As we all know,Chinese tax system had undergone the most significant reform since reform and opening up in 1994,the new tax system directly gave birth to Chinese unique taxation phenomenon "land finance".There is no doubt that land finance had advantages and disadvantages,on the one hand,land finance significantly increased the Chinese local government revenue,greatly relieved the local fiscal revenue and expenditure gap,for the local government to speed up social welfare improvement,urban development and livelihood protection provided financial support,including local education,health care and infrastructure construction.However,on the other hand,under the support of the land finance prosperity also hidden many worries,for example,high quality farmland resources dropped,too much infrastructure and only GDP theory,then the lack of real economic and social benefits of the image and performance project caused resources serious mismatch and waste,the land finance is unsustainable.Wherefore,How to evaluate the advantages and disadvantages of Chinese land finance and understand the long-short term impact of land finance on Chinese economic and social welfare,there is significant meaning to the Chinese economy and society development.As so far,the academic literature on land finance study can be described as "the whole libraries are filled",mainly focused on the land finance reasons,influences and solutions,generally formed positive views and negative views.Optimistic people saw the positive role of land finance in mitigating and eliminating capital bottlenecks to local economic development,but negatives saw land finance resource mismatch and land finance is unsustainable.This paper is intended from a whole new perspective,Which is from Amartya Sen new welfare economic perspective,especially Amartya Sen "Capability Approach Theory",empirical study and evaluate the welfare effect of Chinese land finance,in order to reach new insights and conclusions.Welfare economics research based on 1920s Pigou "Welfare Economics"book.Traditional welfare economics focused on research and answered "What is welfare or happiness","how to measure welfare or happiness" and "What factors influence welfare or happiness",putting more emphasis on material wealth impact on individuals,group and society welfare.However,Amartya Sen had published a series of research since the beginning of the 1980s,reflected materialism,utilitarianism,and justice theory welfare economics theory,gave fairness,justice,equality and freedom a new meaning,examined the social welfare and its influencing factors,new welfare economics is available.The theory putted a series of new concept and theory,including capability theory,pointed out that development should be extended personal value freedom,the material wealth did not create and represent welfare,despite it can affect personal life,but this effect through a certain institutional arrangements created"Function Freedom" and "Ability Freedom" to be realized and measured,then Political Freedom,Economic Condition,Social Opportunity,Transparency Guarantee,Protective Safeguard are five instrumental variables to promote development,the instrumental freedom to measure individual function freedom and ability freedom.This paper is based on the literature of land finance causes,impacts and solutions,summarize and refine Amartya Sen theory on social welfare,social choice,fairness and justice,poverty and famine main points,then combing and comparing the similarities and differences between Amartya Sen new welfare economics and old welfare economics.On the basis of that,from the perspective of Amartya Sen new welfare economic to analyzed Chinese land financial social welfare effect,recognized the long-term negative effects of land finance,clarified the short-term welfare effect of land finance.After the reform of tax system,the central government collected financial power and delegated authority,local government appeared power-authority imbalance phenomenon,especially the grassroots government,the local government in order to reduce the level of financial gap and expand the level of revenue,the local government actively sought extra budgetary revenue,moreover,Chinese unique land,tax and official promotion system,encourage the local government through low-cost land acquisition and high price to sell commercial land,then obtain high gap of land transfer payment,land finance had become the local government "second finance".The question is land finance whether or not impacted social welfare,if there is a favorable or adverse effect,what is the specific transmission mechanism?Traditional welfare economics approximated GDP as social welfare,land finance is helpful to raise local GDP,but base on Amartya Sen new welfare economics theory,GDP is a factor that affected social welfare,whether or not the improving of land finance,economic growth and social welfare are both synchronized?If not synchronized,how to use A.K.Sen theory to explain?This paper based on Sen Capability Approach theory,from Political Freedom,Economic Condition,Social Opportunity,Transparency Guarantee and Protective Safeguard five instrumental variables,used Chinese different 31 provincial cities and 285 prefecture-level cities 2004-2013,2050 county-level cities 2000-2014 panel data,through fuzzy mathematics and factor analysis method to measure Chinese different regional social welfare.Through analysis found that under the background of land finance,different regional social welfare had a big difference,the economic developed better,the social was higher,but the social welfare level is not synchronized with the land finance and economic growth,then the overall social welfare index in each region is irregularly fluctuating.Moreover,through research found that eastern coastal cities absolute and relative land finance are far more than western cities,central region land revenue growth rate is relatively high.In order to measure the relationship between land finance,economic growth and social welfare,this paper introduced the concept of decoupling index,through calculation found that most of Chinese regions social welfare index and land finance,social welfare index and economic growth have a absolute or relative decoupling phenomenon,that is,land finance,economic growth and social welfare growth is not synchronized,then explain the reasons for the imbalance between land finance and social welfare.Moreover,this paper through computing Chinese different cities social welfare index and land finance spatial correlation and spatial heterogeneity index,through analyze found that social welfare index and land finance have a positive spatial correlation,indicating the social welfare index and land finance in the adjacent areas is close,then the eastern coastal cities social welfare index and land finance are located in the central region while the western backward cities are in the peripheral areas.Moreover,through spatial panel model to empirical analyze found that the relationship between land finance and social welfare index is inverted U-shaped curve,then social welfare index had lag phenomenon,fiscal decentralization,economic growth,inflation and other factors will have a significant impact on social welfare.At the same time,through spatial panel model to empirical analyze found that there is a "U" curve relationship between land finance and economic growth,the relationship between population with land urbanization and social welfare index is inverted U-shaped curve.Finally,based on the above conclusions,this paper on how to correctly regard the relationship between land finance and social welfare,accurately measure different social welfare index,coordinate the relationship between economic growth,land finance,urbanization,income gap and social welfare proposed policy recommendations,then emphasis the importance of regional cooperation.