Abstract

The rural land system is a basic system. China's rural land system is characterized by a split; land of the state and collective co-existence; government's land expropriation of land ownership rights is the only contact the two kinds of bonds. Land acquisition is the responsibility of the economic substance rules to protect land ownership. China's land acquisition does not fully meet the efficiency limits the principle that the public interest and reasonable compensation. Land misery index can be used to reflect the efficiency of land acquisition in the degree of distortion and loss of farmers 'welfare state, the objective of China's current land misery index close to 1, reflecting the efficiency and farmers' welfare seriously distorted severely damaged. Only continuous deepening of reform, adhere to the market mechanism in the land to the basic role in order to achieve the efficiency of land allocation requirements, and ensure farmers' interests are not compromised. Land institution is one of fundamental institutions in Chinese rural area. There's an institutional division between urban and rural area, which is the feature of China's land institution. Eminent domain is the only way that can link the state-owned with collective-owned land property . The economic nature of eminent domain is to protect land property by liability rules. However, eminent domain in China does not accord with two efficiency principles, which are public use and just compensation. Misery Index of Eminent Domain can be used to describe the distortion degree of economic efficiency and the hurt degree to peasantry. The in Chins is now nearly close to I, which seriously reflects economic efficiency distortion and decrease of peasant welfare. What we should do is to reform land institution by use of market mechanism, which is the only way to decrease economic efficiency distortion degree and to keep peasant welfare