Urban and Regional Governance in China: Process, Policies, and Politics 3662450399, 9783662450390

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Lin Ye

Urban and Regional Governance in China Process, Policies, and Politics

Urban and Regional Governance in China

Lin Ye

Urban and Regional Governance in China Process, Policies, and Politics

Lin Ye Center for Chinese Public Administration Research, School of Government Sun Yat-sen University Guangzhou, China

Supported by Chinese Fund for the Humanities and Social Science Chinese Academic Translation Project 14WZZ004 ISBN 978-3-662-45039-0 ISBN 978-3-662-45040-6 (eBook) https://doi.org/10.1007/978-3-662-45040-6 Jointly published with Central Compilation & Translation Press The print edition is not for sale in China (Mainland). Customers from China (Mainland) please order the print book from: Central Compilation & Translation Press. © Central Compilation & Translation Press & Springer-Verlag Berlin Heidelberg 2021 This work is subject to copyright. All rights are reserved by the Publishers, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publishers, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publishers nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publishers remain neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer-Verlag GmbH, DE part of Springer Nature. The registered company address is: Heidelberger Platz 3, 14197 Berlin, Germany

Preface

The writing of this book started five years ago but the journey of this book began much earlier. My mentors at the University of Louisville (UofL) brought me into the field of urban research many years ago when I took on my doctoral study there. Some materials in this book are from what I learned in Louisville about the western urban theories and observations of rising city regions around the world. China’s urbanization obsessed me in the past ten years while I have been working in Sun Yatsen University (SYSU) in Guangzhou. Gradually, I started to realize what I learned in the classroom in the Midwest America can help me understand what is happening in the most rapidly urbanizing part of the world for the past half a century (or even the most magnificent urbanization history in mankind’s history). The more I wrote for this book the more perplexed I become in consideration of China’s urbanization and regional development. I had thought it was not going to be difficult to use this book as a synthesis of my research in the past 20 years but it took much more and much longer than I had expected to complete this project, at least to a degree that I can look at this book and think about all I did to become an urban researcher. Writing a book as a reflection of the ongoing research on urban and regional governance in China can be an endless task. But, at some point it comes to a time when such a publication takes its shape to present itself as a standing-alone publication, with its own theoretical framework, research questions, logic inquiry, and findings plus conclusions for a useful explanation of what happened and what it means, nationally, continentally, and worldwide. One can only hope such a book contributes to the sea of literature on China’s urban and regional governance by offering something new or interesting, worthwhile as a way of dialogue between the oriental and western scholars. Not a single theory or a set of existing theories can explain urbanization in different parts of the world. The embedded political and administration institutions in China shape the urban development and demonstrate a path for city-region formation. More importantly, the governance of such urban and regional development presents a daunting task. State rescaling and multi-level governance framework would provide a useful way to approach such a mega question, but the answer is not fixed and is far from complete. v

vi

Preface

The more I wrote the less I feel I understood China’s urbanization. The day after this book is published new things will happen in China’s urban world to further intrigue the governance puzzle. Nevertheless, we will continue to observe, analyze, and try answering the question. I hope this book will just serve as one of such efforts and offer its insights. If I consider this book a product of my research on urban and regional governance in China so far, I am indebted to a sea of people. As I mentioned, my mentors in UofL, Hank V. Savitch, Ronald K. Vogel, Peter B. Meyer, John I. Gilderbloom, Steven Bourassa, Steven Koven, Thomas Lyons, and many others, together with the peer students I had the fortune to work together, without all of you, I would have never had imagined a career in urban research. School of Government at SYSU provided me with all the support and help to carry out research on China’s urbanization. My colleagues, my students, and my friends at SYSU bring all the inspiration for this book. My collaborators around the world in all these years, Jian Sun, Jill Gross, Richard LeGates, Cathy Yang Liu, and others in the USA, Uwe Altock, Sonia Schoon, Emma Bjorner, the International Metropolitan Research Consortium (IMRC) group in Europe, including Christian Levefre, Ernesto D’albergo, Loraine Kennedy, Enrico Gualini, Giulio Moini, Yüksel Demirkaya among others, Nelson Rojas Carvalho, and Luiz Cesar de Queiroz Ribeiro in South America, and Alfred Muluan Wu and Hui Li in Singapore. My Chinese collaborators, colleagues, and friends make my research job as joyful as it can be. The friendship I was able to harvest is the most treasurable thing along my way of doing research around the world. The help from several journal editors tremendously facilitated my research in this field. Ms. Yuyan Jia and Yongjie Zheng at the Central Compilation & Translation Press offered their warm professional support in the production of the book. My students, to just name a few, Yuze Yang, Xulei Zhang, Liangwei Yang, Yunxuan Chen, Xiangeng Peng, Xingzhou Song, and Xinhui Yang helped with the final preparation of this book. All my current and former students encouraged me to complete this book and march on with my urban research. They are my biggest inspiration. As always, the most fundamental and wholehearted appreciation goes to my family. Without their sacrifice, support, and love in all these years, nothing would have been possible or meaningful. This book is supported by Chinese Fund for the Humanities and Social Science Chinese Academic Translation Project 14WZZ004. I see this book another beginning for exploring urban and regional research in China. I am indebted to all these people and many unnamed friends and solely responsible for any errors and omissions of this book. Guangzhou, China December 2019

Lin Ye

Contents

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Urbanization, Demographic Movement, and Mega-Regions in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 The Theoretical Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 The Outline of the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 5 13 14

2 Governing City Regions in China: Process, Policies, and Politics . . . . 2.1 Process: Linked Development, for What? . . . . . . . . . . . . . . . . . . . . . . 2.2 Policies: State-Led Planning, and How? . . . . . . . . . . . . . . . . . . . . . . . 2.3 Politics: Multi-level Governance, or More? . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19 19 24 27 30

3 Logics of Urban Development and Governance in China: A Closer Examination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Inter-Governmental Struggles, Fiscal Relations, and Housing Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Urban (Re) Development, Land Dilemma, and Growth Politics . . . . 3.3 Peri-Urban Development: Integration Versus Deprivation . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Urban Redevelopment: Restructuring and Growth . . . . . . . . . . . . . . . . 4.1 Land Pressure and Fiscal Constraints: Reshaping China’s Urban Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Urban Redevelopment and Transitional Governance: Case of Guangzhou . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 A Closer Look at the Landmark Redevelopment Case: Restructuring, Growth, and Governance . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Urban-Rural Development, Integration, and Governance . . . . . . . . . . 5.1 From Rural to Urban: Rise of New Urban Communities in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

35 35 44 46 50 55 55 60 68 77 81 81 vii

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Contents

5.2 From Villagers to Urbanites: Migration, Resettlement, and Urban Community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Transitioning from Rural to Urban Community Governance . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 An Analysis of Major City Regions in China . . . . . . . . . . . . . . . . . . . . . . 6.1 Beijing-Tianjin-Hebei Mega Region: Strong State-Led Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Yangtze River Delta Region: Influence of Foreign Capital . . . . . . . . 6.3 Pearl River Delta and Guangdong-Hong Kong-Macau Greater Bay Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4 Inter-City Competition and Cooperation Under Reinforced State Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Conclusions and Beyond: The Future of City Regions in China . . . . . 7.1 New-Type Urbanization and City Regions: The National Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Current Policies and Future Directions . . . . . . . . . . . . . . . . . . . . . . . . 7.3 A Chinese-Style Urban and Regional Governance Model . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89 93 98 101 104 106 108 122 123 127 127 133 135 141

About the Author

Lin Ye is a Professor at the School of Government, Sun Yat-sen University in Guangzhou, China. He is the director of Guangzhou International Urban Innovation Research Center. He teaches undergraduate, MPA, and doctoral courses in urban management and regional governance. His research focuses on metropolitan development, urban politics, and governance issues. He received his MPA and PhD degrees in urban and public affairs from the University of Louisville, Kentucky, and taught at Roosevelt University in Chicago from 2006 to 2010, where he was the president-elect for the American Society for Public Administration Chicago chapter. He currently serves on the Urban Affairs Association’s governing board, the board of the China-America Association for Public Affairs, and the Section of Chinese Public Administration of the American Society for Public Administration. Lin Ye is an editorial board member of the Journal of Urban Affairs,Urban Governance, and several journals in China. He co-edited special issues on emerging urban research in the Journal of Urban Affairsand Cities. Lin Ye published 10 books and over 100 articles and chapters on Public Administrative Review, American Review of Public Administration, Journal of Urban Affairs, Cities, Journal of Planning Literature, Small Business and Economics, Public Money and Management, Social Policy Administration, Journal of Current Chinese Affairs, Local Economy, Chinese Public Administration Review, and many other journals in China. He serves as an external reviewer for a dozen of journals and consults for government and public organizations around the world.

ix

List of Figures

Fig. 1.1 Fig. 1.2 Fig. 1.3 Fig. 2.1 Fig. 3.1 Fig. 3.2 Fig. 3.3 Fig. 3.4 Fig. 3.5 Fig. 4.1 Fig. 4.2 Fig. 4.3 Fig. 4.4 Fig. 4.5 Fig. 4.6 Fig. 4.7 Fig. 4.8 Fig. 4.9 Fig. 5.1 Fig. 5.2 Fig. 5.3 Fig. 5.4 Fig. 5.5 Fig. 5.6 Fig. 5.7

Urban Population Growth in China 1950–2015 . . . . . . . . . . . . . . Built-up areas in Chinese cities 1996–2015 . . . . . . . . . . . . . . . . . Major urban regions in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Major Urban Regions and their GDP proportions in China . . . . . Urbanization in China 1950–2015 . . . . . . . . . . . . . . . . . . . . . . . . . Migrant Population in Guangdong Province 1995–2015 . . . . . . . The Central-Local Fiscal Relation in China . . . . . . . . . . . . . . . . . Built-up Areas in China 1996–2016 . . . . . . . . . . . . . . . . . . . . . . . Urbanization in China: Process, Policies, and Politics in Three stages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Guangzhou and Shenzhen’s GDP Proportion in Guangdong Province 1990–2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Land-Use Change in Guangzhou 1991–2020 . . . . . . . . . . . . . . . . Redeveloped Nan Hua Xi Neighborhood in Guangzhou . . . . . . . Cao Fang Wei Neighborhood in Guangzhou . . . . . . . . . . . . . . . . . Yangji Village in 2011: Dilemma of Urban Village Redevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yangji Village in 2014: The Rise of a New High-rise . . . . . . . . . New Pa Zhou Village Celebrating Its First Reunion after Redevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ancestral Temple Kept in New Pa Zhou Village after Redevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Big Red Flags Hanging down in the Temporary Relocation Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shenzhen’s population growth 1990–2018 . . . . . . . . . . . . . . . . . . Shenzhen’s built-up area 1990–2017 . . . . . . . . . . . . . . . . . . . . . . . The initial development in the urban fringe . . . . . . . . . . . . . . . . . The starting point of a new CBD . . . . . . . . . . . . . . . . . . . . . . . . . . The second stage of the development in the urban Fringe . . . . . . The marketing of the new development . . . . . . . . . . . . . . . . . . . . . The third stage of the development in the urban fringe . . . . . . . .

2 4 5 21 36 36 39 42 50 60 61 68 69 70 70 72 73 74 82 83 83 84 85 85 86 xi

xii

Fig. 5.8 Fig. 5.9 Fig. 5.10 Fig. 6.1 Fig. 6.2 Fig. 7.1

List of Figures

Marketing of the new urban space . . . . . . . . . . . . . . . . . . . . . . . . . Constructing public facilities in the new center . . . . . . . . . . . . . . Continuing expansion of the new center in the urban fringe . . . . Number of patents in Four Major Bay Areas in the world 2013–2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shenzhen’s economic structure 2000–2015 . . . . . . . . . . . . . . . . . The Path of New Urbanization in China . . . . . . . . . . . . . . . . . . . .

86 87 87 116 117 132

List of Tables

Table 1.1 Table 2.1 Table 6.1 Table 6.2 Table 6.3

Paradigm for “Global Cities” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dominance of major regions in China in 2018 . . . . . . . . . . . . . . . Demographic statistics in the Pearl River Delta region 2000–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Socioeconomic statistics in the Pearl River Delta region 2000–2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Four major bay areas in the world . . . . . . . . . . . . . . . . . . . . . . . . .

7 20 109 110 116

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Chapter 1

Introduction

In his most famous writing, Wirth (1938) describes cities from three perspectives: • Ecological perspective: cities consume rather than produce men due to low birth rate and high death rate in cities. • As a form of social organization: different from the traditional type of family due to the transfer of activities to institutions outside families, such as education, recreation, etc. More money is spent on recreational purposes rather than basic necessities. More and more interdependence among people while traditional ties were weakened. • Collective behavior: voluntary groups, political, educational, religious, recreational, etc., to act in the representative of individuals. China provides a live laboratory for demonstrating “Urbanism as a way of life,” with its five thousand years of human settlement and world-wide unprecedented urbanization in the past four decades. When we look back at the past 40 years, China’s urbanization presents itself as the most intriguing path in human urban history.

1.1 Urbanization, Demographic Movement, and Mega-Regions in China China is quickly urbanizing. The urban population in China grew from merely 62 million in 1950 to an astonishing 770 million in 2015, recording a 1,200% increase within 65 years (Fig. 1.1). The current urbanization rate in China reached 60% in 2018 and grows at over 1.2% annually. Two periods of fast urban population growth can be identified in Fig. 1.1. The first growth period occurred in the 1950s, during which China’s urban population increased from 62 million in 1950 to 130 million in 1960, more than doubling in 10 years. However, this upward trend drastically slowed down in the early 1960s. The proportion of the urban population in China started to decline after 1960 until © Central Compilation & Translation Press & Springer-Verlag Berlin Heidelberg 2021 L. Ye, Urban and Regional Governance in China, https://doi.org/10.1007/978-3-662-45040-6_1

1

2

1 Introduction

million

%

1125.

60.0

900.

45.0

675. 30.0 450. 15.0

225.

0.

0.0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Urban Population

Rural Population

%Urban

Fig. 1.1 Urban Population Growth in China 1950–2015. Source China statistical yearbook, various years

the reform and opening era. In 1960, 19.7% of China’s population resided in urban areas. The figure dropped to 17.4% in 1970 and recovered to 19.4% in 1980. The slowdown of urban population growth in the 1960s was largely due to the widely discussed hukou (household registration) system (e.g., Chan 1994; Dorothy 1999; Young 2013). The 1950s can be seen as the period when the hukou system was gradually established. In 1951, the Provisional Urban Household Registration Regulation in Cities was implemented in all Chinese cities, indicating the emerging hukou regulation. In the 1954 Constitution, China allowed for “the freedom of migration and residence” for its citizens. However, the exploding urban population and continuing waves of people rushed to cities raised major concerns during the rebuilding of the new China. Chinese cities had just recovered from over a hundred years of wars and turmoil and could hardly house millions of additional people from the countryside. In 1953, when China carried out the first national population census it was required that rural areas register their populations. When urban migrations exploded in the mid-1950s, the national government issued two consecutive administrative orders to control the flow of population from the countryside to cities. The National Urban Household Registration Regulation was formally implemented in 1958 by the National People’s Congress to separate urban and rural resident status. This regulation started three decades of separating between rural and urban residents, creating a “a two-class society of privileged urban residents and secondclass rural citizens” (Friedmann 2005, 12). The hukou system not only altered the demographic growth pattern of China but also led to the fundamental differentiation

1.1 Urbanization, Demographic Movement, and Mega-Regions in China

3

of urban and rural resident rights. Such a wall of separation later became the fundamental factor in China’s urbanization path. The impact of the hukou system will be discussed in the later chapters of this book. The second period of rapid urban population gain started in the early 1980s after China started the reform and opening-up. The hukou regulation gradually loosened. In 1984, the State Council announced the Notice on Farmers to Settle in Towns Regulation, allowing rural residents to move to towns if they were able to provide evidence of a self-supporting food supply. In 1985, the Ministry of Public Security implemented the Provisional Regulation on Urban Resident Registration, allocating 0.2‰ rural-to-urban registration (nongzhuanfei) conversion quota for each city, providing a slim chance for rural residents to obtain urban household registration. In the same year, China implemented the Resident Identification Card Regulation, which further enabled rural residents to obtain urban status. However, the application for such a conversion quota was extremely competitive. Owing to the gradually loosened hukou control, the proportion of the urban population in China increased from 19.4% in 1980 to 29.0% in 1995. Since 1995, the demographic movement from rural to urban areas further increased. As the latest statistics show, China considered 59.6% of its population urban in 2018, representing an annual growth rate of 1.2%. During this 23-year period, China’s rural population experienced a decline from 860 to 564 million, recording a decrease of 296 million. In the same time period, the urban population grew from 352 to 831 million, recording an increase of 479 million. The reasons for such dramatic urban and rural demographic changes are multi-faced. First, millions of rural residents migrated to cities. As stated in the Communique of the first plenary session of the 19th CPC Central Committee still had an estimated 80 million migrants in 2017. The number was more than 250 million 10 years ago. During the 10-year period, many migrants settled in cities or returned to the countryside. However, tens of millions of rural residents had lost their farm land, and had no rural “home” to return to. In some cases, these migrants had to change their residential status from rural to urban after their farm land was converted from rural to urban use. These two types of rural to urban demographic transition contributed significantly to China’s rapid “urbanization” (Ye and Wu 2014). However, the physical presence of individuals and families in these urbanized areas does not carry the same meaning of urbanization for these “urban populations” because they have fundamentally different welfare coverage, employment opportunities, and daily lifestyles, as China’s official urban residents (Ye 2011). As described by Chan, China’s incomplete urbanization has been achieved mainly by “allowing ‘temporary’ migration (of a ‘floating population’) to cities but denying the migrants access to urban welfare and many other benefits” (Chan 2010, p. 66). As the population continues moving to urban areas, Chinese cities kept expanding in the past two decades. Figure 1.2 shows the increasing urban built-up areas in Chinese cities from 1996 to 2016, a growth rate of 268% in 20 years. According to the national statistical standard, urban built-up land is defined as constructed land with available urban infrastructure and service facilities.

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1 Introduction

60 54.3315 52.1023 49.7726 47.855 45.565 43.603

45 40.058 38.1073 35.4697 32.5207

36.2953

33.6598

30.4062

30

28.308 25.9726 24.0266 20.2142

20.7913 21.3796

21.5245 22.4393

15

0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

1000 sq. km

2

Fig. 1.2 Built-up areas in Chinese cities 1996–2015. Source China statistical yearbook, various years

Ma (2002) reviews the literature on China’s urbanization from 1949 to 2000 and discusses the basic elements of China’s urbanization and urbanism included socialist urbanization, post-reform urbanization, globalization and urbanization, urban land transformation, spatial and administrative reorganization, and the state’s role in economic restructuring. It calls for a country-specific theory to explain China’s urbanization transformation. Chan (2010) revisits China’s urbanization by delineating the fundamental characteristics and determinants and argues that the administrative hierarchy, and the restrictions to labor mobility across locales by setting up the hukou system are two features of China’s urbanization. Industrialization strategy and incomplete urbanization, and under-agglomeration in cities constitute two fundamental determinants. Another important phenomenon of China’s urban growth are the rapidly rising mega-urban regions across the country. It is estimated that over 90% of China’s total population resides in the southeastern region of the country, which produced a disproportionately high density of population and economic output. In the new century, the Chinese government issued a series of national plans regarding the development of mega-urban regions, including the National Primary Functional Zone Planning 2010, the National New-Type Urbanization Plan 2014–2020, and the Opinion on Establishing a More Effective Regional Coordination Mechanism in 2018. The National Primary Functional Zone Planning 2010 was enacted according to the national development strategy announced in the 17th National Congress of the Communist Party of China and the Eleventh Five-Year Plan about the Economic and Social Development of the People’s Republic of China (2006–2010). Figure 1.3 shows China’s major urban regions outlined in this strategic plan. Beijing-TianjinHebei, Yangtze River Delta, and Pearl River Delta are the three leading urban regions in China. The Beijing-Tianjin-Hebei region includes the national capital, Beijing,

1.1 Urbanization, Demographic Movement, and Mega-Regions in China

5

Fig. 1.3 Major urban regions in China. Source National primary functional zone planning 2010, http://www.gov.cn/zhengce/content/2011-06/08/content_1441.htm, Fig. 8

a city directly under the administration of the central government, Tianjin, and surrounding cities in the Hebei Province. The Yangtze River Delta region encompasses Shanghai, and cities in Jiangsu and Zhejiang provinces. The Pearl River Delta region consists of 9 cities in Guangdong Province, including Guangzhou and Shenzhen, the third and fourth largest cities in China. Section 4 of the National Primary Functional Zone Planning 2010 stipulated that urban development in China shall be conducted based on the principle of regional coordination, with the goal of enhancing the high-quality growth in the eastern regions while fostering high-density city clusters in the middle and western parts of the country, in order to promote a balanced regional development pattern. Chapter 6 of the book provides a detailed demonstration of the development in the three leading regions in China.

1.2 The Theoretical Framework Facing the widespread and rapid development of urban regions, countries like China are calling for new ways of governing (governancing) their unprecedented urbanization. In order to fulfill this task, it is necessary to trace the evolution of governance across the world and to learn about the governance path China has taken before any model can be possibly discussed and cross-referenced. The following section

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1 Introduction

develops the main framework of analysis, building on the classic urban politics inquiries and rescaling of city-region governance. Glocalization, Regionalism, and Beyond The globalization of the world economy is characterized by the deindustrialization of the economy, migration of population, advancement of technology, and standardization of products (e.g., Castells 2000; Friedmann 1986; Sassen 2001; Savitch 1996; Savitch and Kantor 2002). This great economic transformation has significantly influenced human settlement and mobility. With the decline of traditional manufacturing industries, financial firms and corporate headquarters have become the new growth engines for cities that are now competing in the global marketplace. The change in the composition of the global economy demands top-level concentrations of technological facilities, highly advanced infrastructure for specialized services, and innovative strategies to facilitate new economic growth. All these are concentrated in cities whose agglomerative features make them natural centers for coordination and direction. Savitch found that cities are extremely important in their national economies. In 1990, Barcelona held 7% of its nation’s Gross Domestic Production (GDP), Seoul held 23%, Sydney held 19%, and New York contained 2.5% (Savitch 1996, p.46). Profound changes in the composition, geography, and institutional framework of the global economy have intriguing implications for cities (Sassen 2001; Savitch 1996; Savitch and Kantor 2002). Savitch argues that globalization not only refers to the integration of the world economy but also is a political and sociocultural phenomenon. It conveys the intensification of interaction and interconnection between localities across the world (Savitch 1996, p.41). Cities have responded differently to challenges and opportunities in the face of globalization due to their diverse constitutional, economic, and social features (Clarke and Gaile 1998). Urban scholars have tried to identify the hierarchy of cities in the tide of globalization (Castells 2000; Friedmann 1986; Ruble, Tulchin, and Garland 1996; Sassen 2001; Savitch 1996; Savitch and Kantor 2002). At the top of the pyramid are the so-called “world cities” (Friedmann, 1986), “mega-cities” (Castells 2000), “global cities” (Sassen 2001), or “primate cities” (Savitch 1996; Savitch and Kantor 2002). Ruble, et al. (1996) identified “five paths” of different cities’ responses to the challenges of globalization. The “postindustrial cities” are among the great industrial centers of the past that reflect differential rates of adjustment to postindustrial realities. Such cities are located primarily around the North Atlantic Rim, some of them in Latin America. The “new age boomtowns” are cities that have capitalized on newly developed industries and technologies to emerge as major financial-service production centers, with special reliance on postindustrial technologies. The “postsocialist cities” are located throughout the formerly communist states of East Central Europe and Central Eurasia and are confronted by multiple transitions simultaneously. The “partially marketized cities” are urban communities of the developing world, primarily in Latin America, that are embedded in statist regimes and have undergone political transformations. The “marginalized cities” are cities that can be found throughout the developing world and are bypassed to a large degree by technological change and the global economy (Ruble et al. 1996, pp. 5–16).

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Table 1.1 Paradigm for “Global Cities” World cities—Friedmann (1986)

Mega-cities—Castells Global cities—Sassen Primate (2000) (2001) cities—Savitch and Kantor (2002)

• Integration with the world economy • Basing point for global capital • Particular production sectors • Concentration and accumulation of international capital • Points of destination for migrations • Spatial and class polarization • Higher social costs

• Very large • Command points in • Giant entities that agglomerations of the world economy are central to a • Key locations and human beings national economy • Nodes of the global marketplace for • Thriving nests of economy leading professional banks and corporate • Concentration of the industries headquarters directional, • Major sites to • Able to build upon productive, and provide producer economies of managerial upper services agglomeration functions • Control of media • Real politics of power • Symbolic capacity to create and diffuse messages

Friedmann establishes the world city model as the main thesis to link urbanization processes to global economic forces, which explains the spatial organization of the new international division of labor and presents inter-related theses to explore what happens in the major global cities of the world economy (Friedmann 1986). Castells finds mega-cities as a new spatial form of the global economy and as dominant centers of population, magnets for their hinterlands, and gravitational powers for major regions of the world (Castells 2000, p.434). Sassen defines global cities as strategic sites for the management of the global economy and the production of the most advanced services and financial operations (Sassen 2001). Savitch and Kantor describe primate cities as cities that not only hold financial banks and corporate headquarters but also are balanced by textile manufacture, light industry, chemical production, and warehousing. Primate cities are giant entities whose agglomerations are at least twice as large as the next largest city in the nation (Savitch and Kantor 2002, p. 27). Table 1.1 summarizes the four paradigms. Many of the aspects demonstrated in Table 1.1 reflected how major cities and city regions in China strive to climb up in the hierarchy of world cities. As the latest data revealed by the Globalization and World Cities (GaWC) Research Network,1 Hong Kong, Beijing, and Shanghai are among the Alpha+ cities in the world, while Taipei, Guangzhou are ranked Alpha cities and Shenzhen as Alpha-. These six cities have become the core center of emerging city regions in the greater China area, as Beijing leading the Beijing-Tianjin-Hebei region, Shanghai leading the Yangtze River Delta Region, Hong Kong, Guangzhou, and Shenzhen as the core of the Greater Bay Area. Classic urban politics and political economy provide a useful angle to analyze the profound urbanization occurring in China in the past four decades. Facing waves 1

https://www.lboro.ac.uk/gawc/world2020t.html.

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of globalization since the 1980s, cities are adapting to restructuring trends with a range of policy choices. Jane Jacobs (1985) argues that cities are resilient and adaptive; they offer import replacement efforts to create rich, dense, complex city regions. Logan and Swanstrom (1990) suggest that the grounds for political choice are broader and deeper than initially assumed and cities are essentially political, not determined by larger economic forces. The interpretation of globalization and restructuring processes is a political process of problem definition. Globalization may mean that regions and localities become more important decision arenas (Clark and Gaile 1998). Peterson (1981) argues that cities are places to maximize the exchange value of place, tax-based revenues, and political officials’ self-interest of reelection. The commodification of place is considered fundamental to urban growth and development issues. However, increasingly local politics are characterized by nonelected public, private, and non-profit actors as well as decision-making organizations and partnership arrangements that bridge public and private sectors and coordinate inter-local agencies. Swanstrom (1985) contends that Peterson’s account replaces the pluralist image of the decision-making process, which is rooted in conflict and bargaining, with a corporate image based on consensus and technical expertise. In Petersons’ account, there are three types of local policies. Pluralist politics only remains powerful in one of the policies, which are “allocational” policies that do not affect the local economy one way or the other (Peterson 1981). Developmental policies are the top priority of urban politics and are decided, for the most part, by the economic elite in a locality, assisted by business communities that possess the technical expertise needed to design such policies that can stimulate local growth. The third type of policies, redistributive policies, can be detrimental to local growth and rarely embraced by the local political elite and business groups. In general, the city is treated as a “unitary” organization in which the community as a whole objectively benefits from “developmental policies” that promote local business interests and thereby “strengthen the local economy, enhance the local tax base, and generate additional resources that can be used for the community’s welfare” (Peterson 1981, p.131). The Chicago School of human ecology considers spatial relations the analytical basis for understanding urban systems, including the physical shape of cities, relations among people, and economic and social relations between urban areas. The Marxian approach defines development as the consequences of capital accumulation. Conflicts in the living space are a reflection of the underlying tension between labor and capital (Harvey 1982, 2001). Growth machine activists tend to oppose any intervention that might regulate development on behalf of the use values. An apparatus of interlocking pro-growth associations and government units formulates a doctrine of value-free development, with the notion that free markets alone should determine land use. Aggregate growth is portrayed as a public good and an increase in economic activity is believed to help the whole community. Along with such a notion, one form of truly urban conflict is the internal struggle between use and exchange values and a second is the external battle of place elites against one another and against the general public. The elites can mobilize the government to bolster growth goals. The government is obliged to coordinate the roles of diverse members of the growth

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coalition and secure the cooperation. Access to a government can also help generate resources from the tiers above. Therefore, cities, regions, and states do not compete to please people; they compete to please capital, creating a growth machine of cities to increase aggregate rents and capture related wealth for those in the right position to benefit. Local interests in the specific place are being shaped by the changing ordering of international spatial relations (Logan and Molotch 1987, p. 249). Stone (1989) develops the regime paradigm to specifically describe the informal arrangements that surround and complement the formal workings of governmental authority. In this regard, community consensus about development policy is not as dominated as described in Peterson’s growth machine model and the role of politics in shaping municipal policy should not be underestimated. Mollenkopf further calls for attention in his “Contested Cities” paradigm and contests Peterson’s assumption that cities always reached a consensus on the subject of public-private development programs (Mollenkopf 1983). Cities would often have diverse interests toward developmental and welfare affairs, under the pressure of layers of governments and wide-split community constituencies. The work of Shefter (1985), Stone (1989, 1993), and Mollenkopf (1983) explore the complex relationship between public and private power and believe a more pluralist understanding of interest articulation and coalition building is crucial in making urban policy decisions. In contrast to the old debate between pluralists and elitists which focused on the question of “Who Governs?” the regime perspective is concerned with a capacity to form coalitions to enhance certain interest group’s capacity, instead of exercising control and resistance over other groups. In the diverse and complex urban world, any group is unlikely to exercise comprehensive control but has to find allies in their pursuit of common goals. Neither does the approach regard governments as likely to respond to groups on the basis of their electoral power or the intensity of their preferences. Under such a premise, governments are driven to cooperate with those who hold resources essential to achieving a range of policy goals, that is, the holder of “systemic power”. Stone (1989) refers to power being a matter of social production rather than of social control. Policy-making becomes at least partly contingent. Stone (1993) emphasized the point that “to be effective, governments must blend their capacities with those of various non-governmental actors” (Stone 1993, p.6). In responding to social change and conflict, governmental and non-governmental actors are encouraged to form regimes to facilitate action and empower themselves. A regime is defined as an informal yet relatively stable group with access to institutional resources that enable it to have a sustained role in making government decisions (Stone 1989, p.4). Participants in a regime usually have a system power in a policy domain and form an ally based on coordination to reach a common goal. Logan and Molotch (1987) provide another framework to explain the coalition in cities. They argued that U.S. cities tend to be dominated by a small but powerful elite well positioned to use the powers of local government to their advantage. They emphasized the power of the business community and saw the role of rentiers— local landowners—as crucial to shaping the urban system. As Molotch (1993, p. 31) concluded, “Coalitions with interests in growth of a particular place (large property

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holders, some financial institutes, the local newspaper) turn government into a vehicle to pursue their material goals.” In many countries, local government authority usually has limited authority than the state and national government, which makes informal arrangements an important way of building policy collation to implement the growth orientation in urban politics. Therefore, in the growth machine model, there are informal groups with significant institutional resources to have an important role in making governing decisions. In any urban policy arena, public support for private development is vital to a diverse body of interests for them to receive profit from favorable patterns of urban development. In recent years, local growth coalitions have been augmented by multinational corporations seeking to establish “command centers” in urban downtown and a national industry of urban redevelopers—with a major economic interest in how city governments control land use (Levine 1989, p. 18). Stoker (1998, 1995) sees the regime and coalition approaches as premised on the view of powers that interplay in urban politics. In a complex society, the crucial act of power is the capacity to provide leadership and command power that enables significant tasks to be done. Stoker calls it as “the power of social production.” Different kinds of powers formed a systematic social control system in urban politics (Stoker 1998, pp. 123–124). The interplay of intertwined political and economic groups, powers, and coalitions dominates the decision-making and policy implementation of urban development. The above reviews of theoretical analyses of urban politics reveal that in every arena of urban development, the existence of conflicting economic and political interests and stakeholders determine the complexity of the urban system. Rescaling and Governance of City Regions Economic globalization and political transformation of the world order brought about profound changes to governing city regions, turning on redefining the scale of governance and search for spatiality of politics (Brenner 1999, 2000, 2004; Cox 1993; Gualini 2006; Jessop 2000, 2009; Savitch and Kantor 2002). Because of the reshuffled world order and national power, urban and regional governance has since been reconfigured systematically. In one way, globalization has grown international trade, commerce, shipping, and travels at an unprecedented frequency (Savitch and Kantor 2002). A more linked world demands territories respond in ways that governments at many levels and in different jurisdictions act jointly in a network. Both vertical and horizontal cooperation is required and necessary. In another way, the multipolar world order challenged traditional regional integration and inter-governmental models based on the centrality of the nation state as a primary unit of analysis (Gualini 2006, p. 888). Such forces eroded the entrenched relationship between cities and states, where states used to dominate as the functional territories of capital accumulation and institutional regulation. Nation states struggled to reposition themselves to attract free-flowing capital and talent populations, a new international geography was in the making to connect increasingly complex economies and spaces. Scott and Storper (2003) argue that intensifying globalization is making the interrelated systems of regional economies a vital link to urban development throughout the world. Regional development demanded city regions to serve as the nodes of

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global capital and economic transactions. Globalization between the 1980s and 2000s produced a new spatial organization where a higher level of regional economic integration occurred. The rise of city regions across the developed and developing world penetrated the traditional local-national territorial and political boundaries, pointing to new relationships between places and their social, economic, and cultural connections beyond the nation state. The emergence of city regions has been argued to be the spatial response to the social, economic, political, and cultural challenges of globalization and changing world politics. Governing city regions transformed (rescaled) territory and politics, evidenced by a shift from the national to the regional and metropolitan level (Brenner 2002, 2004; Scott and Storper 2003; Vogel 2010). As Jessop argues, the national state is now subject to various changes which result in its “hollowing out.” While national states remain politically important, more economic transactions and social interactions have started to occur at the city-region level among the newly established urban network around the world, which “bypass central states and connect localities or regions in several nations”(Jessop 1994, p. 264). The wave of neo-liberalization, characterized by market-oriented and sub-national responses to economic affairs transformed the urban world in the 1980s and intensified such territorial reorganization. The polycentric and multi-scalar character of a neo-liberal ideology produced geopolitical and geo-economic revolution in urban and regional governance in Western Europe and North America. Brenner and Theodore content that “neo-liberalism has also generated power impacts as sub-national scales—within cities and city-regions” (Brenner and Theodore 2002, pp. 3–4). Brenner states that This recurrent dynamics of de- and reterritorialisation has been organized through a wide range of scalar configurations, each produced through the intermeshing of urban networks and state territorial structures that together constitute a relative fixed geographical infrastructure for each historical round of capitalist expansion. Therefore, as capital is restructured during periods of sustained economic crisis, the scale-configurations upon which it is grounded are likewise reorganized to create a new geographical scaffolding for a new wave of capitalist growth… (Brenner 1999, p. 434).

