidian, Hannan, East and West Lake, Huangpi, and Xinzhou Districts). Wuhan has crossed into the ranks of megacities, with its total economic output consistently ranking among the top ten in China and first in central China for many years. In recent decades, rapid urban development has led to intensified land use and conflicts of interest among stakeholders. The integrated pricing of districts in land expropriation is a more typical problem. The comprehensive pricing during land expropriation poses a common challenge. Consequently, it serves as a typical case study area for further investigation and analyses.

Table 1. The RCLP of Wuhan in Hubei Province in 2019.

District Unit	District Level	District Comprehensive Land Value (CNY 10,000/mu)	District Comprehensive Average Land Price (CNY 10,000/mu)
Wuhan Central Districts	1–7	38/33.4/28.8/24.2/19.9/15.6/11.5	24.49
East and West Lake District	1–3	6.9/6.5/5.9	6.43
Caidian District	1–5	6.5/5.9/5.5/5.1/4.8	5.56
Jiangxia District	1–5	6.5/5.9/5.5/5.1/4.8	5.56
Huangpi District	1–5	6.5/5.9/5.5/5.1/4.8	5.56
Xinzhou District	1–5	5.9/5.5/5.1/4.8/4.4	5.14
Hannan District	1–3	5.1/4.8/4.4	4.77

Note: The central city districts of Wuhan referred to in this article are the seven central city districts in the traditional sense, including Wuchang District, Jiangan District, Qiaokou District, Hanyang District, Hongshan District, Jianghan District, and Qingshan District. Data are derived from Hubei Provincial Government, “Notice of the Provincial People’s Government on the Announcement and Implementation of the RCLP Standard for ‘Expropriated Districts’ in Hubei Province” (E Zheng Fa [2019] No. 22 [20]). The traditional mu is about 675 square meters or 800 square yards. However, the colonial customs authorities used a larger mu equal to 8273.75 square feet, 919.3 square yards, or 768.65 square meters. In modern China, the mu is often reckoned to be exactly 1/15 hectare, which is 666.667 square meters or 797.327 square yards.

concludes the basic information on RCLP in Wuhan, and Figure 1 shows the geographical distribution of district comprehensive average land price levels of Wuhan.

3.1. Statistical Analysis of Comprehensive Land Value in Wuhan City

The current comprehensive land value in Wuhan is very similar to its administrative division, with district- and county-level administrative districts as the basic units. Wuhan Central Districts are one of the basic units; East and West Lake District, Caidian District, Jiangxia District, Huangpi District, Xinzhou District, Hannan District, and other relatively remote administrative districts belong to other independent units. Within the basic unit, the districts are further divided into levels, with pricing carried out on a level-by-level basis.

From the comparison of the level of districts within the same district unit, there are both larger and smaller gaps. For example, there is a vast difference in the RCLP of different levels of districts within the central urban unit of Wuhan City. The difference between the highest and lowest land prices can be as much as CNY 265,000 per mu. In other units, the difference between the prices of the different levels of districts is not very large. For example, the difference between the highest and the lowest levels in the East–West Lake District is only CNY 10,000 per mu.

The RCLP across district units varies greatly. Wuhan Central Districts have a superior geographic location, a developed economy, and a tighter relationship between land supply and demand, with the highest RCLP of a district piece reaching CNY 380,000 per mu and the average land price in the district also reaching CNY 244,900 per mu. The RCLP of other units ranges from CNY 44,000 per mu to CNY 69,000 per mu, highlighting a significant difference. Even the lowest land price in central Wuhan is CNY 115,000 per mu, significantly higher than other units.

The leveling of districts within different district units varies considerably. The Wuhan City center has more levels, with a total of seven. Wuhan Central Districts include seven district- and county-level administrative divisions, covering an extremely large area with a relatively detailed division of district levels. In contrast, the level division of other units is rougher and more straightforward, such as the East–West Lake District, which has a wide area of 495.34 square kilometers [21] but only three levels. On the one hand, the jurisdiction of East–West Lake District is mainly composed of land, the land area involved is vast, and the location conditions are very different from each other. On the other hand, the RCLP applies complex evaluation indexes, and the land value under comprehensive measurement should reflect nuanced differences. However, categorizing East–West Lake District into only three levels fails to implement comprehensive indicators in land value measurement.

