Land-use legislation in China distinguishes between transferable “land-use rights” and inalienable “land ownership”. According to the land-use legislation, two types of land ownership exist: “collective ownership” and “state ownership”. As in the land leasehold system in Hong Kong, industrial enterprises can buy state-owned land-use rights from the municipal government for a fixed period, although this was banned before China’s first land law – The Land Administrative Law (LAL) – in 1986, as was the sale of collectively owned land. The price of land-use rights depends on land-use type, location, land-use density, and neighborhood externalities, and resembles land price determination in Western countries. Land policy reform in China has had a remarkably positive impact on land-use efficiency improvement (Qu et al., 1995).