Fragmented Peri-urbanisation Led by Autonomous Village Development under Informal Institution in High-density Regions: The Case of Nanhai,China

Abstract

Rapid urbanisation in China has been a significant phenomenon with profound social, economic and environmental impacts. The most profound and intriguing changes occur in the interface between the central city and the suburbs—namely, peri-urban areas. Being one of the dynamic urbanising regions, the Pearl River Delta has seen great transitions in its demography and built environment in the context of institutional change. Rapid urbanisation in peri-urban Nanhai has been chiefly driven by the numerous autonomous small-area rural collectives, which has created a fragmented urbanising landscape. The fragmentation and excessive conversion of farmland for industrial uses are brought about by the new institutions of village-based land shareholding co-operatives and their informal leasing of collective land. As a result, extremely scarce land resources are not utilised optimally and the ecological environment is deteriorating. Urbanisation in high-density peri-urban Nanhai is made unsustainable for the long-term future.

Keywords

China fragmented urbanisation high-density regions informal institutions sustainable growth

1. Introduction

China’s urbanisation since the late 1970s has been a historical phenomenon in terms of its economic and social impacts on the populace of this vast country. Physical changes caused by urbanisation in many growing regions are unprecedented in terms of scale and complexity. The magnitude of rural-to-urban migration is equally unprecedented. Migrants from the central and west regions are mainly attracted to the east (or coastal) region, which has made the coastal region one of the most economically dynamic regions in the world. The coastal region accounts for 13.5 per cent of the national territory, but its population represent 44.7 per cent of the national total, according to the 2010 population census (NBSC, 2011a). The inflow of a large quantity of migrants into the already highly dense regions (such as Yangtze River Delta and Pearl River Delta) has exacerbated the fierce competition for limited land resources (Sui and Zeng, 2001).

Intensified competition for land is well reflected in the areas where the process of urbanisation is unfolding in the forms of land development and redevelopment. For the developing countries, the process of urbanisation, incorporating social, economic and physical transformations, often takes places in the form of urban activities penetrating into rural areas. The most profound and intriguing changes occur in the interface between the central city and the suburbs—namely, peri-urban areas. Peri-urbanisation is a term referring to a process in which rural areas located on the urban outskirts become more urban in terms of economic structure, social fabric and physical appearance, while the areas in question still, to a great extent, remain dominated by the rural institutions (Webster and Muller, 2002). The peri-urban areas are the transition zone between urbanised land uses and predominantly agricultural land uses, and it is also the zone of rapid economic and social structural change (Adell, 1999; Kombe, 2005). Peri-urbanisation is particularly phenomenal in the East and South-east Asian developing countries where rural-to-urban transformation occurs in the context of high population density (Maneepong and Webster, 2008; Zhu and Hu, 2009). McGee (1991) has coined the term ‘desakota’ that captures the unique feature of peri-urbanisation in Asian developing countries—i.e. intense mixture of agricultural and non-agricultural land uses in the urban periphery.

Urbanisation has resulted in the transition of both people and land: rural villagers becoming urban residents and agricultural land being converted for urban uses. In China’s peri-urban areas, it also entails institutional transition from the rural collective landownership to the urban state landownership. The land conversion takes place extensively at the peripheries or in the suburbs of metropolises where competition for land between urban governments and rural villages is explicitly demonstrated. Based on the premise that built environments should be moulded within an institutional framework where land rights are critically influential, the main objective of the paper is to uncover the impact of institutional change on the formation of built environments in Nanhai, one of the peri-urban areas in the Guangzhou metropolitan region.

The competition between the urban and rural interests constitutes one of the driving forces behind institutional change. In facing infiltration of urban-sponsored developments into the rural territories, rural villages initiated bottom–up institutional change in the best interest of rural communities. Institutional change results in new institutions, formal and informal. On the one hand, formally legitimised by the state, Nanhai’s villages have become a chief actor developing village economies. On the other hand, it is observed that Nanhai’s very limited land resources (measured by population density) have not been utilised efficiently and effectively under the informal institution of collective land leasing that is not recognised by the state. Sub-optimal land use prevails, caused by short-term competition for land rents. Given the autonomous villages, small in land area, fragmented bottom–up peri-urbanisation ensues as a result of self-contained village development. Long-term sustainability of the high-density Nanhai is made vulnerable.