Comparing the land prices corresponding to different zone levels, except for the Wuhan Central Districts, there are commonalities in the assessment of land prices of different zone levels in other zone units. The land price of each district level is covered by the seven levels of CNY 69,000, 65,000, 59,000, 55,000, 51,000, 48,000, and 44,000. For example, Caidian District, Jiangxia District, and Huangpi District are divided into five levels, from CNY 65,000 to CNY 48,000; Xinzhou District is slightly inferior, from CNY 59,000 to CNY 44,000; and Hannan District is even more inferior, from CNY 51,000 to CNY 44,000. The unit price of each level in East and West Lake District, on the other hand, is slightly higher than that in other far-flung districts, ranging from CNY 69,000 to CNY 59,000 for the three levels.

3.2. Comparative Analysis of the RCLP and State-Owned Land Transfer Fee in Wuhan City

Ground rent is the return a landowner obtains through the enjoyment of land ownership [22], and land price is the capitalized expression of ground rent. The creation of land management rights makes it possible to physically transform the land rent attribute of land. After the government expropriates land, the expropriated land is transformed into state-owned construction land, and the government then grants the land use right to the new landowner. The new landowner who receives the land is required to make the corresponding payment, i.e., the state-owned land transfer fee, or in other words, the land rent. The state-owned land transfer fees received by the government were not equal to the land expropriation compensation previously paid to the expropriated landowners, and the difference between the two is the land rent differential, which is derived from land value-added benefits in the land expropriation and conversion.

Land, as a scarce resource, is mainly offered in the market through auctions. With the inclusion of a bidding mechanism, price becomes the decisive factor in acquiring land, and the highest bidder obtains it; the profit-seeking nature of the market has led to ever-rising land prices. In addition, under the current system of fiscal decentralization, local governments, under financial constraints, rely excessively on “land finance” and generate revenue from land by strictly controlling the land supply to inflate land prices. In addition, the accelerated urbanization process in China has significantly increased the demand for infrastructure, public facilities, and housing, contributing to rising land prices and high land transfer fees. Wuhan City, a more economically developed provincial capital city in China’s jurisdiction, has a thriving land market. The high price of state-owned land transfer fees in Wuhan demonstrates the substantial land value-added benefits from the potential development value of the land during the land transfer process. The difference between the state-owned land fees and the RCLP represents the rent differential between expropriated land and the transferred land. The larger the difference in land rent, the greater the land value-added benefits obtained by the state in the process of land expropriation and re-conveyance. It also means that, in the distribution of land value-added benefits, the more the state shares in the profits, the less the expropriated landowners share in the profits.

Table 2. Land rent difference between land expropriation and transfer of Wuhan in Hubei Province in 2020.

Geographical Subdivision	District Composite Average Land Price (CNY 10,000/mu)	Average Price of State-Owned Land Transfer Fee (CNY 10,000/mu)	Ground Rent Difference (CNY 10,000/mu)
Wuchang District	24.49	2447.54	2423.05
Jiangan District	24.49	1769.51	1745.02
Qiaokou District	24.49	1283.89	1259.4
Hanyang District	24.49	707.44	682.95
Hongshan District	24.49	705.26	680.77
Jianghan District	24.49	603.99	579.5
Qingshan District	24.49	628.37	603.88
East–West Lake District	6.43	580.8	574.37
Jiangxia District	5.56	218.62	213.06
Caidian District	5.56	215.74	210.18
Huangpi District	5.56	423.82	418.26
Xinzhou District	5.14	206.84	201.7
Hannan District	4.77	259.43	254.66

Note: Data are derived from Hubei Provincial Government’s Notice of the Provincial People’s Government on the Announcement and Implementation of the RCLP Standard for “Expropriated Districts” in Hubei Province (E Zheng Fa [2019] No. 22 [20]) and the Wuhan Municipal Bureau of Natural Resources and Planning’s announcement of 2020 state-owned land sale data.

summarises the land acquisition prices and land transfer fees in each district of Wuhan, and the difference between them.

Apparently, there is a vast difference in land rent between land expropriation and land transfer in Wuhan. The most significant difference is observed in Wuchang District, where the rent differential is as high as CNY 24,230,500 per mu. Even for Xinzhou District, which has the smallest rent differential, the difference is CNY 2.017 million per mu. Compared to the original land expropriation compensation, as accounted for in the RCLP, the state-owned land transfer fees are astronomical. Accordingly, it can be seen that in the distribution of land value-added benefits, the state obtains the vast majority of the proceeds, while expropriated landowners receive only a small portion of the profits.