In Western Europe, central-local relations changed radically in the early 1980s. the dynamics of regionalization and the redefinition of regional policy rationales in most of the European Union (EU) member states symbolized the “process of institutional or political development, during which the regions gain importance in policy-making—be it by autonomy or by participation in central politics” (Benz and Eberlein 1999, p. 345). The regionalization processes resulted in the emergence of regions as social and political actors in national as well as supra-national policy arenas, forming network-like modes of interaction (Gualini 2006). As urban regions compete with one another the scales of urban and regional territorial organization became more crucial in Europe (Brenner 1999). The regionalism in the United States has been described as occurring in a succession of waves (Stephens and Wikstrom 2000; Norris 2001a, b; Frisken and Norris 2001; Brenner 2002). The first major wave of regionalism emerged in the midnineteenth century and developed through the early twentieth century. It was characterized as “modernist approaches to urban planning and architectural form in

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the expanding industrial city” (Brenner 2002, p. 6). The second wave emerged during the postwar period. By the late 1930s, consensus prevailed among scholars of metropolitan governmental organizations that the fundamental problem of the metropolis was the fragmentation of local governmental structure. The fragmented nature of local government and lack of metropolitan political leadership presented an inability in solving metropolitan problems and delivering cross-area public services, which often produced inefficiency, ineffectiveness, and inequality in urban affairs on a metropolitan-wide basis (Stephens and Wikstrom 2000, pp. 29–50). “Small governments were considered unprofessional and inefficient, and fragmentation of authority, either within a government or among multiple local governments, was viewed as a source of weakness that would prevent coordination” (Bish 1971, p. 3). Since the early 1990s, there has been a new wave of interest in regional planning in North America (Savitch and Vogel 2000a; Norris 2001a, b; Frisken and Norris 2001; Brenner 2002; Wheeler 2002). The emergence of new regionalism, which is defined as “both a policy agenda and a set of public interventions designed to fulfill that agenda” (Savitch and Vogel 2000, p. 158) aimed to address the negative externalities resulting from fragmented governmental structures and avoid the high costs of establishing a big, inflexible, and politicalized regional government. The traditional model of establishing a regional government requires a formal institution and administrative apparatus of government while the transformed governance approach calls for an issue-based informal mechanism to solve regional issues (Savitch and Vogel 2000). The new regionalism model stresses self-regulating, voluntary cooperation, and collaborative problem-solving mechanisms in achieving regional governance (Norris 2001b, p. 536). Although such a notion of urban and regional governance is widely spread, it takes substantially alternative forms in some developing countries, such as several East Asian countries, where the government systems are traditionally centralized state authorities and traditionally very strong. Ye (2009) identifies that a combination of the traditional state-led approach and the innovative governance model has been jointly adopted in China to ensure the central government’s tight control of regional development. Ye (2013, 2014) further explains the state-led model where state and market interact, with state exerting directive authorities on urban and regional development. Under a state-led system, the government at multiple levels from the top exercises a strong influence on economic and political matters and designates policy ordinances. With regard to urban and regional development matters, the way states and markets interact shapes the transformation of cities to a great extent. Under a state-led system, urban development is largely directed by state policies usually with favorable economic conditions and a high degree of inter-governmental support. The government draws upon access to fiscal assistance and regulatory authorities to implement policy objectives (Savitch and Kantor 2006). Many heavily state-directed market economies such as China and India adopted such a model to direct urban and regional growth (Lal 1995, Pratt and Hutton 2012). For instance, in the second half of the twentieth century, China’s urbanization policy of giving priority to the development of small and medium-sized cities has not been able to serve this trend, and in practice, there are some disadvantages such as insufficient clusters of industrial

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regions, lack of scale efficiency, and weak international competitiveness. Therefore, in the new Urban and Rural Planning Law issued in 2007, the local government abolished the original proposal of “strictly controlling the scale of large cities,” and put forward the policy of “strengthening urban and rural planning and management, coordinating urban and rural spatial layout” to coordinate the development of large, small and medium-sized cities and small towns. As China’s urbanization continues, the transmission of population, resources, and information has become increasingly frequent and intensive along with the advancement of Information and Communication Technology, transportation technology, as well as the development of economic globalization and regional integration. As a result, more public affairs have broken through the boundary of traditional management and influenced a wider area. In terms of economic development, regional industrial structure, investment structure, population mobility, and the construction of infrastructure such as transportation and communication also demand the coordination and cooperation between different regions to attain optimal efficiency. Therefore, the above discussion of urban politics and rescaling governance theories provide a promising framework to anatomize urban and regional development in China, examining how policies are developed, which processes have occurred, and what political inter-relations are formed among multiple levels of governments. However, such a notion has to be considered and adopted extremely carefully with deep attention paid to the embedded state power and administrative hierarchy in China before any analysis can be conducted. Any comparison without a realistic examination of city-regional development and its governance issues in China.

1.3 The Outline of the Book This book contains seven chapters. This chapter provides a foundation of the book with a comparison of western and Chinese theories and models of urban and regional governance. Western theories including neo-liberalism, urban growth coalition, urban regime, and regionalism will be discussed to compare with China’s state-led approach. The historical track of China’s urban transformation and regional development will be presented for further analysis in chapters to follow. Chapter 2 lays out the analytical framework of the book from the perspective of process, policies, and politics of urban and regional governance in China, adopting the case of the Pearl River Delta region. The process of China’s urban development is highlighted by the emergence of city regions. Chinese governments carried out strong policy initiatives to stimulate and regulate such development. More importantly, the politics behind such development will be discussed with regard to multiple actors involved, their interaction and bargaining, vertical and horizontal relations, and the outcome of such political inter-plays. The central, provincial, and local governments jointly carried out aggressive policies to lead regional development in major

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regions. When inter-city competition is inevitable China was able to develop vertically strong top-down state policies to enforce horizontal cooperation. Local governments take advantage of regional development as a growth opportunity to maximize economic gains. Grass root organizations exercise limited power. Such a strong stateled network has been producing significant regional growth but needs to carefully consider for future adaptation for its continuing success. Chapter 3 analyzes the logic of urban development and governance in China from the lens of urban redevelopment, analyzing inter-governmental struggles, fiscal relations, and land politics. These factors have a profound impact on major governance issues, including urban redevelopment, suburban expansion, and rural transition. The urban redevelopment will be discussed in more depth in Chap. 4, focusing on governance issues and the reshaping of urban space in Chinese cities, such as Guangzhou and Shenzhen. Chapter 5 expands the discussion on the transition from rural to urban society. The urbanization path is the key to China’s socioeconomic development and future growth trajectory. How to solve the problem of rural-urban transformation and emergence of urban communities will be the key to China’s sustainable urban growth. This chapter provides an empirical analysis of rural-urban transition and finds it necessary to design and implement effective community governance policies to foster smooth transitioning from rural to urban China. Chapter 6 examines the latest regional development in China. These three regions have distinctive development patterns, with the Beijing-Tianjin-Hebei region showing dominant government authorities, the Yangtze River Delta under a strong influence of global capital, and the Pearl River Delta entailed the Greater Bay Area development. It is important to recognize the differences in development patterns while at the same time synthesize coordinated governance models. The transition from a disconnected administrative framework to an integral governance model demonstrates the latest cooperative nature in China’s mega-regions. Chapter 7 concludes the book with a review of major findings in this book, a Chinese style urban and regional governance model is proposed, which entails stateled policies and calls for cooperative governance that accommodates the diverse demands from multiple stakeholders and take into consideration the process, policies, and politics of urban and regional development in China.

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Chapter 2

Governing City Regions in China: Process, Policies, and Politics

As in many other parts of the world, the development of city regions has been a dominant theme of China’s emerging urban development since the 1980s (Xu 2008; Xu and Yeh 2010; Zhang 2006a, b; Ye 2009, 2011). Gross et al. (2014) demonstrate that the fastest growing urban agglomerations (UAs) are largely concentrated in Eastern and South-Eastern Asia on the Pacific Rim. China contributes disproportionally to urban agglomerations in excess of 750,000 in population and over one-third of the fastest growing agglomerations located therein. By contrast, the slowest growing urban agglomerations by population are found across Europe and North America. City regions are clusters of contiguous cities or metropolitan areas, which have developed phenomenally and each houses millions of people in a rather small land area in China (Ye 2009). In the past three decades, rapid urbanization has made these regions undergo a significant spatial and socioeconomic transformation, due to market reform and globalization forces (Xu and Yeh 2010; Ye 2014; Ye and Bjorner 2018).

2.1 Process: Linked Development, for What? The National New-Type Urbanization Plan 2014–2020 outlined that China should establish a coordinated urban region development mechanism. For example, it is articulated that the urban regions in the eastern part of China need to speed up economic restructuring, further optimize spatial planning, promote sustainable use of resources, and improve the quality of the environment. In particular, the leading Beijing-Tianjin-Hebei, Yangtze River Delta, and Pearl River Delta regions will strive to improve their standings in the world urban hierarchy and to improve their competitivity in the global economy. The restructuring of these developed regions requires that their low value-added industries be moved to the inner areas of China. In this way, urban regions in the central and western part of the country can take advantage of the manufacturing industry relocating and utilize their ample land, affordable labor © Central Compilation & Translation Press & Springer-Verlag Berlin Heidelberg 2021 L. Ye, Urban and Regional Governance in China, https://doi.org/10.1007/978-3-662-45040-6_2

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2 Governing City Regions in China: Process, Policies, and Politics

Table 2.1 Dominance of major regions in China in 2018 Region

Land area (10,000 km2 )

Population (Million)

Regional GDP (Billion Yuan)

GDP per capita (Yuan)

Beijing-Tianjin-Hebei

18.3(1.9%)

89.5(6.4%)

7,089.6(8.6%)

79,197(133%)

Yangtze river Delta

10.2(1.1%)

98.1(7.1%)

13,298.6(16.1%)

135,474(227%)

Pearl river Delta

5.5(0.6%)

57.1(4.1%)

7, 352.0(8.9%)

128, 866(216%)

China

960(100%)

1,390.1(100%)

82, 712.2(100%)

59,660(100%)

Numbers in the parentheses are the percentages of the national total Source Provincial Statistical Yearbook in respective provinces, various years

cost, and available natural resources and try to develop the “second-tier” industry pole of the country. Three major urban regions occupied an increasingly important position in China’s economic growth. With about 3.6% of the total land in China, these areas produced over 35% of the national total Gross Domestic Product (GDP) in 2015. The numbers for per capita GDP indicated that these three major regions led the national economic development with the Yangtze River Delta and the Pearl River Delta regions surpassing over 200% of the national average while the BeijingTianjin-Hebei region exceeding the national average by 33% (Table 2.1). Figure 2.1 demonstrates the three major regions occupied an increasingly important position in the national economy. Under the background of globalization and accelerating regional integration around the world, China has also entered the rapid development of regional integration. Since the reform and opening-up started over forty years ago, China has formed traditional urban agglomerations such as the Pearl River Delta, Yangtze River Delta, and the Beijing-Tianjin-Hebei Urban Agglomeration during its speedy national economic development. Recently, the country has proposed to build large new urban agglomerations, including the Central Plains Urban Agglomeration, Shandong Peninsula Urban Agglomeration, Urban Agglomeration on the West Side of the Straits, and Beibu Gulf Urban Agglomeration. Regional integration and urban agglomeration development have become important policies in the national 13th Five-Year Plan to promote the healthy development of urbanization in China. Before the 1990s, China mainly adopted the mode of “regional governmental administration,” which is an inevitable outcome at the initial stage of China’s market economy. Its original intention is to ensure the circulation of production factors across administrative divisions by governments’ cooperation in a certain region, meet local development needs in the region, and provide reasonable institutional arrangements to bolster the regional economy. Characterized by openness and competitiveness, market economy requires free circulation of production factors across administrative divisions. However, hindered by the “economy of administrative division” and other factors, the flow of resources among different administrative divisions was blocked, which resulted in a negative impact on the economic development. Regional governmental administration tries to solve this contradiction by adjusting the relationship

2.1 Process: Linked Development, for What?

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28

21.1086

22 17.9047 18.1624 17

11

14.9633 14.3984 14.4455

20.3635 20.2476

17.0341

15.9906 15.8055

10.9703 11.0486 10.6853 10.695 10.7369 10.4504 10.3173 9.4338 9.9298 9.055 9.6371 9.9636 9.454 9.2627 8.9538 9.0625 8.4411 8.3899 8.8918 6.8718 6.1569 6.3346

6

0 1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

Pearl River Delta Yangtz River Delta Beijing-Tianjin-Hebei

Fig. 2.1 Major Urban Regions and their GDP proportions in China. Source Liang ed. (2015), China’s Regional Economic Development Report, in this chapter, Table 4, p. 50

between upper and lower governments, the relationship between governments at the same level and the relationship between regional administration, regional economy, and regional development. By setting up a mechanism, all governments in the region respectively hand over some or all of their rights such as decision-making, management, and execution to the same administrative department in order to pursue harmonious and rapid economic and social development in the region. This concept of regional administrative integration is quite consistent with the western concept of “regional government,” who emphasizes on regional administrative integration of decision-making, execution, as well as supervision and evaluation. But in general, these mechanisms are still within the boundary of management by the government. In the mid-1990s, as the development of the market economy and the level and complexity of public affairs determine the diversity of subjects in public management, more diversified governing bodies such as non-governmental and non-profit organizations participating in public affairs management emerged. Under this new type of public administration, there were more flexible regional policies formed by uniting the government and non-governmental organizations in a certain region to solve regional public issues and maintain regionwide interests. Such mode has made great progress over “regional public administration,” which only relies on the power of government. Such a dramatic change would reduce the number of administrative

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2 Governing City Regions in China: Process, Policies, and Politics

divisions within the region and make policies like coordinated infrastructure development more easily resolved within a single structure of metropolis than multiple units of government. Any structural government reform is highly difficult in a country like China where administrative restructuring needs to go through an extremely tight process at the national level (Ye 2009; Zhang and Wu 2006). The establishment process of formal regional government or institution is not a quick process, with the interests of existing government structures and their personnel needed to be taken into account. Large regional governments tend to ignore the differences in economic and social conditions within the regions, leading to inflexible policies and slow reaction to citizen needs. Since the beginning of the twenty-first century, governance theory has been extensively applied in China’s regional public affairs management, which has promoted the development of “regional governance” model. It mainly refers that in order to maximize regional public interests, government, non-governmental organizations, private sector, citizens, and other stakeholders handle regional public affairs and resolve problems through negotiation, consultation, and partnership. Derived from Latin and Ancient Greek, the word “governance” originally means “control, guidance, and steering.” Since the World Bank first proposed the term “crisis of governance” in a report in 1989, the concept and theory of governance have become the research perspectives in politics, administration, and sociology. Different scholars have different opinions on the definition of governance, among which the definition is given by the Commission on Global Governance in Our Global Neighborhood: The Report of the Commission on Global Governance is rather authoritative: Governance is the sum of many ways individuals and institutions, public and private, manage their common affairs. It is a continuing process through which conflicting or diverse interests may be accommodated and co-operative action taken. It includes formal institutions and regimes empowered to enforce compliance, as well as informal arrangements that people and institutions either have agreed to or perceive to be in their interest.

The development of inter-city cooperation needs to be driven by all three aspects. Governments at all levels should straighten out their willingness for development, clearly position the inter-city development, and enhance the political impetus for inter-city cooperation. The economic complementarity should be explored to enhance the economic momentum of both sides. What’s more, it is necessary to take into full account the needs of residents of the two cities and seek the basic consensus for cooperation so as to form the social drives for inter-city cooperation. These three factors are inter-related, and it is necessary to integrate the administrative system, economic cooperation, and social participation to drive inter-city cooperation through the joint efforts of government, market, and society. From the perspective of the current administrative system, China lacks a regional authority that transcends local governments. Some local governments, out of the pursuit for local interests, have no choice but to sacrifice the overall interests of the region, which not only makes it difficult to effectively solve regional public issues, but also infringes on the principle of mutual benefit inherent in regional economic integration, resulting in a vicious circle of surging regional public issues. Cooperation

2.1 Process: Linked Development, for What?

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between the two local governments will be more difficult in the absence of effective cross-jurisdiction management. It is necessary to stress the importance of inter-city cooperation and maintain the guiding direction of the governments at higher levels, so as to promote the positive response of local governments and overcome the difficulties in the implementation of various cooperation policies. The inter-governmental coordination mechanism needs to break the original arrangements of the administrative system, reshape the institutional evolution of interest structure, and establish a good information communication and multilateral consultation mechanism for the possible game dilemma among local governments. There are many deficiencies in the traditional administrative mode of administrative regions. It is necessary to coordinate cross-governmental and cross-departmental cooperation through the positioning of government functions, build a grid-based governance platform, and resolve the potential inadequacies brought by “fragmented” management among various parties of regional governance, excessive pursuit of marketization, and weakening government coordination mechanism. It may be explored to set up a special regional institution between the macromanagement of the upper-level government and the micromanagement of the lowerlevel government. By clarifying the power boundary of this type of institution, the provincial and municipal governments can introduce the regional governance institution and mechanism, grant it independent administrative authority, and realize the effective guiding measures for the evolution of regional governance forms. Sometimes the dilemma of inter-city cooperation is that the economic relationship between local governments is in a state of tension, being competitive and cooperative at the same time. The cooperation between the two cities needs to rely on the development of an economic win–win relationship featuring multi-party coordination. The lack of willingness for inter-city cooperation made it difficult for cross-jurisdiction construction projects to enter the policy agenda of both sides, but even if the projects were approved, they might be placed at the bottom of implementation projects by both sides, and some projects might be stalled or even canceled. Interest driven is the fundamental inducement for cross-jurisdiction governance, and the balanced distribution of interests will become the core issue for the realization of cross-jurisdiction effective regional governance. Inter-city cooperation needs to be carried out based on the optimal combination of the development of the relationship between the two cities, fully analyze the economic structure and development characteristics of different cities, promote the economic development and transformation of the two cities through feasibility studies and reasonable planning, and establish the basis for cooperation from the perspective of economic integration and urban development needs. Inter-city cooperation also requires greater social participation to fully respond to and meet the public interests of relevant groups and communities. In cross-jurisdiction governance, many public matters involve residents and communities in adjacent areas, including inter-city infrastructure and economic development. The consultation and governance process concerning these matters requires the transformation of government functions, the deep participation of social organizations, and the formation of multi-actor coordination mechanisms for sharing information, seeking synergies, pursuing resource complementarity, and conducting

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project-based cooperation between governments and between governments and social organizations. Through the establishment of various types of cross-jurisdiction, social organizations and their active participation in cross-jurisdiction public matters, they can become an effective mechanism to convey the public will to the local governments in the region and promote the protection of public demands. The social participation in governance based on citizens and communities can create an equal dialogue platform with the government and promote the interactions between the government and society in inter-city cooperation. These are the important prerequisites for benign inter-city cooperation in China. It is difficult for local governments to consider the optimal development of the economy and society of the entire region from a holistic perspective, thus weakening the performance of inter-city cooperation. Due to the dominance of administrative power of the government and the immature social participation mechanism, the main contents of inter-city cooperation are not only susceptible to the influence of local development, but also lack of stability and continuity due to the change of policy priorities of governments at all levels. In China, the interventions of governments have taken once again strong form in regional development, which is through a multi-level planning framework that largely shaped the formation and growth of major regions.

2.2 Policies: State-Led Planning, and How? Globalization is a pattern of ongoing development that promotes cross-national interaction, interdependence, and common reference points. This process is fed by megacities around the world to become platforms and nerve centers for globalization. In the meantime, cities form urban regions as responses to globalization, building connected economies, interactive societies, and complex political orders. The development of city regions in China is a product of tight state-led urbanization strategy and top-down policy directives forged jointly by the national, provincial, and local governments, under the pervasive globalization shift. Such forces eroded the entrenched relations between cities and states, where states used to dominate as the functional territories of capital accumulation and institutional regulation. As nation states struggled to reposition themselves to attracting more free-flowing capital and talent populations, a new international geography was in the making to better connect economics and spaces. As Brenner (1999) states, the dynamics of de- and reterritorialization has been organized through a wide range of scalar configurations, each produced through the inter-meshing of urban networks and state territorial structures. The current urban policymaking in China has been strongly tied to metropolitan and regional development, in response to the pressure of globalization and urbanization in the country (Douglass 2000; Ye 2013, 2014). China’s regional policy has decades of history from the founding of the People’s Republic of China. Affected by climate, natural conditions, resource endowment, and local economic system, China, with a vast territory, has become a patchwork

2.2 Policies: State-Led Planning, and How?

25

of regional social and economic differences (Cannon 1990). After the founding of New China, the central government faced with difficult national conditions and international situations. The country needed to strengthen political control and stabilize the domestic order domestically and at the same time, to restore production and increase economic output by formulating the strategy of balanced regional development. Therefore, it launched the Third Front Construction from 1965 to 1971, with the movement of “going to the countryside” and the enforcement of “household registration system.” From the 1940s to the 1960s, regional investments were diverted from the more developed coastal areas to the less advanced western regions, in order to balance regional development and to meet the national defense requirement (Yang 1990). A large number of factories and industrial workers were related from the eastern part to scattered regions in the western part of China (Ma 2002, 2005; Naughton 1988), pursuing a balanced distribution of productivity and closing the development gap between the east and west regions (Naughton 1988). The downturn of the national economy in the 1960s and the 1970s posed serious challenges for China’s regional growth. Under such circumstances, China urgently needed new development concepts to change the under-urbanization and extremely low economic growth since the 1970s. Thus, western theories of regional development gradually gained influence as one of the most important models China adopted to stimulate its economic and social development. From the late 1970s to early 1990, the Chinese regional development strategy mainly was influenced by the aim at reducing uneven development, increasing national investment layout, and emphasizing the efficiency goal of regional policies (Fan 1997). The course of regional governance in China became increasingly important after the period of reform and opening-up due to the unbalanced development stage in the early stage and the coordination stage since 1990. The guidelines for regional economic development gradually shifted from the past emphasis on war preparation and narrowing regional differences to a focus on improving economic efficiency. The national development priorities were gradually shifting eastward. Among many others, opening-up is one of the most critical policy developments in China’s regional growth. By implementing the policy of reform and opening-up and directing regional development from the coast to the inland, the state creates a favorable policy atmosphere for regional economic development, fasting the speed and scale of national economic development. Regional strategies became China’s comprehensive national development priority. Various factors of production flow to regions with optimal development conditions, growth potential, and closeness to the consumer market, optimizing the allocation of resources and spurring the development of the national economy (Zhou 2010). Such opening-up policy attracted a large amount of construction funds by offering various preferential policies, which alleviated the problem of insufficient funds in the regional economic development. It also promoted the development of a regional export-oriented economy and greatly improved the outward orientation of China’s economy, making China a major trading country in the world in a short time. The regional agglomeration strategy catered to the trend of economic globalization and

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2 Governing City Regions in China: Process, Policies, and Politics

produced mega-urban regions in China, including the Yangtze River Delta (Li and Wu 2013) and the Pearl River Delta urban agglomerations (Eng 1997; Lin 2001). However, such a pattern of regional policy led to a significant increase in the economic gap between regions (Fujita and Hu 2001; Jones and Cheng 2003). The inequality among regional growth thus became a top priority of China’s national development policies in recent decades. In 1991, the eighth five-year plan put forward the coordinated development of the regional economy and promoted the rational division of labor of the regional economy. In 1995, the ninth five-year plan proposed to implement policies to ease regional disparities and gradually adjust the transfer and diffusion of state investment and industrial distribution to the central and western regions. Since 1999, China has consistently implemented the strategy of developing the western region, revitalizing the northeast and other old industrial bases, and promoting the rise of the central region. Therefore, after decades of searching for regional institutions and policies, a transformed regional development framework gradually appeared in China. As Heikkila and Xu point out that ample scope for the local initiative within the broad parameters produces the result of a hybrid of top-down and bottom-up policies (Heikkila and Xu 2014, p. 829). On November 29, 2018, The CPC Central Committee and the State Council of the People’s Republic of China issued the Opinion on Constructing Better Regional Coordinated Development Mechanism.1 It stipulates that inequality has gradually become the major obstacle for regional development and sustainable growth in the country. The fundamental principles include: – stick to the cooperation between the government and the market, with the government providing guidance while the market as the key play in promoting efficient and effective regional development. – stick to the coordination from the central government with responsibilities from local government. The central government is responsible for the top-level design to specify the duties and functions of and to optimize the motivation and actions of local governments. – stick to the coordination fair competition and differentiated policies in different regions, with a deepened regional governance scale, in order to promote regional integration, to protect open market competition, and to avoid negative outcome such as local protectionism and policy distortion. – stick to the integration of perfecting the current policies and innovative reforms to carry forward effective regional coordinated development mechanism. Under the new circumstance it is necessary to adopt more scientific and more efficient regional development policies. – stick to the integration of problem-oriented and goal-oriented policy design that would solve the issues and realize the target of regional balanced development, with a focus on regional coordination, interaction, and comprehensiveness. The goal is to construct a regional coordinated development mechanism that facilitates the goal of a well-off society, with regard to equalization of basic public 1

Translated from http://www.gov.cn/zhengce/2018-11/29/content_5344537.htm.

2.2 Policies: State-Led Planning, and How?

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services, regional policy regulation, and safeguarding the healthy market activities by the year 2020. Until 2035, a new regional coordinated development mechanism shall be in place in line with the modernization of China to promote the linked fiscal, monetary, and social policy at the regional scale, with a narrowed developmental gap among regions. The ultimate goal is to fully implement a modern regional coordinated development mechanism that facilitates overall regional governance and the goal of building a modem and powerful socialist country.

2.3 Politics: Multi-level Governance, or More? China is in the initial stage of building socialism with Chinese characteristics. Both the central and local governments have been actively initiating a new arrangement of multi-scalar relations among different levels of governments. The state pushed for further marketization and urbanization. Such a model entails a strong state-led orientation of urban development through a multi-scalar governance system and adapts to both the vertical leadership and horizontal governance capacity for regional growth in a state-led environment. Faced with the complex regional issues, China has been committed to seeking for effective cross-jurisdiction governance mechanism and formed regionalism on the basis of voluntary cooperation, which resembles the new regionalism model in the west. However, China’s regional governance has a significant top-down and multiple level policy directive, which differentiates the Chinese case from the western ones. In this context, the central and provincial governments adopt appropriate strategies, such as scale reconstruction, consolidation of administrative divisions to readjust regional strategic planning, so as to overcome a series of problems caused by vicious competition caused by administrative division (Ma 2005; Zhang and Wu 2006; Wu and Zhang 2007; Xu 2008; Li and Wu 2012, 2013, 2018; Ye 2013). Li and Wu (2012, 2013) argue that the theoretical concepts of “new state spatiality” and “state spatial selectivity” (Brenner 2004) are both highly relevant to the understanding of Chinese regional manifestations. Traditional opinions believe as an important part of government functions, the government should use public power to manage inter-regional public affairs, adjust inter-regional relationships, respond to the interests of different regions, resolve regional contradictions to achieve regional coordination and development and promote the development of the whole society. However, it will easily cause the absolute authority of the government and the mire of “strong government-weak society” in the regional public affairs governance. The regional development model with an overemphasis on market should also be reflected on the other hand. The development of a market economy can introduce competition and cooperation into the regional governance. Local governments in the region can break down geographical boundaries to offer public services by full competition, promote the local economy, and provide efficient public services. However, local protectionism driven by self-interest may occur when major conflicts concerning

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2 Governing City Regions in China: Process, Policies, and Politics

local economic and political interests are involved. Due to the lack of unified highlevel authority and restriction, opportunistic behaviors such as inaction despite having the decision and free-rider problem may happen in front of an unclear division of property rights. As rooted in EU studies, multi-level governance refers to the governance of society through a variety of processes and institutions and is conceptualized as the spreading of authoritative decision-making across different territorial levels (Bache and Flinders 2004; Gamble 2000; Hooghe and Marks 2003). The multi-polar world order has challenged traditional, regional integration and inter-governmental models based on the centrality of the state as a primary source of power in urban affairs (Brenner et al. 2010; Gualini 2006). The city-region plans in China are forged in the visions national, provincial, and municipal governments have for these cities and regions and embedded in the multi-level governance to essentially combine top-down and bottom-up actions between multiple levels of government (Lu et al. 2017). The political activity crosses administrative and jurisdictional boundaries with a strong sense of “power-sharing” between levels of government has been a significant character of multi-level governance. Under such an arrangement, national, regional, and local governments share powers with no dominating authority but systematical coordination over cross-jurisdiction issues (Alber and Kern 2008). Multi-level governance allows the interaction and integration of a wider scope of interests and powers that are “nested” in the political system where decision-making authorities and responsibilities filter through vertical hierarchies (Corfee-Morlot et al. 2009; Betsill and Bulkeley 2006). Multi-level governance has been used widely to study China’s recent environmental and climate policy. Horizontal collaboration in the context of multi-level governance refers to intra-metropolitan governance and city networking, whereas vertical collaboration refers to the central-local policy cooperation (Alber and Kern 2008). Schreurs (2017) finds that policies introduced at the local level can act as testing grounds for new ideas, spread horizontally once they prove to work, and eventually be introduced at the national level. Hooghe and Marks (2003) point out two ideal types of multi-level governance. Type I reflects the traditional spirit of federal systems where the central government delegates and shares authority with local governments (Bache and Flinders 2004). Type II governance model is more policy or issue-oriented and with a diverse body of public, semi-public, and private organizations involved in fluid systems at multiple levels (Hooghe and Marks 2003). The multi-tiered administrative structure in China in one way established a hierarchal political system with concentrated powers at the senior government. On the other hand, the transforming central-local relation generated a complex network that transcends formal organizational borders. In this regard, the multi-level governance framework allows layers of government to scale up their experiments in inter-related policy arenas (Wu et al. 2016). For instance, China’s urban social welfare reconstruction can be conceived of as what Hooghe and Marks (2003) call “Type II Governance,” under which numerous entities at various levels, with intersecting memberships, are clustered around a particular policy task (Hurst 2011).