2. Institutional Change from the Below: Bottom–Up Urbanisation under Uncertainty

Societies and markets are bound by institutions that are “the humanly devised constraints that structure political, economic, and social interactions” (North, 1991, p. 97). Institutions thus provide “regularities in behavior which are agreed to by all members of a society and which specify behavior in specific recurrent situations” (Schotter, 1981, p. 9). From the economic perspective, institutions are deemed “sets of rights and obligations affecting people in their economic lives” (Matthews, 1986, p. 905). On a pragmatic note, the World Bank (2002) defines institutions as rules, enforcement mechanisms and organisations. Organisations, whether they are political, economic or social, behave and perform as collective actors within a framework defined by institutions (Knight, 1992; Weimer, 1997).

Economic and social transitions suggest profound institutional change. Since 1978, significant changes with the single goal of national economic growth have occurred in China where a social transition is being spearheaded by the economic reforms. Because of political constraints, gradualism prevails, which brings in an approach of trial and error in the implementation of new initiatives. In North’s (1990) and Eggertsson’s (1994) views, institutional change is always made marginal, incremental and path-dependent by an immense stock of social capital in the form of an institutional matrix. Institutional change is thus related to social choices that are constrained by cultural norms. Institutions are composed of both formal rules like constitutions, regulations and laws, and informal constraints such as conventions, moral rules and social norms. Formal institutions are explicitly enforced by the state. When formal institutions are in the process of transformation and thus not able to effectively maintain order and manage interactions, informal institutions, often unwritten and implicit, may emerge to fill the gap left by inept formal institutions.

Institutions, generated in the context of pervasive uncertainty in human interactions, are fundamental to mitigating uncertainty. Institutions as social norms intend to make human behaviour predictable by bounding individuals and providing regularity (North, 1990; Cornell and Kalt, 1997). Although informal institutions can provide a framework for social and economic activities during the dynamic transition, the informality of the institutional environment creates uncertainty in the context of rapid social and economic changes. In a close-knit homogeneous community, informal institutions as a product of collective action and unwritten codes of social conduct may serve to co-ordinate members’ expectation and behaviour. Being culture-specific, informal institutions may not be sufficient to provide order in the absence of formal institutions when society becomes diverse and heterogeneous (World Bank, 2002). Conventions, moral rules and social norms are not necessarily shared and observed among members of a diverse community (Mantzavinos, 2001; Elster, 1989). Uncertainty could induce disorderly short-term behaviours. When uncertainty occurs, it prevents individuals from making rational and most appropriate decisions because of not knowing the causality.

Being the basic social unit in rural China, natural villages have been a very stable and steady institution in China’s long history (Gao, 1999). Since the 1949 revolution, China’s villages have also become the basic collective economic organisation for the rural economy and rural communities have been managed by a three-tiered governance system which is the cornerstone for the collective landownership as well, with townships (xiang/zhen), administrative villages (xingzhengcun) and natural villages (zirancun) replacing the commune, the brigade and the production team respectively, since the 1980s (Smil, 1999; Ho, 2001; Tang, 2009). Since collective farming was abolished and replaced by the Household Production Responsibility System (HPRS) in the early 1980s,¹ agricultural production has been decentralised to village households that till the land leased from their village. Village land stock is equally distributed among all village households. The practice of the HPRS seems to echo the principle that villages are the default autonomous social and economic organisation, and the basic holder of collective land.

In the peri-urban areas where urbanisation is penetrating into the countryside, agricultural lands are increasingly converted for non-agricultural uses. There is fierce competition for land between rural villages and urban agents (Zhu and Hu, 2009; Shieh, 2011). Competition for land during transition could instigate institutional change, aiming to make land rights conducive to social and economic growth. Without endorsement of the state, however, this institutional change is likely to lead to informal institutions. Informal institutions may serve the purpose of providing certainty to a steady and homogeneous community and enhance its welfare. In a dynamic and heterogeneous environment, informal institutions may not be able to provide certainty for increasingly complicated social and economic transactions. In this case, institutional uncertainty does not facilitate a long-term perspective. Short-termism prevails. Autonomous villages develop their land resources for their short-term interests, which could be a sub-optimal mode in the face of acute land scarcity and small-sized villages in terms of land area. Collaboration between villages for economies of scale in the utilisation of limited land resources could be hampered by uncertain informal institutions which work only within a homogeneous village.

