Lying flat city and rat race city: Chinese cities’ land development strategies

Abstract

A characteristic feature of China’s urbanization is the active role of city governments in organizing and financing land development. Through this process, local governments capture trillions of yuan in land value annually, channeling these revenues into urban infrastructure—a phenomenon widely known as land finance. While existing studies have extensively documented the socio-economic effects of land finance, less attention has been paid to its institutional origins, particularly how local governments shaped its development. This article adopts a historical institutionalist approach to examine the formation of land and infrastructure development institutions in Chongqing and Beijing since the late 1990s. By comparing these two contrasting cases, the study reveals what efforts city governments could make to create an active land development strategy, and how the strategy could remain passive without these efforts. This article argues that entrepreneurial municipalism best characterises Chinese city governments’ strategic efforts in land development. Key efforts include: setting ambitious urban development goals, centralising land management authority, and providing political and economic support to public asset corporations of land and infrastructure development. Revealing these efforts might help cities in other developing countries to devise their land development strategies for capturing land value in rapid urbanisation and industrialisation.