2.3 Politics: Multi-level Governance, or More?

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Such a model at large can point to the ongoing city and regional politics in China. Regional strategic development plans and main functional area plans are formulated across the nation to enforce central guidance on spatial development and crossjurisdiction coordination. It is believed that the emergence of urban areas and the scale reconstruction of politics are behind the spatial practice of state power (Cox 2009; Jonas 2012; Jonas et al. 2014) to address social reproduction, cross-domain social and environmental issues (Gough 2002; McCann 2007). Down-scaling has been considered to producing new national space (Brenner 2004) but not the lack of national influence. Local governance acts as a collection of state power (Allen and Cochrane 2010). In the face of increasingly prominent cross-jurisdiction governance and regional public service supply, a growing number of local governments to realize regional cooperation has become an important policy to solve the problems of the regional common, especially in the industrial structure adjustment and cross-jurisdiction supply of public goods and services. Driven by the theory and practice of new regionalism, local governments in China try to establish a regional cooperation network, with voluntary cooperation and coordination of inter-governmental agreement, such as cooperation framework, joint meetings, and inter-city summit, hoping that the formation of regional networks to further promote cooperation. Ye (2013) uses the transformation in the Pearl River Delta (PRD) mega-region as an example to analyze how the mega-region development model is being adopted in China and identifies the factors that contribute to such institutional arrangements. The PRD region’s development model has followed a state-led, dirigiste approach, with aggressive economic, social, and institutional policies enacted by the senior government to support regional development. The government is able to take strong control of public resources and form continuing regional policies. As regional development is a top government priority and being emphasized by the national and provincial governments across China, a top-down hierarchy is established with an extensive horizontal government network of local government and agencies working together to implement the policies. Such a model entails a strong state-led orientation of regional development while directing cooperation among local governments and agencies to produce better performances. This model tends to provide both vertical leadership and horizontal governance capacity, with local discretion operates within a controlled framework. It appears to work well under China’s current situation to promote regional development. It calls for a new direction in studying regional governance in countries like China where the state exerts a strong control over regional policy-making and planning process. Such a state-led, dirigiste approach appears to be distinctive from the neoliberal urban development model, which has been popularly argued for China. The polycentric regional governance approach, which relies heavily on informal arrangement and engagement of non-governmental sectors, may not be the only appropriate solution to effectively address regional matters. It is worth investigating further to what extend the PRD case in China is applicable to other countries and whether it is reasonable to generalize the case studied in this chapter as a new pattern of regional governance for other countries under similar conditions.

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Chapter 3

Logics of Urban Development and Governance in China: A Closer Examination

For the first time in its history, China’s urban population surpassed that of its rural areas in 2011, following the three decades of astonishing economic development and social transformation. To date, China’s urban population approached 60% in 2020 and is entering a profound urbanization period. It is important and intriguing to look back and to see how such an unprecedented process occurred and what the drivers are.

3.1 Inter-Governmental Struggles, Fiscal Relations, and Housing Policies It can be seen in Fig. 3.1 that between 1980 and 1995, China’s urban and rural populations both increased, with the urban population growing at a much faster rate. Between 1995 and 2015, China’s rural population experienced a decline from 860 to 603 million, recording a decrease of 257 million and a 30% decrease. As shown in Fig. 3.2, millions of migrants moved to Guangdong Province since the 1990s. The percentage of migrants exceeded 8% in 1995 and reached its historical high in 2010, with over 18.4% of the total population. In recent few years, due to the regional industrial restructuring policies, rising labor cost, and increasing tendency of migration back flow to the central and western regions, the proportion of the migrant population in Guangdong experienced a slight drop. To some degree, local policies to provide migrant workers urban resident status reduced the number of unregistered migrants as well (Ngok 2012). At the same time, the urban population grew from 352 to 771 million, recording an increase of 419 million and an over 54% increase. During this process, many rural surplus labors moved to the eastern part of the country. For example, Guangdong Province attracted increasing inward population migration during the past two decades until recent industrial restructuring slowed down the population migration. © Central Compilation & Translation Press & Springer-Verlag Berlin Heidelberg 2021 L. Ye, Urban and Regional Governance in China, https://doi.org/10.1007/978-3-662-45040-6_3

35

36

3 Logics of Urban Development and Governance … 56.1% 60%

1000

49.9%

900 800

50%

43.0%

700

36.2%

40%

600

29.0% 26.4% 500 23.7% 19.7%18.0% 19.4% 400 17.4%17.3% 13.5% 300 11.2% 200

30% 20% 10%

100 0

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Urban Populaon

0%

Urbanizataion Rate

Rural Populaon

Fig. 3.1 Urbanization in China 1950–2015. Source China Statistical Yearbook, various years

%

million 137

20.

18.3795 16.9658

110 13.3064

14.0744

15.

82 10.

8.0953 55

5. 27

0.

0 1995

2000

2005

2010

2015

Total Population Registered Population % Migrant Population

Fig. 3.2 Migrant Population in Guangdong Province 1995–2015. Source Guangdong Statistical Yearbook, various years

3.1 Inter-Governmental Struggles, Fiscal Relations …

37

Li, Chen and Hu (2016) categorized the demographic movement in China into two types of voluntary and involuntary migration. In the voluntary migration, rural residents willingly moved to cities, in search of better employment, higher income, and more desirable public services. Migrants have to work in low-pay, low-skilled, and labor-intensive jobs. Migrants’ weak network capability with other urban residents and low capacity of adapting to urban life poses significant challenges and has required the transformation of urbanization in China. The forces behind such a stimulating urbanization are multi-faceted. However, the inter-governmental relation between the central and local governments is he fundamental drive for development. The relationship between different levels of government has long been discussed in China, especially on the relationship between the central and sub-national governments. As early as April 1956, Mao Zedong, in his famous thesis on “The Ten Major Relations” stated that in China the relationship between the central and sub-national, including provincial and local governments, is a contradiction. As a vast country, China should encourage local governments to be more active in development issues but not solely rely on the central government. Moreover, Mao indicated that local governments, such as municipality, county, town, and village ought to have their rightful independence. Such independence should not be considered local protectionism but instead helpful to promote overall benefits for the country (Mao 1956). Sixty years later, in August 2016, the central government issued the No.49 Decree on “The Guidance on Advancing the Reform of Divisions of Revenues and Expenditure Responsibilities between the Central and Local Governments”, which outlined the division of expenditure responsibilities (shiquan) and revenue assignment (caiquan) between the central and local governments (State Council 2016). Although this document is argued to be much less powerful than the long-expected goal to adjust the fiscal and administrative divisions between central and sub-national (Zhang 2013), it demonstrated the long-lasting problem of inter-governmental relations, particularly in fiscal policies in China’s 60 years of development. During the past seven decades, China underwent three major periods of intergovernmental fiscal arrangement. The tax-sharing system was established in 1994, with the balance of revenue distribution shifted significantly in favor of the central government. As a planned or unwanted consequence, the imbalance of expenditure responsibilities (shiquan) and revenue assignment (caiquan) became a major determinant of urban growth and development patterns in China in the following two decades. The impact of the tax-sharing scheme has been widely discussed academically, with heated debates on the implication of decentralization and fiscal federalism (e.g. Ma 1997; Montinola et al. 1996; Qian and Weingast 1997; Tsai 2004; Wong 1998, 2002; Shen et al. 2012). Montinola et al. (1996) and Qian and Weingast (1997) adopt the model of market-preserving federalism to analyze how the new tax-sharing scheme might satisfy both the central and local governments in China. The intention of this major fiscal reform was to establish a two-tier tax-administration system and to use rule-based transfer formulas to collect more revenue than through the previous methods of centralization. Shen, Jin and Zou (2012) find that the post-1994

38

3 Logics of Urban Development and Governance …

era highlighted the process of recentralizing revenues upward and devolving expenditures downward, extending from the central to the provincial to the prefectural to the county and ultimately to the township and village level. Each level pushes fiscal responsibilities down to lower levels while asserting the largest possible claim on revenue residuals. Unfortunately, such an effort of strengthening revenue collection by two-tier collection and allocating expenditure by inter-governmental transfers produced significant backfire at the local level. Therefore, local governments were left little choice for public goods provision but to rely on informal finance or “extrabudgetary”, which are not remitted to the central government as taxes and encroach on the central government’s share of fiscal revenues and explicitly permit the rise of informal finance (Tsai 2004). Such identical uses of within-budget and off-budget funds are called “fiscal dualism” (Wong 1998). Increasing concerns were raised to study how the tax-sharing scheme affected sub-national governments’ behavior in a fundamental way. At the provincial level, Liu, Martinez-Vazquez and Wu (2016) find that intro-provincial decentralization produced a high level of inequality in Chinese provinces, measured by localities’ economic output. Such a phenomenon could be explained by what Wu and Wang (2013) demonstrated that all central government transfers go through provincial governments before reaching the various layers of sub-provincial governments. The intermediate government between the central and local governments, namely provincial governments may have “grabbed” central grants for self-interests and made central grants “leaking”, without fulfilling the intended purposes of the 1994 tax reform. With regard to the local government, Jia et al. (2014) argue that since the taxsharing reform in 1994, the Chinese fiscal system has exhibited a marked vertical fiscal imbalance of a mismatch between expenditure and revenue assignments between the central and sub-national governments, which may cause the commonpool problem in local governments’ behavior. Zhang (2013) studies the transfers from central to local government to advance the rural “tax and fee” reforms and concluded that the central policy of incentivizing county governments with inter-governmental transfers had relatively limited success and the heavy tax burden and equity concerns had to be more effectively addressed. Therefore, it can be seen that the 1994 fiscal reform in China had a profound impact on various levels of government. The existing literature discussed the central government’s regaining control of revenue, the imbalance of expenditure responsibilities (shiquan) and revenue assignment (caiquan) between the central and sub-national governments, and the changing behavior of sub-national governments in developmental matters. China has a traditionally centralized inter-governmental system and an extremely strong central government, fiscally, administratively, and politically. The dominance of the central government in inter-governmental relations in China can be demonstrated by the fiscal arrangement between the central government and sub-national government. Figure 3.3 shows the central government started to possess a larger proportion of the national total revenue after the 1994 tax reform while the expenditure of the central government remained rather low.

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39

Fig. 3.3 The Central-Local Fiscal Relation in China. Data source China Statistics Yearbook, various years

It could be argued that part of the revenue trickled down from the central government to the sub-national governments as a form of transfer payment (Wu and Wang 2013). Such a transfer often comes with mandates that enforce the central government’s policies, strategies, and visions. The “power of purse” is usually used as “power of order”. The central government’s dominance in the revenue side reached its peak in the mid-2000s, recording over 54% of the national total revenue. The figure started to decline after 2007 and dropped to around 45% in 2016, with a slight recovery in 2017. The expenditure incurred by the central government continued to decrease more significantly, dipping under 15%. It is evident that the central government possessed increasingly strong fiscal power to maintain the tight control of intergovernmental relations (Zhang 2006). The trend of a widening gap of centralized revenue with weakening expenditures at the national level exacerbated sub-national level governments’ financial burden to sustain economic growth and to contain desirable public service (Uchimura and Jutting 2009). This disparity has been argued to be a primary cause for complex urban development issues in China, which will be further elaborated on in later chapters in this book. As shown in the above figure, the 1994 tax reform fundamentally changed the fiscal relations between the central and sub-national governments in China. Local governments were no longer able to keep the residual revenue after remitting a fixed contractual amount, which led to an increasing proportion of the tax revenue was seized by the central government. Although a significant amount of revenue could be returned to the provincial and local governments, they have been in a dire situation to find sizable off-budgetary revenues to make up the gap between allocated expenditures and necessary costs for economic growth and public services. With limited options, land value was exploited as a source of capital formation and an important revenue source by local governments in China. The changing fiscal relations

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3 Logics of Urban Development and Governance …

between the central and sub-national governments in China frame an intertwined system where the higher level government exerts control over the urban development path but allows (or encourages) local governments to compete against one another and strive for growth. This system coupled with reforms and opening-up in other policy areas stimulated urbanization in China since the 1980s. One of the activities at the local level during this period was to aggressively pursue industrial development in both cities and their countryside so more tax revenue could be generated to equip local governments with additional fiscal resources for further infrastructure investment and city building. Advanced infrastructures and creative strategies for growth in regions like the Pearl River Delta and Yangtze River Delta, in turn, provide a sustained stimulus for new rounds of growth. Such a circle enabled the country to undergo a rapid era of industrialization and unprecedented economic growth. The institutional and spatial dimension of urbanization is strongly inter-related whereas the evolving central-local governmental relation has made landcentered development as the most significant feature of China’s urbanization. Urbanization in China is defined by Gu and Wu (2010) as “a complex and multifaceted process involving population migration from rural to urban areas, rural and urban land conversions, spatial reconfiguration of settlements, and changing governance” (Gu and Wu 2010, pp. 1–2). Lin and Xu argue that local governments including the municipal and district formed a strong orientation toward development, with regard to having relatively complete political power structures and independent financial structures, thus making them more autonomous and able to take stronger initiatives in performing their functions and supplying public goods. With relatively autonomous economic decision-making power and the growing demand to locate funds for urban growth and public services, local governments in China exploited land as a source of capital formation. Lin (2007) argues that the rapid outward development of Chinese cities was driven by a city-centered urbanization model with the characteristics of “place-making” and “place-promotion”. Li et al. (2010) identify the economic and fiscal nature of such a land development process in China where land ownership is divided, with urban land legally owned by the state and rural land collectively owned by villages. Therefore, municipal governments tend to act as the representatives of the state to control urban lands and its marketization process, intended to generate large profit by separating the user right and ownership of land (Xu et al. 2009). Ye and Wang (2013) find that inter-governmental fiscal arrangements significantly favor the central government, leaving the local government without adequate revenue capacity but to exploit possible fiscal resources from land finance, including leasing, banking, and borrowing from land-related sources. Ye and Wu (2014) test the drives for land development in Chinese cities and find out that the impetus to obtain disposable revenue for municipalities was a significant push for local governments to pursue land finance and urban expansion. While most local governments in China heavily rely on budgetary revenues and inter-governmental transfers to meet their spending needs, land finance has been utilized in larger urbanized areas such as the eastern coastal area. Land-transfer revenues lead to a biased budgetary expenditure structure that prioritizes economic development over social development (Li 2016). When facing pressing growth demand for urban expansion,

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legal restrictions on farmland conversion tightly control rates of farmland conversion to non-agricultural use (Feng et al. 2015). Although such regulations did limit urban spatial growth to a certain extent, it is optimal for local officials to maximize land conversion. Therefore, in order to preserve farmland according to the law it is inadequate to merely reform the fiscal system but to overhaul the growth policy and government performance evaluation system so as to change local governments’ pro-growth spending preferences (Li 2016). Heikkila (2007) depicts two exemplified approaches to how land can be urbanized in Chinese cities. On the first model, rural land was first conveyed to urban land by the means of land banking (tu di chu bei) without immediate commercial development. During this process, land ownership was transferred from rural collectives to local state, with villages being compensated for the agricultural value of the land but not the future value as urban land, which can rise hundreds of times when stateowned land’s user rights are sold to market companies or to private developers. Such a process provided a significant amount of local revenues. In some cases, local governments earn over half of their revenues from land transfer and other related fees (Lin 2007). However, this process tends to produce a wide range of land-use problems, including an aggravated land conversion for non-agricultural use, built land vacancy with inefficient use, instable migrants due to land requisition and farmers’ land lost, and rural livelihood problem (Liu et al. 2014). Wang et al. (2012) find that cultivated land significantly reduced and developed land rapidly increased in the first decade of the twenty-first century, which was the rapid urbanization era in China as shown in the previous chapter. Such dramatic changes in land use are closely related to enacting and implementing land conversion policies across the country since the 1990s. The other model of urbanizing land in China refers to the formation of developed land within the village boundary, which has been encompassed by the surrounding urban land development. This model is with an unavoidable issue of legally converting the rural land to urban land to rectify the land development project. Otherwise, such development is a mere expansion of the boundaries of urban space without urbanizing the landscape, the economy, and the residents, which inflates the urban population and produces pseudo-urbanization (Yew 2012). The situation will evolve to a more difficult situation when such development space turns into an enclave of migrants, informal activities, and illegal housing. In many cases, due to the unwillingness or unavailability of land conversion, such a pattern of land development leads to so-called “village in the city” or “urban village”, which will be further discussed in later sections and chapters in this book. This new “land-centered urban politics” has been identified by many as the most significant phenomenon of the spectacular expansion of Chinese cities and the growth in land expansion and urbanization since the mid-1990s. Land urbanization in China is taking both paths explained by Heikkila (2007) and eventually led to the expansion of developed urban areas.

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50 40 30 20

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Fig. 3.4 Built-up Areas in China 1996–2016 (1,000 square kilometers). Source China Statistical Yearbook, various years

Figure 3.4 shows the growth rate of built-up areas in China from 1996 to 2016. Under the strong drive to expand, urban built-up areas in Chinese cities doubled in the span of twenty years from 1996 to 2016. Empirically, strong relations were identified between dependency on land financing and land urbanization in Chinese cities (Ye and Wu 2014). The capitalization of urban space and resources is highlighted by turning urban land into municipal revenue, though conducive to capital accumulation and spatial growth. For those cities that are more dependent on land leasing fees as part of their local budget, the government is under greater pressure to exploit the land and relies on real estate development to generate revenue to support public spending. Municipal governments in China capitalized on the land over which they have powers of requisition, allocation, and conveyance to finance urban services and support development projects (Tao et al. 2010; Ye and Wu 2014). China’s urbanization has been land-centered development with a tendency of real estate development and fixed asset investment. The phenomena of land-centered urbanization pushed for more land available to drive local development. Chinese cities find it more helpful to urbanizing rather than industrializing, for the sake of increasing local funds for service delivery and expanding municipal revenue sources. Such a transformative urbanization pattern led to the slow growth of domestic industrial firms and a low level of industrialization with a high urbanization scale (Han and Kung 2015). Therefore, it can be said that the rising private housing market in the 1990s provided another push for such a land-centered urbanization model. The changing nature of urban space during China’s profound urbanization coupled with the commercialized housing market and intensified property right restructuring points to a complex space production process. The growing implication of housing, disrupted social transformation, and conflicting property rights encounter a fundamental governance dilemma. Analyzing such a space production process and its political-social

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implications through the lens of emerging land urbanization demonstrates how housing politics and space production transform urban communities in Chinese cities and change the social and political relations between the grassroots, commercial capital, the society, and the governments at various levels. Space is a social production as well as a tool of thought and of action, a means of control, and hence of domination, and of power (Lefebvr 1991, p.26). The local– global link points to how global processes have penetrated and restructured localities in various ways around the world (Appadurai 1990). Context-structuring processes are new institutional arrangements that alter the frameworks within which groups mobilize resources, anchor local policies, and negotiate economic development issues. In this regard, Chinese communities reflect a new geography of value-added space production processes which underlies the work of cities (Clark and Gaile 1998). During this process, housing in China has become a consumer commodity that intensified the advantages of people who were advantaged in the past (Logan et al. 2009). Pushing urbanization through housing and land development has been a key element in China’s growth in the 1990s and the 2000s (Ye and Wu 2014), until the housing price reached so high that the central government had to step in for a possible remedy. Housing accessibility relates to individual attributes, including household registration status, party affiliation, employment sector, and social network in Chinese cities. The expansion of housing has been argued to be a product of industrial development, land exploitation, and urban renewal (Wang et al. 2009). Following rapid urbanization, communities in Chinese cities continue to grow. The formulation of urban communities composed of private housing demonstrated China’s social transformation from the previously tightly controlled “work unit” society to a more individualized grassroots organization based on property rights (Logan et al. 2010). Due to the rapid transformation and rising property rights, an increasing number of social conflicts associated with issues such as property rights and grassroots governance in Chinese cities were reported in the past decade (Stern and Hassid 2012). The internal link between urbanization, space production, and housing politics needs to be identified to better understand the emergence of community restructuring along the rapid urbanization in Chinese cities. It is important to realize that urbanization is a multi-dimensional phenomenon. Rapid urbanization has provided a strong impetus for China’s social and economic development. The cluster effect and scale economy of cities have improved the efficiency of resource allocation and promoted the rapid development of the national economy, the significant improvement in people’s living standards as well as urban and rural public services. In the past four decades, China’s policy guidance on the proper scale of cities in the process of urbanization has changed significantly. For a long time, there are two views on the policy orientation of China’s urbanization. In most part of the twentieth century, the dominant view is that the construction of small and mediumsized cities is the focus. The Urban and Rural Planning Law promulgated in 1989 stipulates that “the State shall strictly control the size of large cities and reasonably develop medium-sized cities and small cities to promote the rational distribution of

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productivity and population”. Among them, “big cities refer to cities with the nonagricultural population of more than 500,000 in urban and suburban areas. Mediumsized cities refer to cities with the non-agricultural population of more than 200,000 but less than 500,000 in its urban and suburban areas. Small cities refer to cities with the non-agricultural population of less than 200,000 in its urban and suburban areas”. However, according to the Notice on Adjusting the City Size Classification promulgated by the State Council in 2014, a Chinese city with a population over 10 million is a “super city”, between 5 and 10 million to be a “mega city”, between 1 and 5 million to be a “large city”, between 500,000 and 1 million to be a “medium-size city”, and all other cities with a population below 500,000 are “small cities”.1 Such a change in the classification indicates the vast growth of urban population in China, which now has more than 10 “super cities”. The original intention of strictly controlling the scale of urban development before the 1990s did not help large cities to meet the public service needs of their residents. In the increasingly fierce global competition environment, the traditional single city center has been unable to meet the needs of the competition. It has become an increasingly popular development mode to integrate regional advantages, make full use of the complementary resources of cities and surrounding areas, and take the region as a whole to gain a competitive edge. The rise of regions has become a key feature of China’s urban development in the twenty-first century.

3.2 Urban (Re) Development, Land Dilemma, and Growth Politics Since the reform and opening-up, China has vigorously developed the market economy and the central and local governments all share a strong desire for growth. In the process of China’s economic transformation, especially since the fiscal and tax reforms in the 1990s, the central government has increasingly tightened control over local finances, putting increasingly severe fiscal pressures on local governments. With the rapid development of the cities in China, the demand for public services to be tackled by local governments is on the rise. In this context, local governments can only rely on their own asset advantages to drive the operation of local development so that local assets (especially land) can gain additional value to meet increasing financial demands. Local governments in China have a strong desire to promote economic growth and pursuit of maximizing their own interests. The growth alliance in Chinese cities has gradually taken shape under multiple pressures and the theory of urban growth alliance has been applied to analyze urban problems in China. Since the 1990s, China has entered a period of urbanization along with urban modernization, presenting both opportunities and difficulties. On the one hand, as the essence of modern civilization, cities have attracted a large number of people from rural areas to live with their original lifestyles undergone great changes. On the other 1

http://www.gov.cn/xinwen/2014-11/20/content_2781156.htm.

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hand, the interests of various participants are rather complex. In the case where public power and commercial interests are combined, the interests of the public needed to be protected to safeguard the stability of society. With the increasingly narrower space for urban development and bottlenecks in land use, urban redevelopment has become one of the most important and sensitive issues in urban development in China. To a large extent, the urban redevelopment in China is still at the growth-driven stage dominated by the real estate development. Large-scale urban redevelopment initiated by the government faced challenges to consider the comprehensive interest from multiple groups. However, with the continuous expansion of the cities in China, the construction land quota has been tightened and the policy of ensuring the “red line” of 1.8 billion mu of agricultural land in the country has been unswervingly followed. Therefore, all major cities have begun to implement the strategy of reusing land from the old town area to tap into internal resources. It can be said that urban redevelopment, especially land transformation, will become a necessary condition for the further development of Chinese cities. The academic circle has had some discussions on the specific issues of public management, project mode, cooperation methods, funding arrangements, and public participation in urban redevelopment. However, most of these discussions only attempted to design and optimize urban redevelopment policies without covering the logic of urban redevelopment nature at the theoretical level. There have been vast attempts to adopt western urban theories such as the growth machine or urban regime paradigms to analyze China’s urban redevelopment. For instance, He and Wu (2005) tried to understand China’s urbanization from the perspective of urban renewal and believe that China’s neo-liberalization is controversial and unsustainable, mainly because of the social resistance and the tension between central and local governments. However, China’s urbanization is a responsive and flexible system in which local governments can effectively manage and assist the process of urbanization. Tan and Altrock (2016) find that the government’s strategic framework of urban renewal is unstable and discontinuous, with a high degree of flexibility and adaptability. Participating stakeholders are increasingly diversified, and the participation of entities such as media, scholars, residents, and NGOs has changed the expected strategies for spatial planning, compensation, and demolition in urban renewal areas. He and Wu (2005) argue that the lack of positive social goals in urban renewal caused a lot of displacement and relocation problems. Many residents moved from the old city to the suburbs. The social network experienced irreversible changes, and the improvement of the living environment was hard to achieve. As a result, the indigenous population was marginalized in the process of urban renewal. It is believed that with the improvement of the physical conditions of urban renewal communities and the strengthening of cultural symbols, residents have regained their selfesteem, achieved regional continuity through collective memory, but the residents’ self-efficacy has not improved. China’s urban–rural dual system is the institutional reason for the urban villages, and it is also part of the reason why the urban villages are not well developed. The main issue in the development of urban villages is the redistribution of land value-added interests among the main stakeholders. The joint

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commitment through partnerships is the key to the successful implementation of the project. The strategies and behavioral changes of all stakeholders will change with time and space, so there are no standard renewal strategy and cooperation models (Zhou 2014). Shin (2011) explores the rights of residents in urban renewal. Since residents’ resistance to demolition is mainly due to the unsatisfying compensation, local governments and developers believe these residents do not care about the public interest but only their own interests. Therefore, a tension always occurs between levels of government, diverse resident groups, and housing developers, which was demonstrated by Ye and Yang (2008) as the “missing link” in China’s urban redevelopment. How government decisions are made is an important problem of local governance. Urban renewal Chinese cities present an intriguing case of such a decision-making process. According to the classic western urban regime and growth coalition theory, local governments, business elites, and local communities form a network to jointly make decisions on local development and public service issues (Fainstein 1986; Logan and Molotch 1987; Stone 1989, 1993). Such coalitions try to maintain the basic social equity in their cities and promote sustainable growth. However, this decisionmaking mechanism is far more complicated in China. Many scholars have identified China’s local governance as unpredictable and ad hoc, where governments used to have absolute authority but have gradually become willing to partner with private businesses (both domestic and international) to pursue high economic growth. Local residents and communities were usually fairly weak in negotiating with government and business.

3.3 Peri-Urban Development: Integration Versus Deprivation The development of the urban periphery has become an emerging theme in urban and regional governance in recent decades. Peri-urban development often refers to the space where the city meets the countryside and is also often referred to as urban– rural interface, peri-urban area, edge city, and even suburbs (Yang and Ye 2019). the United States report on The World Urbanization Prospects 2018, indicates that over 55% of the world population is now urban, with the expectation that the proportion will rise to almost 60% over the next decade. By 2020 it is anticipated that: Eastern Asia will be almost 65% urban, South-Eastern Asia 50% urban and Oceania will be 71% urban (United Nations 2019). The transformation from rural to urban is regarded as the spatial change and a dynamic process that brings about broad issues related to economic growth, land-use transformation, public service provision, ecological conservation, urban planning, social equity, and so on. Huang et al. (2016) argue that the multi-scalar and multi-level politics involved in peri-urban development in China’s urbanization demonstrates the state-scalar interaction that needs careful examination. Although “being urban” has been a widely recognized development

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pattern across the world, it is not entirely clear about its concept and scope. There is space surrounding urban areas, which is peri-urban development that poses an important challenge for people to be living in such transitional places between urban and rural (Yang and Ye 2019). How government decisions are made is an important problem of local governance. Peri-urban development in Chinese cities presents an intriguing case of such a decision-making process. Lynch (2005) reveals the importance of flows and interactions between rural and urban areas. The distinction between urban and rural needs to be considered linked but not separated. It needs to be systematically examined that a wide range of issues on the urban–rural interface including the flows of food, natural resources, people, information, and finance. Being urban in China presents not only spatial and economic advantages but also social and institutional rights that “originate from exploitative urban institutions” (Smith 2014). When the traditional western Fordist urban–rural paradigm cannot fully explain the transformation in Asian countries, the concept of desakota is put forward to identify the spatial and economic transition where regions of an intense mixture of agricultural and non-agricultural activities that often stretch along corridors between large city cores (McGee 1991). Moench and Gyawali (2008) build on the concept system of desakota and identify seven criteria to examine such a phenomenon, including linkage to a metropolitan center, the availability of a daily labor market, information of the outside world, mixture of urban and rural activities, on the existence of voluntary activities, modern technology, and the degree of engagement or linkages at global or local levels. The institutional challenges in desakota regions that threaten the sound regional development include inter-local competition, poor regional infrastructure, and unregulated population movement. Developing countries in the global south provided many cases of the Desakota development. Phillips et al. (1999) examine the definition of peri-urban interface and related conceptual issues including land and economic activities, social issues, and environmental impacts to analyze the development and application of environmental planning and management approaches in Ghana and India. Ros-Tonen et al. (2015) provide suggestions for governance in peri-urban areas by looking into the issues of administrative fragmentation, institutional disfunction, and the inability to implement the goal of inclusive development. As discussed in the previous chapter of this book, the multi-level governance model would provide possible institutional designs for a sound governance system that encourages integration, interaction, adaptiveness, and continuous and shared learning at the metropolitan and regional level to promote an inclusive growth model. China experienced rapid development in the peri-urban areas in the past few decades along its breath-taking urbanization. As Savitch et al. (2014) argue it is perhaps more appropriate to consider these areas as being post-suburban, in the sense that they represent new “multi-faceted, and multi-scalar transformations affecting metropolises” (Phelps and Wu 2011, p. 245), occurring at “different times in different national settings”, thus “blurring the boundaries between eras of suburbanization and post-suburbanization” (Phelps and Wu 2011, p. 2). There are in fact many types of peri-urban settlement, such as the American suburbs and urban–rural fringe in developing countries like China (Iaquinta and Dreschler 2000).

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Leaf (2002) examines the impacts of globalization on peri-urbanization in Vietnam and China, driven by both global forces and local authorities (Aguilar et al. 2003). At the micro level, there are personal motivations for those who relocate to peri-urban areas where intra-metropolitan migration instead of the traditional rural migration dominates the peri-urbanization (Browder et al. 1995). Smith (2014) examines the rationales of peri-urban residents who are reluctant to join the city in China and claims that both top-down and bottom-up frameworks are important in periurbanization and their interactions impose great influences on the final outcomes of urban development. Tian et al. (2017) join to argue that top-down directives and state-led growth paradigm dominate the process and outcome in China’s urbanization, producing an uneven urban–rural distinction. Chuang’s study shows that an in situ process of bureaucratic absorption by documenting the preemption of resistance to land expropriation. Shen and Wu (2017) demonstrate the suburban new towns essentially function as a spatial fix in China’s contemporary process of land and capital accumulation. The development of new urban space in the form of land expansion is a process of territorial development, in which municipal governments develop a metropolitan structure, which highly depended on the interaction of state and market. The notion that the world is becoming increasingly urban encompasses varying meanings of about more people moving to cities, or about areas being “taken” both formally and informally by a diverse group of state, market, and civil society actors. During such a process, the interest in supporting economic growth and urban lifestyle might outweigh social considerations. The process of becoming urban in China is a highly dynamic and complex progress that cannot be fully explained and noted by traditional Western growth models (Savitch et al. 2014). In China, expansion to the countryside and peri-urban areas and is a government-driven target to stimulate growth. On the contrary to suburbs in the western countries where the wealthy live, most peri-urban residents are lower-middle and middle income, long-term urban dwellers instead of rural migration in China and other developing countries (Browder et al. 1995). Urbanization in China is consistent with its growth-oriented goals but may take very different cases in its process and policies to reflect politics in varying localities and regions. In some cases, formal jurisdictional directives by state actors are prevalent. In others, it is informally shaped by local culture and growth coalitions. It often presents economically driven and socially transitional changes in people’s housing demand, community restructuring, and individual changes at all places across China, with distinctive regional variations (Savitch et al. 2014). The interface between urban and rural demonstrates such varying attributes. Whiting (2011) explores how periurban residents respond differently when facing divergent land disputes. Zhao (2013) examines the new trend in urban periphery using the case of Beijing and finds that an increasing number of middle-class have migrated to the city and resided in urban villages, which results in a new urban eyesore with a high concentration of low income and stressed livelihood. China’s current peri-urban planning system is still out of function due to fragmented management, growing market forces, and social

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stratification. Peri-urban development reflects the dichotomic nature of urbanization in China where rural and urban becomes increasingly linked but unequal. China’s urbanization is developing under the joint influence of globalization and market transition with capital, land, and investment in Chinese cities that have largely shaped the urban space. As an important means of specialized capital accumulation, the production of new urban spaces has projected profound influences on China’s urban socio-economy. Such production is resulting from the interactions between the state and the market in the era of economic and social transition. At the same time, the production of new urban space is the materialization and spatialization of social change, while the former also in return acts upon the latter. For instance, residential segregation is the spatialization of social polarization, while the former in the meantime intensifies the latter. Examining the inter-relationship between the state, market, and society is, therefore, instrumental to understanding the new mechanisms of the production of China’s new urban spaces and the resultant spatial order. Figure 3.5 summarizes the analytical framework of China’s urbanization and serves as the road map of the following chapters of this book. The stage of Urbanization I is analyzed in Chaps. 2 and 3, with a focus on the logic and process of China’s urbanization and its policy and political implication. The stage of Urbanization II is demonstrated from Chaps. 4 and 5, with key areas including urban redevelopment, community restructuring under urban–rural transition. NewType Urbanization in the new decade onward will be investigated in Chaps. 6 and 7 to provide a remark of the process, policies, and politics of urban and regional governance in China.