3. Rapid and Fragmented Urbanisation in Peri-urban Naihai

Since the late 1970s, China’s economic reforms, aiming at building a socialist market economy, have brought about tremendous changes to the country. Driven by market orientation and opening-up to the world, China has created an economic miracle, demonstrated by the remarkable economic growth in GDP at an average rate of about 9 per cent per year for three decades since 1978 (Zhu, 2005). Concurrent with the economic growth is the prominent phenomenon of rapid urbanisation. During the autarchic and centrally controlled era between 1949 and 1978, urbanisation was suppressed because of the ideology of socialist industrialisation (Ma, 1976). Urban residents only accounted for 17.9 per cent of the total population in 1978, rising from 12.5 per cent in 1950 (NBSC, 2006). Urbanisation has increased rapidly since 1978, due to the marketisation and pent-up demand for industrialisation. By 2010, 50.0 per cent of the national population had been urbanised (NBSC, 2011b). The physical change in China’s cities is equally significant, especially in the economically dynamic coastal regions, shown by the uncontrolled urban expansion (Lin and Ho, 2005).

As an integrated ‘economic zone’, Pearl River Delta region (PRD, see Figure 1) has been the pioneer of China’s new practice of ‘reform and openness’ (Vogel, 1989). Driven by the two engines of industrialisation and market-oriented land development, it has become one of the most dynamic regions in the world, known as the ‘world’s manufacturing factory’. Rapid urbanisation manifested by its unprecedented expansion of built-up land is well pronounced (Weng, 2002). With a total area of 41,690 square km, the PRD saw its built-up land area increased by 2.86 times between 1988 and 2008, rising from 1765.13 square km to 6816.04 square km (Yang and Yuan, 2010). While the old central cities are restructured substantially driven by new equilibrium of demand for and supply of land, the rapid urban expansion is marked by the extensive land development in the outskirts to accommodate incoming industrial investments and rural-to-urban migrants. The built environment in the interface between the core cities and traditional rural areas—namely, the peri-urban areas, has been experiencing dramatic change.

Figure 1.

Location of Naihai in the Pearl River Delta. Note: Drawn by the authors.

Nanhai is located to the immediate west of Guangzhou, the capital city of Guangdong Province, and to the north of Foshan central city that is the third-largest city in the PRD after Guangzhou and Shenzhen (see Figure 1). Naihai used to be a rural county, and it has become an urban district annexed to Foshan municipality since 2003. Located in the fringe of both central cities, it has been receiving substantial outside investments and becoming a dynamically growing district in the PRD. From 1982 to 2010, its total gross economic output increased from ¥0.8 billion to ¥179.67 billion (at current prices) at an annual growth rate of 22.2 per cent. With the economic development, the total population in 2008 was 2.6 time of that in 1978, reaching 2.1 million, among which 55.8 per cent (1.2 million) were local residents with a certificate of household registration (hukou) and 44.2 per cent (0.9 million) were non-residents working and living temporarily in Nanhai (NHBDPS, 2011). As a rural county initially, Nanhai has been experiencing rapid urbanisation since the 1980s, demonstrated by its extensive and high-speed land conversion from agricultural uses to urban uses. It saw its built-up land area reach 568.8 square km in 2008, rising from 114.5 square km in 1990. The built-up area as a percentage of the total land area (1073.9 square km) rose from 10.7 per cent in 1990 to 53.0 per cent in 2008 (see Table 1 and Figure 2).

Table 1.

Built-up areas in Nanhai, 1990–2008

	1990	1995	2000	2005	2008
Built-up areas (square km)	114.5	255.0	335.1	415.6	568.8
Built-up areas as a percentage of the total	10.7	23.7	31.2	38.7	53.0

Note: The estimations are based on data from satellite remote sensing maps at: datamirror.csdb.cn/admin/introLandsat.jsp.

Figure 2.

Development of the built-up area in Naihai, 1990–2008.

