China’s rural land reform is entering a critical new phase, according to a report from Citi this week, and it could unlock more than US$20 trillion of wealth.

While China’s rural land is owned by collectives and is largely non-transferrable, reforms that began through a pilot scheme in 2015 aim to change that. The government has extended the pilot program, and Citi analysts see this as a sign to encourage further experiments.

“High expectation also abounds that the rural land reform could accelerate after 19th Party Congress,” according to the report.

Analysis of “shadow prices” of the rural land points to remarkable wealth owned by farmers, which divided by registered rural population would equal around US$23,594 per captia, almost 13 times rural disposable income per capita. The total would equal around US$20.6 trillion.

The report enumerates four possible implications:

We expect it to:

(1) increase rural household wealth and consumption, benefiting sectors like autos, consumer discretionary, consumer electronics, education and real estate;

(2) advance urbanization and help sustain China’s economic growth;

(3) improve agricultural productivity and promote corporate farming – China’s modern agriculture is an area of great potential for investment; and

(4) restoring local fiscal discipline and social stability.