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Unpicking China’s Urbanisation Boom

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In China, state entrepreneurism starts with planning. Professor Fulong Wu’s influential research group is at the forefront of exploring its effects on the nation.

Unpicking China’s Urbanisation Boom

Shanghai Bay, China.

Credit: Fulong Wu

It may not have shaped the global urban development story for much of the last hundred years, but China’s breakneck urbanisation, fuelled by unrelenting economic growth, has already bagged it a central role in the story of the next hundred.

Due to way in which the government directs the speed, shape and distribution of economic growth, and the shifting urban environment that represents it, China’s urban rise will trace a different path to the development of the great cities of the West. As a result, those seeking to describe what is happening in planning terms may need to shed the cultural baggage that accompanies their historical expertise.

In China, the primary purpose of making an urban plan is to create growth.

Professor Fulong Wu

“In the West the planning system is typically seen as an instrument of regulatory control and therefore blamed as a constraint to economic growth. In China, it is a development instrument: a lever that can be used to attract investors and deliver growth,” says Profesor Fulong Wu, Joint Head of The Bartlett’s China Planning Research Group, which stakes a decent claim to be one of the world’s most influential groups in its discipline.

In fact, the China Planning Research Group’s 2017 International Conference on ‘China Urban Development’ was the largest of its kind organised outside China, featuring 240 participants, 180 papers and commanding its own special issue of the journal Urban Studies.

The urbanisation boom

Ever since absorbing the socialist model from the Soviet Union in the 1950s, planning in China has been regarded as a policy tool to allocate resources – its scope far wider than physical planning. Following 1979, Deng Xiaoping’s market reforms accelerated the process, facilitating the role of investment. After 2001, when China joined WTO and industrialization – especially in coastal areas – took hold, planning was at the heart of the rapid urbanisation that resulted.

“In China, the primary purpose of making an urban plan is to create growth. Wherever a city expands into a new area, a plan will exist to lay out the major development,” says Fulong.

The market is at the core of the “state entrepreneurism” that shapes China’s urban plan. Its defining features include the development of a functioning land market and the promotion of private developers and investors alongside public and quasi-public bodies like development corporations.

Local government financing vehicles are not facing immediate collapse, but nor do we have a definitive answer regarding how this story will end.

Professor Fulong Wu

Challenges for local governments

But the speed and scale of the China’s centrally planned urbanisation boom means that there are plenty of planning challenges that no one has had to grapple with before. Particularly gnarly – and one focus for Fulong and his team – will be the impact of local government indebtedness.

Local governments across China are struggling to pay back, or even service, the loans taken by their financing vehicles (LGFVs), through which they fund local development and infrastructure projects. With lands sales and development taxes providing the major source of local government income, the pressure to raise funds by simply expanding a city’s footprint is huge.

The process is restrained by Beijing, which enforces development quotas limiting the rate of conversion of arable land to the city and, increasingly, sustainable and carbon-light projects. And with many cities approaching their geographical limits there is a real motivation to find a sustainable model.

But at a country level, land-related revenues to LGFVs continue to increase as house prices in many of China’s Tier 1 cities shoot up. “This is a topical issue on which we have focused a good deal of research,” says Fulong. “LGFVs are not facing immediate collapse, but nor do we have a definitive answer regarding how this story will end.”

The School of Planning is one of the leading research-led planning schools in Europe, offering a creative and stimulating environment to study the form, planning, design and management of cities, and to shape their future. It is part of The Bartlett, UCL's Faculty of the Built Environment. Find out more: https://ucl.ac.uk/bartlett/planning

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