Further analyses reveal that the built-up land has been developed in a spatially dispersed pattern. As a result, rural and urban areas are intensively mixed-up (see Figure 2). A Fragstats² patch analysis highlights that farmland has become increasingly fragmented over time, indicated by an increase of patch numbers from 77 (1990) to 885 (2008), and the gradual fall of the mean patch size from 1245 ha to 63 ha per patch (see Table 2). The continuous dropping off of the contagion index over time shows that Naihai’s landscape is increasingly fragmented (see Table 2), with farmland and built-up land extensively piecemealed and spatially intermingled. Intensive mixture of urban and rural land uses is conducive to neither urban living nor rural farming, as efficient provision of facilities for living and farming requires urban compactness and sizeable farmland.

Table 2.

Patch analysis of farmland and contagion index, Nanhai

Year	Number of Patches^a	Mean patch size (ha)	Contagion index^b (0–100)
1990	77	1245.5	62.70
1995	314	260.7	40.78
2000	448	164.8	38.02
2005	680	96.8	33.91
2008	885	63.3	30.28

Patch is a terminology in the discipline of landscape ecology, defined as spatially consistent areas with similar thematic features as basic homogeneous entities, in describing or representing a landscape (McGarigal and Marks, 1994). A farmland patch is thus defined as a complete plot of farmland without spatial separation.

The contagion index measures the extent to which land uses are aggregated or fragmented. The landscape is aggregated at high values, and dissected into small patches at low values (O’Neil et al., 1988).

Source: The estimations are based on data from satellite remote sensing maps at: datamirror.csdb.cn/admin/introLandsat.jsp.

Fragmented land development in peri-urban Nanhai seems to be caused by diverse landed interests and various modes of land development. It is observed that there are two types of urbanisation spatially intermingled in general. One is the top–down penetration of urban projects sponsored by the urban state (34.8 per cent); the other is the bottom–up rural industrialisation and rural housing construction initiated by the village collective (65.2 per cent) (see Figure 3). The former entails the change of landownership from the collective to the state, while the latter does not change the collective landownership.

Figure 3.

Land developments by the state and rural collectives, 2008.

4. Institutional Change Driven by the Rural Collective

4.1 Collective Landownership as a Unique Institution

China’s land is governed by a dual framework of state and collective landownership. According to China’s Constitution, in principle, urban land belongs to the state with the municipal government as its agent and rural land is collectively owned by the agrarian community. As a key component in the programme of economic reforms, the 1988 amendments (Article 10) to the Constitution formally declare that land should be recognised as a special commodity and its use rights, separated from ownership, can be leased to developers or users for a fixed period after a payment of rental as a lump sum. The invention of public land leasehold has explicitly made the state-owned land economic assets. Property rights are clearly defined over the land supplied under the leasehold (Tang, 1989). An emerging urban land market has been evolving ever since (Zhu, 2005).

However, China’s collective land is a unique institution. The idiosyncrasy of the collective landownership is that it is based on the Marxist doctrine that land should be treated as a means of production, not an economic asset.³ Land is owned by the rural communities on the condition that it is only used for economic production. Collective landownership is thus defined such that the collective has neither the right to derive income from land by letting it out, nor the right to change its form and substance by developing it for non-agricultural activities without approval from the government at the county level or above. The right to develop rural land for village industries should be granted by the urban state (Byrd and Lin, 1990). The right to alienate collective land is restricted to the situation where the other party in the transaction is the state (Lin and Ho, 2005).

Moreover, ownership of rural land is vested with the collective entities at three hierarchical levels (township, administrative village, natural village). An official maxim describes owners of the collective land as sanji suoyou, dui wei jichu (collective ownership belonging to three entities—the commune, the brigade and the team—and with the team being the basic holder).⁴ Thus, the collective landownership is ambiguous to its nominal owners, as how much each entity is entitled to has never been clearly delineated. The collective land rights are also incomplete in that the collective landowners do not autonomously possess the right to develop land or change its agricultural uses to non-agricultural uses. The villagers as members of the collective owners are explicitly entitled: the use right over farm land allocated to them under the HPRS and the right to residual income of farming; the use right over a small plot of land to build housing for the household; and the right to benefit from land held under a three-tier hierarchy of management of the rural communities.

