Financial Risks of Land Financing by Local Governments——Case Study of a Developed Area in East China

The purpose of the paper is to study risks of running land by loca l governments and to propose countermeasures. Method of case study was employed. T he results show land financing has become an important source of local revenue a nd funds for urbanization. The urbanization since last 90s features governmentdominated urban expansion. The industrial taxation by urban expansion within loc al financial budget and land remise income beyond financial budget have become r eal "land revenue". The principal of land reserve by the government is to purs ue the maximum land benefit and the land financing by mortgage. The new round of urban expansion is supported by funds of bank while the loan is driven by land.