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Opening-up

Relax of Hukou regulation

Influx of foreign capital

1978-1990s

Urbanization I

Housing privatization

Central-local tax reform

Emerging city region

Land exploitation

1990-2010s

Urban redevelopment

Urbanization II

Community restructuring

2010s onward

Urban renewal

Policies

New Type Urbanization

Process

People centered

PoliƟcs

Fig. 3.5 Urbanization in China: Process, Policies, and Politics in Three stages. Source Author

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Chapter 4

Urban Redevelopment: Restructuring and Growth

Urban redevelopment is a worldwide issue and has gradually become imperative in China as the country rapidly urbanizes, consuming urban land at a breath-taking speed and absorbing any possible resources available. After four decades of fast urbanization, many Chinese cities find themselves in the dire condition of lacking ample land for further development. In 1990, Chinese cities had a built-up area of 11,608 square km2 . The number grew to 22,114 square km2 in 2000, nearly doubled in a 10-year span. The number exceeded 40,000 square km2 in 2010. The latest national statistics recorded a total of 55,155 square km2 built-up land in Chinese cities in 2017, with an almost 400% increase from 1990. New land in the city center is ultimately scarce under the tightened national land-use control. For instance, Guangzhou has a total planned urban land of 1949 square km2 in its Urban Development Master Plan 2010–2020. In 2017, the city had used up 1818 square km2 , which counted for over 93% of the land allowed for development. Under a significant pressure of seeking available land for urban growth, Chinese cities all turn to a classic urban development approach, to redevelop, reuse, and recycle the urban land.

4.1 Land Pressure and Fiscal Constraints: Reshaping China’s Urban Space Urban redevelopment is not new in China or in the world. In her classic book, Fainstein et al. (1986) examined municipal redevelopment policy as the outcomes of the struggles between the business and middle classes, the fight of public investment between core and peripheral areas, and debated allocation of public expenditures for capital accumulation. It has been argued that the socio-spatial aim of redevelopment policies is to maximize the commercial establishment and use value of the urban territory, sometimes at the expense of local community interests. Since the reform and opening-up in 1978, economic transformation and development became the central matters of China. The importance and signification of urban © Central Compilation & Translation Press & Springer-Verlag Berlin Heidelberg 2021 L. Ye, Urban and Regional Governance in China, https://doi.org/10.1007/978-3-662-45040-6_4

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construction to national economic development were rapidly recognized. China restored urban planning and reformed the urban renewal system. To the late 1980s, the renovations and constructions of the old cities were launched in overall planning and development. The local governments have been strengthening the legislation work to advance the comprehensive development of urbanization. Since 1980, the shift from the planned economy to the socialist market economy, which represented a historic breakthrough in reform and opening-up, has provided a broad space and opportunities for the development of the city’s economy. In the twenty-first century, the redevelopment of urban infrastructure, including cultural value, functional activities, and physical environment, especially the cultural and social factors, which should be parallel with the development of the economy as an emerging issue. According to Ma, the local state encompasses multiple governmental levels in China and is marked by “complex negotiations and conflicts” in the urban renewal process (Ma 2005, p. 484). A top-down planning process is complemented by multi-scalar policy-making, from the level of province, city, and county to town and township. Major policies related to land use need to be carried out at the national level. In recent years China’s urban development practice has started shifting its focus from city expansion toward inner-city renewal. Municipal governments and planners were rediscovering the potential of historic city quarters as an incubator for new urban life and an asset for city branding and marketing. Municipal government at the city level is mostly responsible for policy design and oversight of urban renewal while urban district government implemented the urban renewal strategy and carried out the policies at the neighborhood level. Joining with the private sector, the local government sought to achieve new sources of revenue and improve the reputation of the city by facilitating traditional trade street revitalization, regenerating old residential areas, and protecting the historical block. In recent years, the city government aimed to share risks, facilitate economic growth, alleviate financial stress, and build a charismatic city. Aside from stimulating the economy, urban redevelopment was also meant to build a place identity and to provide a suitable and comfortable space for all inhabitants and activities. The involvement of the city and district government reflected the entrepreneurial spirit in the urban renewal project, which is characterized as “territorial-based entrepreneurialism” (Shin 2009a; He and Wu 2009) and a target-driven approach to implement policy (Plummer and Taylor 2004 in Shinb 2013). The complex situation of conflicting interests has made urban redevelopment a comprehensive undertaking involving various aspects of society and interest groups. On the one hand, the project being driven top-down by the government is to pay more attention to the need for the public interest. On the other hand, the market force is being asked to be more entrepreneurial. Furthermore, residents’ attention to improving residential safety, protecting public space, and safeguarding community interests gradually became an important driving force from the bottom-up for urban redevelopment. As demonstrated in the previous chapter, the urban regime and growth coalition is formed by local governments, business communities, and facilitating groups in order to carry out urban (re)development in cities. As argued by Fainstein et al.

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(1986), in the western context, state actions of urban redevelopment often consist of constant elements which tend to encompass a dialectical product of institutional arrangements and class-defined politics. The strategic aims in redevelopment and the operational issues associated with governmental programs do not always produce desirable social outcomes. The state intends to balance organizational interests and fiscal solvency, maintaining the structural position of the state in relation to private economic institutions and enhancing the political power of capital and the class character it establishes for the state. The economic objective of redevelopment action is to facilitate the accumulation and implement programs that produce new investment in the built environment so the previously developed land could be capable of generating profit, providing assets, and adding the market value of the real estate. Another set of changing elements include the national shift in public policy, political agenda, and investment patterns that wished to preserve the old urban core instead of spatially outward expansion without proper planning in consideration of natural resources and environment. Conflict might rise when the strategic objectives of the state are not always in line with local interests. The local state does not act in the interest of capital in general but of specific fractions of the market forces along with ancillary private institutions. The interests of capital are directly incorporated into the regime, which usually marginalized lowerand working-class interests in redevelopment. In the mid-1990s, the change of inter-governmental fiscal relations between the central and local governments and the decentralization of service responsibilities significantly increased local governments’ need for private investment in order to carry out urban (re)development. The imbalance of revenues and expenditures forced local governments to look for additional revenue sources (Li et al. 2010). Landleasing revenue became a vital fiscal source for local governments in China to actively seek (Fang and Zhang 2003; Yeh and Wu 1996; Lin 2007; Ye and Wu 2014). Under the current inter-governmental fiscal relation, sub-national governments are responsible for a majority of local public service expenditure, while collecting less than 50% of total government revenues (Ye and Wu 2014; World Bank 2002). When Local governments directly took charge of development issues, the private sector started to engage in urban redevelopment, with the surge of privatized housing market and real estate boom in China. Consequently, the scale of urban redevelopment expanded, and its commercial components increased (Fang 2000). As explained in previous chapters, urban and rural land in China has two distinctive ownership structures. When urban land, which is owned by the state is to be taken for new development the ownership of the land does not need to change. However, when rural land is to be used for urban development, the land should be firstly taken by the state before the change of land use can be approved. During such a process, the village and its villagers, who collectively owned the land need to be compensated. Heikkila (2007) explains two different approaches to how land is urbanized in Chinese cities. Land can be developed before it is conveyed to urban state-owned land, which forms the typical case of urban village environment in many Chinese cities. Another approach is that land is firstly taken by state use before any

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development occurs. Both ways point to a process where rural undeveloped land is converted to urban developed land for growth purposes. The adoption of a monetary relocation compensation system in 2001 reiterated the further marketization of urban redevelopment (He and Wu 2005). In early 2011, after the Provisional Regulations on the Requisition and Compensation of Houses on State-owned Land was promulgated by the State Council, dispute settlement procedures such as relocation in redevelopment projects were changed from administrative rulings to judicial rulings and mandatory enforcement. The policy tightened the voluntary redevelopment of urban villages and began to adopt public land transfer and public financing, which increased the financial pressure on redeveloping urban villages and strengthened the government’s supervision of the selection of partners by the village committee. In urban development and redevelopment in China, the government maintains oversight and control over inter-governmental matters and redevelopment policies (Lin 2001; Wu and Zhang 2007; Xu and Yeh 2005). In recent years, the increasing scarcity of land provision in major cities and city regions in China further demand the reuse of formerly developed land because new land construction quota has become one of the most precious resources for a city. In 2014, the National Ministry of Land Resource (now the National Ministry of Natural Resource) limited new construction land quotes for any city with a population of over 5 million so that all cities had to seek “reusing the land” for new urban development. In this regard, China’s urban redevelopment has undergone a complicated process with the government tightening or loosening its control over the market and capital in the past three decades. Under the circumstances that the government’s fiscal funds are relatively abundant or the overall development of the city is emphasized, the government may loosen its control over the revenues from land development. Once the government needs to draw financial resources directly from urban redevelopment, the control over land capital would be tightened. All said, land and capital are the most decisive factors for urban redevelopment. Governments at all levels and developers have been competing for the use and redevelopment of land resources to obtain financial leverage and capital. Land has become one of the most fundamental elements of urban development and the focal point of urban conflicts under the current growth planning and management system in China, which is similar to the analysis of the traditional urban growth coalition and political development in the West. Stone (1989) suggested that one of the necessary conditions for the emergence of urban regimes is that the main participants have a strong local interest relationship, especially as land owners or commercial capital operators. The growth coalition chases possible economic benefits and enables the policies of the city to support the economic expansion and wealth accumulation. As the “dual-track system” of urban and rural land markets has resulted in a huge gap in rents in the process of urban redevelopment in China, the potential profits have been pursued by relevant stakeholders such as local governments and commercial capital. By directly controlling the primary land market, local governments formulate policies that are suitable for specific conditions on the premise of implementing the central government’s tight land policy control. China’s land

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property rights system provides an institutional source of local government’s intervention in the real estate market together with the fiscal and taxation system. The key factor for the urban redevelopment policy lies in the different power exercisers in cities which are governments with public policy-making power and enterprises with capital investment power and their interaction. However, the urban growth coalition’s over-emphasis on the economic benefits of urban redevelopment has led to the large scale of rebuilding Chinese cities without sufficiently taking into account the social and cultural needs of the society, residents, and communities. As the distribution of urban redevelopment benefits is controlled by the dominant members of the growth coalition, urban communities and resident groups only play a passive role due to a lack of political and economic resources. They are often excluded from the growth coalition without sharing the outcome and benefits of urban redevelopment. To change this situation, it is imperative to fundamentally transform the way and purpose of urban redevelopment and shift urban redevelopment from a growth coalition to community-shared interests. The balanced needs of public interest, market incentives, and property rights should be considered comprehensively, with the public interest in priority concerns. An overall public interest refers to increase in urban land-use efficiency through urban redevelopment with reasonable spatial planning and improvement of the ecological environment. Community interests include improving the livelihood functions, maintaining the historical style, and continuing the cultural heritage of the community. Urban redevelopment needs to coordinate the planning of neighboring land, integrating the beneficial resources of the surrounding areas, and making reasonable use of the existing infrastructure. Market interests include the economic benefits of urban redevelopment projects and the project returns of all parties involved. The property rights interests are made up of both the legal rights of the original owners in resettlement, relocation, and compensation as well as the residential rights of the original tenants. The government should not only consider the direct economic interest from the redevelopment but also take into consideration of shared interests for the residents, communities, and society at all. Under such a mechanism, the urban redevelopment will be the implementation of the vision of city planning and the sustainable construction of infrastructure, and meaningful historical conservation in the long run. Regardless of land development or real estate construction, it should not become a means by which economic benefits or political achievements are pursued. At present, urban redevelopment in China has put an excessive emphasis on the return of the interests of commercial actors involved in the project, that is, the market interests. In the past decade, the government has made innovative attempts at public participation and public decision-making. However, due to the short period of the policy, complicated policy environment, lack of effective channels to fully participate in the decision-making of redevelopment projects, and inadequate information disclosure, residents and villagers have required increasing public participation. How to ensure that the interests of different property rights stakeholders are adequately expressed and reasonably realized is an important issue that needs to be resolved. In order to safeguard property rights interests with effective market regulation, the

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government needs to be responsible for ensuring the public interest in urban redevelopment. With the basic functions of urban land planning, space configuration, environmental protection, and ecological preservation the local governments will secure public interests in urban redevelopment through the formulation and implementation of policies in the integrated planning for urban and rural areas, division of functional areas, and infrastructure layout, and exercise the supervision and adjudication functions on the realization of market interests in urban transformation, thus restructuring the logic behind the urban coalition in China from growth politics to equally shared interests. The sections below trace urban redevelopment in Guangzhou with examining policies over years and highlights from landmark projects.

4.2 Urban Redevelopment and Transitional Governance: Case of Guangzhou Guangzhou is a city that has over 2000 years of history. With intensifying global and inter-local connections, the city is facing increasing competition from nearby cities in the PRD region (Sit and Yang 1997; Lin 1997, 2004). The return of the sovereignty of Hong Kong and Macao in the late 1990s significantly challenges Guangzhou’s economic dominance in the region. The central role of Guangzhou has been undermined, as shown by indicators like its GDP share in the province, GDP per capita, export, as well as economic growth rate (Fig. 4.1), by the rise of the neighboring rival of Shenzhen. In the 1990s, Guangzhou made up more than 20% of the provincial GDP while Shenzhen just had over 10%. The gap gradually 33 26 20 13 7 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Guangzhou

Shenzhen

Fig. 4.1 Guangzhou and Shenzhen’s GDP Proportion in Guangdong Province 1990–2018. Source Guangdong Statistical Yearbook, various years

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Fig. 4.2 Land-Use Change in Guangzhou 1991–2020. Source Guangzhou Land Use Master Plan 2006–2020, http://g.mnr.gov.cn/201808/t20180801_2156982.html

narrowed in the 2000s. Between 2005 and 2015, the two cities almost produced an identical GDP volume. In 2015, Shenzhen overpassed Guangzhou to become the leading economic power in the PRD region, making up more than 25% of the provincial GDP output. Guangzhou’s growth is hindered by limited autonomy in retaining revenues at the local level. It is estimated that Guangzhou only possesses less than 40% of the total revenue after remission while Shenzhen can keep at least 60%. This has forced the Guangzhou government to continuously develop the inner city with high density (Gaubatz 1999). After over three decades of intensive urban development, Guangzhou is facing a significant shortage of land available for future growth and competition against newer cities in the PRD region, including Shenzhen and Foshan. Figure 4.2 documented the urban land expansion in Guangzhou from 1991 to 2015. As laid out in the latest Guangzhou Land Use Plan 2006–2020, it was projected that the build-up areas in Guangzhou reached 22.16% of the city’s total area. This figure would increase to 24.32% in 2020. As shown in Fig. 4.2, Guangzhou had 216 square kilometers of urban construction land in 1990. The figure grew to nearly 400 square kilometers after five years’ rapid urban growth in 1995. In the following five years, the urban construction land increased at an annual rate of 11% and reached 620 square kilometers in 2000. In the mid-2000s, Guangzhou had used up over 22% of the total land available for urban construction within its city boundary. Such a high intensity of land use could not be sustainable for the city’s future development. Therefore, Guangzhou’s urban redevelopment process over the past three decades fully reflected the changes in the interactive relationship between the government and the market. The evolution of Guangzhou’s urban redevelopment policy went through the following stages since the 1990s. In the early 1980s, the city government decided to take on the dilapidated urban neighborhoods by itself and assumed the role of “redeveloper” by providing funds, enacting planning policies, and implementing projects. The target of urban

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redevelopment during that period was residential areas in the old city center that had been lacking basic infrastructure, including roads, water, and electricity. Other neighborhoods’ housing was in highly unfavorable conditions for human domicile. In the early 1980s, the urban redevelopment policy model adopted by Guangzhou was completely a planned approach, implemented by the government and characterized by government leadership and scattered redevelopment with the renovation and reconstruction of dilapidated houses led by the government entities. Due to the limited fiscal fund and a quite small scale of renovation, this model had a relatively ineffective outcome of urban redevelopment. In 1983, the policy of comprehensive development with supporting construction was implemented for the residential building construction in the old city area, with scattered construction of dilapidated units and selfconstruction for their own use changed to comprehensive development by construction companies featuring putting up the main building and supporting construction simultaneously. Development in new areas and redevelopment of old city areas were combined to carry out urban construction in a planned and step-by-step manner. Under such a model, the government did not have sufficient financial and administrative resources to carry out urban redevelopment in the city center where many land parcels needed to be regenerated. During this process, the municipal government of Guangzhou tried to encourage state-owned enterprises (SOEs) to engage in redevelopment projects in their residential facilities and for workers. However, this arrangement opened the door for enterprise-owned housing, which became a less supported policy option when the housing market in China gradually started to privatize in the late 1980s. In 1987, the Management Office for the Redevelopment of Dilapidated Housing was established in Guangzhou to centrally manage the use of funds and advance the dilapidated housing reconstructions by each project, which significantly improved the effectiveness of urban reconstruction. During this period, urban redevelopment was one of the priorities of the Guangzhou Municipal Government, which established the Guangzhou Urban Construction and Development Corporation and its branches in various districts, in order to find a financially feasible way to carry out urban redevelopment projects. The Management Office for the Redevelopment of Dilapidated Housing collected all the funds available and form an urban redevelopment fund for the city. The fund was to be allocated throughout the city by the priority of the redevelopment projects in order to better coordinate projects in different districts and different neighborhoods. On the one hand, the government acted as the policy-maker to enforce zoning and other necessary changes to approve a project. On the other hand, the government or the Municipal Company of Urban Construction and Development established by the government, worked as the contractor to design the project, relocate residents, and construct the site. There were few non-governmental resources or support, which made few redevelopment projects successful in the 1980s. Not until the later stage of the urban redevelopment project in the 1990s, the Guangzhou government had to invite private capital to be involved in the relocation of residents and construction of housing. In 1992, the Guangzhou municipal government issued the Notice on Expediting the Redevelopment of Dongfeng (East Wind) and Jinhua (Golden Flower) Neighborhoods (Ordinance [1992] No. 9), allowing district

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governments to use land-use rights to attract private capital to facilitate redeveloping these two neighborhoods. Thus private investors, for the first time, entered the urban redevelopment business in Guangzhou and acted as the “primary participator in the pro-growth coalition” (He and Wu 2005, p. 11). However, such a coalition was short-lived. The addition of market capital pushed forward the redevelopment projects but community complaints rose as well. Residents were afraid of the lack of accountability of private investors in securing the compensation package for the neighborhood. Emergency meetings were called by the residents to make their concerns and complaints heard to the public and the governments. In response, Guangzhou People’s Congress issued the Regulation of Managing Urban Housing Demolition in 1997 (Ordinance [1997] No. 42) to require a high amount of deposit from private developers who wished to participate in any urban redevelopment projects as a guarantee of contractual compensation for the original residents. Afraid of spreading unrests, the Guangzhou municipal government abolished the 1992 ordinance after 7 years and prohibited private developers’ involvement in any urban renewal project in the city. The coalition between public and private sectors dissolved. Although these measures to a certain degree facilitated the upgrade from scattered redevelopment to large-scale projects, the government had always been the major actor both as the policy-maker and executor. The government was responsible for planning and providing policy guidelines while the government-own and government-run construction companies would sign land development contracts with state-owned enterprises undertaking the task of reconstruction. The government would determine the scope of the redevelopment, stipulate the deadline for the project, and handle the procedures for allocating land and other resources. It allowed government-run enterprises to transfer the construction land to other units at consideration for construction in accordance with relevant land management regulations. The government was also responsible for coordinating the relationship between the construction units in the redevelopment area and helping to solve the related problems in the process, supervising the project and the complete approval. There were several landmark cases in this period. As mentioned above, the reconstruction projects of Dongfeng Residential Community in Yuexiu district and Jinhua Residential Community in Liwan district in the late 1980s are typical examples of this model, with the municipal government possessing the policy-making authorities and implementation responsibilities in the redevelopment process. Although there were disputes on the functions of the government, since the private real estate capital of China in the 1980s was still at the infant stage without the independent capacity to conduct urban redevelopment, this model produced positive effects to a certain degree. But at the same time, it imposed heavy administrative and financial burdens on the government and the pace of urban redevelopment was slow and inefficient. In 1983, Guangzhou started the renewal project for the Golden Flower Community (jin hua xiao qu) in Liwan district, one of the oldest districts in the city symbolizing the traditional West Gate (xi guan) culture of Guangzhou. This old neighborhood housed over 7881 households and 300,000 residents, with 146 streets and roads. Many houses had been over 100 years old and in ruined condition. Narrow streets

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with less than 3 m of width prohibited any fire fighter trucks to get in. Streets always flooded after rains. The Liwan district government established state-owned Urban Construction and Development Company (cheng shi jian she kai fa gong si), together with the municipal state-owned Guangzhou West Gate Construction and Development Company (Guangzhoushi xi guan jian she kai fa you xiangongsi) and Lihua Real Estate Company, to undergo the renewal of the Golden Flower Community (GFC). The major obstacles of such types of redevelopment projects lie in two parts. On the one hand, city and district governments had to assume the sole responsibility of the entire redevelopment process, from demolishing old housing, relocating original residents, allocating renewal funds, and rebuilding the community for residents who wished to move back. On the other hand, how to arrange the relocation or moving back of the original residents required careful policy design. The only division of functions occurred between the municipal and district government. The Guangzhou municipal government provided the approval of land-use planning, zoning ordinance, and compensation scheme for temporary relocation and resident moving-back. The Liwan urban district government acted as the de-facto developer to implement the redevelopment plan, to monitor the project completion, and to safeguard any unrest from the residents who were affected. There were several accounts of reports about residents’ complaints that they were forced to be relocated to the outskirt of the city. The mayor of Guangzhou, the chief of the municipal construction bureau, the governor of the Liwan district, and other government officials had to provide continuous on-site consultation to alleviate the complaints in order for the project to be carried out. It was not until about 20 years later in 2003 the new Golden Flower Community was ready for the original residents to move back, providing 61 buildings of high-rise residential housing, most of which were over 16 stories, a total construction floor area of 663,000 m2 , of which 296,300 m2 were used to rehouse the 6,144 households of the original residents. Such a redevelopment project allowed about 78% of the original residents to move back to the once dilapidated neighborhood with additional market housing units in the city center. However, one of the reasons why the Golden Flower Community redevelopment project took several up and down and almost 20 years to complete was that the government itself could not possess all the legal, financial, and political resources to accomplish multiple goals, including regulating zoning change, building market housing and compensating original residents from the redevelopment project. The situation differed from what He and Wu (2005) describe in Shanghai. At the beginning of the Golden Flower Community redevelopment project, the Guangzhou municipal government was the primary policy-makers of this unprecedented renewal project in the city and had to assume the role of risk takers during the two-decade process. The Liwan district government was the implementer of the policy and the monitor of the project. The reconstruction headquarters of the old Yuexiu and Liwan districts adopted the method of using land to attract funds and invested a large amount of funds in demolition and relocation, which greatly advanced the reconstruction projects which had been in process for many years. However, excessive participation of private capital in urban redevelopment led to many chaotic problems, such as the conflict

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between urban redevelopment and historical protection, slow relocation of citizens after demolition and arrear of relocation subsidy, and so on, putting the government under the pressure from the public and opposition against relocation. On the basis of the Guangzhou Master Urban Planning (2001–2010) featuring the principle of “expanding the south, developing the north, moving toward the east and coordinating with the west,” the strategy of developing the old city center by optimizing the industrial structure, living environment, and public services, enhancing the development quality and outcomes, strengthening management and invigorating the system and mechanism was put forward by the municipal party committee of Guangzhou in 2000. Therefore, urban redevelopment focusing on the old city area was again highly valued by the Guangzhou Municipal Government. Due to multiple reasons such as shortage of financial resources in real estate development and the government, the Guangzhou Municipal Government once again began to encourage developers to participate in urban transformation since 2008. For example, for the Nanhuaxi Street Reconstruction Project in Haizhu district, the district government first decided on the reconstruction project, and then the Guangzhou Land Development Center financed the project, arranged for demolition and compensation, and transferred the land by bidding, auction, and listing, the proceeds of which were partly transferred to Guangzhou Land Development Center and partly used for the construction of urban public infrastructure facilities. This model had been widely used in many urban transformation projects in Guangzhou. With the government and the market joining hands, the urban transformation model featuring government leadership and market participation has taken shape. As previously discussed, Guangzhou was in danger of losing out in the economic competition to other cities in the PRD in the early 2000s. One of the measures taken to re-strengthen the city’s capacity to grow was the adoption of a series of urban development plans, which targeted a more efficient land-use system for further urban growth and economic development. In 2000, the Guangzhou municipal government launched Guangzhou Urban Development Strategic Concept Plan (GUDSCP, Guangzhou chengshijian she zongtizhanlue gai nianguihua). One of the most significant aspects of this plan was to spatially rescale the city under the strategy of “exploring to the south, optimizing the north, moving to the east, connecting the west” (nantuo, beiyou, dongyi, xilian) and to develop the city into a polycentric metropolis. Searching for new land was the focal point of almost all four principles of development since the land resource had been the most significant constraint for a historical city like Guangzhou. In 2011, the Guangzhou Urban Development Master Plan (GUDMP, Guangzhou cheng shi fa zhan zong ti gui hua) 2010–2020 further identified the renewal of developed urban areas to increase the land stock in the city center as one of the primary tasks of Guangzhou. More importantly, the Outline of the Plan for the Reform and Development of the Pearl River Delta (2008–2020) directed the high efficiency of land use as one of the ways to improve sustainability and balance urban development. Increasing land-use efficiency requires sorting out idled and undesirable land stock in urban areas and innovating land development models by renovating and reusing oncedeveloped urban land in city centers. In the following year, the Guangdong provincial

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government announced the Opinion of Promoting “Three Olds Redevelopment” and to Promote Efficient and Intensive Land Utilization (Provincial Ordinance [2009] No. 78). The Guangzhou municipal government followed up with Forwarding the Provincial Government’s Opinion of Implementing the “Three Olds Redevelopment” Work (Guangzhou Ordinance [2009] No. 122) and Opinion of Expediting “Three Olds Redevelopment” Work (Guangzhou Ordinance [2009] No. 56). “Three Olds Redevelopment” (San Jiu Gai Zao) was formally adopted as a role model of urban redevelopment regulations and initiated a new wave of urban renewal in the city. These documents outlined “Three Olds Redevelopment” policy guidelines in terms of goals, leadership, land planning, financial support, and preferential taxation was formulated for the reconstruction of the “Three Olds” sites, which refer to three categories of land, including abandoned urban industrial sites, dilapidated urban residential areas, and existing urban villages. On February 24, 2010, the “Three Olds” Reconstruction Office was formally established in charge of coordinating the “Three Olds” reconstruction work in Guangzhou. The “Three Olds” office in each district were also set up. The “Three Olds” policy made major innovations in the areas of historical land use, the public decision-making power of the transformation project, and project processes. According to Opinions on Promoting the Reconstruction of the “Three Olds” and Promoting the Economical and Intensive Use of Land issued by the government, for the construction land included in the scope of “Three Olds,” in line with the overall plan for urban land use but without going through legal land-use procedures, if used before January 1, 1987, it would follow the procedures to register for the authentic right of state-owned construction land after the land administration departments of the governments at the municipal and county level issue the opinions on the land in conformity with the overall land-use planning; if used after January 1, 1987, and before June 30, 2007, without disputes over the use of land, it would follow the procedures based on the current land conditions after the land management regulations were implemented at the time of the land use. In order to enhance the public participation channels in urban transformation, the “Three Olds” redevelopment policy introduced a two-stage consultation system at the early stage of the project during the transformation of the old urban area: in the first round of consultation, at least 90% households in the project area had to agree with the plan before the green light; in the second round, the redevelopment was only allowed if at least 2/3 households agreed to sign the house demolition and resettlement agreement based on the specific compensation and resettlement plan within the prescribed period (Ye 2011a). For the minority who did not sign the agreement, the administrative ruling procedure would be initiated in accordance with relevant regulations. For the urban village redevelopment, at least support from 80% members of the village collective was required before implementation of the targeted redevelopment plan, the compensation and resettlement plan for the demolition and other plans. The “Three Olds” redevelopment policy also clarified the principle of governmentled, district-based, and territorial responsibility in the redevelopment. As the major responsible party of the reconstruction project, the district government took charge in

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the preliminary investigation of the reconstruction, preparation of the redevelopment plan, land reserve arrangement, arrangement of resettlement, and maintenance of social stability. Under the premise that the government was the major responsible party of the “Three Olds” to guide the overall coordination and planning of the “Three Olds” redevelopment, the original land users were encouraged to participate in the process. Subject to compliance with policies and regulations, the original land users were allowed to join the redevelopment project by means of cooperation and co-financing. Although it was clearly stipulated in the related document that the government was the major responsible party of the “Three Olds” redevelopment and developers were not allowed to participate at the early stage, developers were involved in major matters such as funding arrangements and the formulation of redevelopment plans through various informal channels in the actual development process. Under the overall guidance of governments at all levels transforming the appearance of the city and intensive land use, the interests of the government and developers had gradually merged, driving the formation of an alliance of urban redevelopment. In different projects of “Three Olds” redevelopment, the interested parties involved in the redevelopment of old factories were relatively simple and an agreement between the plant’s competent unit or legal person and the relevant government department was only required. In comparison, the reconstruction of the old city area and the village in the city involved more complicated parties in diverse forms. Usually, the government took the lead in urban redevelopment while the market played the “invisible hand” behind it. In urban village reconstruction, it was quite common for village committees to seek developers as partners with the supervision of the government. The “Three Olds” redevelopment plan needed to be approved by the district and municipal governments and the funds were also subject to the full supervision of the government. Therefore, it was more like “the government setting up the stage, for the village committee and the developer to perform.” The government became the policy-maker and supervisor of urban redevelopment with the specific implementation rights transferred to the market to a large extend. Based on the discussion above, Guangzhou had transitioned from a governmentoperated urban redevelopment practice to a market-dominant model from the early 1980s to the mid-2000s, then to a more integral redevelopment as the “Three Olds” redevelopment and urban renewal in recent years. Waves of redevelopment practices produced uneven outcomes in different periods. Figures 4.3 and 4.4 showcase the typical urban redevelopment projects in Guangzhou. Nan Hua Xi neighborhood is one of the pilot projects of Three Olds Redevelopment, which symbolized the protection of the historical urban fabric of Guangzhou, Arcade (qi lou), and the construction of residential high-rise buildings (Fig. 4.3). In Fig. 4.4, Cao Fang Wei was a neighborhood that had undergone several years of redevelopment but still partially remained an undesirable living environment. As Ye described “[the urban poor] actually want the regeneration so their living condition can be improved. With the location compensation they may be able to move back to the area when it is redeveloped and becomes a much nicer community” (Ye 2011b, p. 342). During the redevelopment process, the complex transformation of a village community took place, not without discontent and struggle. Figures 4.4 and 4.5 show

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Fig. 4.3 Redeveloped Nan Hua Xi Neighborhood in Guangzhou. Source Photo by the author November 15, 2010

the Yang Ji village in the center of Guangzhou during the redevelopment projects. In Fig. 4.5, the lonely houses surrounded by modern residential high-rise buildings were what remained after several years of unsuccessful negotiations between several villagers and the developer on their compensation agreement. After most of the old properties in the village were torn down to clear up the land for redevelopment, these households remained to resist the redevelopment and insisted on higher payback for their relocation. There were incidents of standouts between the owners of these houses and the public security police. After five years of contention, the land was finally cleared in 2014 (Fig. 4.5), after the government called for several meetings to convene the families affected, the village heads, and the developer. These two photographs taken at the same site three years apart try to demonstrate that how urban space is restructured through urban redevelopment in Guangzhou. Among this process, discontent, struggle, and despair exist while cities in China are finding their way of renewed and sustained growth into the future time (Fig. 4.6).