4.2 Formal Institution Change: Village-based Land Shareholding Co-operatives

Since the implementation of the HPRS, farmland has been let, for a 15-year lease initially in 1984 (subsequently a 30-year lease), to village households equally in terms of land quality and quantity based on the egalitarian principle (Kung, 1995, 2000). More often than not, households have several pieces of farmland with various degree of fertility, not adjacent to each other (Wang, 1994; Ministry of Agriculture, China, 1993). Nanhai is a county with high population density and thus severe land scarcity. Farmland per capita was only 400 square metres in the early 1990s, only one-third of the national average (Ministry of Agriculture, China, 1993). Village land distribution had to be readjusted periodically because of change in village population and each readjustment aggravated the problem of land fragmentation. As a result of land allocation based on the HPRS, further improvement in agricultural productivity was seriously hampered by the extremely piecemeal land sub-divisions that do not allow economies of scale. Meanwhile, off-farm jobs have become abundant in Nanhai and cities in the PRD which has been rapidly industrialising since the 1980s. Instead of tilling the meagre landholding, young villagers went to the mills to seek better remuneration. Twenty per cent of the rural labourers were already engaged in non-agricultural employment by 1990 (Hou and Zeng, 1991). Farmland was left idle as a result. The nature of collective landownership forbade land transfer between households, let alone land sub-lease to farmers outside the village (Fu and Davis, 1998; Yao, 2000). The dire situation called for institutional change.

Guangdong has been the vanguard of economic reforms which chiefly promote the participation of non-state actors in economic development. In the early 1980s, Nanhai government announced and implemented the ground-breaking policy guideline that has created the well-known ‘Nanhai model’. The key characteristic of the Nanhai model is to develop a decentralised economy by engaging six ‘engines’: county-owned enterprises (state-owned); enterprises owned by townships, administrative villages and villages (collectively owned); privately owned enterprises and joint ventures with foreign capital. The gist of the Nanhai model is to make a decentralised economy with the participation of all sorts of market actors.

Endorsed by the Nanhai district government that promotes village economies, village-based Land Shareholding Co-operatives (LSCs) have been created in Nanhai since the early 1990s as an experiment in rural reforms (Fu and Davis, 1998). There were 1765 LSCs in total in 2008, of which 224 LSCs were administrative village-based and 1541 LSCs were natural village-based (Division of Social Works, Nanhai Government, 2009). All land parcels except family housing plots in the village are recollectivised in order to conduct non-agricultural development. The beckoning rural collective industrialisation needs consolidated large land parcels. Farmland lots need to be pooled to enable agricultural production with economies of scale. Only village members can hold the shares of LSCs and those shares cannot be transferred and sold. If a member has to quit the village (for example, death and migration), his or her shares have to be surrendered to the co-operative. Shares are distributed to the co-operative members equally based on a formula which takes into consideration members’ prior contribution towards the collective assets. Incomes from village enterprises and properties are distributed among co-operative members according to their shares, albeit about 40 per cent of the collective incomes are supposedly held by the co-operative organisation for future collective development. An LSC is run by a management committee elected by its members, not controlled by professional managers as normal business undertakings are. Since villagers are the nature members of LSCs, LSCs are reckoned as both social and economic autonomous organisations.

4.3 Informal Institution Change: LSCs’ Land Leasing

While the official doctrines of collective landownership remain unchanged, LSCs manage to strengthen their holding of the collective land by stipulating that an agreement from two-thirds of the co-operative members is required in the case of alteration of co-operative resources where land stock is the major component. It is most significant to the villages as the power of the urban state in land acquisition is curbed. Village enterprises had been growing at a high speed until market competition became intense. The number of village enterprises had reached the zenith of 3878 by 1996 (392 in 1978) (NHBDPS, 1998). The village industries contributed 31.2 per cent to Nanhai’s total industrial output in 1984 and the share rose to 47.2 per cent in 1995 (NHBDPS, 1998). Correspondingly, the built-up land as a percentage of the total rose from 10.7 per cent (1990) to 27.9 per cent (1996) (Nanhai Land and Resource Bureau, 1996) and agricultural labourers as a percentage of the total rural workforce declined from 38.1 per cent to 24.9 per cent in the same period (NHBDPS, 1998).

