Circulation and Balance between Urban and Rural Land Use in China: Theory and Market-Oriented Mechanism

land use arouses an important economic and public concern currently. The reasonable usage of lands between urban and rural areas is related directly to the macro economic growth and food security in China. With the advent of development and urbanization, many problems revealed. Based on the realistic policies of Balance of Arable Land and Circulation of Construction Land, this paper theoretically analyzes and establishes the dynamic equilibrium model among the Construction Land, the Rural Homestead, the Arable Land and the Wasteland. Based on such a theoretical model, we propose an innovative operating mechanism for the Land Circulation Quota and accordingly give its pricing model. With the market-oriented design combining the public and private sectors, the self-recovery feature of this new mechanism will probably promise the long-turn sustainable running for the circulation and balance of land use. The numerical simulation result of quota price can be treated as the benchmark for policy-makers and other market participants.