Noteworthily, Huangpi District and Caidian District have the same average RCLP of CNY 55,600 per mu, but there is a negative correlation in the average price of state-owned land transfer fees. Huangpi District’s average state-owned land transfer fees of CNY 4,338,200 per mu are much higher than Caidian District’s CNY 2,157,400 per mu. This disparity is due to the faster economic development in Huangpi District compared to Caidian District in recent years. Economic development has become the driving force for land appreciation, resulting in higher and higher state-owned land transfer fees in Huangpi District.

3.3. Challenges and Shortcomings in Wuhan City’s RCLPS

Compared with the traditional compensation standards of land expropriation, the RCLP shows considerable superiority, which should be recognized. This is also the reason why, after more than ten years of local practice, the RCLP has been incorporated into the national law as a practical achievement and has been recognized by the legislation. On the one hand, the RCLP adopts comprehensive evaluation indexes, combining natural geographic indexes with humanistic and economic indexes. For example, it incorporates social security per capita, land supply and demand, and other human economic indicators to measure land value [23]. For a long time, the one-sidedness and limitations of the factors measured in the previous land expropriation standards have been criticized. However, the comprehensive assessment of the RCLP is not such a concern [24]. On the other hand, the RCLP helps to realize the relative regional uniformity of land expropriation compensation. The old land requisition standard is based on the production value of land, which is prone to differences in the production value of neighboring land due to factors unrelated to the land itself, such as weather and workforce, thus making the specific standard between individuals unequal. Different prices for the same land are arbitrary, causing significant social conflicts and even leading to a delayed implementation or failure of land expropriation projects [25]. The RCLPS, on the other hand, is the same level and price within the same district. When applying human economic indicators, individual differences are excluded, and overall fairness is pursued. The relevant indicators are based on the overall economic situation of the area, which helps to satisfy the feelings and pursuits of the expropriated landowners for fair compensation and uniform standards. However, there are still some shortcomings in the practice of Wuhan’s RCLPS.

3.3.1. Unreasonable Distribution of Land Value-Added Benefits

As mentioned above, from the perspective of land rent, the current RCLP is not reasonable in the distribution of land value-added benefits, and the land expropriation and re-conveyance of land create a huge difference in land rent [26]. The current compensation for land expropriation takes little account of the portion of the land value-added benefits, and the state has been given the lion’s share of the land value-added benefits from the land transfers [27]. This inequity is detrimental to the personal rights and interests of the expropriated, and also poses a risk of jeopardizing the realization of sustainable economic and social development.

The distribution of land value-added benefits has always been a contentious topic in land expropriation compensation. Some scholars advocate that land value-added benefits should be attributed to the state, i.e., that “the increase in price belongs to the public sector”, arguing that land value-added benefits arise from the development of national investment, the state’s management of the land and the dividends of related policies, or the overall development of society. As the National People’s Congress explained in its interpretation of the old law, “the differential land rent that determines the different land prices is formed by the state’s investment, and in principle, this benefit should belong to the state” [28]. Conversely, some scholars believe that the gains from land appreciation should belong to the expropriated landowner, asserting that ‘the price increase belongs to the private sector’. This perspective is more widely supported in academic circles. The argument lies mainly in the fact that land ownership determines the right to development and other land rights and that price increases are the legal fruits of ownership. In contrast, land expropriation is compulsory, and thus, the gains of land appreciation should be given to the original owner, i.e., the expropriated landowner. “The right to land development derives from land ownership”. In addition, the need for moral compensation and social stability as well as the idea that China emphasizes the importance of the sedentary idea and the spiritual loss of the expropriated landowner further support this viewpoint. Some scholars advocate for a rational distribution of land value-added benefits between the state and expropriated landowners, adopting a “public–private” approach. The argument is “taking into account the actual utility of capital and land ownership”. In this regard, it should be taken into account that in the generation of land value-added benefits, both the state and the expropriated landowner play an objective role and cannot be biased in favor of one side, so it is appropriate to adopt the “public–private” path. Both sides play a certain degree of force, and the proportion should not be disparate.

