Collective ownership isn't State or Government Ownershaip (negating the "all land" part) and in China "State Ownership" is an underlying ownership that doesn't carry the weight of immediate direct ownership, hence nail houses where individual lease holding rights that are automatically renewed trump the underlying state ownership.

Point being, it's not as simple as it's made out to be and it's not dissimilar to many other countries that have a notion of underlying ownership, seperation of surface and mineral rights, cave outs for eminant domain, etc.

In this specific context it's not especially clear what the GP's "how's that working out for them" is meant to convey.