Businesses and property owners in parts of China are facing new charges and fines as local authorities conduct land-use audits ahead of a national farmland protection law that does not take effect until next year, according to business owners interviewed by The Epoch Times.
They spoke on condition of anonymity out of fear of reprisal.
In Shandong Province, authorities have been reviewing factories, rural homes, and other properties built on land classified as farmland, and are demanding payments for farmland reclamation and alleged violations, according to the business owners, several of whom said the bills can run into hundreds of thousands of dollars.
The developments come as China prepares to implement its Farmland Protection and Quality Improvement Law on Jan. 1, 2027. The law establishes a compensation system for farmland occupied by nonagricultural construction.
Under the law, developers using farmland for nonagricultural construction must pay farmland reclamation fees.
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However, local governments in several provinces have already introduced or revised farmland reclamation fees before the national law takes effect.
In February, authorities in Jinan, China, announced they would double the farmland reclamation fee for legally occupying ordinary farmland for nonagricultural construction.
For some businesses, however, the fee collections go beyond the farmland reclamation fee.
Arbitrary Fees and Fines
A factory owner in Shandong Province said that local authorities have been conducting land-use checks on businesses and assessing two main types of charges: a farmland reclamation fee based on land classification and a separate fine based on the total area occupied by a factory.
The second charge, he said, applies regardless of whether the land itself is classified as farmland.
“This fine is calculated based on the overall area occupied by your factory. Whether it is farmland or not doesn’t matter. As long as you occupy it, you have to pay,” the factory owner told The Epoch Times.
He said some businesses have been reluctant to challenge the charges because of the potential consequences of refusing to pay. Some businesses have faced threats of having their water or electricity cut off, of having access to their facilities blocked, or of having government-hired personnel sent to interfere with their operations, he said.
For the factory owner, the issue goes beyond the immediate financial burden. He said many factories were established years ago under arrangements that were acceptable to local governments at the time but no longer meet current land-use requirements.
“What worries businesses is not just the current payment, but the lack of clear policy boundaries,” he said. “A receipt for fee payment also provides little assurance that businesses will not face additional charges later.”
The owner said local officials appear focused primarily on collecting the money rather than explaining the legal basis of the charges. In his view, the collections are closely linked to the deterioration of local government finances.
“Put bluntly, the government doesn’t have money now, so it is indirectly asking businesses for money,” he said.
A former factory owner in Yitang, Shandong Province, told The Epoch Times that he recently paid farmland reclamation fees and fines for a building used as a guardhouse and residence.
He said the building was built about five years ago, following guidance from the authorities overseeing the demolition of a factory on the site. At the time, he said, the government did not require the same level of payments now being demanded.
More than 50 households in his village, he said, have been asked to pay, with some facing bills of up to 600,000 yuan ($89,400).
“There are also people who pay even more, and some pay more than 1 million yuan ($149,000). It depends on the size of the area you occupy and the amount of the fine in each locality,” he said.
The former factory owner said similar enforcement began earlier in other parts of Shandong Province and later expanded. Authorities determine whether land is considered farmland partly by referring to satellite imagery, he said.
For those who cannot afford to pay, he said, authorities can subject them to repeated inspections and other forms of pressure.
“The worst-case scenario is that [the authorities] demolish it,” he said.
Retroactive Enforcement
In Shandong’s seaside city Weifang, a factory owner surnamed Liu told The Epoch Times that authorities in his area are reviewing factories, farms, and dairy breeding operations that were built or established on farmland.
He explained that many of those businesses were established during earlier periods of economic expansion, when the government did not enforce many regulations, thereby encouraging economic development.
“In the past, for the sake of developing the economy, there were many problems that the government did not deal with at the time. Now that the [economic] situation is not good, they are settling old accounts,” he said.
Liu said he previously operated a breeding business in a locally designated breeding area. The land was classified as agricultural facility land, but he did not have complete land-use documentation.
As farmland protection rules have tightened, he said, business operators who followed earlier local development arrangements can now find themselves facing additional costs and administrative requirements.
For business owners who invested under more permissive conditions in the past, Liu said, the renewed scrutiny creates another layer of uncertainty over whether existing projects can remain viable.
Li Jing and Gu Xiaohua contributed to this report.
