● Funds related to land remediation will be tilted toward regions with heavy tasks for replenishing cultivated land, as well as major grain-producing areas and key grain-producing counties. Starting in 2010, the Ministry of Finance and the Ministry of Natural Resources will, in conjunction with rural land remediation plans and annual cultivated-land-replenishment programs, adjust and refine the allocation and use of the central government’s share of fees collected for the paid use of newly added construction land.

● In conjunction with major projects for land consolidation, reclamation, and development, as well as the “Ten Thousand Villages Land Remediation” demonstration project, centrally allocate the fees for paid use of newly designated construction land, arable land reclamation fees, land reclamation fees, and revenue from land transfers earmarked for agricultural land development. Explore establishing a reward and punishment mechanism for the management and use of funds related to land remediation.

To further strengthen the management of funds related to land remediation and effectively improve the efficiency of fund utilization, the Ministry of Finance and the Ministry of Natural Resources recently jointly issued the “Notice on Strengthening the Management of Funds Related to Land Remediation,” which calls for aligning thinking, standardizing management, coordinating arrangements, enhancing supervision, and improving the efficiency and effectiveness of the use of funds for land remediation.

The Notice points out that it is essential to unify thinking and fully recognize the importance of strengthening the management of funds related to land consolidation. Finance and land resources departments at all local levels should, in accordance with the requirements put forward by the Third Plenary Session of the 17th CPC Central Committee—namely, vigorously promoting rural land consolidation—and from the perspective of the country’s economic and social development strategy, further unify their thinking, enhance their awareness, establish and improve management measures for the use of funds related to land consolidation, strictly enforce all relevant management systems, and effectively carry out work at every stage, including fund allocation, utilization, and supervision and management.

The “Notice” requires standardized management and rigorous review of expenditure budgets for land remediation projects. Financial and land and resources departments at all local levels must earnestly strengthen budget management for land remediation projects. Local land and resources departments at all levels should meticulously carry out feasibility studies, planning and design, budget preparation, as well as supervision and inspection during project implementation and completion acceptance. Financial departments at all levels should conscientiously perform the review and issuance of land remediation project budgets, disburse funds, and conduct supervisory management. Provincial-level financial and land and resources departments should carefully organize and supervise the implementation and management of land remediation project budgets. At the same time, a sound statistical reporting system for land remediation-related funds should be established, featuring comprehensive design specifications and clearly defined relationships among various entities. An effective tiered reporting system for fund receipts and expenditures should also be put in place, providing reliable data support for scientifically allocating funds and strengthening fund oversight.

The Notice requires coordinated planning to enhance the efficiency and effectiveness of the use of funds related to land remediation. First, we must fully leverage the role of planning and control to guide the allocation of funds in a rational manner. Localities should strictly adhere to the requirements of the overall land-use plan, taking into full consideration factors such as water resources and ecological environment, and formulate regional plans for rural land remediation. The allocation and use of funds must be consistent with these plans. At the same time, we should increase investment in regions with heavy tasks for replenishing cultivated land and in major grain-producing areas, ensuring that funds for land remediation are tilted toward regions, counties, and prefectures with significant responsibilities for replenishing cultivated land and those that are major grain producers. To further improve the efficiency of fund utilization, starting from 2010, the Ministry of Finance and the Ministry of Natural Resources will, in conjunction with rural land remediation plans and annual cultivated-land-replenishment programs, adjust and refine the allocation and use of newly added central government shares.

Second, we must strictly control the scope of fund expenditures to reduce idle funds and surpluses. All localities must adhere rigorously to the prescribed expenditure guidelines for land remediation funds, and are strictly prohibited from diverting, misappropriating, or arbitrarily expanding the scope of expenditures. For regions facing a shortage of reserve arable land resources, provincial finance and land and resource departments should promptly refine the management measures for the allocation and use of land remediation funds, striking a balance between fund amounts and workload to ensure that these funds are used effectively. At the same time, we should streamline the project application procedures and enhance the efficiency of fund utilization.

Third, we must highlight key priorities and fully leverage the effectiveness of fund combinations and economies of scale. Localities should, in accordance with the requirements of the “Notice from the Ministry of Finance and the Ministry of Natural Resources on the Allocation, Use, and Management of Fees for Paid Use of Newly Added Construction Land Allocated by the Central Government” (Cai Jian [2009] No. 286), and in conjunction with nationally designated major projects for land consolidation, reclamation, and development as well as demonstration projects such as the “Ten Thousand Villages Land Remediation” initiative, centrally allocate the fees for paid use of newly added construction land, arable land reclamation fees, land reclamation fees, and revenue from land transfers earmarked for agricultural land development—both those allocated by the central government and those retained locally—so as to maximize the scale benefits of these funds.

The Notice calls for strengthening supervision to promote standardized and refined management of funds related to land remediation. Provincial-level finance and land resources departments shall, in accordance with the "Interim Measures for the Inspection of Paid Use Fees for Newly Added Construction Land Allocated by the Central Government" (Cai Jian [2008] No. 30) and other relevant requirements, promptly formulate and improve their regional regulations on the supervision of the use of funds related to land remediation, and intensify oversight and performance evaluation of fund utilization. It is essential to reinforce both ex-ante and in-process supervision, foster an organic integration of supervision and management, fully mobilize the supervisory forces at all levels of finance and land resources departments, establish a coordinated supervision and inspection mechanism involving multiple departments, and step up the intensity of supervision and inspection efforts. Moreover, we must proactively accept oversight from audit, disciplinary inspection, and supervisory authorities.

The Ministry of Finance and the Ministry of Natural Resources will actively explore establishing a reward-and-punishment mechanism for the management and use of funds related to land remediation. Regions that demonstrate significant results in the management and use of these funds will receive appropriate rewards when allocating quotas for paid-use fees on newly added construction land. Conversely, regions with inadequate management practices and large unspent fund balances will see their allocations of paid-use fees for newly added construction land reduced accordingly. Meanwhile, the Ministry of Finance and the Ministry of Natural Resources will, at an opportune time, conduct special inspections to ensure the effective implementation of the “Notice on Strengthening the Management of Funds Related to Land Remediation.” They will also intensify penalties for all types of illegal and non-compliant activities, strictly enforce discipline, and ensure that the use of funds related to land remediation is standardized and highly refined.