The current rural land transfer rules on entering urban land market actually bounds the real value of rural land due to governmental monopoly, which further restricts the development of rural area. This paper compares the local institutional design and practical effectiveness of the rural construction land transfer policies in Chengdu and Wuxi. The results show that the institutional settings in Chengdu, carried in forms of farmers dominance, social forces’ participation and supervision of the government, virtually return rights to farmers. This mode is of great advantage in solving the problems of rural development. Therefore, we argue that releasing rural land value is a new way of promoting the development of rural area as a latecomer. The paper concludes with some policy recommendations. For instance, the government can release the rural land value if it aims to promote rural development; a well functioned market mechanism is also a key for rural development; land use policy reform can be a new way of integrating the rural- urban co- development; farmers can have more power and rights for protecting their own interests during the transfer.