The Chinese government has approved the creation of a legal structure that allows farmers to trade their land use rights, the Financial Times reported. Confirmation of the reform came from Chen Xiwen, director of the office of the central leading group on rural work, in a party magazine published on Thursday. Chen said China will "construct a healthy market for the transfer of land contract rights . . . based on the principles of legality, free will and adequate compensation for the peasants." The first land use rights exchange was set up on Monday in the western city of Chengdu. Qin Shikui, head of the Chengdu United Assets and Equity Exchange, which is responsible for the new exchange, said they had already received many inquiries from farmers. The decision to facilitate the transfer of land titles – which are allocated as 30-year land use contracts – was made last weekend behind by the Communist Party Central Committee.