Land finance and urbanisation

Sun Sheng Han () and Ning Yan ()

Chapter 9 in Institutions, Culture and the Chinese City, 2025, pp 196-219 from Edward Elgar Publishing

Abstract: Chapter 9 examines the most recent, visible and astonishing aspect of urban development in modern China: land-centred urbanisation. By applying a land financing approach, Chinese cities have rapidly modernised their real estate and transportation. This was made possible by the institutions and culture surrounding the land regime and urban development. A de facto public land ownership was established through the socialist transition movement during the 1950s, placing land resources in the hands of the Chinese government. Since its commercial value was discovered in the late 1980s, land has become a gold mine and has been exploited to secure funds for local government projects. Several key institutions, including the dual collective and state land ownership structure, the GDP-based performance evaluation system for cadres and the tax-responsibility division that disadvantaged local governments, have laid the groundwork for land-driven urbanisation. Consequently, the urban built environment has transformed exceptionally quickly, while social changes have lagged. Several urban problems, including urban sprawl, urban villages and ghost cities, undermine the effectiveness of the land-financing approach. The accumulated debt burden and the unique institutional and cultural factors that supported land financing indicate that the land-based development model is neither sustainable nor replicable.

Keywords: Dual land ownership structure; Land-centred urbanisation; Land financing; Promotion tournament; Urban sprawl; Ghost city (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035312429
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