Nevertheless, rudimentary rural enterprises faced increasingly fierce competition from inward foreign and private investments which had industrial expertise and understood modern business management. Privately owned enterprises and joint ventures gradually took over, while village factories withered, either bankrupt or privatised (Che and Qian, 1998; Vermeer, 1999; Pei, 2002; Li and Rozelle, 2003). Collectively owned enterprises’ share of the total industrial output declined drastically from 50.2 per cent (1998) to 2.9 per cent (2008), while the foreign and private enterprises’ industrial output as a percentage of the total jumped from 40.9 per cent (1998) to 96.4 per cent (2008) (NHBDPS, 1998, 2009).⁶ LSC economies were in peril in the face of market competition, which prompted an informal institutional change from below. Aspiring to lead the way of industrialising villages, LSCs gradually took the role of ‘landlords’ leasing land to private enterprises and their migrant workers so as to capture land rent differentials.⁷ LSCs cannot lease their land resources to renters to earn land rentals, as regulated by the collective landownership. Only recently has agricultural land leasing been allowed to overcome the problem of farmland fragmentation. Land plots for non-agricultural uses cannot be leased to non-LSC members without approval from the urban government. Therefore, leasing of non-agricultural land without the urban authority’s approval is an informal institution. The fact that LSCs cannot place their land resources as collateral for bank loans is a clear testament that collective land is not an asset. When rural collective enterprises have to be closed, industrial land is supposed to be restored to farmland.

According to four years’ Nanhai data for 2006, 2008, 2009 and 2011, land rentals to LSCs and dividends to LSC members accounted for 81.7 per cent and 41.9 per cent of the total net income of LSCs on average respectively (NHRWO, 2007, 2009, 2010 and 2012). The authors’ fieldwork investigation⁸ reveals that dividends from the collective economy and household housing rentals⁹ represent 35.3 per cent and 15.7 per cent of the total household income respectively, in Lianxing LSC (the remainder being the wage from working in the factory). The significance of land leasing to the collective economy and villagers’ welfare (51.0 per cent of the household income) is clearly shown. The rights of the state to develop agricultural land for non-agricultural uses (such as manufacturing and services) and to lease it to tenants were somehow ‘encroached’ upon by the village collectives, without an explicit agreement with the urban government as the agent of the state.¹⁰

5. Bottom–up Land Development by the Autonomous LSCs and Fragmented Urbanisation

5.1 Opportunistic Land Development under Uncertainty

The LSCs have managed to gain more rights over controlled landholdings than their predecessors (village collectives). However, informal institutional change is not formally recognised by the state and there is no existence of long-term certainty and security of the informally acquired land rights. When uncertainty occurs, it prevents one from making rational and long-term planning. Instead, uncertainty can induce short-term behaviour. It is observed that most industrial sites in the LSCs are developed opportunistically in a piecemeal and casual manner. Factories were poorly built and thus attracted low-standard industrial tenants (see more elaboration in section 5.2).

The usual low living standard in the village presses the LSC management to make improvement of villagers’ welfare its first priority. Land rental incomes from the existing industrial land stock (which is not used efficiently) are not able to meet the LSC members’ rising expectation for a better life, due to the high population density of the villages. LSC management committees scramble for more land available for leasing and thus ‘illegally’ develop village farmland for industrial uses. Because of the status of informality, or strictly speaking, illegality of land conversion, LSCs are unable to raise loans from the market for the industrial property development. It explains the low standard of industrial buildings and non-existent services for the industrial sites. The informal land conversion is motivated by the capture of land rent differentials, which strategically pre-empts the urban state’s land acquisition at compensation rates for land in agricultural uses. An informant revealed that the compensation rate for one mu ¹¹ of farmland was only ¥28,000 at a time in the 1990s, while the rental income from one mu of industrial land could be as high as ¥70,000 per annum. Impending land acquisition by the state makes villages anxious and restless, and LSCs have every incentive to convert farmland to non-agricultural uses under their control.

In the process of economic reforms and decentralisation, China’s local governments have become the local developmental state committed to local economic development (White and Wade, 1988; Woo-Cumings, 1999; Zhu, 2005). Nanhai district government has been an active actor in the development of urban industrial zones and urban centres. As LSCs have strengthened their holding of village land, it is difficult for the urban state to urbanise the rural areas adjacent to the urban district in an integrated manner. Conversion of a whole village into an urban area by the urban government is practically impossible, as villagers would be deprived of their livelihood. The urban government has to negotiate with every LSC for land acquisition opportunistically to build urban projects. As a result, urban projects (land acquired by the state) are dispersed spatially with 789 patches across 181 administrative villages (see Figure 4).

Figure 4.

Dispersed urban state-led land developments across villages, 2008.

