Abstract: One of the key issues in the current discussion on China's land system is whether the system and concept of public appreciation of land price is reasonable. However, current dispute lacks the empirical analysis on the composition and scale of "land finance", which is of fundamental significance for demonstrating the distribution mechanism of land value-added income. It is found that land finance is mainly composed of land transfer income, land tax and land fees. It is a mixed public revenue. Since the late 1990s, land finance has grown rapidly, becoming an important composition to local fiscal system. Local governments have strong dependence on land finance. Land finance shares the characteristics of land rent, tax and finance, which makes local governments facing financial risks and debt issue.