Is illegal farmland conversion ineffective in China? Study on the impact of illegal farmland conversion on economic growth

This paper constructs an econometric model for evaluating the impact of illegal farmland conversion on economic growth based on the neoclassical production function. Then the concrete impact of illegal farmland conversion on economic growth is estimated by using the panel data of 31 provinces in the Chinese Mainland between 2001 and 2012. The results show that on the whole illegal farmland conversion throughout China has had a significant positive effect on economic growth; but along with the scale expansion of illegal farmland conversion, the change of its impact on economic growth will present an inverted U-shaped curve. Furthermore, along with the Chinese government's implementation of the land supervision system for strengthening the investigation and punishment of illegal land use, the degree of the impact of illegal farmland conversion on economic growth after 2007 has obviously decreased in comparison with that in previous years. In addition, compared with legal farmland conversion, illegal farmland conversion has a greater marginal impact on economic growth in the short term. This impact of illegal farmland conversion on economic growth is closely related to the Chinese Mainland's economic growth pattern that depends on land development, the rigid annual land use plan and the imperfect land development management. At the end, policy recommendations are provided to improve the management of farmland conversion.