However, in the practical operation of land expropriation compensation, the government remains the dominant pricing authority. In contrast, developed countries with a more mature market economy, such as the United States, generally use government intervention as a last resort in land expropriation [29], restricting to a greater extent the exercise of the government’s power of the eminent domain. The compensation system for land expropriation in these countries is generally based on private ownership, which essentially treats land expropriation as a transactional act, taking into account not only the market value of the land, but also the value of the future earnings of the land to be expropriated, as well as other incidental compensations in the process of land expropriation, ensuring smoother expropriation processes and fewer conflicts between the government and individuals. The experience of these countries can be taken into account in the distribution of land value-added benefits. Wuhan’s RCLPS needs to be fairer in that it focuses on the state and neglects the expropriated landowners in the distribution of land value-added benefits during land expropriation and transfer. In 2020, Wuhan’s land expropriation and re-conveyance created a significant disparity in the value of land rents, with districts’ land prices ranging from CNY 2,017,000 per mu to CNY 24,230,500 per mu. The average land price of each district in Wuhan ranges from CNY 47,700 per mu to CNY 244,900 per mu. In comparison, the average price of the state-owned land transfer fees is as high as CNY 2,068,400 per mu to CNY 24,475,400 per mu, and the proportion of the land expropriation price to the land price is less than 10 percent. Wuhan’s RCLPS still prioritizes the state in the distribution of land value-added benefits and does not take into account enough of the contribution of expropriated landowners; the distribution of land value-added benefits is not reasonable [30,31]. This practice ignores social fairness and is highly likely to increase disputes and conflicts, which is not conducive to social stability.

3.3.2. Insufficiently Fine-Grained Delineation of “Expropriated Districts” Levels

At present, the division of Wuhan’s “expropriated districts” is relatively rough and simple, basically equivalent to the division of administrative divisions. From a broad category, district- and county-level administrative districts serve as the basic units of the major categories of “expropriated districts”. From a small category, each district is only divided into 3–7 levels of the district level, which is not fine enough. In addition, the land prices of different classes of inter-district tracts are similar. It is generally in the middle of the seven classes of CNY 6.9, 6.5, 5.9, 5.5, 5.1, 48, and 44,000. This fails to adequately capture the finer differences in land value.

When state-owned land is transferred, the benchmark land price of the land is carefully divided into levels. In Wuhan, for example, commercial and service land is divided into 1 to 8 levels, with benchmark land prices ranging from CNY 10,258 m² to CNY 1408 m²; residential land is divided into 1 to 8 levels, with benchmark land prices ranging from CNY 9900 m² to CNY 1895 m²; and industrial land is divided into 1 to 5 levels, with benchmark land prices ranging from CNY 2106 m² to CNY 122 m² [32]. The difference in the benchmark land prices between these grades is vast. This also proves that there is a big difference in land value in Wuhan, highlighting the necessity for a more detailed breakdown of the level of “expropriated districts” when assessing the RCLP.

Different administrative districts have been categorized as different districts, which should indicate differences in land values. However, in practice, the districts of Wuhan are very similar in terms of the RCLP. For example, the prices of land in Caidian, Jiangxia, and Huangpi Districts all range from CNY 65,000 to CNY 48,000 in the five levels of the RCLP; the amount is exactly the same, and it is not very clear. Again, in Huangpi District, the average price of state-owned land transfer fees has been significantly higher than in the Caidian District, making the RCLP and the average price of state-owned land transfer fees show a significant negative correlation between the relationship; it is not appropriate.

At present, the difference in land value is not manifested in the grading of the land price of “expropriated districts”, and the RCLP fails to match the actual value of the land. This misalignment is detrimental to the protection of the rights and interests of the expropriated landowners, and undoubtedly exacerbates the social contradictions and hampers the process of sustainable development.

3.4. Policy Implications for Enhancing Wuhan City’s RCLPS

Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their needs, and it is people-oriented development that is of great significance to the long-term prosperity of cities. Improving the land expropriation system based on the concept of sustainable development can effectively reduce the erosion of the interests of the expropriated landowners, promote their sharing of long-term stable income, guarantee the stable improvement in their living standards, ease the conflicts between the expropriated landowners and the local government due to land expropriation, and make the farmers really share the real benefits of the right to land in the process of urbanization and industrialization, which will be conducive to the achievement of the goal of sustainable development of the society. Based on this, the following countermeasures are proposed.

