Urban Land Development in the Reform Period:

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Urban Land Development in the Reform Period

• Introduction

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Introduction

• A growing literature on urban land and housing in
  China has emerged
• increasingly tied to mainstream urban studies
• Theories of the city have to take account the
  peculiarities of cities in China
• To a significant extent the shortage problem
  discussed in Tang (1994) no longer exists
• Chinese cities now assume a much more modern and
  thriving landscape
• Yet unplannedness and wastes and inefficiencies
  still prevalent

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Major ConsiderationsI. Globalization and the
Entrepreneurial City

• Massive inflow of Foreign Direct Investment (FDI)
  especially since 1992
• Growing dependency on external trades
• Rapid development of the IT sector
• Chinas accession to the WTO
• gt Chinas economy is increasingly tied to and
  becoming part of the global economy

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Globalization and urban development in general

• Hierarchical ordering of the global economy
  manifests itself as hierarchical ordering of
  world or global cities.
• emerging autonomy of cities (as opposed to
  dependency on the nation state) as an economic
  and political entity
• Cities in China, like cities elsewhere, try to
  establish their niches in the world system of
  cities

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The Chinese case

• Every major city tries to position itself as an
  international metropolis.
• Success is measured against the extent to which
  the city can present an international outlook,
  however defined, and the citys ability to
  attract domestic and international capital.
• Managerial cities giving way to Entrepreneurial
  cities

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II. Chinas Gradualist Reforms

• Reforms in China have been gradual and often
  times ad hoc
• The political system of surveillance and control
  stays more or less intact.
• But there has been substantial devolution of
  decision-making powers to the local government
  and the state-owned enterprises.
• Also the collective and private sectors now
  account for the majority of non-agricultural
  employment and the GDP

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Local Government in China

• Vested with greater decision making power and
  have access to greater variety of resources than
  in most capitalist economies.
• the developmental drive also much stronger
• The mayor and other senior city government
  officials generally appointed for a 3- or 4-year
  term
• Success in transforming the cityscape over a
  short time enhances negotiations with upper-level
  governments and promotion prospects.
• Thus the massive investments in urban
  infrastructures in recent years.

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Production Enterprises

• Market elements introduced on a gradual basis
• state enterprises still occupy pivotal positions
  in the national economy
• (State) enterprise reform
• transform to modern corporations
• to dissociate from the day-to-day operation of
  the state
• Profit, rather than fulfilment of production
  quota, to become the overriding objective.

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Lingering influence

• Yet the main ingredients of the central planned
  economy persisted for a long time
• the annual budgetary exercise,
• soft-budget constraint, and
• administrative allocation of resources
• including the allocation of urban land
• The state work units continued to claim usage
  rights of land parcels formerly allocated to them

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Implications of Gradualist Reforms

• Urban development in the post reform period
  represents a complex interplay of forces
• the central state,
• the local government,
• the production enterprises, and
• The market
• Market forces increasingly take hold.
• But most often urban development is a result of
  complex political and financial negotiations.
• People - existing and potential urban dwellers
  are of secondary importance

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Latest developments

• Accelerated enterprise reform
• Massive layoff of workers by state enterprises
• Huge urban unemployment problems
• Growing importance of the private enterprises
  the 16th Party Congress
• Chinas entering the WTO and level play by SOE,
  FFE, and POE
• Accelerated withdrawal of SOE from housing and
  social welfare provision and
• Accelerated dissolution of work unit compounds

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III. Marketization of Land and Housing

• Major Reform Measures

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1. The land leasing system

• A major reform measure underlying much of the
  urban transformation in the 1990s and beyond
• modelled after Hong Kong
• formal adoption in 1988
• Theoretically all urban land belongs to the State
  
• But the individual user, upon payment of a price
  to the State (represented by the local
  government), is conferred the right of
  alienation for a period of time stipulations of
  the land lease.
• Price usually determined through negotiation
  between the land user and the city government

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Implications of Land Leasing

• Land becomes a major source of revenue for
• the local government, and
• individual state work units with land holding
• Substantial incentives and enhanced abilities for
  both to undertake urban development and
  redevelopment projects
• Imposing buildings government offices, sports
  centres, public squares, commercial complexes
• Transport and other infrastructures
• Accelerated suburbanization

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• Complex negotiation among
• the local municipal government (and the many
  bureaux planning, land administration, etc
  involved in the land leasing process),
• the individual enterprises and other land
  holders, and
• the rural collectives
• Together with scrambling the division of the rent
  gap
• results in highly particularistic and often
  anarchistic pattern of urban development
• And emergence of black markets
• Problem of unplannedness and haphazard
  development remains

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2. Comprehensive development of urban land

• Introduced in the mid 1980s
• to overcome the problems arising from the
  particularistic nature of urban land development
  (i.e., urban land development tied to specific
  capital construction investment projects) in the
  pre-reform period
• The local government (often designated its
  authority to a certain developer, an enterprise
  formed by the local government) to undertake land
  formation qitong yiping

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• Carving out large parcels of land to the
  developers or to form economic and technical
  development zones
• can be seen as project-specific development, but
  at a different scale
• Planning authority has very little to say on land
  use within the zone
• Hence a source of unplanneness
• E.g. the case of Shekou, Shenzhen (Tang, 1988)
• Carving a huge piece of land to China Shipping
  and Merchant Ltd for development
• A special economic zone within a special economic
  zone