Businesses and property owners in parts of China are being charged fees and fines by local authorities conducting land-use audits ahead of a farmland protection law that does not take effect until January 2027, according to business owners in Shandong Province interviewed by The Epoch Times who spoke on condition of anonymity out of fear of reprisal.
The business owners said local authorities have been reviewing factories, rural homes and other properties built on land classified as agricultural use and demanding payments for land reclamation and alleged violations. Several said the bills can run into hundreds of thousands of dollars. They described receiving little formal documentation explaining the collections and said there is mounting pressure to pay, including threats of inspections and utility disruptions.
They said the fees are adding to financial strain on small businesses already struggling in a weak economy.
The law and the timing
China’s Farmland Protection and Quality Improvement Law is scheduled to take effect on Jan. 1, 2027. The law establishes a compensation system for farmland occupied by nonagricultural construction and requires developers using such land for nonagricultural purposes to pay reclamation fees.
The audits and collections being conducted now are the source of concern among those interviewed. They said the charges are arriving without the formal legal framework that the 2027 law will provide, and that the lack of documentation makes it difficult to contest or verify amounts.
The broader economic context
The farmland audit pressure comes at a period of economic difficulty for small businesses in China. Consumer demand has remained weak, and small manufacturers and property owners have faced a range of cost pressures including declining orders, financing difficulties and now, according to those interviewed, unanticipated compliance-related charges.
The Epoch Times has reported separately on Chinese tax authorities targeting small closed businesses, suggesting a broader pattern of local government revenue collection activity directed at small operators in the current economic environment.
What the law is intended to do
China’s farmland protection framework reflects longstanding policy concerns about the conversion of agricultural land to industrial and residential use. The country has maintained strict official protections on farmland area since at least 1998, when a land management law established minimum farmland targets. The 2027 law represents an updated and more comprehensive version of that framework.
The compensation mechanism the 2027 law establishes is meant to create a formal and transparent system for calculating and collecting reclamation fees when agricultural land is converted. Those interviewed said the pre-law collections they are experiencing lack that transparency.
The Chinese government has not publicly acknowledged the collection activities described by the business owners. The Epoch Times was unable to independently verify each individual claim, and the business owners spoke anonymously.