4.3 A Closer Look at the Landmark Redevelopment Case: Restructuring, Growth, and Governance Pazhou is one of the largest villages in Guangzhou. There were about 1,300 local households in the village with a total ingenious population of about 5,500. Another

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Fig. 4.4 Cao Fang Wei Neighborhood in Guangzhou. Source Photo by the author October 14, 2010

7,000 residents were renters who were mostly migrant workers from all over the city of Guangzhou. During the process of rapid urbanization, villages in the city became concentrated communities that provide low-quality but affordable housing for migrants (e.g. Huang and Jiang 2009; Logan et al. 2009; Shin 2009a, 2014; Wang

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Fig. 4.5 Yangji Village in 2011: Dilemma of Urban Village Redevelopment. Source Photo by the author on September 7, 2011

Fig. 4.6 Yangji Village in 2014: The Rise of a New High-rise. Source Photo by the author on March 29, 2014, shot from the same angel as in Fig. 4.5

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et al. 2009). The village had a total land of 757,639 m2 and a construction floor area of 730,000 m2 . The rough floor area ratio before 2008 was about less than 1.0. After the redevelopment project was completed in 2015, Pazhou village had over 1,850,000 m2 of construction floor area, of which about 522,000 m2 were used to rehouse the original villagers and their families, 256,000 m2 were kept as the collective commercial properties for the village to generate long-term financial returns. The rough floor area increased to 2.44, recording a 150% rise from the old village and providing ample space for new residential and commercial development. Pazhou village is located at the south bank of the Pearl River and facing the new CBD of Guangzhou, Pearl River New Town (Zhu Jiang Xin Cheng) on the other side of the river. A new bridge, Pazhou Bridge was built in 2003 to connect this area, which was designated as the new convention center of the city and the new CBD. The village’s advantageous location made it an important and lucrative site of development. The redevelopment planning stage started in 2008. The city, village, and residents worked out a compensation scheme that each family had the option to either take a new apartment after the village was re-built on an equal-floor-area trading formula, which was called the “moving back” (yuanzhi huiqian) scheme or receive a cash payment of RMB 4,500 for each square meter of their legitimate housing area measured by the village and agreed by the city government, which was called the “monetary compensation” (huobi buchang) scheme. Most families chose the first option, in the consideration of maintaining the village connection and the significant appreciation of the property value in the long run. For these families, a temporary monthly relocation allowance was agreed on RMB 20 for residential areas and RMB 30 for commercial areas in the old village. Averagely a family was to receive an allowance of RMB 5,000–6,000 every month. Comparing to the official statistics of Guangzhou’s per capita wage RMB 6,187 in 2014, such an allowance received wide support from the village families and became one of the reasons for the project to move ahead, together with the relatively generous “moving back” floor area compensation policy. In 2009, a major real estate in Guangzhou won the bid for the land parcel of Pazhou with a stunningly low price of only RMB142,000,000 but under the obligation of an estimated over RMB 4 billion to complete the project. Hence, this mega project with the fancies title “Future Pazhou, Manhattan in Guangzhou” was fully underway in 2009. After five years of construction, the new Pazhou was completed in late 2014, and village families were ready to move back to the now modern resident complex. After a year of settling down period, the biggest village family clan of Zhen celebrated their first yearly village convention during the Chinese New Year of Monkey (Fig. 4.7). Hence, the redevelopment project of the Pazhou district has been claimed to be one of the showcase successes of Guangzhou’s urban redevelopment. In many historical blocks in the area, the original features like Cement Kneading, garble decorations, and the iconic wooden sliding doors, were repaired. All the roof tiles and traditional skylights were renewed, and the original old roof tiles were remade into the special paving and feature design, which artfully created the new water-feature wall. The old large quarry stones of the traditional granite street were laid out again as the

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Fig. 4.7 New Pa Zhou Village Celebrating Its First Reunion after Redevelopment. Source Photo by the author on January 3, 2016

central feature paving of all alleyways, accompanied by the contemporary wide curbs, which are now widely used for signage, planting, and outdoor decoration. A timber platform with carefully crafted steps sets the stage for an outdoor gathering. Numerous local and even national media reported the project throughout the entire project period. Figures 4.7 and 4.8 show the new village with the original family ancestor hall relocated in the magnificent residential high rise, reminding people of the hundreds of years of Pazhou’s old time and its new look in the coming decades (Fig 4.8). However, such a project was not without debates and struggles during the entire process. According to a questionnaire administered by Yang (2012), among the 120 households surveyed, all of whom chose to move back once the village was re-built, about one-third of the respondents indicated they did not have enough opportunities to be actively engaged in designing the relocation and redevelopment process. The majority of the meetings they attended were held by the village committee, which conveyed the policies and agreements worked between the village, the government, and the developer. As described earlier, one of the important “Three Olds” redevelopment policies was the requirement of resident participation in the redevelopment process and a voting ballot agreeing on the redevelopment policy. It can be said that a majority of families in Pazhou village were in favor of improving their living conditions as an expected outcome of redevelopment. But the project design needed to fully engage the families in the decision-making process. In order to obtain enough support to fulfill the requirement of the “Three Olds” policy, the village committee, together with other actors in the redevelopment process mobilized all resources to secure the completion of the project (Fig. 4.9).

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Fig. 4.8 Ancestral Temple Kept in New Pa Zhou Village after Redevelopment. Source Photo by the author on January 3, 2016

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Fig. 4.9 Big Red Flags Hanging down in the Temporary Relocation Housing. Big red flags hanging down in the temporary relocation housing during the Pazhou Village redevelopment, signaling the project as “an opportunity once a thousand years” to convince the remaining families to sign the redevelopment agreement as soon as possible to seize this opportunity. Photo by the author on May 18, 2011

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As we reexamined this 6-year-long (2008–2014) redevelopment project some important lessons can be learned and further discussed. As Shin points out that the urban (re)development in China is “not simply the over-accumulation in the primary circuit of industrial production which facilitates the channeling of fixed asset investment into the secondary circuit of the built environment. Both circuits reinforce each other’s advancement, while the state monopoly of financial instruments provides governments and state (and state-affiliated) enterprises the possibility of tapping into the necessary finances” (Shin 2014, pp. 511–512). As the local government in China needs to locate sufficient funds to accomplish its growth purpose land has been identified as a primary source to attract private capital to invest in the local economy (Ye and Wu 2014). As shown in the Pazhou case, although the Guangzhou government did not require a high land transfer fee from the developer, it was able to leverage huge investment funds, which would never have been possible for the local government to allocate. The involvement of the private developer served at least two purposes. On one hand, the developer became the primary fund provider for the redevelopment project. On the other hand, the developer helped complete the redevelopment project, which had been set as the priority development policy for a historical city like Guangzhou, with mutually dependent political, social, and market powers. The village residence had potential demand for a better living condition as well. Therefore, an agreement for redevelopment had been feasible between the village, the developer, and the government. As the developer received the use right of the land parcel for a very low price, it was able to provide a relatively generous relocation compensation scheme, which was accepted by most of the families in the Pazhou village. Once the support from the village was in place the government could move ahead with changing the land category from collectively owned by the village to state-owned land, which pave the way for redeveloping the village to new residential and commercial properties. Thus a circle of (re)development was formed. In addition, under the pressure of maintaining stability, local government in Guangzhou adopted a tight policy to obtain support from the Pazhou residents in order to protect the smooth redevelopment process. When there was a case of residents who did not agree to move and fought to keep their properties from demolishing the government allowed the lengthy negotiation to be carried out until a peaceful agreement was reached. Although not perfectly implemented, the requirement of two rounds of public participation and resident voting to a large degree enhanced the legitimacy of the project. Therefore, a relatively stable development and governance triangle was formulated among the government, the local community, and the developer, for namely successful projects like Pazhou. There have been several other redevelopment projects in Guangzhou received high praises, including another famous case of redeveloping the village of Liede. The question rests about who gains and who loses. The evidence in the cases analyzed in this book refuted previous arguments in literature that claimed the urban redevelopment game generally led to gentrification and lose of community of the original village or sacrificed the interest of the local communities for property-led redevelopment. While the interest of tenants in these villages remain

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questionable because they were not entitled to compensation or relocation once the redevelopment took place, the majority of the village residents received acceptable temporary housing allowance while the project was under construction and moved back to the new residential complex with satisfactory housing after the project was completed. The game seems to be rather perfect. However, a point raised here is how to consider the outcome of redevelopment for only the village community or the entire city of Guangzhou. This chapter likes to argue that such a redevelopment model may favor the particular village, its residents and the developer, but may be at the expense of the economic welfare and social equity of the entire city and its general population. Once the huge amount of financial, fiscal, and administrative resources were pouring into such a mega project, it significant drives up the land price and property value in this area. As the new Pazhou becomes the center of convention and commercial development the property values went up several times during the past ten years, far exceeding the average price increase in Guangzhou. The disproportional increase of land value exacerbated the burden of property ownership in the area. At the same time, other villages look up to the model and demand high compensation of redevelopment. As a result, the overall housing price will increase, due to this redevelopment model built by the government, the village and the developer. Such a reason can be argued to be the driving force for the skyrocketing housing price in many Chinese cities. If we look back, such a way to (re)develop and govern a city needs careful consideration before being adopted as a model. The private sector will always look for a higher profit margin for any project they invest in. When local government follows the business strategy and allows private developer to take in charge of the redevelopment project, it is hard to take into account of the overall benefit for the city as a whole. It is possible that a project can be accomplished by the cost beard by the general public can be heavy. In 2016, the pilot micro-transformation policy was implemented to bring in an interactive model of urban renewal in which government, private sector, and local stakeholders can actively play their roles. Such a policy shift reflects urban redevelopment in the past two decades. At the early stage, the government was the primary actor in the system, allowing private sector marginally involvement and using a one-dimensional focus on demolishing the old and building new structures in order to maximize financial gain. This approach received trivial outcome, which led the government to reform its approach. Characterized by a consultation of the local public, the private actors were given much less room to dominate and served just as part of the decision-making process. Meanwhile civic groups and higher education institutions took up the role of representing local interests and connecting urban renewal to historical preservation. The next phase was highlighted by a bottom-up strategy that left mainly the local public to perform a self-organized renewal process without providing many resources or guidance to do so. As the government stepped back and no private entities were left, this phase showed a situation of lacking effective policy to facilitate and connect the scattered and small-scale initiatives.

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In November 2020, the Guangzhou Municipal Government announced its latest policy plan, the “1 + 1 + N” scheme to deepen urban renewal reform for a highquality urban growth goal. Such a scheme consists of an Implementation Opinion, Work Plan, and a set of supplementary project documents, including the Guidance of Urban Renewal Site Planning and Approval, Cost Estimation Guide for Major Infrastructure and Public Service Facility in Urban Renewal Area, Micro-renewal for Old Residential Areas, Project Evaluation for Urban Renewal Project, and Think Tank Expert Working Plans.1 With this latest policy scheme, the micro-transformation policy intends to establish a new model of urban renewal in Chinese cities to overcome the challenges of equitable development, housing affability, and social stability in the long run.

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Chapter 5

Urban-Rural Development, Integration, and Governance

China’s urbanization has advanced at a rapid pace with the development of city regions and deepened social transformation. Transformative governance has become imperative and prominent in the process of rapid urbanization. Chinese urban communities are faced with pressure to address rural to urban transition while safeguarding the sound operation of cities and strengthening the urban governance system. It is important to secure continuing urbanization that will bring justified benefits to all rural migrants, urban residents, and transitional communities.

5.1 From Rural to Urban: Rise of New Urban Communities in China The urban land expansion has been characterized as a response and adaptation to the rapid socioeconomic development in China. For example, Lin (2007) analyzes the land-use conversion and divides the process of urbanization in China into two phases. From the 1980s to the early 1990s, there was a town-based urbanization “from below”. From the mid-1990s, there has been a city-based and land-centered urbanization. In big cities, the expansion of non-agricultural land is due to the city-based land expansion. While in small cities, rural-based industrialization is the major driving force. Deng et al. (2008) examine the process of land urbanization in China and find that income, population, agricultural rent, and transportation costs are all significant factors driving urban land expansion. But the predominant factor is income, which means that China’s urbanization is the consequence of economic development. Lin et al. (2015) examine the spatial patterns of land urbanization in China and show that bigger cities had a faster land urbanization process, with coastal cities urbanizing much faster than inland cities. In Chinese cities, residential and industrial lands showed different urbanization patterns in cities of different scales, while residential land was converted to urban land much faster in bigger cities. In addition, population © Central Compilation & Translation Press & Springer-Verlag Berlin Heidelberg 2021 L. Ye, Urban and Regional Governance in China, https://doi.org/10.1007/978-3-662-45040-6_5

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increase, industrial growth, and investment capital are the core drivers of land urbanization in China. In all aspects, scales of cities mattered. Kaung et al. (2016) find that urban and industrial land expansion has a higher growth rate in the 2000s than in the 1990s, with national policies, population growth, and economic development are the major drivers of such expansion while national policies remain the most determinant factors. Figure 5.1 shows the population increase in the fastest growing city in China, Shenzhen from 1990 to 2018. Due to a statistical policy change, a higher proportion of non-permanent residents were included in the total population since 2004. The city’s total population grew from 2 million in 1990 to over 13 million in 2018, not counting a few million “floating population” that are still left out in the demographic statistics. In Fig. 5.2, the increase of the built-up areas in Shenzhen from the same period was documented. The data for the year 1992 and 2003 were missing. In 2004, Shenzhen started to include two of its outskirt districts of Baoan and Longgang in the city’s built-up area so the numbers were significantly high since 2005. Shenzhen had 713 square kilometers of built-up land in 2015. The figure grew to 925 square kilometers in 2017, recording a 30% increase. Figures 5.3, 5.4, 5.5, 5.6, 5.7, 5.8, 5.9 and 5.10 trace the new area development in an urban fringe in Shenzhen from 2012 to 2017, documenting the site from the same cross road every six months to show the change from an urban fringe area to a new center. During this six-year span, this area transformed from a village place to a modern high-rise complex, providing residential and commercial services for surrounding residents and businesses. Such phenomena occur throughout China in the past few decades. In Fig. 5.3 the first phase of the development took place to create a residential complex by utilizing the rural land. The Hong Kong listed real estate Kaisa Group 1400

1050

700

350

0 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 Population in 10,000

Fig. 5.1 Shenzhen’s population growth 1990–2018. Source City Statistics Yearbook of China, various years

5.1 From Rural to Urban: Rise of New Urban Communities in China

83

sq. km. 1125

900

675

450

225

0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Fig. 5.2 Shenzhen’s built-up area 1990–2017. Source City Statistics Yearbook of China, various years

Fig. 5.3 The initial development in the urban fringe. Source Photo by the author on December 8, 2012

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Fig. 5.4 The starting point of a new CBD. Source Photo by the author on December 22, 2013

was the developer of this mega project. On the homepage of this developer company, it says. In the process of urbanization in China, Kaisa has been making the efforts to improve the living environment and build a happy life as a city operator…Kaisa’s layout spreads into the main economically prosperous zones of China, such as Beijing-Tianjin-Hebei Region, Yangtze River Economic Zone and Guangdong-Hong Kong-Macau Bay Area, with more than 100 comprehensive development projects.1

Such a motto conveys the notion that market enterprises with domestic or foreign capital marched through the urbanization process in China with ambitious business plans and intimate relations with local government. In Figs. 5.4 and 5.5, the project bloomed into its second phase, with additional land being converted from rural to urban and new high-rise buildings being constructed. The third phase started in 2014 after the initial project was well received. According to the approved plan, the project included a total land area of 300,000 square meters with a construction floor area of 1,800,000 square meters, being one of the largest new development projects in Shenzhen after 2010. The first phase would build 235,140 square meters of residential areas, 11,600 square meters of commercial complex, and 10,090 square meters for public facilities, including a kindergarten that can enroll 12 classes each year. The second phase included a total area of 400,570 square meters, among which 1

http://www.kaisagroup.com/En/Default.aspx, accessed September 13, 2019.

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Fig. 5.5 The second stage of the development in the urban Fringe. Source Photo by the author on January 1, 2014

Fig. 5.6 The marketing of the new development. Source Photo by the author on August 19, 2014

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Fig. 5.7 The third stage of the development in the urban fringe. Source Photo by the author on January 25, 2015

Fig. 5.8 Marketing of the new urban space. Source Photo by the author on August 12, 2015

58,000 are residential, 255,110 for commercial, 50,200 for office space, 21,510 for business rental apartments, and the remaining 15,750 for street shops. The third phase constructed a total area of 315,530 square meters, including residential areas of 295,330 square meters, 15,800 square meters of commercial estate, and 4,400 square meters of public facilities, including a new kindergarten to hold 9 classes each year.

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Fig. 5.9 Constructing public facilities in the new center. Source Photo by the author on August 12, 2015

Fig. 5.10 Continuing expansion of the new center in the urban fringe. Source Photo by the author on July 28, 2017

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d’Albergo, Lefèvre, and Ye analyze this case from the perspective of how public– private relations shape the metropolitan space. The construction of urban space is potentially influenced by strategies, policies, and actions carefully designed by government and carried out by public and private actors on various scales, aimed at the transformation of the urban and metropolitan fabric through infrastructure construction, economic growth, institutional reforms, and spatial expansion (d’Albergo et al. 2018, p. 183). As discussed in previous chapters, the PRD mega-region experienced rapid economic development and demographic changes in the past three decades to become one of the most developed regions in China. According to the 2013 City Competitiveness Report of China, Shenzhen’s competitive index was only second to Hong Kong and the highest among mainland Chinese cities. Being one of the Special Economic Zones, Shenzhen was designated as “the experimental field” for economic opening and reform and considered the economic center of the PRD region. Since Shenzhen is categorized as a semi-provincial city in China its fiscal, administrative, and economic policies are largely under the direct supervision of the central government. One of the major reform policies adopted in Shenzhen as a national experiment was the marketization and privatization of the economy in the 1980s. In 2006, the People’s Congress of Shenzhen approved the city’s Urban Development Strategy Plan 2030 and positioned the city as “national center of technology advancement, regional logistic center, and an international metropolis connecting with Hong Kong.” In 2009, the central government designated Shenzhen as one of the eight Comprehensive Reform Zones, which enabled the city to try out various land management, urban development, and government reform policies. In the same year, the central government approved Shenzhen’s Urban Development Master Plan 2010–2020 and rectified the city’s position as “the nations’ leading Special Economic Zone, national economic center, and an international city.” Such a high-profile approval decentralized most freedom to Shenzhen in carrying out its economic growth and urban development goals. The private sector became the primary driving force for the economic and urban development in Shenzhen. Even in the 1980s when the state-owned enterprises were dominant elsewhere in China Shenzhen allowed for the private sector and foreign-invested enterprises to grow. The growth of technology and telecommunication enterprises spurred the spatial expansion of Shenzhen. The development of these hi-tech companies requires clustering of enterprises, research institutions, and service industries. Such demand has become the strong driving force for Shenzhen to expand outward. Furthermore, the regional strategy of the PRD provided an intercity network for such spatially linked development. The above-described new area development serves as a typical case of such outward expansion, transforming previously urban fringe land to fully urbanized space at the metropolitan scale (Gualini et al. 2018). Most recently, on August 18 of 2019, six months after the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area was issued, China announced the Opinions of the CPC Central Committee and the State Council on Supporting Shenzhen in Building a Pioneering Demonstration Zone for Socialism

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with Chinese Characteristics. This document directs the latest round of development in Shenzhen in the face of the emerging development of the PRD region and the Guangdong-Hong Kong-Macao Greater Bay Area. In this strategic plan, Shenzhen’s unique growth model is laid out to include five dimensions of a pinnacle of highquality development, a city governed by the law, a place with urban civilization, a benchmark for a desirable quality of life, and a pioneer for sustainable development. The document highly praised Shenzhen’s effort in the past four decades of technological innovation, research and development, and industrial breakthrough. Along with its economic surge, Shenzhen was able to upgrade its public service delivery and maintain the ecological-friendly environment, with an entrepreneurial spirit for a modern global innovative city. The target of the city is anchored to become a global center of innovation, entrepreneurism, and creativity and to forge a model of the socialist modernized city.

5.2 From Villagers to Urbanites: Migration, Resettlement, and Urban Community It has been widely discussed the dual land property rights system and its implications on China’s urbanization. The dual land property rights lead to the appearance of land rent residuals, which provides distinct incentives to urban governance and rural collective institutions to maximize their benefits (Li et al. 2010). Different stakeholders may adopt different strategies, which include new district construction, top-down urbanization in urban areas, and construction on rural land in the countryside. As a result, new districts, rural construction, and urban villages have become the new symbols of China’s urbanization. Lin and Yi (2011) provide a detailed introduction of the dual-track land system in China, and how land is used by municipal governments to gain accumulation of capital for development. Land capitalization can be realized by either levying land conveyance fees for the construction and development of cities to attract external investments or lease urban land owned by the state out to developers for land leasing fees, and or use urban land as collateral to get a bank loan for municipal government. There is a strong correlation between urban land expansion and the growth of funds used for urban construction and maintenance. He et al. (2016) examine the driving forces of land urbanization and argue that it is not just a response to the growing economy and population but rooted in China’s institutional structure. The joint forces of fiscal decentralization and political centralization attributed significantly to land urbanization in China, with unstopped land expansions and population migration. Considering the low urbanization level in the pre-reform period, the fast growth of the urban population in China has received wide attention with ample empirical investigations of the dynamics and mechanisms of China’s urbanization. Chan (1992) systematically analyzes the process of China’s urbanization from 1949 to the 1980s and argues that in the early stage of industrialization, China aims to encourage

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industrialization and accumulation while lowering urbanization costs. The policies adopted by the central government to restrain urbanization include the tight control of rural–urban migration, maximum employment of urban workforce, and limited expansion of urban service sectors, by only allowing “temporary” workers in cities. Through these approaches, China successfully achieved rapid industrial growth and slowing urban growth at the same time, which leads to an “under-urbanization” phenomenon. Ma and Fan (1994) propose the concept of “urbanization from below” to explain China’s urbanization in the 1980s, which means that there is a spontaneous, self-generating economic growth and random urbanization development in village levels with much policy and fiscal aid from the central government. Such a phenomenon often occurred in coastal areas such as the PRD region where local townships and counties have been traditionally strong with entrepreneur-spirited leaders. By contrast, other scholars insist urbanization in China is still state dominated. Ong (2014) investigates the incentive, process, and implications of China’s urbanization and argues that China’s urbanization is driven by fiscal motivations instead of simple economic development. The municipal government achieves not only more land but also more revenue, which stems from lucrative land-leasing income and rising real estate prices. The rural residents who are relocated into higher-density accommodations may face worse living conditions due to inadequate compensation, rising living expenses, and so on. Ye (2014) agrees that metropolitan governance in China is government-led and develops a framework of state-led metropolitan governance to explain the urbanization and metropolitanization in China based on the PRD case study. China’s metropolitan governance follows a state-led approach, where policies from senior governments play an important role in setting up plans and directing the trajectory of growth. Through this approach, different development strategies are adopted by local states to respond to economic and institutional pressure. Liu et al. (2012) investigates the process of urbanization and urban construction in China’s inland cities and find the local government has adopted a variety of approaches to achieve its policy goals, including planning, gaining funds, attracting enterprises, population migration, and urban facilities construction. Urbanization in China is different from western models and can be seen as “administrative urbanization”. Shen et al. (2002) analyze the dual-track urbanization in China based on the case of the PRD region and distinguish China’s urbanization into two categories of state-sponsored urbanization concerning nonagricultural population and spontaneous urbanization concerning agricultural population. With a similar angle, Shen and Lin (2017) examine the dual-track urbanization of state-sponsored urbanization (measured by non-agricultural population growth) and spontaneous urbanization (measured by agricultural population growth). Cases show that China underwent a rapid growth of urbanization and spontaneous urbanization is more important a driving force than state-sponsored urbanization. It was also found that there is a transformation of state-led urbanization from inland counties to coastal central cities, which leads to an unbalanced urbanization pattern. All said, China is experiencing a rapid urbanization process which has had a profound impact on the country’s governance reform. The latest national policy of

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people-centered urbanization requires integrating urban and rural development and directs the integration of urban and rural populations as the new path of urbanization in China. Among important policy issues, urbanizing over 200 million migrants moving from their rural domicile to urban areas and contributing largely to Chinese cities’ tremendous growth has become the key to accomplishing people-centered urbanization and fulfilling the new mode of governance in the era of transition. Migrants have been the primary force pushing China’s urbanization. However, prior generations of migrants never gained full access to urban social welfare and public services. In order to pursue a good governance model for urbanization, the underlying factors that hinder the smooth and reliable transition and development of migrants must be understood. Learning about millions of migrants’ choices to become urban residents will provide important lessons for China’s urbanization policies. Such a developmental approach contributed to China’s economic growth during the process of rapid urbanization by facilitating low-income populations’ engaging in productive employment in order to maintain their basic income and welfare. At the early stage of urbanization, the movement of the labor force between urban and rural areas to meet market demand was one of the driving forces for urban development in China. Millions of rural residents migrated to cities seeking better employment, improved economic and social lives, and personal development. The provision of social welfare and other policies for these migrants has been a key issue in social policy reform in China (Li 2006; Nielsen et al. 2006). Existing literature largely discusses the individual, family, and professional background of migrants and how these factors influence their willingness to become urban residents. Many scholars consider individual characteristics to be major causes, including age, gender, education level, marital status, and so on. Using the research data from Guangzhou in 2005, Wang and Peng (2009) argued that factors of age significantly affect the permanent settlement intention of migrants. Older migrants tend to be more reluctant to move, while the younger usually have strong intentions to settle in cities. Different generations of migrants, with different lifestyles and pursuit of personal and professional development, have received significant attention. Those who were born after the early 1980s, and possibly born in a city, had a far weaker bond with their rural residence than did their parents’ generation. However, since they are still not entitled to urban services, they face a tougher decision between remaining in cities and returning to their rural homes. Liu and Xu (2007) found that the new generation of migrants is more willing to live in cities because they tend to consider themselves a member of the city, and they are more used to the urban living environment (Liu and Xu 2007). Luo (2012) made use of a series of data from a survey of Shanghai migrants in 2006 and found that marital status is an explanatory variable that affects the intention of permanent settlement. The migrants who got married in the city are more willing to stay and seek opportunities to become urban residents and permanently stay in the city. Some other studies reveal that family background is a key variable to comprehend the behavior of migration. Wei (2003) conducted a survey among the migrants in seven counties and found that family characteristics are significant in many

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ways. Individuals with big families are less likely to migrate. Migrants with families engaged in non-agriculture industries are more likely to settle down in cities. Other variables such as family education level and number of children at school age were insignificant. Wang and Zhao (2013) used the rural–urban migration survey data to find that social networks notably affected labor movement. If a migrant has more relatives or friends in cities, he or she prefers to stay in cities rather than going back to a rural hometown, since the social network facilitates sharing of labor market information and improves employment opportunities. Other literature show that professional background plays an important role in the intention of permanent settlement. Wang and Zhao (2013) found that the migrants who received occupational training had a stronger willingness to stay permanently in cities. Luo (2012) found that those migrants who tried to improve their job skills in the service industry showed a preference for staying in cities. Social factors are also emphasized in the existing literature. Many consider the hukou (urban household registration) system the major cause of the difficulties faced by the migrant population in Chinese cities, as individuals lacking hukou status are not entitled to urban “citizenship” and the related privileges of urban life (Cao et al. 2014). Tan (2010) argued that uncertain housing security and urban facilities may lead to migrants’ intention of going back to their hometown rather than staying in cities. If a city provides more employment services, it means more opportunities for migrants, so they are more likely to stay there. Likewise, the housing problem is crucial to most of the migrants in big cities. Once these problems are resolved, more migrants will choose to settle down in the cities. Institutional factors such as social protection, medical care, and employment security play a significant role in affecting demographic urbanization in China. Accessibility to these benefits is the main determinant of whether migrant populations intend to stay in cities in the long term. Ye et al. (2014) find that once controlled for institutional factors, several individual factors are no longer important determinants for migrant populations’ long-term settlement plans. Migrant populations who enjoyed more desirable welfare coverage, in particular the medical insurance, showed a significant preference to become urban residents. China needs to design and implement targeted policies to alleviate urban–rural disparity and improve the welfare coverage of migrant populations, in order to establish a good governance model for people-centered urbanization. The transformed urbanization requires changing the traditional concept of construction-oriented growth to a service-oriented growth to balance the economic and social benefits of urbanization, taking into account the long-term interests of the city and residents. It is important for Chinese governments to gradually remove related institutional constraints and to enhance the level of social security and public services. It is the embodiment of China’s pressure-driven administrative system in urban development to emphasize short-term economic gains. Governments need to carefully design an urban policy to entitle residency to migrants and their families who are both willing and able to stay in cities and towns where they contributed significantly to building the city. In addition, governments should provide migrants with better medical insurance, employment insurance, and job security to facilitate their permanent urban

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settlement. As migrants expect more government assistance in cities, their willingness to migrate permanently will rise. Steadily extending basic public services to fully cover the permanent population of cities and towns is desirable and necessary, so that the migrants are able to enjoy the development of modern urban life equitably together with urban residents. The gap between the service needs of migrants and governments’ provision requires effective ways of enhancing cooperation and coordination among government agencies and non-governmental organizations (Ngok 2013).

5.3 Transitioning from Rural to Urban Community Governance One of the most noteworthy manifestations of China’s urbanization is the rapid expansion of urban land and the shrinking of the countryside. As a result of such expansions, China is witnessing a rise of urban communities rapidly transformed from formally rural villages. In addition to rural–urban migration, resettled villagers due to land requisition also occupy a vital part of “new urbanites.” Xu et al. (2011) examine the transformation process of rural villages in China’s urbanization. Based on fieldwork in two transformed villages in Shanghai, the authors argue that urbanization is not only a physical change but also a complex transformation of social, economic, cultural, and organizational characteristics. The authors document the transformation of two categories of villages: semi-urbanized villages and urban resettled housing districts. The surveys show that urbanization is still incomplete in these communities, manifested in segregation, conflicts, and rural traditions. Based on surveys in two villages in Jiangsu Province, Qian (2017) examines the resettled villagers’ life and adaptation in urbanization transformation and delineates the socioeconomic conditions, compensation, and attitudes of landless and resettled villagers. It was found that although land expropriation and resettlement improve the life qualities of villagers to some extent, there still exist many conflicts and contradictions in villagers. For example, a lot of villagers are dissatisfied with the current land acquisition compensation with a lack of equal social security programs, satisfactory monetary compensations, and secured employment. True urban–rural integration is far from complete. Zhang et al. (2017) investigate the changes of social interactions of resettled villagers and find that resettled villagers are overall satisfied with the new environment and most of them experience a widening of social interactions with neighborhoods, co-workers, and community personnel. However, the positive effects depend on the socioeconomic characteristics of resettled villagers. Those residents with higher income, increased assets, or working within the neighborhood can gain more positive changes, while those residents with lower income, older age, and no employment may suffer from a narrower social relation compared with before. These results indicate that there are unbalanced impacts of resettlement on villagers’ social relations.

