Differential Treatments of Investments in the Contractual Right to Land Management

Wenjun Wang & Shuxin Zhu 

In practice, there are two basic ways to invest in the contractual right to the contractual land management for equity interest. The first involves the dynamic equity system, which complies with the “voluntary joint investment with the land contract and operation right on a voluntary basis to engage in cooperation agriculture production,” provided under the Law on Land Contract in Rural Areas. The other is to invest such a right as the contribution for the establishment of a company or a cooperative. Current legislation prohibits the investment of a contractual right to land management for the establishment of a company. Making the investment for equity interest is an important way to circulate the right to land management contractually and could bring real benefits to peasants. Under the premise of governing and guiding relevant activities, it would be advisable to loosen the restrictions on such investments and to distinguish the different ways of equity investment, i.e., to fully promote the first way and actively develop the second. Based on the differences between a company and a cooperative, it would be better to promote the investment with the right to contractual land management under cooperative equities.

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