3.4.1. Reallocate the Distribution of Land Value-Added Benefits

It must be emphasized that both the state and the expropriated landowners play a role in the land value-added benefits and are thus entitled to the corresponding distribution of the land value-added benefits [33]. The state, on the one hand, promotes the appreciation of land through social development, and as a collection of members of society, enjoys land value-added benefits on behalf of the people, which it needs to take from the people and use for the people. On the other hand, the state investment promoted the emergence of differential rent and land appreciation. The two aspects together make the state enjoy the qualification to be the beneficiary of land appreciation. As for the expropriated landowners, on the one hand, with the core element of land ownership, they naturally enjoy the right to development of the land and other rights, and the income from the appreciation of the land value is their due right and interest. On the other hand, the expropriated landowners can add value to the land with their own labors (at this time, it is the general situation that the owner of the land is also the user of the land, and the situation of separation of the three rights will not be discussed for the time being). To summarize, the distribution of land value-added benefits should adopt the path of “public–private” [34], and the government should re-plan the distribution of land value-added benefits according to the size of their respective causation [35]. Following such a path will help to prevent local governments from arbitrarily and excessively expropriating land due to low land prices and carrying out projects without planning, which will ultimately lead to a reduction in arable land resources and intensify social conflicts. In addition, the reasonable distribution of value-added benefits is also of great significance in easing the disputes and conflicts caused by land expropriation, preventing local governments from relying too much on land finance because of the large amount of value-added benefits they can obtain, and seeking a sustainable development method.

The portion of land value-added benefits should be fully considered and compensated in advance in the assessment of the RCLP so as to ensure that the expropriated landowners can enjoy the huge land value-added benefits resulting from the land expropriation and re-conveyance [36]. After such a revision, the RCLP will be significantly improved in general so that the land rent difference will be further reduced. Reference can be made to the highest optical use method in the United States, whereby the true value of the land at the time of expropriation is assessed on the basis of the highest market price at the time of the optimal use of the expropriated land, to ensure that the expropriated landowner receives the highest value-added income based on the land itself in advance at the time of expropriation, irrespective of the use of the land in the future.

The land value-added benefits involve many factors, which are difficult to accurately estimate in advance and often need to be roughly estimated after the land has been transferred through the correction of the difference in land rent and related factors. The current land expropriation system requires that compensation payments for land expropriation be determined and retained in full prior to expropriation and that compensation payments for land expropriation be made in full and in a timely manner when the land is expropriated. Some scholars propose to distribute land value-added benefits of the expropriated landowners proportionally after the land is transferred. However, this move deviates from the original intention of the full payment system to protect the expropriated landowners and carries the risk of delayed payments. Compensation for expropriation should be paid to the owner of the immovable property within a reasonable period of time [37,38]. It is recommended that the analogical approach be used to solve the problem through analogy with similar land that has been expropriated and re-conveyed to form the difference in the value of land rent for the purpose of estimating the corrected land value-added benefits. When reassessing the new round of the RCLP, calculate the land value-added benefits of similar land after expropriation and re-conveyance during the last round of the RCLP, and by analogy, calculate the land value-added benefits that the expropriation and transfer of the existing land will form. It is also included in evaluating the RCLP and is distributed proportionally according to the extent of the force generated by the expropriated landowner’s enjoyment of land property rights and the possible appreciation of their labor.

3.4.2. Refine the Delineation of “Expropriated Districts”

The compensation price for land expropriation within the same “expropriated district” is determined by level, with the same level and price in the same land expropriation area [39]. To this end, land value needs to be measured by a number of indicators in order to better delineate “expropriated districts”. The more comprehensive the assessment indicators are and the more detailed the assessment process is, the finer the final land value assessment results will be and the more obvious the difference between them will be. In addition, in order to ensure fair compensation for land expropriation, the fluctuation of land value within the same area should be limited to a small range. As a result, land with similar land value should be delineated in a smaller area. Otherwise, it is challenging to realize the advantages of a comprehensive assessment.

Most of the existing “expropriated districts” are organized on the same basis as district- and county-level administrative divisions. There are a few district units that are different from district- and county-level administrative districts, but in essence, they are also based on district and county administrative divisions and are a collection of several district- and county-level administrative districts. There is an inherent advantage in using administrative districts as the basis unit for “expropriated districts”, as the expropriation of land is an administrative act carried out by the government, which can be conveniently carried out within the same administrative district. Therefore, to maintain district- and county-level administrative districts as the basic unit of “expropriated districts”, it is necessary to divide different levels of districts within the district so as to reflect the differences in the price of the land by means of pricing by level.