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All said, China’s rural–urban transformation brings about tremendous benefits to the country, but also results in many problems. How to effectively govern the changing space and people in rapid urbanization has become a big challenge to the state. One major trouble is how to govern the quickly urbanizing space with a significant relic of rural socioeconomic characters. In order to promote the prosperity of the local economy, local governments in China have a heavy reliance on economic development. Urban governance has been concentrated on the management of urban infrastructure and basic life, such as public security, fire protection, roads, health, etc. With the deepening of reform and opening-up, global capital has entered into various fields of urbanization in China. A large number of rural surplus labor forces poured into the city, which increased the difficulty of urban community governance. The development of marketization has resulted in a transfer of many community governance functions to society. Local governments have become the main rule makers and executors of urban affairs. Classic urban studies have examined the process of space production and its implication for urban communities (Fainstein 2001; Olds 2001; King 2002). Intensified place competition in the era of globalization necessitated the governments to constantly reposition themselves and reformulate strategies to stay on their growth path (Lin 2010). The changing nature of space and place in the process of urbanization reflects the fixed and objectified treatment of space as a container and place as some countable entities or conditions existing “out there.” Friedmann (2007) defines urban places as “the experienced spaces,” which acquires their character as a place by virtue of being lived in. Such places have a different appearance and feeling from the deserted or abandoned spaces that have left behind only the empty shell of buildings. They are also different from spaces that have been newly built but are not yet inhabited (p. 259). Attention has been shifted toward the humanistic interpretations of place, particularly people’s emotional attachment to place and their different perceptions and sense of place (Tuan 1976; Ley and Samuel 1978). Western countries often treat the community problems from a social perspective, where urban communities are considered the space where social activities take place in a concerted manner (Mumford 1961). The western lifestyle makes community living isolated, lonely, and thus segregated by age, gender, and race. Newly established urban communities in Chinese cities do not foster greater integration of different social classes but instead create large disrupted spaces in urban areas (Wu et al. 2020). Lack of planning enforcement and development coordination generates profound problems in many urban communities in Chinese cities. The emergence of urban communities in China can be seen as a process of urban development and expansion. In order to solve the problem of urban population congestion, traffic congestion, and the inability of public services and meet the growing needs of the population, the construction and formation of space can be classified as a clustering pattern in urban planning (Atkinson and Flint 2004), which means that newly built urban area is connected with the central city through the convenient transportation and in this way, the new and old city clusters promote each other. This model is especially suitable for the expansion of big cities. Zhou and Qu (2014) investigated mega-urban communities in the peripheral of Chinese

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cities and attributed their development to the increasing problems of congestion and insufficient public service in central cities in China if without proper planning, which made communities growing larger and outward. The administratively divided community covers time, space, and demographic factors. Therefore, in administrative practice, the community is the basic unit of government management. With urbanization, globalization, the development of new technology, and the increasing population mobility, both sociological communities and administrative communities have been challenged. Due to the increasingly fierce competition for economic development among Chinese cities, the urban community has been considered a market commodity that regulates the contradiction between urban development requirements and conditions by using market mechanisms and market rules. It focuses on the collection, reorganization, and operation of resources that constitute urban space and urban functions, and explores the maximum potential of these resources, so as to maximize and optimize resource allocation capacity and benefits, in order to seek liquidity and appreciation of urban assets. This approach which regards the city as an enterprise, allocates the city resources through the market mechanism, and produces the economic benefits, which has the characteristics of highly market-oriented management, causes the inefficiency of the service function in the urban governance of transitional communities. In the early stage of urbanization, such a governing model with the supremacy of economic interests played a positive role in the prosperity of the urban economy, improvement in urban competitiveness and urban construction, and improved the living conditions of urban residents. However, the capitalization of urban space and resources, conducive to capital accumulation and spatial growth in the short run, will damage society, space, and eventually the economic foundation for the city’s sustainable development in the long run. Capital, land, and investment in Chinese cities have largely shaped the urban space and public service provisions, with resources being controlled and allocated by businesses. China’s emerging physical and social spaces are developing under the joint force of globalization and market transition. As an important means of specialized capital accumulation, the production of these new urban spaces has projected profound influences on China’s urban socio-economy. The proliferation of new urban spaces signifies the emergence of new mechanisms of space production and policymaking, thus leading to the rise of a new urban spatial order. Such production of new urban spaces is resulting from the interactions between the state and the market in the era of market transition. At the same time, the production of new urban space is the materialization and spatialization of urban social change, while the former also in return act upon the latter. For instance, residential segregation is the spatialization of social polarization, while the former in the meantime intensifies the latter. Examining the inter-relationship between the state, market, and society is, therefore, instrumental to understanding the new mechanisms of the production of China’s new urban spaces and the resultant spatial order. Population urbanization and land urbanization are not separated and tend to interact with each other in China (Luo et al. 2018). The purpose, process, and planning of rural to urban development reflect how the power of capital permeates in housing

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construction and community restructuring in Chinese cities. The power coming along with housing development goes far beyond residential arrangement, extending into the control, production, and governance of space. In return for economic gains, governments forfeit their control over property rights and grassroots governance. Housing does not merely serve as a domicile but a right of all citizens. It has to be realized that residential housing and commercial development cannot be considered as the instrument of space production but should serve the general public interest and social advancement. How to withhold such tendency of housing politicization while sustaining the positive benefit of urban development demands for a model of coordinated urban–rural development needs to be adopted in Chinese cities, aiming to balance development between the two sectors not only by making large cities more welcoming to rural migrants but also the small cities, towns, and areas equally desirable for all residents. Wang et al. (2016) analyze the spatiotemporal patterns of rural–urban transformation in China from 1990–2010 and assess the rural–urban transformation from three dimensions, namely urban–rural development level (URDL), urban–rural structures level (URSL), and urban–rural coordination level (URCL). While the level of URDL and URSL has undergone a rapid increase, the level of URCL has declined in many regions, indicating a huge urban–rural inequality along with urbanization. With the growth of the urban population and the expansion of urban areas in China, the demand of urban residents for infrastructure and public services continues to grow. Different groups of residents in the city, especially the marginalized groups, including migrant workers, college graduates, low-income groups, as members of the city, have made their own contributions to the development and prosperity of the city but encountered the bottleneck of further development because of household registration, labor skills, social capital, and interpersonal network. These groups live in cities, but they can’t really integrate into urban society. For them, more inclusive welfare policies, including education services, public health, cultural leisure, and social security, are the focus of new urban management. With the expansion of Chinese cities, the old city’s municipal facilities are overburdened. Traffic congestion, equipment aging, and other problems are increasingly serious. Housing conditions, environment, and sanitation also need to be developed and improved. All these have left the city government struggling to cope with. Due to the rapid development of the urban fringe, public transportation, medical institutions, educational facilities are relatively scarce. The “village in the city” in the center of the city has become home to the floating population. Management of floating vendors, food safety supervision, and public security management are particularly challenging in these areas, making them the “high risk” areas in the city. Urban security, including ecological security, environmental security, economic security, social security, personal security, food safety, and energy security, is a necessary condition for the sustainable development of the city and also a challenge for new urban management. Urban management in China should shift from simply emphasizing the expansion of economic development to welfare-oriented urban management that takes fairness and balance into account. With the continuous urbanization and expansion of the scale of cities in China, urban communities will become increasingly diversified, which poses intensifying

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challenges to the existing urban governance. The transformation of China’s urbanization requires the reconciliation of economic development and social benefits, a comprehensive governance mode with diversified participation and governance of the government, market, and society. It is necessary to generate the unification of responsibilities, rights, and interests, connection of leadership, and hierarchical responsibility. Starting from the transformation of government functions, responsibilities and functions of grassroots communities need to be clarified. At present, one of the most fundamental issues of the system is interests. Power and interests have a great influence on the behavioral motivation and value orientation of various stakeholders. Emphases should be put on coordinated action and reconstruction of the relationship between power and interests. The government needs to establish cooperation with the market and society through its supervision function, construct the balanced network of multi-party cooperation, and realizes the governance mode of multi-centric cooperation among the government, market, and society, with the establishment of a participatory cooperative system. The development of urbanization needs to be separated from the economic interests and to balance the economic and social welfare of multiple groups. By encouraging social organizations to participate in public affairs, establishing responsibilities and behavior boundaries among different participants, a network of interdependence and self-governance is expected to be built. Transitional Chinese cities must fully mobilize and utilize limited resources to break through the bottleneck of urban economic and social development in the process of urbanization, and provide sustainable momentum of growth for cities. The new type of urbanization asks for a cooperative governance network of government agencies, market, and social organizations by cultivating the participation consciousness of multiple players in the urban management network, including community organizations, industry groups, and the public, and emphasizing the guidance of local governments and supervision, while introducing market competition and social cooperation. Encouraging measures and the regular participation system can mobilize the enthusiasm of participants. In such a way, urban–rural integration can be promoted from a wide range of policies, including trade between industry and agriculture, the utilization of savings deposits, land requisitioning, labor transfer, ecological dividends, public infrastructure, compulsory education, medical and health care, social security, and public finance. The core elements of urban–rural integration lie in the deployment of key resources between rural and urban areas and enhancing the capacity of the transitional urban communities to better serve rural to urban migrants. One of the approaches addressed by Huang et al. (2015) is to make the community development planning based on the community values, and to integrate with the local forces so that the community development planning can be integrated into the action plan. Community values include three aspects of physical, human, and social capital assets with a community comprehensive planning strategy formulated to encourage the optimization of community spaces and the upgrading of community governance. Methods to enhance value attitude, public participation, and role transformation can be the key to community capacity building (Moreno et al. 2017). In total, rural–urban

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transformation brings about opportunities as well as challenges to both urban and rural areas. The government will eventually no longer rely on political power and administrative means, but through new technologies and tools to improve the management of urban public affairs. The essence of governance is to build a mechanism of distribution and adjustment of related interests among multiple players, whose consideration and behavior are based on specific interests. In the process of integration, distribution, or redistribution of multiple interests, different players may have interest conflicts due to diversification of their needs and scarcity and finiteness of resources. The core of urban management system innovation lies in identifying many players, analyzing their interest pursuits and the realization mechanism, and seeking the interest integration mechanism, so as to build a reasonable operation mechanism of urban management. In the new era of urbanization, China’s urban government should be positioned as the provider of public services. Decentralization and participation do not mean the reduction of the responsibility and role of the urban government, but more importantly, the importance of government function reorganization under the new situation. In addition to providing urban public service, the government should also undertake new functions in urban governance, such as strategic planning and management, promoting regional economic development, and strengthening social conflict management. The early stage of urbanization emphasizes the economic and material characteristics of the city and ignores the equally important cultural and social characteristics. The welfare of urban development is too much concentrated in the urban elites, while the migrant population, indigenous people, and rural population who have made great contributions to the great development of the city are neglected. The concept of people-centered and inclusive development of urbanization has been deeply embedded in the connotation of urban progress in the twenty-first century. Urbanization is not only a physical process marked by rising skyscrapers and expanding pavements but also a complex transformation of social relations, culture, and beliefs of millions of “new urbanites.” Even though China keeps seeking its approach to promoting urban–rural integration and “common prosperity,” there is still a long way to go.

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Chapter 6

An Analysis of Major City Regions in China

China’s regional policy has decades of history, from a rather divided regional management system at the beginning of the founding of the People’s Republic of China to the unbalanced development stage in the early stage of reform and opening-up, to the coordination regional development stage since the 1990s when China’s regional system has undergone a major transformation as a result of market reforms, globalization, and rapid urbanization (Xu 2008). Many towns that were previously in the periphery or rural areas have developed into active economic centers of mega regions in China (Lin 2001; Li and Wu 2013). The resulting polycentric spatial form is combined with the rise of urban dominance, which is increasingly becoming the key national strategy to enhance the social and economic development throughout the country. Such a regional formation might produce negative externalities such as uncoordinated growth, local protectionism, and duplicated projects, when localities compete fiercely to attract mobile capital, spend on infrastructure, and look for profitable development that can generate revenue to support local government’s demand for economic upgrading and service delivery. Since the founding of the People’s Republic of China, regional development has always been one of the top priorities of national policies. In the early 1950s, the central government faced with profound national conditions and complex international situations. On the one hand, the country needed to strengthen political control and stabilize the domestic order, on the other hand, it needed to restore domestic production and improve the falling economic situation by formulating the strategy of balanced regional development. Therefore, China launched the Third Front Construction (1965–1971) strategy, including the influential “going to the countryside” and “household registration system” policies. For the sake of national security, regional investments were diverted from the more developed coastal areas to the poorer interior regions. At the same time, such a movement tried to utilize the land, labor, and raw materials in the hinterland, in order to correct the inherent uneven regional development across the country and to pursue a balanced distribution of productivity between the east and west regions (Naughton 1988). Since millions of young people relocated to the western countryside in the “going to the countryside” movement, the © Central Compilation & Translation Press & Springer-Verlag Berlin Heidelberg 2021 L. Ye, Urban and Regional Governance in China, https://doi.org/10.1007/978-3-662-45040-6_6

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speed of urbanization of China dropped substantially in the 1960s, which led to underurbanization (Zhang and Zhao 2003). In addition, the household registration system, set up in 1958, divided the population into two categories of rural and non-rural households. Individual interests and rights, such as education, healthcare, housing, and employment, were tightly linked to household registration. Rural residents did not have access to social welfare in the cities so it was very hard for them to move to urban areas. The dualism between urban and rural areas was the most significant obstacle for urbanization in China before the 1970s (Chan 1996). Regional policies during this period only focused on regional political and administrative management but did not take regional policies as part of the main economic and social development strategies (Ye 2009). Despite the rapid industrial and economic development of the Midwest cities under the guidance of this strategy (Naughton 1988), the comparative advantages between the cities were neglected, and the development efficiency of the eastern cities was sacrificed, resulting in an inefficient regional distribution of resources, capital, and growth, which could not provide the necessary base for the national economy (Ma 2002). Since the late 1970s, China urgently needed to change the backward economic status by supporting new development concepts. After the country formally adopted the reform and opening-up policy in the late 1970s, China started to change the regional unbalanced development stage by making full use of the comparative advantage of the eastern coastal city and encouraging the more opened and developed regions to drive the development of hinterland cities. The national regional policy continued to improve and adjust in this period. Since then, the evolution of China’s regional policy generally experienced different stages, namely from 1979 to 1990 as the uneven development stage and the regional coordinated development stage since the 1990s (Wei 1996). In the early stage of reform and opening-up, China’s regional development strategy was mainly influenced by the dilemma of uneven development, national investment layout, and regional policy that emphasized economic efficiency rather than equality across regions. As the reform and opening-up continued to deepen, coastal areas led the development while the western and central regions followed the transition of the economic development strategy and system. The national regional policy guidelines for economic development have gradually shifted from the past focus on national defense to narrowing regional gaps by improving economic efficiency in coastal areas. The state’s investment priorities gradually shifted eastward, where the regions took the lead in opening-up and were more open to the world. In the early 1980s, China began to redesign policies and reallocate resources to hinterland areas. These policies foster division of labor based on differentials in regional endowments (Fan 1997). Among many policies, the policy of opening-up was one of the most critical policy measures in China’s regional development. By implementing the policy of opening to the outside world from the coast to the inland, the state created a favorable policy atmosphere for regional economic development, improved the efficiency of regional economic development, and stimulated the speed and scale of national economic development, so that the overall national economy was significantly improved. On

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the other hand, major changes took place in the regional allocation of various factors of production and the distribution of productive forces. Elements of production flew to regions with desirable development conditions, potential closeness to the consumer market, thus optimizing the allocation of resources and promoting the development of the national economy. The opening-up policy attracted a large amount of construction funds by offering various preferential policies, which alleviated the problem of insufficient funds in the regional economic development, accelerated regional economic growth, and promoted regional economic development. The influx of foreign capital promoted the development of a regional export-oriented economy and forged the outward orientation of China’s economy, making China a major trading country in the world in a short time in the 1980s. Such an outward-oriented economic structure changed the layout of China’s economic development, accelerated the development of basic industries, such as energy and raw materials that had long restricted the development of the national economy. This strategy that catered to the trend of economic globalization, stimulate urban agglomeration development in China, such as the Yangtze River Delta (Li and Wu 2013) and the Pearl River Delta (Eng 1997; Lin 2001). However, some scholars noted that this regional policy also led to a significant increase in the economic gap between regions, which became the major obstacle for a balanced national development outlook entering the twenty-first century (Fujita and Hu 2001; Jones and Cheng 2003). Since the early 1990s, China’s national economic growth stimulated widespread regional clusters in the country with a serious situation that development gap continued to widen among regions. Local protectionism rose and dampened the flow of production resources among regions and deterred coordinated growth. Therefore, the national government decided to promote coordinated regional economy, which marked the fundamental transformation of China’s regional development strategy from unbalanced growth to coordinated development (Wei 1996). In 1991, the eighth five-year plan put forward the coordinated development of the regional economy and promoted the rational division of labor resources in the regional economy. In 1995, the ninth five-year plan proposed to implement policies conducive to easing regional disparities and gradually adjust the transfer and diffusion of state investment and industrial distribution to the central and western regions. As shown in the first two chapters of the book, the mid-1990s marked the starting point of the most remarkable growth period in China. It had almost become unavoidable for major urban regions to excel far ahead of other parts of the country, due to the coastal regions’ infrastructure base, entrepreneurial spirit, and strong political and administrative powers. Xu (2008) argues that regional strategic planning is a policy choice for urban agglomeration to overcome administrative decentralization. In addition to the disputes around “urbanization from below” and “urbanization from above,” a variety of other models are proposed by scholars. Sit and Yang (1997) propose a model of foreign-investment-induced exo-urbanization in China. For instance, foreign investment became the most major driving force of urbanization in the Pearl River Delta region after 1978. This exo-urbanization is characterized by intensive inflows of foreign investments in a short time, labor-intensive and low-skill manufacturing development, rapid industrialization of small cities and counties, and

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the trade-creative, export-oriented foreign investments with a pattern of urbanization along the corridors across borders and between urban agglomerations. As discussed in the previous chapters, in the transition from the traditional planned economy system to the market economy system, the national government delegates most developmental functions to local government, in order to stimulate the enthusiasm of economic growth and relieve the central government’s burden on local issues. The political power remains in the central government with a great deal of fiscal power delegated to local governments and the central government playing a step-back role in local economic activities. Such a system promotes local government’s entrepreneurship and innovative spirit (Xu and Ye 2009; Chien and Gordon 2008; Walder 1995). At the same time, the competition among localities increased dramatically, in the process of promoting market-oriented reform and fiscal decentralization. The organization of economic activities is no longer dominated by “rules and regulations,” but increasingly regionalized (Wu 2002). Under the influence of globalization, marketization, and economic decentralization, regional issues become increasingly complicated. Local governments formed vicious competition under the constraint of inherent administrative divisions and bring about many complex influences, leading to an “administrative economy” that is contrary to regional economic integration and the emergence of “administrative administration” were manifested in the convergence of inter-regional industrial structure (He et al. 2008), weakening of regional division of labor (Zhao and Wei 2015) and market segmentation (Bai et al. 2004), as well as problems such as local protectionism and redundant construction (Zhou 2004), which affected the coordinated development of regions. The following section looks at the three major urban regions in China to examine their specific development pattern, driving factors, and policy characteristics, with the latest regional development matters discussed.

6.1 Beijing-Tianjin-Hebei Mega Region: Strong State-Led Development Affected by geographic location, natural resource, and local economy, China, presents a mix of regional social and economic differences, with the country’s vast territory. While the laisse-fair development model is embraced by the local government with an entrepreneurial spirit to use regional competitiveness to promote bottom-up development, the national regional development agenda is used by the central government to enforce top-down authorities (Cannon 1990). The Beijing-Tianjin-Hebei Region presents an incomparable case where the core city, Beijing is the national capital and always takes a far-reaching lead in regional growth (Sun and Zhao 2015; Wu et al. 2015; Zhang et al. 2016). Beijing forms a mononuclear concentric growth pattern with Tianjin being another city directly under the central government but occupying a far less important role in the region.

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In recent years, urban expansion in Beijing was mainly concentrated in its fourth to the sixth ring road in the northwest and southeast parts of the city, whereas the major expansion was observed in the southeast in Tianjin. Major cities in the Hebei Province, such as Shijiazhuang and Tangshan took a rather dispersed sectorial point pattern of development. Factors affecting such a regional growth pattern included national and regional policies, physical features, and administrative hierarchy. For instance, Beijing is the national capital while Tianjin is one of the cities directly under the central government. These two cities have taken a large proportion of urban growth in this region. The urban expansion rates were inversely related to city size from 1978 to 2015 with the exception only from 2005 to 2010 (Sun and Zhao 2018). In order to carry out a model of coordinated regional development for the country, at the same time better serving the capital function of Beijing, the CPC central committee carried out the Outline Plan for the Coordinated Development of the Beijing-Tianjin-Hebei Region in April 2015, which is the first regional development outline plan established after the 18th CPC plenary. One of the key principles of this outline plan is to extract the functions that are not essential as the national capital out of Beijing so as to make the city a more amenable place to live. At the regional scale, it is vital to adjust the economic and spatial structure of the region and search for a way for efficient and intensive growth. A compact model of development should be pursued to better suit the population and economy, with the goal of a coordinated development and sustained new growth poles for the region. The entire region will pursue coordinated development based on the plan of “one core, two cities, three axes, four sub-regions, and multiple nodes.” The core of the region is Beijing and the “two cities” refer to Beijing and Tianjin to be the focal point of regional development with the two cities establishing better-linked integration mechanism, deepening and expanding the scope of inter-city cooperation, and utilizing the advantage of highend industries and their radiation effect. The three axes refer to the Beijing-Tianjin, Beijing-Baoding-Shijiazhuang, and Beijing-Tangshan-Qinhuangdao corridors that formulate the central frame of the region, with industrial clusters and urban agglomerations. The four sub-regions include the central functional area, coastal development zone in the east, functional expansion region in the south, and ecological reservation in the northwest part of the region. Multiple nodes cover all the cities in this region such as the regional leading cities like Shijiazhuang, Tangshan, Baoding, and Handan, and nodal cities like Zhangjiakou, Chengde, Fangfang, Qinhuangdao, Cangzhou, Xingtai, and Hengshui, with an emphasis on improving the overall bearing and service capacity of cities and promoting the orderly concentration of industries and populations. Such a plan entails the strategic place of the capital city of Beijing, which takes the most important purpose of this region’s development. Therefore, the Beijing-Tianjin-Hebei region’s future largely depends on the function as the “capital region” and is inevitably centered by a state-led approach.

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6.2 Yangtze River Delta Region: Influence of Foreign Capital Although regional development is a relatively new policy tool in China compared to western countries, the country has actively sought dynamic regional policies to address economic and social development issues, to learn from other countries’ experiences and to develop regional policies that fit China’s needs. According to the Yangtze River Delta Urban Agglomeration Development Plan, this region consists of 26 cities, including Shanghai, Nanjing, Wuxi, Changzhou, Suzhou, Nantong, Yancheng, Yangzhou, Zhenjiang and Taizhou in Jiangsu Province, Hanzhou, Ningbo, Jiaxing, Huzhou, Shaoxing, Jinhua, Zhoushan, Taizhou in Zhejiang Province, and Hefei, Wuhu, Maanshan, Tongling, Anqing, Chuzhou, Chizhou, and Yicheng in Anhui Province. By the end of 2014, The YRD region covered 211,700 square kilometers of land area, with a total GDP of 12.67 trillion yuan and a total population of 150 million. This region occupied 2.2% of the national land area to produce 18.5% of the total national GDP and to house 11% of the national total population, making the YRD region the most advanced area in China. Cartier (2015) proposes the concept of territorial urbanization to explain the logic of China’s urbanization process and argues that the state will achieve economic development through restructuring administrative boundaries, as well as reproducing the state power. Drawing on the case of Pudong New Area, Shanghai, the author analyzes how the party-state achieves the reproduction of state power through territorial urbanization. Cartier notices that a city in China can only be produced by the change of administrative boundaries, and this paper is one of the few works that emphasize the importance of administrative divisions in understanding China’s urbanization. Shanghai is the lead major city in the region. The strategic function of Shanghai in this region has a long history. Zhang (2006) demonstrates that the relationships among cities in a region depend on the economic, political, and institutional interests. The cities in the YRD region realized the negative impact of intercity competition in the 1990s resulting from the unwise competition for similar industries and resources and formed a network to collaborate in establishing mutually complementary sector structures. Inter-city competition became particularly evident in the area of infrastructure building in the YRD region. Chien and Gordon (2008) finds that cities will emulate and repeat the construction of ports, roads, and airports in a region if without proper planning guidance. Such a dilemma wastes public budget, human resources, labor, and land so it is even worse than a zero-sum game. Zhang (2006) argues that in the fierce global competition, it is difficult for a single city to win, so strengthening cooperation between cities has become a strategy of local governments. The underlying forces affecting the relationship between Shanghai as a service center and the other cities in the YRD region as manufacturing bases include the internal factors, such as the development stage of cities and the government’s promotion policies, and external factors, such as national policies of directing foreign direct investment

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to the region, both forces formulating a dynamic and complex relationship among neighboring cities. Fragmentation of government structure raised concerns when it comes to crossdomain and cross-sectoral cooperation of public affairs while the government under the influence of bounded rationality and asymmetric information tends to pursue short-term interests, leading to collective action dilemma, makes the supply of regional public goods inefficiency, and hinders the process of regional integration (Bai et al. 2004; He et al. 2008). Therefore, some local governments in China implement the “the government of the large area” development strategy, through withdrawal of county and city districts and merger measures to form a large area government, provide uniform for local city planning, and coordinate various departments, trying to lower the fragmentation of the local government structure and improve the efficiency of public services (Zhang and Wu 2006). Luo and Shen examine three typical cases of inter-city cooperation, including Suzhou-Wuxi-Changzhou Cityregion Planning, the Forum for the Coordination of Urban Economy of Yangtze River Delta Region, and Jiangyin Economic Development Zone in Jingjiang to elaborate inter-city cooperation in the YRD region from a partnership perspective. Three types of partnership arrangements, including hierarchical partnership, spontaneous partnership, and hybrid partnership are identified. Cities in the YRD region are experiencing the growth of both residential and industrial land in the last decade (Gao et al. 2015). The dominant characteristics of urban land expansion varied within different development and administrative levels. Important factors, including foreign direct investment, labor, government competition, institution, population, and job-housing relations determine land-use change in the economic transition process. Single-nucleus and multi-centric models co-existed in the YRD region’s urban agglomerations development and the formation of its spatial structure, which differs fundamentally from the Beijing-Tianjin-Hebei region’s single most function of “the region serving the capital.” The inter-linked regional growth mode provided a network for industry distribution, special functional core establishment, and environmental protection in both urban and rural areas. At the regional scale, inter-city plans are used by the central government to coordinate diverse local interests to achieve a more balanced development. However, complex politics between different levels and divisions of government make such plans difficult to deliver central regulation on city-region integration and collaboration. The growing economic benefits of intercity cooperation serve as a driver for local government to change from hostile competition to collaboration. Regional governance is far from established. Instead, regional transformations reflect the local politics of economic devolution and urban entrepreneurialism (Li and Wu 2012). It is difficult to examine the spatial patterns and underlying determinants of regional formation in the YRD region. The spatial agglomeration effect of urban land efficiency has intensified with the development of transportation accessibility and the increasing need for economic transition. The accessibility and globalization both played a significantly positive role in urban land efficiency and marketization in the YRD region (Wu et al. 2017). Urban land efficiency in northern Zhejiang is

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more sensitive to foreign direct investment and tertiary industry development, while urban land efficiency in southern and central Jiangsu is more likely to be associated with globalization and labor-intensive manufacturing. Such an urbanization pattern affects multiple aspects of the region, including industrial structure, environmental protection, and cluster density (Zhang et al. 2010). The institutional aspect and socioeconomic ties in regional coordination are the subject of close examination in the YRD and other regions in China. It is commonly suggested that the regional coordination mechanism should have the real power in bringing cities together with regard to region-wide issues. The need for interjurisdictional linkages and coordination can improve the efficiency and equity in regional development through a carefully planned and enforced planning process. Yeh and Xu (2011) indicated that China has witnessed strong intervention by the state and an increasingly complex inter-scalar order for regional development. Such institutional intervention and arrangement are based on senior governments’ vision for regional development across the country. With the central government’s strategic vision on the YRD region, the openness to the world and the influx of foreign capital continue to drive regional economic growth, urban cluster formation, and inter-city cooperation.

6.3 Pearl River Delta and Guangdong-Hong Kong-Macau Greater Bay Area The Pearl River Delta region provides a representative case to study regional policies and how governments play a leading role in China’s regional development since this region is the only major region in the country that is encompassed in one province (Guangdong) which makes strong state-led region policies possible. Cities within the Pearl River Delta region have had a long history of interaction and cooperation under a region-wide development scheme (Xu and Yeh 2010, 2011; Ye 2011). In other parts of China, the coordination of regional issues becomes more difficult when multiple provincial-level jurisdictions are involved in a region. Tables 6.1 provides the development profiles of this region. In 2010, with 0.5% of China’s territory the PRD region housed about 2% of the national population while producing 10% of the national (GDP). This region underwent significant demographic, economic, and spatial transformations in the past three decades. This region enjoyed over 40% population growth in the new century, with the population density increasing from 782 per square kilometer in 2000 to 1125 per square kilometer in 2017. It can be seen clearly that the PRD region had a much faster population growth between 2000 and 2010 than in the past decade. The population growth slow down after 2010 can be attributed to the restructuring of the global economy, which significantly affected the PRD region, and the general low demographic gain in the whole country. In the PRD region, the GFZ metropolitan area is the largest and had a land area of almost 26,000 square kilometers with a total population of over 26 million

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Table 6.1 Demographic statistics in the Pearl River Delta region 2000–2015 City regions

Land area (Sq. Km)

Population (million) 2000

2010

% Change 2000–2010

2017

% Change 2010–2017

25,957

18.6

23.8

28.2

26.3

10.5

Guangzhou

7287

9.9

12.7

28.4

14.5

14.2

Foshan

3848

5.3

7.2

35.8

7.7

6.9

Metropolitan area I

Zhaoqin

14,822

3.4

3.9

15.5

4.1

5.1

Metropolitan area II

15,781

16.6

23.2

39.7

25.6

10.3

Shenzhen

1953

7.0

10.4

48.2

12.5

20.2

Dongguan

2472

6.4

8.2

28.5

8.3

1.2

Huizhou

11,356

3.2

4.6

43.7

4.8

4.3

Metropolitan area III

12,995

7.6

9.1

20.3

9.7

5.4

Zhuhai

1654

1.2

1.6

30.1

1.8

12.5

Zhongshan

1800

2.4

3.1

30.1

3.3

6.5

Jiangmen

9541

4.0

4.5

11.4

4.6

2.2

54,733

42.8

56.2

31.2

61.6

9.6

Total

These are statistics for populations who reside in the area for at least six months and registered with the local government. The PRD region has millions of temporary residents (migrant workers) who are not registered in the population statistics, usually account for around 50% of the local population

in 2017. Guangzhou is the giant city in this area and is the provincial capital. This area enjoyed a 28% population growth before 2010 but the growth rate decreased to 10% in this decade. Its population density in 2017 was 1013 people per square kilometer. Foshan is the second largest city in this metropolitan area and the third largest city in the PRD region. With regard to the economic development status, the three metropolitan areas in the PRD region presented different industrial structures while the first two metropolitan areas highly depended on the tertiary sector and the third metropolitan area specialized in the secondary industries. The total GPD in the entire region grew by nearly 640% during the 15 years between 2000 and 2015 (Table 6.2). The Pearl River Delta (PRD) region stands out in the regional development in China in several ways. First of all, the PRD region is entirely located in the Guangdong Province, which makes a unified regional vision highly practical and possible to implement. Secondly, cities in the PRD region formed several closely linked metropolitan areas with a long history of inter-city exchange of social, economic, and cultural activities. Such bonds greatly enhance inter-linked regional growth in this area. Thirdly, the PRD region is one of the regions in China that pioneered reform and opening-up policies. With its close connection to Hong Kong and Macao, the region’s transformation in recent decades has been actively linked to the global economy and

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Table 6.2 Socioeconomic statistics in the Pearl River Delta region 2000–2015 Metropolitan regions

GDP (billion yuan)

GDP proportion 2015 (%)

2000

2015

% Change

Metropolitan area I

379.2

2807.4

640.3

Guangzhou

249.2

1810.0

626.3

Foshan

105.0

800.4

Zhaoqin

Primary

Secondary

Tertiary

2.3

41.2

56.5

1.3

31.6

67.1

662.3

1.7

60.5

37.8

25.0

197.0

688.0

14.6

50.3

35.1

Metropolitan area II

344.6

2691.8

681.1

0.6

44.1

55.3

Shenzhen

218.7

1750.3

700.3

0.0

41.2

58.8

Dongguan

82.0

627.5

665.2

0.3

46.6

53.1

Huizhou

43.9

314.0

615.3

4.8

55.0

40.2

118.2

727.5

515.5

3.9

51.2

44.9

Metropolitan area III Zhuhai

33.2

202.5

509.9

2.2

49.7

48.1

Zhongshan

34.5

301.0

772.5

2.2

54.3

43.5

Jiangmen

50.5

224.0

343.6

7.8

48.4

43.8

842.0

6226.7

639.5

1.8

43.6

54.6

Total

Source Guangdong Statistic Yearbook, various years

outside world. For all these reasons, the PRD region represents an important case to study China’s regional development and governance. Although strategic development plans have become popular in many Chinese cities and regions, they lack a wide social foundation and serve more or less as a visionary statement (Wu and Zhang 2007). These plans tend to be relatively vague and without real “teeth.” The PRD region presents a different case. In 1995, the Guangdong provincial government and the Department of Construction launched the Pearl River Delta Economic Region Urban Cluster Plan (PRDERUCP) and designated Guangzhou to serve as the regional development pole and provide a “radiant effect” to enhance the economic growth in the Shenzhen and Zhuhai metropolitan areas. In 2003, the Guangdong Provincial Communist Party Committee, the Guangdong provincial government, and the national Ministry of Construction (the predecessor of the Ministry of Housing and Urban–Rural Development, MOHURD) jointly formulated the Pearl River Delta Urban Cluster Coordinated Development Plan (2004–2020) (PRD-UCCDP). In July 2006, the implementation of this plan was endorsed by the Guangdong People’s Congress and came into effect in December of that year. It was “the first statutory regional plan in China” (Xu and Yeh 2011, p.108). The PRD-UCCDP was called to “maximize the showcase effect of the Shenzhen and Zhuhai special economic zones” and make them “the national laboratory for in-depth reform and institutional innovation” (Yang and Jin 2011) and made Shenzhen the second center of the PRD region. In December 2008, the National Development and Reform Committee (NDRC) and the Guangdong provincial government announced the Outline Plan for the Reform and Development of the Pearl River Delta (2008–2020) (“the 2008 Outline Plan” hereafter). This

