This paper investigates the impacts of land rental market development on the efficiency of labor allocation and land utilization in rural China using original household survey conducted in Fenghua. We construct simply agricultural household model and set up a hypothesis that shadow wage of household labor with limited off-farm opportunities would increase with the development of land rental market for households whose marginal product of farmland are higher than real rental fee. To testify the hypothesis, we separate surveyed households into two groups whether a household rents in farmland or not, and estimate agricultural production functions to deduce marginal product of agricultural labor, respectively. Statistical comparison between the shadow wage and the estimated market wage based on Mincerian wage function controlling sample selection bias has been conducted. The results show that the shadow wages of both groups are lower than market wage, but the that of rent-in household is statistically higher that of others. Those results are consistent with our hypothesis. In addition, the estimated marginal product of farmland for rent-in households is statistically higher than actual land rent that rent-in household pays, while we cannot reject that the null hypothesis that real land rent accepted by rent-out households is equivalent to the marginal product of farmland for those households. This result indicates that efficient land rental market has been developing in Fengshan city, and policy supports for local agricultural and land transaction would be effective for improving the efficiency of labor allocation and farmland utilization.

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The purpose of this study was to analyze the choices made by farmers about migration and the supply of off-farm labor, devoting special attention to the effects of land availability on these issues. Because many extant econometric analyses have confirmed the close relationship between these two factors, we concentrated primarily on the following two aspects. First, we examined how the development of a rural land-transfer market influenced the choices of individual peasants about off-farm labor. Because China offers a vast market in which the rights to land management can be transferred, huge differences between regions exist. Second, we focused on the special conditions confronted by Chinese farmers and their reactions to these situations. In China, the right to use rural land is controlled by the collective government. In this context, however, farmers are able to allocate the labor resources of their family to maximize the income of their households. The basic household model asserts that farmers serve not only as agricultural laborers but also as land owners and consumers. Thus, the conditions of the agricultural land and factors such as other sources of family income can influence individual choices about labor. The impact of these choices depends on the status of each family member. Our empirical analysis used micro-level data from three rural areas. These data were collected during the 2005 and 2007 household surveys in Xiaojin and Jiangyou Counties in Sichuan Province and the 2009 household survey in Fenghua City in Zhejiang Province. Finally, we will discuss the implications of our results for future policies, with an emphasis on the importance of the rural landrental market.

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This paper summarizes the changes in China’s FDI policy and empirically examines the trend of locational choice of foreign enterprises in the Yangtze Delta. It mainly uses county level data from the Jiangsu and Zhejiang provinces using geographical information and applies spatial econometric methods. The main results are as follows. First, the degree of concentration (Gini coefficient) of firm location slightly declined. Meanwhile, the degree of accumulation (Moran’s I) significantly increased in the 2000s. Second, despite China’s FDI policy becoming more selective in the 2000s, the core of geographical accumulation still remained in the city, which established a state level economic development zone in the early years of reform and opening period. Third, the choice of location of foreign enterprises is significantly influenced by market size, the number of companies, the existence of an economic development zone, and the situation of the neighboring areas. However, contrary to expectations, wage does not have a negative influence on locational choice. These results imply that accumulation plays an important role in attracting foreign enterprises to a region; therefore, the government should apply a policy to help in the accumulation of know-how and the establishment of a firm network in addition to cost-cutting policies like tax reduction.

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