Urbanization in China is also in the process of transforming landrights from collective ownership to state ownership. Urban gov-ernments have been the dominant actors in the conversion of ruralland to urban land during China’s rapid urbanization. When agri-cultural land is acquired for urban uses, villagers losing land viathis form of eminent domain are compensated and offered reset-tlement. The compensation is based on land value for agriculturaluses, as land owned by the collective is for farming only. These vary-ing rates of compensation are the land rent differentials betweenagricultural and urban land uses. The gap between potential landrent and actual land rent capitalized under present land use consti-tutes the land rent differential. Informal land market booms whenthe legality of transactions is unclear either because the law isvague or because they are not covered by existing laws (Ho andLin, 2003) Bearing resentment against deprivation of land develop-ment rights, rural collectives have launched covert operations, indefiance of the urban state, to take hold of those rights (Tian andZhu, 2013).