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plan became the leading official document that outlines this region’s development in the coming decades. One of the focuses of this plan is to promote coordinated regional development, with three regions identified as the centers for economic growth. Ye (2013, 2014) demonstrates the transitional process of these three plans and how they shaped the regional development outlook in the PRD region. The clustering of cities and their long-time cooperation is just one reason why the PRD region is able to develop an integrated region. Another important reason lies in that the entire region is within one province, which makes aggressive institutional policies more possible and practical than other regions in China where multiple provinces and jurisdictions are involved. Together with its advanced economic and governing capacity and the historical reform-oriented mentality, the PRD region received a high level of autonomy to carry out regional development policies. The Case of the Guangzhou-Foshan Metropolis In recent years, a cross-jurisdiction governance model that advocates the participation of multiple actors and aims to build up partnerships and balance the risks and interests of inter-city cooperation has become a new trend of innovation in the development and governance of city clusters in China. The cross-jurisdiction governance emphasizes the combination of local governments with diversified governing bodies, identifies cooperation mechanisms among government, market, and society, and addresses complex cross-jurisdiction public matters. The development of Guangzhou-Foshan Metropolitan Area (GFMA) is a typical case to better explore the optimal model of inter-city cooperation in the PRD region and in China, with highly interactive participation of multiple parties in local public decisions and the relations of various actors in the horizontal relationship of local government to coordinate the interests of economic development, improve the cross-jurisdiction governance mechanism, and promote the effective inter-city cooperation by rationalizing the relationships between different actors (Ye 2014). The development concept of Guangzhou-Foshan Metropolitan Area (GFMA) was first proposed in Guangdong Province in the 1990s. Since the early 1980s, the cities in the Pearl River Delta have all experienced considerable economic growth. The rise of these cities was driven by different factors and forces in the early days of reform and opening-up. There were no close economic links between and among the cities. In the Pearl River Delta Economic Region City Cluster Plan: Coordinated and Sustainable Development in 1995, Guangdong Provincial Construction Committee for the first time proposed to build the Pearl River Delta City Cluster, which would be composed of many cities closely linked, playing different roles and closely collaborating with each other. With the deepening of reform and opening-up and the increasingly closer interactions between Guangdong Province and Hong Kong and Macao, the Pearl River Delta presented a development pattern of the dual-core city cluster with Guangzhou and Shenzhen as the cores at the end of the twentieth century. Following the emergence of multi-center competition, Guangzhou, as a traditional regional center, began to face severe challenges of transformation and development. Against this background, Guangzhou proposed the development strategy of “Moving to the East, Connecting the West, Expanding into the South, Optimizing the North,

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and Adjusting the Central Region” in the Guangzhou Urban Development Master Plan (2000–2010) in 2000. Connecting with Foshan in the west was then launched in an all-round way. By promoting the cooperative development between Guangzhou and Foshan, the two cities will jointly assume the role of driving the economic development of the PRD region. Guangzhou and Foshan jointly held the Workshop on Guangzhou-Foshan Regional Cooperation and Coordinated Development in 2003 to explore and study the important strategy for building the Guangzhou-Foshan Metropolitan Area (GFMA). In response to Guangzhou’s strategy of Connecting with the West, Foshan proposed an urban plan of “Carrying on Industry Transfer from the East” and proactively accepted the role of Guangzhou as the radiation center. Within this context, the interaction and communication between Guangzhou and Foshan began to develop. In December 2008, the key contents of the GFMA plan were included in the Outline Plan for the Reform and Development of the Pearl River Delta (2008–2020), which was reviewed and approved by the State Council. The document clearly stated that the nine cities in the PRD region need to break through the barriers of the administrative system, follow the principles of government promotion, market leading, resource sharing, complementary advantages, coordinated development and mutual benefits, explore innovative cooperation mechanisms, and optimize resource allocation so as to promote the integrated development of the PRD region with GFMA as an example. The GFMA effect should be strengthened to lead the development of city clusters with rational distribution, balanced functions, and close connection in the PRD region. The release of this document marked that the GFMA as a breakthrough in the PRD regional integration was officially upgraded to the national strategic level. Under the guidance of this series of documents, the governments of Guangzhou and Foshan signed a cooperation agreement for GFMA construction in Foshan’s Nanhai District, which is at the junction of Guangzhou and Foshan in March 2009. At the same time, four supporting agreements (known as the “1 + 4” framework agreements) involving city planning, transportation infrastructure, industrial collaboration, and environmental protection were also signed to promote the construction of GFMA. In accordance with the spirit of the Minutes of the Meeting of the Party and Government Leaderships of Guangzhou and Foshan and related cooperation agreements, Guangzhou and Foshan established the inter-governmental cooperation mechanism at three levels. First, the leadership group consisting of the party chiefs of the municipal party committees and the mayors was established. Second, GuangzhouFoshan Joint Mayors’ Meeting Office was set up in the municipal development and reform departments of the two cities. Third, the task force on urban planning was set up in the planning departments of the two cities while three other task forces involving industries, transportation, and environmental protection were also set up in the respective government departments. At the same time, Guangdong Provincial Government had established the GFMA Planning Coordination & Guidance Group, with its office residing in the Guangdong Provincial Department of Housing and Urban–Rural Development. The task force with the participation of the provincial government could fully leverage the coordinating and guiding role of the provincial

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government and the related provincial departments. As a result, the policy framework for Guangzhou-Foshan inter-city cooperation was basically established. Since 2009, the municipal governments of Guangzhou and Foshan would formulate the GFMA Key Task Work Plan every year to promote the construction of the GFMA by classifying the projects into four categories: early stage, start-up, promotion, and completion. A key GFMA policy is to promote the integration of transportation between the two cities through infrastructure construction. With the development of GFMA, the infrastructure of Guangzhou and Foshan was gradually connected to form a network, which promoted the formation of an urban economic agglomeration with the social and economic development of the two cities getting increasingly interdependent and interconnected and with vast continuous space and territories. the success of inter-city cooperation requires the establishment of a comprehensive cross-jurisdiction governance system, including the coordination mechanism between governments, the optimal model of economic cooperation between the two cities, and the role of social participation in the process of policy formulation and implementation. The Emerging Guangdong-Hong Kong-Macao Greater Bay Area On February 18, 2019, the national government announced the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area to further direct the regional development in this area. Guangdong-Hong Kong-Macao Greater Bay Area consists of the Hong Kong Special Administrative Region (HKSAR), the Macao Special Administrative Region (MSAR) as well as the municipalities of Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen, and Zhaoqing in Guangdong Province, covering a total area of 56,000 square kilometers with a combined population of approximately 70 million at the end of 2017. As one of the most open and economically vibrant regions in China, the Greater Bay Area plays a significant strategic role in the overall development of the country. In 2014, Shenzhen first mentioned “Bay Area Economy” in Report on the Work of the Municipal Government to reveal the region’s vision for future development. In March 2015, the Vision and Actions on Jointly Building the Silk Road Economic Belt and the twenty-first-century Maritime Silk Road announced the establishment of Guangdong-Hong Kong-Macau Greater Bay Area. In March 2016, the thirteenth fiveyear plan proposed to construct Guangdong-Hong Kong-Macau Greater Bay Area and major inter-provincial cooperation platform, and the construction of GuangdongHong Kong-Macau Greater Bay Area was included in the national planning. In March 2017, Premier Li Keqiang of the State Council put forward to study and formulate a development plan for the urban agglomeration of Guangdong-Hong Kong-Macau Greater Bay Area in the Report on the Work of the Government. In October 2017, The Report to the 19th National Congress of CPC stated that “The development of Hong Kong and Macao is closely tied up with that of the mainland. We will continue to support Hong Kong and Macao in integrating their own development into the overall development of the country. We will give priority to the development of the Guangdong-Hong Kong-Macao Greater Bay Area, cooperation between Guangdong, Hong Kong, and Macao, and regional cooperation in the pan-Pearl River Delta, thus

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fully advancing mutually beneficial cooperation between the mainland and the two regions.”1 From “deepening the cooperation between the Mainland, Hong Kong and Macao” in the Report on the Work of the Government to “fully advancing mutually beneficial cooperation between the Mainland, Hong Kong and Macau” in the Report of the 19th National Congress of CPC, Guangdong-Hong Kong-Macau Greater Bay Area has entered an era of joint construction. In December 2017, the Bulletin of Central Economic Work Conference stated that “coordinated regional development strategy should be enforced and the construction of Guangdong-Hong Kong-Macau Greater Bay Area should be designed systematically.” Construction of GuangdongHong Kong-Macau Greater Bay Area thus became a regional development strategy at the national level. In October 2018, during the inspection tour in Guangdong, Xi Jinping put forward that Guangdong should “deepen the reform and opening-up and take the construction of Guangdong-Hong Kong-Macau Greater Bay Area as a great opportunity for Guangdong’s reform and opening-up.”2 Since then, the construction of GuangdongHong Kong-Macau Greater Bay Area, which was planned, has entered a new chapter. In November 2018, the State Council and the Central Committee of CPC promulgated Opinions on The Establishment of A More Effective New Mechanism for Collaborative Regional Development, stating that “integration and development of major regions in China should be promoted strategically; Hong Kong, Macau, Guangzhou and Shenzhen should take the lead in the construction of Guangdong-Hong KongMacau Greater Bay Area, and boost the innovative and green development of the Pearl River-Xijiang River Economic Belt.” In December 2018, the People’s Government of Guangdong Province issued Several Policies and Measures pertaining to Further Promoting Scientific and Technological Innovation, proposing “to improve balanced and coordinated development inside the region, strive to build an innovative regional pattern with Guangzhou and Shenzhen as the main engines, the Pearl River Delta as the core, and the coastal economic zone and northern ecological zone realizing coordinated development, and to strengthen classified guidance and offer differentiated policy support.” This series of documents reflect that besides coping with the impact of global transformation on the Pearl River Delta, Guangdong-Hong Kong-Macau Greater Bay Area can also solve the lack of capital and labor and intensified competition in the region under global austerity. As the consequence, the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area sets a strategic attempt to break new ground in pursuing opening-up on all fronts and a further step in taking forward the practice of “One Country, Two Systems.”3 The plan sets up six principles for the Guangdong-Hong Kong-Macao (GHKM) Greater Bay Area development, including to drive by innovation and led by reform, to coordinate the development and plan holistically, to pursue green development and ecological conservation, to 1

http://language.chinadaily.com.cn/19thcpcnationalcongress/2017-11/06/content_34188086_6. htm. 2 http://cpc.people.com.cn/n1/2019/0222/c419242-30895679.html. 3 See https://www.bayarea.gov.hk/en/outline/plan.html.

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open-up and cooperate and achieve a win–win outcome, to share the benefits of development and improve people’s livelihood, to adhere to the “One Country, Two Systems” principle and act in accordance with the law, and to promote a further step in taking forward the practice of “One Country, Two Systems.” Guangzhou is to be established as a “national core city and a comprehensive gateway city, will reinforce its functions as an international business center and comprehensive transportation hub while cultivating and enhancing its function as a sci-tech, education, and cultural center.” Shenzhen is going to become a “special economic zone, a national economic center city, and a national innovative city,” to speed up the construction of a modern international city and strives to become a capital of innovation and creativity with global influence. The GHKM Greater Bay Area development will target seven fields of development including establishing an international innovation and technology hub, expediting infrastructural connectivity, building a globally competitive modern industrial system, taking forward ecological conservation, fostering a quality living circle for living, working, and traveling, strengthening cooperation and jointly participating in the Belt and Road Initiative, and jointly developing GHKM cooperation platforms. The region is the most open area in China, with Hong Kong being a free trade port and one of the freest economies in the world, and Macau serving as a global tourist destination and leisure center and a business cooperation platform between China and Portuguese-speaking countries. The Pearl River Delta is the most extroverted economic region and an important window for opening-up in the Mainland. This region has a clustering of universities, research institutes, high-tech enterprises, and national science and technology projects that exert critical domestic and global influences. Global Innovation Index 2017 ranked the GHKM region the second in the world for owning 16 Fortune 500 companies and more than 30,000 national high-tech enterprises. Table 6.3 compares the GHKM greater bay area to the other three major bay areas in the world. This region occupies only 0.6% of the country’s land area but contributes 12.57% of the country’s total GDP, with a per capita GDP exceeding US$ 20,000. It is well equipped with the sea, land, and air transportation and logistics network, with 5 airports, 6 sea ports, and regionally inter-connected high-speed railway plus highway networks to propel logistics development. The Hong Kong-Zhuhai-Macau Bridge opened in 2018 to become the longest sea-crossing and the longest opensea fixed link in the world, with a 55-km bridge-tunnel system consisting of three cable-stayed bridges, an undersea tunnel, and four artificial islands. Figure 6.1 shows the number of patents in these four bay areas in the past five years, recording a year-by-year increase from 2013 to 2017. The world’s three major bay areas are dominated by the tertiary industry, while the GHKM Greater Bay Area is relatively low with the ratio of tertiary industry accounting for about 60%. The region had the highest number of patents issued among other leading bay areas in the world. On August 18, 2019, the Central Committee of the Communist Party of China issued the Opinions on Supporting Shenzhen in Building a Pilot Demonstration Area of Socialism with Chinese Characteristics. The opinion puts forward development

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Table 6.3 Four major bay areas in the world GHKM bay area

Tokyo bay area

New York bay area

San Francisco bay area

Population in 1000 67,650

43,470

23,400

7150

Land area square km

56,500

36,700

21,400

18,000

GDP (trillion US$)

1.38

1.86

1.45

0.82

Key industry

Technology Finance Manufacturing

Advanced manufacturing Wholesale and retail

Financial service Technology Real estate Professional Medical services

% of tertiary industry

62

80

89.5

82

Port container throughput (1000 TEU)

65,200

7660

4650

2270

GDP per land (billion US$/square km)

0.165

0.344

0.460

0.309

Source Guangdong-Hong Kong-Macao Greater Bay Area Development Report 2018

Patent in Four Major Bay Areas Around the World 300000

250000 200000 150000 100000

GHKM Bay

Tokyo Bay

San Francisco Bay

2017

2016

2015

2014

2013

2017

2016

2015

2014

2013

2017

2015

2016

2014

2013

2017

2016

2015

2014

0

2013

50000

New York Bay

Fig. 6.1 Number of patents in Four Major Bay Areas in the world 2013–2017. Source GuangdongHong Kong-Macao Greater Bay Area Development Report 2018

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strategies for Shenzhen in 5 aspects, including the construction of a modern economic system that showcases the requirements of a high-quality development, the creation of a democratic environment that demonstrates fairness and justice, the shaping of a modern urban civilization that demonstrates the prosperity of socialism, the formation of a common development pattern of co-construction and common governance and sharing common prosperity and the creation a beautiful Chinese model of harmonious coexistence between man and nature. Regarding the cooperation with Hong Kong and Macao, the Opinions promote the interconnection and mutual recognition of financial markets in Hong Kong and Macao, accelerates the construction of Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone, encourages Shenzhen to co-organize various forms of cultural and artistic activities with Hong Kong and Macao, further deepen the reform and opening-up of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone and make good use of Hong Kong and Macao’s exhibition resources and industry advantages. At the same time, it will facilitate the development of Hong Kong and Macao funded medical institutions and provide Hong Kong and Macao residents with desirable arrangements to living and working in Shenzhen. This strategic policy will deepen reform and expand opening-up in Shenzhen and be conducive to the implementation of the Guangdong-Hong Kong-Macao Greater Bay Area development plan. Figure 6.2 shows Shenzhen’s economic restructuring during the past 15 years, demonstrating the tremendous growth of the tertiary industry in the city. By 2025, Shenzhen will become one of the leading cities in the world in terms of economic strength and quality of development. Its research and development input,

Secondary and TerƟary Industry in Shenzhen 2000-2015 80 75 70 65 60 55 50 45

49.3 49.5 49.8 48.6 49.2 49.8 47.7 46.0 46.8 53.1 53.8 52.0 50.7 50.1 50.0 49.9 49.6 51.0

52.7 52.5 52.4

47.2 47.4 47.5

40

56.1 57.4 54.5 55.5

45.4 44.5 43.9 42.6

35 30 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Secondary Industry

TerƟary Industry

Fig. 6.2 Shenzhen’s economic structure 2000–2015. Source Shenzhen Statistical Yearbook, multiple years

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industrial innovation capacity, and the quality of its public services and ecological environment will be first-rate in the world, according to the document. By 2035, Shenzhen will become a national model of high-quality development, as well as a hub of innovation, entrepreneurship, and creativity with international influence. By the mid-twenty-first century, the city will become one of the top cosmopolises in the world and a global pacesetter with outstanding competitiveness, innovative capacity, and influence, said the document.4 With the strategic plan of building Shenzhen a demonstration pilot zone for socialism with Chinese characteristics and developing the Guangdong-Hong KongMacao Greater Bay Area as the world-class region, the PRD region will continue to be the focus area of fast-forwarding growth in China. The future of this region reiterates the multi-level governance structure, where strategic plans from the central party committee and state council continuously guide the regional development and formation of the greater bay area. Such a development goes beyond the traditional regional development since it involves the implementation of the “One Country Two Systems,” which both provides a rare opportunity to examine how collaboration between institutions with different political systems and institutional settings could collaborate and poses highly challenging issues about how such a cross-jurisdiction cooperation and integrative regional co-development could be carried out. The traditional collaborative governance model considers collaborative capacity for joint action and the related capacity-building process the most critical components in influencing collaborative outcomes (Wang et al. 2019). In many cases, how collaborating partners work out the differences caused by collaborators’ procedural and institutional design factors poses a serious challenge when partners have high transaction costs in information flow and less coordinated activities caused by structural variations of different decision designs (Emerson et al. 2012; Ran and Qi 2018). The complex internal, domestic, and external, international environment in the GHMK Greater Bay Area further complicates the outcome of a possible world-class bay area regional formation. As a large number of regional problems have emerged along with the continuous development of globalization and regional integration, specific issues such as environmental pollution, watershed management, and public security demands for a new type of regional governance model. Cross-jurisdiction governance transcends the limitation of administrative divisions and is an effective way to realize the governance of cross-jurisdiction public affairs by the joint efforts from the government, market, citizen, and social organization. It is necessary to ensure public goods provision by improving the demand side participation, strengthening coordination and cooperation among cities, forming a common development foundation for the urban agglomeration, and conducting innovative policies. To tackle the lack of coordination in Guangdong province and the two SARs issues involving core interests would require an open and collaborative framework with multiple participants and a multi-level and multi-subject planning and collaboration framework to be established.

4

http://en.people.cn/n3/2019/0819/c90000-9607004.html.

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Although Guangdong, Hong Kong, and Macao have a long history of cooperation, there is no legal cross-jurisdiction regional coordination agencies and the administrative agreements tend to have relatively weak legal effects, with the implementation of agreements depending on the initiative and enthusiasm of all parties. Limited participation of the governing subjects has greatly affected the enthusiasm of cooperation between Guangdong, Hong Kong, and Macau, and impeded cooperation projects and constructive objectives. The most important premise for the region to thrive is to cultivate a regional innovation atmosphere and institutional structure. The latest development in this region needs to build on the fruit of the Pearl River Delta development and fully address the cross-jurisdiction issues between Guangdong and the two SARs. Such innovation requires an overall integration for enterprises, governments, knowledge production institutions, including universities, research institutions, intermediaries, and users to achieve major technological advancement. The coordination of the speed, scale, and structure of regional development with a carefully planned population, society, economy, environment, and other aspects of areas needs to secure the benefits of the entire region be maximized so coordinated development between the areas will be realized to narrow disparities among localities. Due to the asymmetric governmental structures and inter-jurisdiction cooperation scheme, the traditional regional governance mechanism may not meet the greater bay area’s development in light of substantial differences in economic structures, social values, and financial systems between Guangdong, Hong Kong, and Macau. It is necessary to establish a statutory cross-jurisdiction coordinating organ led by the central government, which can coordinate and allocate resources in the greater bay area. Synergy among multiple governing subjects is an indispensable condition for cross-jurisdiction governance, which emphasizes that all actors co-produce greater overall effect. As a pillar for innovation-driven strategies and a critical engine for building the world’s leading bay area, collaborative innovation needs to be formed on the basis of an all-around partnership. The construction of the greater bay area will enhance the source of innovation for the global science and technology industry and a pilot zone for the systematic reform for science and technology in China. By combining rich resources among the local governments, colleges and universities, research institutes, enterprises and intermediary service agencies, a collaborative innovation system requires the government to lead its role for systematic innovation, deepening the integration of industry-university-research and building a global leading bay area with technological and policy innovations. Comparing the Mega Regions China is a country that different regions have very uneven development levels and patterns due to their industrial history and natural resources. Before China adopted its reform and open-up policies in the late 1970s, regional policies in China only focused on the political and administrative implications of regions without using regional policies as major economic and social development strategies. Most of the pre-reform regional policies emphasized the government function of regional organizations and ignored the governance arrangement. Under a mix of city-regionalism models with the top-down state-mandated process and the bottom-up process initiated by local

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governments, major urban regions take different ways of integration and cooperation (Li and Wu 2017). In its 6th Five-Year Plan, the Chinese central government realized the uneven development and planned for specific strategies that fit different regions to be adopted to facilitate cooperation among regions and stimulate balanced regional development. Since then, how to design and implement effective policies to facilitate regional development and coordinate inter-region issues has been one of the challenges China is facing. The following section will focus on the inter- and intra-region issues to analyze China’s current regional efforts and how to develop effective, efficient, and equitable regional policies in China. There have been some comparative studies to measure, evaluate, and examine urbanization in the above-mentioned three largest urban agglomerations in China. Haas and Ban (2014) compare rural to urban land conversion changes, magnitude, and speed of urbanization in major regions in China and evaluate possible impacts on the environment by the concepts of landscape metrics and ecosystem services. A total increase in urban land of about 28,000 square kilometers was detected at the expense of a decrease in cropland. By calculating both the speed and magnitude of urbanization, it can be identified urban growth in the Beijing-Tianjin-Hebei Region was the highest, followed by the Yangtze River Delta and Pearl River Delta. Wang and Shen (2016) make a systematic comparison of urban competitiveness in the YRD and PRD regions in the first decade of the twenty-first century. Urban competitiveness is assessed using a four-level hierarchal evaluation system with a total of 59 indicators in the areas of economic, social, environmental, and connectivity to comprehensively measure competitiveness. It is found that cities in YRD outperformed those in PRD in many dimensions of competitiveness when comparing the leading cities with other cities in the region. The primate city in PRD, Guangzhou, and Shenzhen were much weaker than its counterpart in YRD, the global mega city of Shanghai. But the top three competitive cities in PRD were more dominant and competitive than those in YRD over the decade. There was a trend of convergence in urban competitiveness in the YRD region, indicating the increasing dominance of Shanghai. In the PRD region, the development of the two leading cities of Guangzhou and Shenzhen was coupled with the advancement of the second-tier cities, including Zhuhai, Foshan, and Dongguan. The ways of cooperation between Chinese cities are embodied in the establishment of joint meetings, the signing of inter-governmental agreements, and the formation of strategic alliances (Chen et al. 2019). The new regionalism strategy comes into being, which emphasizes the participation, cooperation, and coordination of different local governments in the region to jointly realize the cross-jurisdiction governance of urban agglomeration. Based on trust and relationship, this management model forms a good network relationship through long-term cooperation, and points out a new way to solve the cross-domain problem of urban agglomeration (Feiock 2013). In this context, the inter-governmental agreement is one of the coordination mechanisms for local governments to overcome the obstacles of administrative division in regional governance (Ye 2009). In the face of increasingly prominent cross-jurisdiction governance and regional public service supply, a growing number of local governments

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realize regional cooperation has become an important policy to solve the problems of the regional common, especially in the industrial structure adjustment and crossjurisdiction supply of public goods, services, etc., and based on the principle of voluntary cooperation and coordination, such as all kinds of cooperation framework, memos, opinions, and so on, hoping that through examining the agreement on the formation of regional networks to promote cooperation (Chen et al. 2019). China’s local governments have realized the interdependence and linkage in development and sought more horizontal cooperation to resolve the regional governance dilemma. In recent years, some regions and cities, relying on cooperation mechanisms such as cooperation agreements, joint declarations, strategic alliances, and project memorandums, have broken the traditional administrative restrictions between regions and promoted economic integration. For example, inter-governmental cooperation in environmental protection in the Beijing-Tianjin-Hebei region, inter-governmental scientific and technological cooperation in the Chengdu plain economic zone, intergovernmental cooperation in water resources management in the Pan-Pearl River Delta region, which consists of nine provinces in the southeast in the country and the two SARs of Hong Kong and Macau (Jie et al. 2015) and regional governance cooperation in the Yangtze River Delta city cluster (Luo and Shen 2009; Li and Wu 2013, 2017). By formulating and adjusting regional policies based on historical tasks at all stages, the state has made remarkable achievements in the construction of special zones, poverty alleviation, and development of ethnic minority areas. However, there are some problems at the same time, that is, the implementation of regional policies often takes care of one thing while losing the other. Due to the lack of comprehensively consideration and clear strategies in addressing regional problems, the goal of balanced development between the advantageous and less-developed areas has yet been achieved. The regional governance models in different mega regions in China were recently studied by Wang et al. (2020). It was identified that the structure of cross-jurisdiction governance in the YRD is a participant-governed or shared governance configuration, characterized by a balanced flow of authority among cities or districts, and favors a decentralized governance structure. By definition, the shared governance configuration depends on a principle of voluntary participation and all members’ agreement to engage in the network activities. In the YRD region, the spatial governance partnerships involved flexible cross-jurisdiction institutional arrangements to facilitate mutually beneficial regional planning and development projects. Different from the YRD region, the governance structure of the Beijing-Tianjin-Hebei region revealed a form of network administrative organization (NAO). A separate administrative entity of network broker, the central government of China governs the network and its activities (Provan and Kenis 2008). It has been argued that networks governed by a unique network administrative organization are popular in developing countries for dealing with complex policy issues in transitioning socioeconomic environments but with limited assistance from actors outside of the government (Wang and Yin 2012). As Li and Wu (2012) concluded, it is difficult to establish a formal regional institution or coalition in China. The regional agenda is often economic oriented, project based,

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and issue driven. In recent years, increasing cases of multilateral negotiations have been identified between cities in major regions including the YRD and PRD regions. Regional integration has been focused on enhancing economic competitiveness, with relatively new goals of social integration. The emerging collaborative network points to a new approach of inter-jurisdiction cooperation and regional governance in China.

6.4 Inter-City Competition and Cooperation Under Reinforced State Power In China, cities of different sizes have significantly varying levels of administrative authorities, public services, and economic bases. Attention has been paid to the hierarchical structure of the city system and various administrative boundary changes, attributing one of the means of China’s urbanization being produced by administrative division adjustments, such as county-city upgrading and urban annexation. Cartier (2015) proposes the concept of territorial urbanization to explain the logic of China’s urbanization process. Some regions in China pursue economic development through restructuring administrative boundaries, by reproducing the state power through territorial urbanization. A city in China can only be produced by the change of administrative boundaries, which emphasizes the importance of administrative divisions in understanding China’s urbanization. Fan et al. (2012) examine the history and impacts of transforming counties into cities by documenting the city development policies and evaluate the performance of county-city upgrading policies. It is found that becoming a city only enlarges the size of the local government but without outstanding performance on economic development or public service provision. Such findings echo some experiences in North America (Savitch et al. 2010). Zhang and Wu (2006) examine the administrative annexations in China based on case studies of the Yangtze River Delta, identify the motivations, processes, and effects of urban annexations, and argue that administrative annexations are the products of regional competence and coordination. How state power responded to the changing conditions of the local and global economies has been the most important question to help understand the nature and dynamics of urban and regional development around the world, with a keen focus on the interplay among major actors and agents in the world undergoing profound changes characterized as globalization, neo-liberalization, and lately financialization (Lin et al. 2015). Local governments seek fiscal revenue through land transfer, promote urban development and infrastructure, improve the living environment, and then attract enterprises to invest and develop the real estate industry, which constitutes the main driving force of urban economic development. In addition, after the rapid development of the market economy, fiscal decentralization leads to the rapid development of economic regionalization but still under complicated obstacles, because the result is the emergence of economic regionalism, decentralization, and competition.

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China presents a dynamic field for the nation-state power to penetrate urban and regional development throughout the country. Faced with the complex regional issues, China has been committed to seeking for effective cross-jurisdiction governance mechanism and formed regionalism on the basis of practice, which mainly experienced the stage of transformation from “large regional government” to “new regionalism.” In this context, the central government and provincial governments adopt varying strategies, such as scale reconstruction, consolidation of administrative divisions to readjust regional strategic planning, so as to overcome a series of problems caused by administrative division and vicious competition (Ma 2002; Zhang and Wu 2006; Wu and Zhang 2007; Xu 2008; Li and Wu 2012; Ye 2013). Luo and shen (2009) argues that in the age of globalization, inter-city competition has been intensified. Actually, cities can to a great extend cooperate with each other to enhance the competitive advantage of both cities. The active roles of local governments in the major regions in China show that competition and cooperation can co-exist. There is a large room for regional cooperation to enhance coordination, facilitate integrated development linking urban and rural areas, and build a well-planned, practically structured, spatially compact, and highly efficient modern regional system.

