As part of a drive to further strengthen the control and administration of industrial land and promote intensive utilization of land, the Ministry of Land and Resources (MLR) issued the Circular on Distributing and Implementing the Standards for Minimum Price for Transfers of Industrial Land 2006]307 ?, the “Circular 307”) on December 23, 2006, which came into force on January 1, 2007. This is a followup regulation to implement the Circular of the State Council on Relevant Issues Concerning Strengthening the Land Control 2006]31 ?, the “Rule No.31”).

According to the Circular 307, industrial land across China has been divided into 15 categories. Circular 307 sets out the standards for minimum price for the transfer of industrial land, ranging from RMB 60 per square meter to RMB 80 per square meter.

Circular 307 requires that the Minimum Standards shall be strictly implemented. No local administrative department of land and resources may reduce the Minimum Standards for the reasons as the difference in sources of land, degrees of land development, etc. The administrative department of land and resources at the provincial level may further increase the Minimum Standards or set down different Minimum Standards for different industries and different regions not lower than the Minimum Standards required by Circular 307.

  • Circular 307 provides that when relevant departments grant industrial land, they must use bid, auction, or quotation procedures. Circular 307 restates that the application for the land for industrial projects shall be within the scope of the land used for urban construction as decided in an overall planning of land utilization. However, the Circular 307 sets out two exceptions for the Minimum Standards: 
  • For those industrial projects using the land beyond the scope of the land used for urban construction as decided in an overall planning of land utilization and the initial land development is completed by the land user itself, the lowest price for the transfer of industrial land may be implemented as 60% of the relevant Minimum Standards; and 

For those industrial projects using the state-owned sandy land, bare land, and bare gravel land not listed as supporting arable land and the users who have the land use right (or rural land contracted management right) have not been determined, the lowest price for the transfer of industrial land may be implemented as 30% of the relevant Minimum Standards.