According to current Chinese law, urban land is owned by the state, while rural land is held under collective ownership.

As we can see from these graphics taken from Sohu.com, farmers use the land but do not have the right to sell or develop it. However, the law allows the government to acquire farm land for public use after compensating its occupants.

Officials can then legally transfer the land title to real estate developers for substantial gains. It can be a major source of revenue for some local governments, but offers the evicted farmers an insubstantial share of the profits. This can breed discontent and friction between farmers and local governments.

So one reform policy-makers at the Third Plenum of the 18th CPC Central Committee will likely look at is allowing rural land to be directly sold on the market without government involvement.