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Gao J, Wei YD, Chen W et al (2015) Urban land expansion and structural change in the Yangtze River Delta, China. Sustainability 7(8):10281–10307 Haas J, Ban Y (2014) Urban growth and environmental impacts in Jing-Jin-Ji, the Yangtze River Delta and the Pearl River Delta. Int J Appl Earth Obs Geoinf 30:42–55 He C, Wei YD, Xie X (2008) Globalization, institutional change, and industrial location: economic transition and industrial concentration in China. Reg Stud 42(7):923–945 Jie M, Suo L, Wei C (2015) Collaborating in horizontal networks of interprovincial agreements in pan Pearl River Delta. In: Proceedings of the ninth international conference on management science and engineering management Jones DC, Cheng L (2003) Growth and regional inequality in China during the reform era. China Econ Rev 14(2):186–200 Li Y, Wu F (2013) The emergence of centrally initiated regional plan in China: a case study of Yangtze River Delta regional plan. Habitat Int 39(Complete):137–147 Li Y, Wu F (2012) The transformation of regional governance in China: the rescaling of statehood. Prog Plann 78(2) Li Y, Wu F (2017) Understanding city-regionalism in China: regional cooperation in the Yangtze River Delta. Reg Stud 52:1–12 Lin GCS (2001) Metropolitan development in a transitional socialist economy: Spatial restructuring in the Pearl River Delta, China. Urban Stud 38(3):383–406 Lin GCS, Li X, Yang FF, Hu FZY (2015) Strategizing urbanism in the era of neoliberalization: state power reshuffling, land development and municipal finance in urbanizing China. Urban Stud 52(11):1962–1982 Luo X, Shen J (2009) A study on inter-city cooperation in the Yangtze river delta region, China. Habitat Int 33(1):52–62 Ma LJC (2002) Urban transformation in China, 1949–2000: a review and research agenda. Environ Plan A 34(9):1545–1569 Naughton B (1988) The third front: defence industrialization in the Chinese interior. China Q 115:351–386 Provan KG, Kenis P (2008) Modes of network governance: structure, management, and effectiveness. J Public Adm Res Theory 18(2):229–252 Ran B, Qi H (2018) Contingencies of power sharing in collaborative governance. Am Rev Public Adm 48(8):836–851 Savitch HV, Vogel RK, Ye L (2010) Beyond the rhetoric: lessons from Louisville’s consolidation. Am Rev Public Adm 40:3–28 Sun Y, Zhao S (2018) Spatiotemporal dynamics of urban expansion in 13 cities across the Jing-Jin-Ji Urban Agglomeration from 1978 to 2015. Ecol Ind 87:302–313 Walder AG (1995) China’s transitional economy: interpreting its significance. China Q 144:963–979 Wang F, Yin HT (2012) A new form of governance or the reunion of the government and business sector? Int Public Manage J 15(4):429–453 Wang H, Cheng Z, Zhu D (2020) Striving for global cities with governance approach in transitional China: case study of Shanghai. Land Use Policy 90 Wang L, Shen J (2016) Comparative analysis of urban competitiveness in the Yangtze River Delta and Pearl River Delta Regions of China, 2000–2010. Appl Spatial Anal Policy Wang X, Chen K, Berman E (2016) Building network implementation capacity: evidence from China. Int Public Manage J 19(2):264–291 Wang X, Berman E, Chen D, Niu X (2019) Strategies to improve environmental networks for pollution control: evidence from eco-compensation programs in China. J Environ Manage 234:387–395 Wei Y (1996) Fiscal systems and uneven regional development in China, 1978–1991. Geoforum 27(3):329–344 Xu J (2008) Governing city-regions in China: theoretical issues and perspectives for regional strategic planning. Town Plann Rev 79(2–3):157–186

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Chapter 7

Conclusions and Beyond: The Future of City Regions in China

7.1 New-Type Urbanization and City Regions: The National Agenda When we look back to the 70 years of China’s development, urbanization was not an even path. At the beginning of the new people’s republic, urban development had become the key matter of the country. In the second plenary session of the Seventh Central Committee of the CPC urban growth and management was referred to as the new anchor of the national development strategy. Therefore, China witnessed a flux of population migrated to cities in the first ten years of the new republic, in order to rebuild the country from chaos and poverty left by over one hundred years of way. However, it was soon to find out cities did not have the capacity to house and feed so many populations, which forced the national government to establish the wall of the household registration system, preventing any free movement between the countryside and cities. Such a policy stopped the growth of cities for almost twenty years until the reform and opening-up were called upon to revitalize the national economy. During the first decade of a divided urban and rural world in China, two Central Working Conferences on Cities were held in 1962 and 1963, aimed to solve the increasingly complex issues of deteriorating cities and a widening gap between cities and the countryside. Urban and rural China had become divided with resources being channeled one way from the countryside to feed the cities’ growth. The urban–rural dichotomy persisted. During this period, the second, third, and fourth national five-year plans strictly restricted the growth of cities in China and encouraged township development. Since there was almost no population migration to cities, the ties between cities and the countryside remained unbonded. Cities stayed stagnant without much drive and energy to grow. In March 1978, the third Central Working Conferences on Cities was held to reiterate the importance of cities and the urban management mission of the country. However, the following fifth, sixth, and seventh national five-year plans still strictly limited the growth of big cities in China and strongly favored township development until the mid-1980s. Such a national policy had seemed to © Central Compilation & Translation Press & Springer-Verlag Berlin Heidelberg 2021 L. Ye, Urban and Regional Governance in China, https://doi.org/10.1007/978-3-662-45040-6_7

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help the countryside to grow but since there was no connection between cities and the countryside it had been highly difficult for the rural area in China to produce an optimal economic return for the agricultural product. The rural population had remained under-educated and low-skilled, without proper opportunities for personal advancement and business development. Before the 1980s, the only chance for a rural resident to enter the cities was to obtain a high score in the National College Entrance Exam (NCEE) and stayed in the city after graduation. Such educated people would never return to the countryside, which further drained the talent brain of the rural areas in China and made these areas under long-term poverty. Finally, the eighth and ninth national five-year plans gradually lifted the restriction of city development and allowed for reasonably developed medium-size cities. However, the size of big cities was still strictly prohibited and the development of small towns remained favorable. It was not until the early 2000s, when China had witnessed the rise of big cities and unstopped urban growth under the multiple forces of globalization, marketization, and industrialization, together with the privatization of urban housing, as depicted throughout this book, the tenth national five-year plan eventually pointed to a coordinated large, medium, small city development with small towns. The eleventh and twelfth national five-year plans further stipulated the coordinated growth of urban agglomeration with the development of small cities and towns. In March 2014, the National New Urbanization Plan (2014–2020) was issued to become a macroscopic, strategic, and fundamental strategy, signifying China’s first plan on urbanization enacted by the central authorities. The Central Working Conferences on Cities in 2015 further claimed the support for this strategy. Major ministerial agencies, including the NDRC, the Ministry of Public Security, the Ministry of Finance, the Ministry of Human Resources and Social Security, the Ministry of Land and Resource, and the Ministry of Housing and Urban–Rural Development took an active part in the three years making of this strategic plan to direct China’s continuing urbanization. The plan is divided into eight sections, which contain 31 chapters.1 The main content can be summarized as “one main line,” “four tasks,” and “five reforms.” The mainline is that the plan should closely center around improving the quality of urbanization to accelerate the transformation of urbanization development that will see people-oriented urbanization as an essential value, and city clusters as a major form of urbanization, which will be supported by comprehensive accommodating capacity and safeguarded by institutional innovation. China’s new type of modernization should be people-oriented. Areas of modernization should develop in step with each other. The arrangement should be optimized, it should be ecologically friendly and carry forward cultural traditions. The “four tasks” mean that the new-type urbanization has to gradually settle the former agricultural population who have migrated to the cities, optimize urbanization, and increase the sustainability of cities to eventually achieve unified urban and rural development. The “five reforms” means the 1

See: http://www.china.org.cn/china/2014-03/19/content_31836248_2.htm, accessed December 28, 2019.

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government will step up efforts to manage population, control land resources, secure funds, build urban housing and protect the environment, to perfect the institutional system for urbanization development. Among the six key policy areas in this plan, the first one is to convert the rural population into urban residents in an orderly manner. On December 25, 2019, China issued an Opinion on Promoting the Mobility of Labor and Talent Institution and Mechanism and required all cities that had a population below 3 million to remove all restrictions on hukou regulation and allow free migration. For cities with a population between 3 to 5 million, hukou restrictions should be greatly loosened. It is required that the reform of the household registration system and the equalization of basic public services is imminent in order to grant urban residency to rural migrant workers and their families who are both willing and able to stay in cities and towns where they have had jobs or carried out business for a long time so all people in cities are entitled to equitable welfare coverage. With such a reform, the barrier between urban and rural can be progressively removed to make sure all the people who contributed to urbanization receive equitable benefits. The second policy promoted in the plan is the integrated development of industrialization, the application of information technology, urbanization, and agricultural modernization. Industrialization is the driving force of modernization, with agricultural modernization being its foundation while IT application provides fresh ideas and a new impetus, and urbanization provides a platform. By integrating these four endeavors, China’s modernization drive can be pushed further forward. The third policy is to improve the spatial layout and to coordinate the development of cities and small towns, focusing on major city clusters across the country. As analyzed in Chap. 2, the three leading regions in China produce over one-third of the total national GDP with just 3.5% of the population and 18% of the national land. Due to the increasing environmental pressure and global competition, China needs to foster and develop new city clusters, with adjustment, optimization, transformation, and upgrading of the traditional urban regions so a balanced development of geographical space and new regional economic growth poles can be coordinated. In order to solve the problem of the growing population and decreasing urban mobility, China needs to intensify the integration of transportation and information networks, promote the distribution of key industries, and allocate public resources wisely, so as to help small and medium-sized cities and small towns to develop industries and attract residents to form integrated city clusters. The plan stresses ecological conservation to promote green, circular, and lowcarbon development, conserve water, land, energy, and other resources, and emphasize ecological restoration and environmental preservation. The development of green cities and smart cities will be encouraged, with policy incentives for energy-saving lifestyles and low-carbon city construction, operation, and management methods. It is required to foster cultural continuity and cultivate special features so different cities will portend different urban flavors, according to their unique natural, historical and cultural characteristics, and to avoid cookie-cutter development. As analyzed in Chaps. 4 and 5 in the book, urban history must be preserved when renovating old cities to promote traditional cultural values and to construct scenic cities and

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towns with a long history, a rich culture, a unique landscape, and ethnic characteristics. Humanistic-based urban redevelopment is encouraged with a profound cultural atmosphere and salient modern features. Lastly, the plan stresses reform that will set up a mechanism conducive to the healthy development of urbanization, with comprehensively reform key areas and links concerning people, land, and funds to gradually change the urban–rural dual structure and to integrate the developed and underdeveloped urban areas.2 The analysis in Chap. 6 in the book reveals such a development pattern. Such a document reflects a full demonstration and a transformed direction of China’s great urbanization. Many basic elements of China’s urbanization and urbanism, including socialist urbanization, post-reform urbanization, globalization and urbanization, land transformation, spatial and administrative reorganization, and the state’s role in economic restructuring contribute to the rapid and profound urbanization in the country (Ma 2002). China’s urbanization delineates two fundamental characteristics including the administrative hierarchy and the restrictions to labor mobility across cities and regions (Chan 2010). All these factors demonstrate China’s urbanization has transformed from industry-centered to land-centered, and now to people-centered. Before the reform and opening-up period, China’s urbanization focused on industrializing of the coastal areas and allocating scarce resources to the less developed regions. Urbanization occurred across cities in China while the rural areas were isolated and left out from the urbanization process. After China began the reform era in the late 1970s, the division between urban and rural was gradually blurred. Cities found the countryside to have unmeasurable land and labor necessary for the lifting urbanization in the global era. Between the late 1970s and the early 1990s marked the first period of China’s urban development in the last four decades. During this period, urbanization was accompanied by widespread economic growth across urban and rural areas. In rural areas, the implementation of the Household Contract Responsibility System based on the farmer household linked remuneration to output and significantly improved agricultural productivity. Many male farmers were no longer needed in the village work. At the same time, the loosening hukou system allowed some of these surplus labors to start moving to cities for informal employment in low-skilled jobs, such as construction works, dockers, and plumbers. The influx of surplus labors from the countryside made urban construction practically possible and economically profitable with extremely low wages and virtually no welfare coverage required for these migrants and their families. Complex sources of motivations including individual economic motivation, family-support motivation, and personal development motivation drove millions of rural workers to surge into cities and produced probably the largest scale of demographic movement in human history (Chiang et al. 2013). Nevertheless, China’s urbanization would not have been possible without the foundation of such a rural-to-urban labor movement.

2

Transcript: Press conference on new urbanization plan: http://china.org.cn/china/2014-03/19/con tent_31836248_2.htm, accessed December 28, 2020.

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In the mid-1990s, due to the restructuring of central-local fiscal responsibilities and local government’s burden to provide funds for growth and service, urban land expansion became a response and adaptation to the rapid socioeconomic development and to meet the increasing demand for land and space In big cities. In rural areas and small cities, rural-based industrialization emerged as the major driving force of the expansion of non-agricultural land. Fiscal decentralization, political centralization, and land urbanization simultaneously stimulating urban land expansion across the country’s landscape (He et al. 2016). In the new century, the Chinese government finds that such a land-centered urbanization model had its embedded weakness and posed paramount challenges for the sustainable growth of the country. Such challenges are both economic and social. Economically, extracting financial resources from land exploration and investment drove the land and housing prices in Chinese cities to an unrealistically high level. The high housing price has become one of the major burdens for Chinese people, particularly the young generation who did not have a chance to enjoy the public housing allocation before the 1990s. At the same time, aggressive land use in pursuit of maximizing financial returns consumed vast agricultural land in the country. Such a conversion to non-agricultural land is no longer sustainable. Recently the land-oriented and migration-driven urbanization has been examined integrally. It was found that although rural migration promoted urban land expansion through the production and living processes. Living conditions have no direct impacts on construction land expansion but urban land expansion in China is production-oriented and at the expense of living conditions of citizens (Luo 2018), which is no longer suitable in the long run. Socially, in the planned economy, the lives of social members were fixed at the ends of the “work unit” and “residential area” and the daily activities of most social members moved between the two ends. Public space in urban life is limited, most of which performed transportation functions. As the weak social forces in urban China continued, many social problems aroused. In addition to rural–urban migration, resettled villagers due to land requisition encountered not only a physical change but also a complex transformation of social, economic, cultural, and organizational characteristics. The socioeconomic conditions, compensation, and attitudes of these new “urbanites” were largely still incomplete and dissatisfied in these communities which are manifested in segregation, conflicts, and rural traditions. The expectation of fully implemented social security programs, lump-sum monetary compensations, and government-arranged employment is far from complete for these people affected by the urbanization and land-exploitation process (Qian 2017; Xu 2011). Tse (2016) explores the factors underlying urban residents’ prejudice toward rural migrants and how this prejudice affects the integration of rural migrants into cities. Urban residents of higher socioeconomic status and with a local hukou status presented strong prejudice toward rural migrants. Such an attitude of prejudice lowers the standards of living of rural migrants and increases the difficulty they encounter in social integration. Facing such challenges and as a follow-up measure of the National New-type Urbanization Plan 2014–2020, the latest Central Working Conferences on Cities was held in December 2015, marking a 37-year gap from the last conference in 1978. This

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milestone conference pointed out that China’s urbanization was at the crossroad. This meeting stipulated that urban and regional development in China needed to follow an urban–rural integrated way, with the conversion of farmland to constructed land matching population migration to cities. The size of cities should be compatible with the general environmental capacity of the region. Citizenization of rural migration, optimization of urban planning, and modernization of city management are the three fundamental tasks of the new-type urbanization, with the target of a people-centered urbanization and maintaining the balanced development of agriculture, farmers, and villages (san nong). As Fig. 7.1 shows, the 2010 National Main Function Zone Plan and the 2014 National New-type Urbanization Plan are the two key documents supporting China’s urbanization transformation. At the regional scale, the National Main Function Zone Plan stipulated four strategies to guide the continuing urbanization in China: Balancing natural preservation and desirable exploration, classifying the main function zone, considering resource and environmental capacity, and controlling the intensity of development. It can be seen that the aim of a better planned urban development pattern compatible with natural and environmental resources was demanded for a sustainable urbanization. The National New-type Urbanization Plan added the people-centered dimension into the road map of China’s urbanization path.

National Main Function Zone Plan

National New-type Urbanization Plan

The Physical Dimension

The Human Dimension

Balancing natural preservation and desirable exploration, Classifying main function zone, Considering resource and environmental capacity, and Controlling the intensity of development

Reforming of the household registration system, Integrating development of industrialization, Improving the spatial layout, Promoting ecological conservation, Enhancing cultural continuity, Having a healthy development of urbanization

New Urbani-zaƟon in China

Fig. 7.1 The Path of New Urbanization in China. Source Author

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7.2 Current Policies and Future Directions Urban policy-making in Chinese cities has largely shaped the urban space and public service provisions, with resources being controlled and allocated by institutions. As an important means of specialized capital accumulation, the production of these new urban spaces has projected profound influences on China’s urban socio-economy. At the same time, the production of new urban space is the materialization and spatialization of urban social change, while the former in return act upon the latter. For instance, regional inequality is the spatialization of economic polarization, while the former in the meantime intensifies the latter. Examining the inter-relationship between the state, market, and society is, therefore, instrumental to understand the new mechanisms of the production of China’s new urban spaces, the resultant new spatial order, and governance mechanism. As discussed in this book, the transformative relation between the central and subnational government since the 1990s largely engaged the central government in steering the national development direction while left economic growth in the hand of local governments in China. In competing for mobile capital and business investment, local governments gradually adopted a land-centered growth strategy to maximize the fiscal return from commercializing land user rights. Such a process was facilitated by the privatization of housing in China, which provided significant room for exploitation of land revenue, both for the local government and real estate development. During this process, it was found that mutually competing policies generated by units of sub-national governments to enable the locality to form a strong economic base and export-oriented industries. Attracting foreign investment was identified as the most straightforward and efficient way of pushing local growth, particularly in the fixed asset investment, which produced sizable tax revenue and a multiplier effect of economic gains for local governments and enterprises. Cities have superior political power, vested by their advantageous position in the administrative hierarchy and historical personnel strength tend to reach out to absorb scarce resources from surrounding areas, including labor force, high-end manufacturing, and land. Connected city development made mega-urban regions across China, like in many other parts of the world. Such regions possess not only traditional concentration power but also the unmatchable capacity to offer high quality of public services and quality of life, which in turn created the base for globalized development patter and forged urban regions like the PRD and YRD. Cities and communities in these regions displace the characteristics of world cities and global eminence, whilst other parts of China are still fighting against poverty and for a level of growth that is far left behind. While the growth status has been rather divergent across regions in China the central directive powers remain consistently strong. Regardless of the economic level, urban growth and city development is always the outcome of state-led orders through a multi-level governance structure. Whereas the classical governance model may not be the most appropriate example to demonstrate such a political process,

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the recent rescaling of statehood provides a possible explanation of the ongoing transformation of urban and regional governance in China. When it comes to the urban governance issue, in the early days of the founding of the People’s Republic of China, due to the low level of urbanization, urban management was concentrated on environmental management. Therefore, environmental sanitation management organizations were established across the country under public security and environmental sanitation departments, which were gradually incorporated into the urban development system after 1980. In the late 1970s, in order to address the employment problem and avoid social conflicts, the Chinese urban government actively sought new institutional arrangements in urban management. A large number of business activities were carried out on urban roads and street trading markets appeared in all cities. With the emergence of the street trading market, urban roads became an economic public space with trading and operating functions from only performing the original traffic function. During this period, great changes took place in the social structure. However, the overall functions of the government could not be completely transformed in line with the changes in the economic structure. Urban management at this stage was more about implementing specific regulations of environmental sanitation with no uniform national system and clear division of functions and responsibilities. In 1990, the Notice on Further Strengthening Urban Management and Supervision was issued to guide the development of urban management and supervision taskforces in cities above the county level. At the same time, management problems in Chinese cities became increasingly complex and started to involve multiple administrative departments such as building appearance, environmental sanitation, urban planning, taxation, industry and commerce, and transportation. Almost every department had enforcement power over certain types of urban problems, causing chaos in the qualifications of law enforcement subjects, regulations, and procedures. In order to solve such chaotic urban management systems, some local governments tried to merge law enforcement functions by various administrative city departments and set up a temporary coordination team targeted at a certain area. In order to address such problems, the Law of The People’s Republic of China on Administrative Enforcement was officially promulgated in 1996,3 of which articles 16 to 18 specifies that “the State Council or the people’s government of a province, autonomous region or municipality directly under the Central Government that is empowered by the State Council may decide to have an administrative organ exercise other agencies’ enforcement power related to urban management. However, the power of administrative enforcement involving restriction of freedom of person shall only be exercised by the public security organs.” In 1999, the State Council passed and issued the Decision of the State Council on Comprehensively Promoting Administration According to Law,4 which explicitly stated that it was necessary to actively implement the pilot program of relatively centralized administrative punishment power, summarize the pilot experience and continue to expand the pilot scope. 3 4

http://www.gov.cn/banshi/2005-08/21/content_25101.htm. http://www.gov.cn/gongbao/content/2000/content_60201.htm.

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In September 2000, after the notice of Continuing with the Pilot Program on Relatively Centralized Administrative Enforcement5 from the General Office of the State Council was released, which clarified the dominant role of the administrative organ that exercised centralized powers of relative punishment as the administrative organ of the government at the same level, the pilot program of comprehensive law enforcement in urban management was carried out across the country. In August 2002, the Decision on Further Advancing Relatively Centralized Administrative Enforcement6 was promulgated by the State Council and comprehensive law enforcement in urban management was promoted nationwide. However, as a complete management activity, urban management includes three phases: decision-making, execution, and law enforcement at the end. The overall comprehensive situation of separating law enforcement and management indicated that the urban government still governed the city with a regulation-oriented concept. The problem of each urban management agency having independent policies was not resolved. The motivation of urban management agencies to make coordinated efforts to govern the city was insufficient and the urban management system was far from perfect, which called for continued reform measures. Since the 17th National Congress of the Communist Party of China proposed to strengthen the integration of institution building, explore a super-department system with organic and unified functions and improve the coordination mechanism between departments, a new round of institutional reform toward super departments had been carried out. China’s urbanization and its new path is under the overall state governance capacity building after 2012. The Decision of the CPC Central Committee on Some Major Issues Concerning Comprehensively Deepening the Reform was adopted by the third plenary session of the 18th CPC Central Committee for the first time positioned the general goal of China’s reform as “perfecting and developing the socialist system with Chinese characteristics, and promoting the modernization of the state governance system and governance capacity.” With regard to urbanization, one of the most important questions is how government can be more responsive to citizen needs and thus produce an equitable urban space.

7.3 A Chinese-Style Urban and Regional Governance Model As the analysis in this book has shown, China’s urban and regional development reflects a clear state-led pattern, where the central government guides the development, through national planning strategies over years to initiate and stimulate the continued formation of urban regions across the country. However, when it comes to the implementation of such plans, it is difficult for the central government to overall supervise local actions throughout a vast country like China. The realization 5 6

http://www.gov.cn/gongbao/content/2000/content_60489.htm. http://www.gov.cn/gongbao/content/2002/content_61756.htm.

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of the national strategies was carried out through a carefully designed, sometimes unexpected but generally well-directed agglomeration of urban growth. The process of such a top-down enforced development pattern was coupled with transitional central-local fiscal relations, land-use policies, housing privatization, facilitated by the global economic transformation, capital movement, and cultural interaction. It is not unwise to say China’s urban and regional development in the past several decades is the joint product of the political, social, and economic transformation of the country and the world. Endogenous and exogenous forces both contributed to such a complex change. In the face of a wide range of pressing public issues and inefficiency of government, in order to respond to public demands as soon as possible, the government can only adopt gradual and corrective improvement methods in the short term to redefine government functions, and thus redefine functional boundaries by revoking, integrating and establishing governance norms. It has alleviated the pressure to some extent and made the scope of urban and regional governance gradually clearer, which provides institutional conditions for the advancement of the state governance capacity building. In the current situation, an effective governance system has not yet been formed between the government, market, and society, urging new requirements to advance urban and regional governance from passive reforms to proactive advancement. It not only requires the mindset of rule of law, but also needs to integrate the thinking of modern governance with the basic idea of coordination and cooperation to give full play to reduce the pressure of the government. Local governments need to explore the governance reform in line with regional-oriented conditions. In his visit to Shanghai in early November of 2019 soon after the Fourth Plenary Session of the 19th CPC Central Committee, which outlined decisions on major issues involving how to uphold and improve the system of socialism with Chinese characteristics, Xi Jinping called for deepening reform, opening-up, and institutional innovation to improve the level of governance Shanghai, the city called international metropolitan city with Chinese socialist modernization characters. As an integral means of state governance system and modernization capacity building, the essential meaning of social governance needs to be fully explored to innovatively address urban governance issues. The everyday welfare of all people in the city can be improved. The city’s public spaces should be expanded and optimized to include reasonable arrangements for production, living, and ecological purposes so as to provide fulfillment, happiness, and security for all the residents in the city. It is stressed that the relation between preservation and development is vital to foster a new style of urbanization that reminds people of the urban history while providing a modern lifestyle and preserving the environment.7 The relation between urban redevelopment and governance is explained in detail in Chap. 4 of the book. Such statements reflect the change of China’s urbanization from a materialist model to a people-centered ideology. The quality of development is as important as

7

http://www.gov.cn/xinwen/2019-11/03/content_5448158.htm.

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the speed and scale of growth. In this regard, governing urban and regional development in China requires a carefully planned strategy with decentralized governance power. Urban governance involves not only the system, mechanism, and legal system but also the adjustment of power and interests between multiple parties. At the regional scale, the CPC Central Committee and state council announced the Opinion on Establishing More Effective Regional Coordinated Development Mechanism in November 2018. Chapter 2 of this strategic document outlined that the role of government and market needs to be balanced and coordinated to promote equalized regional development in China. Since regional inequality remains to be one of the major challenges of China’s economic and social development, the senior government’s coordinating role is necessary to provide the working direction for inter-city competition and cooperation. If the market is left alone to dominate the development process such inequality may persist. The central-local relations play a leading function in this regard where the central government designs the general policies while the local government is the entity in charge of implementation. When it goes to inter-city matters, the involvement of senior government is required to provide a means of communication and to serve as the regulatory authority for conflicts. The senior government possesses a broad policy orientation to promote regional coordination and the capacity to identify compatible positions for localities to pursue the common good. By such an arrangement, the regional coordination mechanism can secure a high level of development in advanced areas like the YRD and PRD while helping the disadvantageous hinterland areas catch up. Focused policies are carried out to narrow the widening regional gap. Regions like YRD and PRD will compete in the global marketplace while other second-and third-tier regions can support the competition by providing labor and market and create a comparative edge for themselves by economic cooperation and capital movement. Chapter 6 of the book shows such a multi-level and collaborative governance mechanism in major urban regions in China. At the local scale, urban governance calls for a multiple-level and cooperative governance approach as well. The analysis in Chap. 5 shows that local issues in China have a root in vertical inter-governmental relations. Any local developmental issue is not an independent decision-making outcome. A city’s growth strategy and planning perspective reflect the national, regional, and provincial vision of development and socioeconomic policy. The pressure from the above to a great degree forge the growth mode of a locality. In recent years, the central government increasingly stressed that urban governance is a grassroots matter and decentralized the managerial function down to the lowest level possible. In December 2015, the Guiding Opinion on Deepening City Law Enforcement Reform (Decree 37) was adopted to implement the all-around urban management reform. Two major policies are carried out, including the evolution from a management-oriented to a service-oriented system and the devolution of enforcement power to the low level of governments, namely the street office and even community committee level. The evolution from a management-oriented to a service-oriented system requires a better planned functional system so that more urban governance problems are to be solved in the early stage rather than the enforcement stage. In September 2016,

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the Vice Minister of Housing and Urban–Rural Development further stressed that 70% of the urban management matters ought to be solved by providing desirable services, 20% left to managerial system, and only the remaining 10% by enforcement, which has been called the “721 Rule” of urban management in China. In order to fulfill such a mission, it would require a more participatory mode of governance. To identify the services demanded by the diverse body of population in Chinese cities an open and engaging way of collecting public views and feedback is the utmost task for the ongoing reform. In the Decision of the Fourth Plenary Session of the 19th CPC Central Committee, the term “people” was mentioned over a dozen times and became the most important measurement of the state governance capacity. Such a notion points to the classic question of urban development with regard to “the right to the city.” The foundation of realizing new-type urbanization relies on continuing to carry forward major regional plan, key function area planning, and a working coordination strategy. At the city level, urban redevelopment is considered a key to balance urban growth and city history, build a sound social governance system, and promote peoplecentered urbanization. In his 1968 book Le Droit à la ville, Henri Lefebvre proposed the thought of “the right to the city” to encourage local authorities and residents to reclaim the city as a co-created and mutually livable space—a place for life detached from the growing effects that commodification and capitalism have had over social interaction and the rise of spatial inequalities in worldwide cities throughout the past two centuries. Harvey (2005) says that to claim the right to the city is to claim a shaping power over the processes of urbanization, over the ways in which our cities are made and remade and to do so in a fundamental and radical way. Urbanization has always been a phenomenon while cities have become the geographical and social concentrations of a surplus product from their very inception. When cities are considered accumulation of wealth by dispossession of assets and happiness of the urban residents, urbanization cannot produce a desirable quality of life but merely creating wealth for capital (Harvey 2003). If the pattern of development is not going to create people-centered urbanization and cities for people urbanization is not successful. In order to address the long-lasting issue persisted throughout the world’s urbanization, which creates the conflict between city growth and protection of a right, the involvement of public has to be cultivated from the beginning to the end of urban policy-making and governance. In May 2000, UN Habitat issued the “Declaration on the Norms of Good Urban Governance” in Nairobi, Kenya, aiming to launch a “Global Campaign for Good Urban Governance” to achieve the goal of building sustainable human settlements in an increasingly urbanized world. The vision is to realize the “Inclusive City” through improved urban governance, where every individual and every group have equal access to development opportunities and life security. The campaign aims to increase the capacity of local governments and other stakeholders to practice good urban governance and to raise awareness of and advocate for good urban governance around the world. The declaration proposes that good urban governance is characterized by seven principles, including sustainability, decentralization, equity, efficiency,

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transparency and accountability, civic engagement and citizenship, and security. As one of the most important goals of urban management, sustainable development is defined in the Brundtland Report, also called Our Common Future, released in 1987 by the World Commission on Environment and Development (WCED). It aims to correct the wrong path of urban development in Latin America, avoid the repeated mistakes of many countries, and emphasize that economic development must be inter-linked, self-sufficient, and sustainable with shared social goals. The United Nations Millennium Declaration in 2000 called on all countries to include sustainable development in the plan for the new century. At the Johannesburg Summit in 2002, sustainable development was recognized as the primary principle of UN activities, and the important role of cities in the process of sustainable development was fully valued. In 2005, all the member countries of the United Nations started to implement the national urban sustainable development strategy. The outcome report of the World Summit of the United Nations elaborated three pillars of sustainable development, including economic development, social cohesion, and environmental protection, and expounded the deeper meaning of sustainable development other than ecological or environmental protection. The goal of modern urban governance is to ensure the sustainable development of the city and meet the various needs of all residents. Good urban governance is the sum of approaches by individuals, public and private institutions to plan public affairs and manage public services. It is a continuous process of coordinating various interests and taking cooperative actions. Based on the public needs of residents, Chinese cities need to effectively provide public products and public services, enhance the comprehensive competitiveness of the city, and promote economically and socially sustainable development. Goals of harmonious development should be set to develop people-centric and service-oriented city management. Meeting the needs of the public should be the starting point of government service, and public satisfaction shall be the evaluation standard for government service level and quality, so as to realize the new-type, people-centered urbanization. The proliferation of new urban spaces signifies the emergence of new mechanisms of space production and policy-making, thus leads to the rise of a new urban spatial order. Such production of new urban spaces is resulting from the interactions between the state and the market in the era of market transition. At the same time, the production of new urban space is the materialization and spatialization of urban social change, while the former also in return act upon the latter. For instance, residential segregation is the spatialization of social polarization, while the former in the meantime intensifies the latter. The inter-relationship between the state, market, and society is instrumentally analyzed in the previous chapters to understand the production mechanisms of China’s urban spaces and the transformative spatial order. It is fundamental to build a government that can be responsive to citizen needs, improve the local governance capacity and thus produces an equitable urban space. The relation among different levels of governments in urban governance presents challenges to develop a sound governance structure. With the transformation of China’s urbanization, the price of labor and land as factors of production will continue to rise. Economic development needs to get

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out of the extensive growth mode of low cost and high consumption. The transformation of growth mode will bring about the transformation of urban competition mode. Strengthening the accumulation of human capital has become the core of urban competitiveness. With China’s urbanization entering the stage from “development-oriented” to “welfare-oriented,” the process of new-type urbanization requires breaking the inherent urban–rural dual system, coordinating the public service needs of different groups between urban and rural areas and within the city, and formulating and implementing corresponding policies according to the needs of different groups. As China’s urbanization continues, urban and rural residents’ demands would occur dynamic changes. Only by considering fairness and diversity can the transformed urban governance ensure that different groups have equal access to basic public services and development welfare. As adopted in Decree 37 the devolution of enforcement power to the low level of governments has become a popular tool to optimize the governance mechanism in Chinese cities. This arrangement poses a seeming tension between the centrally planned local growth strategy and the burden of governing Chinese megalopolis at the municipal level. In order to establish such a cooperative governance structure, it would require three aspects to be fully realized. First of all, a clear vision for the city’s future in China is demanded. Secondly, a coordinated urbanization pattern better connecting urban and rural places is required. Thirdly, an enhanced governance system fully joining the power of state, society, and market is necessary. The future of cities in China lies in their functions, not as places creating wealth for global and domestic capital but as the livable and desirable space for their residents. The goal of urbanization needs to be converted from its pure economic gains to general social promotions. Cities ought to be a place that generates modernity and civilization instead of a factory of exploiting the land and utilizing resources. Only with a general welfare goal can urbanization remain as a driving force for sustainable growth. A coordinated urbanization to connect urban and rural spaces points to the essential meaning of cities that should possess a rich history of the past and promising light of the future. Although Ebenezer Howard’s dream of Garden City that is surrounded by greenbelts of permanent agricultural land, relatively dense development, allowing residents to walk, mixed residential, commercial, and workplace elements, and public transit such as railroad or light-rail might not come very close to the modern urban environment the aim of using spatial relations to create a close-knit social community that allows diverse elements to interact is realistic and necessary to achieve (Lynch 1960, 1981). No urban is urban without its rural root. The nostalgia of the agricultural era does not help but a connected and coordinated urban–rural development is the goal of China’s urbanization, both at the local and regional scale. China’s urbanization transformed from a planned-economy dominant pattern to a growth-oriented model and achieved breathtaking accomplishments for the people, the cities, and the country. It has been an urbanization path that no other countries and regions have experienced and the urban and regional governance practices transcend the debates of the western or oriental models. To date, urbanization shoulders China’s pursuit of prosperity in its urban and rural areas and provision of welfare to its urban and rural residents. Major urban regions in China compete on all fronts in the volatile

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global environment. Urban and regional governance in China has become an evolving model and an integral part of the state governance system and state governance capacity modernization efforts. Such a model of urban and regional governance requires vertically directive, horizontally cooperative, and a strong network to design, implement, and facilitate a system of strategies and policies for a linked future of urban and rural integration with balanced regional development. To fulfill the future goals of urban and regional development in China an enhanced governance system fully joining the strategic leadership of the state, the streamlined implementation of the grassroots, the open engagement of the society, and the active participation of the market are all necessary. By carrying out the national and regional vision of development, a structure for diverse interests heard, rights protected, and welfare safeguarded can be built to provide a bright future of people-centered urbanization for the cities, the countryside, and the country.

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