The tiered transaction system for sea use rights in China: Theoretical basis and market construction

The sea use rights (SUR) transaction system is the core of the marine property rights system. This study proposes three theoretical bases for tiered SUR transactions: (1) The allocation result of the initial SUR is led by the government; (2) Free SUR transactions under government supervision can significantly improve sea use efficiency; (3) SUR transaction among local governments is a rational choice of local governments. Based on these theoretical bases, this study shows that the SUR transaction system is a tiered structure under the constraints of state ownership and paid use of the sea. The operation of the SUR transaction system relies on government and market mechanisms. It corresponds to different levels of the SUR transaction market according to the various transaction subjects and dominant mechanisms. That is, the primary transaction market that resolves the allocation of initial SUR from the central to local governments and then to sea-using enterprises (individuals) is under the guidance of government mechanisms. Then, the secondary transaction market for the settlement of SUR transactions among local governments is under the direction of a quasi-market mechanism. Finally, the tertiary transaction market for SUR transactions among sea-using enterprises (individuals) is led by the market mechanism.