At present, the RCLP exactly adopts the method that takes the same district piece of hierarchical pricing. Unfortunately, the level division of Wuhan districts is not fine enough. From the point of view of Wuhan’s classification of state-owned land transfer, there are significant differences in land values in Wuhan. Fine grading helps to implement the assessment of comprehensive indicators and carry out the pursuit of the principle of fair compensation. The differences in land values among districts should be refined by increasing the number of grades to help achieve fair compensation for land expropriation.

In conclusion, the division of “expropriated districts” should still be based on the administrative divisions at the district and county level, but the levels of division within the same district and county should be refined. The number of levels should be increased to 5–10 for single districts at the district level and to more than 10 for comprehensive districts at the district level. In addition, when the original RCLP is far from matching the existing land value, it should be actively adjusted to adapt to the changes in land value in the objective economic development. For example, Caidian District and Huangpi District have a significant negative correlation between the RCLP and the average price of the state-owned land transfer fees, which urgently needs to be adjusted in response to the RCLP.

4. Discussion

This paper analyzes the legal content of China’s RCLPS and its application in land expropriation, focusing on the city of Wuhan. Focusing on the current problems being faced by China’s land expropriation compensation system, it points out the remaining shortcomings of the current RCLP in the distribution of land value-added benefits and the division of expropriated areas, and makes targeted suggestions to improve the distribution of land value-added benefits and the division of expropriated areas in order to enhance fairness and sustainability. The sample size included in this thesis is relatively limited, but still sufficiently representative. On the basis of this study, future research can further expand the scope of this study to include other regions with typical land expropriation compensation issues and further analyze the development trends of the compensation system. In order to improve the RCLP and truly establish fair and reasonable compensation standards for land expropriation, in addition to the improvement methods mentioned in this paper, the principle of fair and reasonable compensation should also be clarified to guide the formulation and implementation of the compensation standards in practice. We should not only pursue the increase in the compensation amount, but also establish a system of a land expropriation compensation standard according to the compensation principle, and promote the diversification of the compensation method. Compensation mainly in monetary terms is obviously insufficient to protect the long-term interests of the expropriated people, and simply raising the amount of compensation will not only increase the government’s burden of land expropriation, but also fail to meet the real needs of farmers. In practice, there are countless examples of expropriated landowners who, due to receiving large amounts of compensation, have developed wasteful habits and even engaged in illegal and criminal behavior such as gambling. Therefore, integrating social security measures into the compensation process is essential. For example, certain expropriated areas used for factory construction can be reserved for expropriated landowners for positions with a low skill threshold, providing them with more employment opportunities. Localities can reasonably arrange compensation in accordance with the actual use of the expropriated land, and introduce social security, employment, business start-ups, land retention, and the establishment of enterprises or shop development in accordance with local conditions, in order to safeguard the long-term livelihoods of the farmers whose land is expropriated.

In addition, there is currently no special legislation on collective land expropriation and compensation. Regulations on this matter are scattered among various laws and regulations, lacking a cohesive system and sufficient specificity, making it difficult for disputes over land expropriation and compensation standards to enter the judicial process and receive judicial remedies. Therefore, a special law on land expropriation should be enacted as soon as possible. This law should provide comprehensive provisions on the basic principles of compensation for land expropriation, the scope of application, procedures, means of redress, etc., and have a clear basis for the legality of land expropriation, i.e., the scope of the public interest in the compensation for land expropriation, which can be defined by reference to the enumeration method used in foreign countries, so that the scope of the public interest can be improved continuously in the course of the judicial process.

An equitable and reasonable pricing system for land expropriation is essential for mitigating social conflicts arising from land expropriation, building a harmonious social order, maintaining social equity and stability, and promoting sustainable development. Examining the challenges and deficiencies of the existing RCLPS and proposing corresponding countermeasures is an inevitable requirement for addressing land expropriation disputes, realizing sustainable land use, promoting the rational allocation of land resources, and bridging the urban–rural divide. Guided by the principles of sustainable development, the land expropriation pricing system should be continuously improved. This ensures that the rights of expropriated landowners are effectively realized and contribute to social justice.