This special issue arose from a project within the “2013 Plan of introducing overseas high-level cultural and educational experts”, which was financed by the P.R. China. The project was applied by the College of Architecture and Environment of Sichuan University, in collaboration with the Trier University of Applied Sciences (Environmental Campus Birkenfeld), Trier, Germany.

The starting point of the project has the intention to face the challenges on the China’s land market. Within the urbanization program of the Chinese government the biggest migration of human history will happen. Thus, speculation and high prices of real estate are a problem. Also the conversion of agricultural sites into developed areas needs more control, in order to guarantee food security. Last but not least, also the tax base of the communes has to be strengthened and sustained. In order to deal with such challenges, a good land use management needs a sound financial base as a “second leg”. With a sound land taxation, the land use planning might be supported by financial incentives. At the same time a sustainable source of public finance might be exploited, without putting economy in disorder. A property tax, such as just being piloted in Shanghai and Chongqing, cannot deal with the mentioned challenges. The project has organized two international workshops in Chengdu. The outcome of the project shall be published in a book. Thanks to this special issue, some of the results are able to be presented in a brief and understandable way to Chinese readers.  A proper strategy for China’s land use market is crucial only for China but also world economy, all authors of this special issue welcome your feedback and suggestions to their point of views.  We wish this special issue could initiate dialogue and creation between international and Chinese scholars for facing the challenges of land use market in China. Subsequently, a short overview about the authors and the key arguments of their articles in this special issue is provided:

Fred Harrison is Research Director of the London-based Land Research Trust, and author of The Traumatised Society (2012), served as a consultant to policy-makers in the Russian Federation’s Federal Duma during the first 10 years of the post-Soviet era . His article, “Financial Rules for Constructing a Strong State”, explains why the greatest cause of disharmony among Western populations stems from the way governments raise revenue. The People’s Republic of China can anticipate the dangers and develop a financial system that unites citizen and State.

Ted Gwartney has worked as a land assessor and appraiser for 50 years in USA and other countries. He established the real estate assessment revenue system for the Province of British Columbia, Canada. His article “Land Rents as a Sustainable Revenue Base for China” , presents the reasons why collecting land rent is the appropriate sustainable revenue base for China,  how to implement the concept and how the Chinese economy will benefit by adopting this methodology.

Terry Dwyer obtained his PhD from Harvard for his thesis of the history of the theory of land value taxation. He served in the Australian Federal Treasury, the Department of the Prime Minister and Cabinet and Economic Planning Advisory Council and as economic adviser to an independent Senator in the Parliament, specializing in estate and tax planning. His article “The taxing and rating of land values in Australia for public works and water supply” illustrates the Australian experience with collecting land rents through land value taxation as public  revenue base, which had successfully financed essential public infrastructure and maximized the economic benefit from those infrastructure.  This article also calls for an attention that vested interests may lobby to undermine a land value rating system towards distorting “user charges” and taxes on labour and capital.

Bryan Kavanagh was employed as a real estate assessor in the Australian Taxation Office and the Commonwealth Bank of Australia. Mr. Kavanagh notes that the repetitive bursting of bubbles in land prices generated financial collapses and economic recession in Australia.   His paper, “The commonwealth as a response to bubble economies”, argues that public capture of land and resource rents for revenue, as an alternative to other forms of taxation, would curtail the formation of such damaging bubbles. He also describes some of the shortcomings in the Canberra land rent system that saw it fail in 1971, but suggests the capture of rent nevertheless has great potential to resurrect the world’s failing economies.

Andrew Purves grew up in Hong Kong, and witnessed the extraordinary growth of the territory from the 1960s to the present day.  While studying at the School of Economic Science in London, he became curious about the prosperity of Hong Kong, and its special characteristics. In this article, “Can Good Taxation Lead to Prosperity?” he points out how so much wealth has been reserved to the public revenue by avoiding the absolute private ownership of land, and the consequent need to tax the process of wealth creation through employment and other regressive means.

Shihe Fu is an associate professor of urban economics and his research focuses on business agglomeration, labor market, real estate market, and environmental issues in Chinese cities.
Li Zhou experienced a career as water engineer in FoxConn and as sales director in the real estate advertising company Sou Fun, Beijing. Actually, she is finishing her Mater degree in the Trier University of Applied Sciences (Environmental Campus Birkenfeld).

Dirk Loehr is Professor of Taxation and Ecological Economics at the Trier University of Applied Sciences (Environment-Campus Birkenfeld), Germany. Among others, his career has included work as a lecturer for a private real estate academy, as a consultant for the German International Cooperation (GIZ) in Cambodia (land sector program), as a chief department manager of the German Railway company (Deutsche Bahn AG) and as financial manager in an international hotel group (management of the IPO). Loehr is actually member of the Public Real Estate Assessment Board of the Rheinhessen-Nahe area and of the Supreme Public Real Estate Assessment Board of Rhineland-Palatinate, Germany.

The paper of Loehr, Fu, and Zhou, “The Qingdao Land Regime—Lessons Learned”, shows that, although it happened on the background of the criminal German colonial policy, the land regime of Qingdao was a blueprint. In Qingdao, the first time in history a far reaching tax and tenure-agenda was put into practice. Although the Qingdao regime had serious shortcomings, it was much more advanced than most of the contemporary land regimes in Western countries are. The land regime might be still considered as a blueprint and a guidepost for an alternative land and tax policy.

The paper of Dwyer and Loehr, “Land rents in lieu of taxes for public revenue--the forgotten advice of Sun Yat Sen and Adam Smith” has the character of an overview and summary. It considers economical, planning and social aspects of land taxation. Land use problems are often caused by a decoupling of benefits and costs, which causes severe distortions. Charging the rent may help to couple benefits and costs. Moreover, it supports land use planning and an efficient use of the scarce factor land. It dampens land prices and eases access to land for needy people. In contrast to other taxes, it does not distort the economy by causing a deadweight loss. Instead, it makes a country more competitive. Moreover, also boom-and-bust-cycles are dampened. Last but not least, it gives the local authorities a sustainable financial source.

We wish you have a pleasant time while reading this special issue, discussions are welcomed. We have a common wish that we could turn today’s challenges of land use market into a sustainable society which not only creates a new public financial system but also the harmony of state and citizens.