5.2 Case Study of Xiabei Administrative Village

Composed of five natural villages together with an entity of administrative village committee, Xiabei administrative village is located immediately next to the central city of Nanhai (see Figure 5). Like many other villages, Xiabei has had its rudimentary cottage industries since the late 1950s. In 1983, the HPRS terminated the collective farming system and collective lands were allocated equally to the village households. In the early 1980s, Xiabei had a territory of 9750 mu. The Nanhai urban government acquired 1055 mu of its farmland in 1988 to build an urban industrial zone and further expropriated a great amount of farmland (4930 mu) up to 1995. After those land acquisitions by the state, the total land area of Xiabei has been reduced to 3765 mu (251 ha) (see Figure 6). The local community has been stable with only a marginal increment of its villagers (registered as local residents with Nanhai hukou), but it is evident that Xiabei has attracted an influx of migrants (registered as temporary residents without Nanhai hukou) (see Table 3). Xiabei epitomises the rapid urbanisation driven both by the urban state and rural collectives.

Figure 5.

Location of Xiabei administrative village in Nanhai.

Figure 6.

Xiabei administrative village before and after land acquisitions.

Table 3.

The total numbers of local villagers and migrants in Xiabei

Year	Number of local villagers	Number of migrants living in the village
1990	5749	355
2000	6483	6560
2008	6663	8796

Source: Nanhai Archives.

Village boundaries were adjusted after about 60 per cent of the original land stock had been acquired by the state. Figure 7 shows how the remaining land areas are distributed among five natural villages and the administrative village committee. The assets of the administrative village committee belong to all the community members within the Xiabei administrative village. Five natural-village-based LSCs and one administrative village committee LSC were set up in 1994 (see Table 4). Each natural-village-based LSC was designated residential areas, an economic development area and preserved farmland (see Figure 8). In 2000, there were 54.8 ha of residential land areas and 45.3 ha of land areas for economic development (manufacturing and commerce) (see Table 5). The built-up area accounted for 39.8 per cent of the total area of Xiabei. By 2009, the total residential land area had reached 70.1 ha and the total land area for economic development had amounted to 109.2 ha, of which 95.7 ha of industrial land areas were rented out to 382 manufacturing firms (authors’ survey in 2012). The built-up area stood at 89.4 per cent of the total area in 2009 (see Tables 6 and 7).

Figure 7.

Spatial layouts of five natural villages and one administrative village committee.

Table 4.

Land area and the total number of local villagers of Xiabei LSCs

LSC	Area (ha)	Number of local residents
BH	31.5	1135
YS	46.6	1827
LB	21.2	765
LN	30.6	946
ZB	67.4	1990
Administrative village committee	51.3	—
Total	251.0	6663

Note: Data for local residents were as of 2009. Data of LSCs’ land areas were valid in the period 1995–2009.

Source: Archives of Nanhai Planning Bureau.

Figure 8.

Land uses of five villages and administrative village committee, 2000.

Table 5.

Statistics of built-up areas in six LSCs, 2000

LSC	Residential land uses		Economic development land uses
	Land area (ha)	As a percentage of the total LSC area	Land area (ha)	As a percentage of the total LSC area
BH	6.5	20.6	10.1	32.1
YS	11.8	24.1	9.0	18.4
LB	5.9	27.8	6.5	30.7
LN	6.8	22.2	4.7	15.4
ZB	23.3	34.6	5.9	8.8
Administrative village committee	0.5	1.0	9.1	17.7
Total	54.8	21.8	45.3	18.0

Source: Archives of Nanhai Planning Bureau.

Table 6.

Statistics of built-up areas in LSCs, 2009

LSC	Residential land uses		Economic development land uses
	Land area (ha)	As a percentage of the total LSC area	Land area (ha)	As a percentage of the total LSC area	Number of industrial enterprises
BH	8.2	26.0	16.5	52.4	50
YS	15.0	32.2	22.1	47.4	77
LB	7.0	33.0	10.9	51.4	48
LN	8.0	26.1	12.4	40.5	38
ZB	28.8	42.7	20.0	29.7	116
Administrative village committee	3.1	6.0	27.3	53.2	48
Total	70.1	27.9	109.2	43.5	382

Source: Archives of Nanhai Planning Bureau.

Table 7.

Land use statistics in Xiabei administrative village, 2009

Land use	Area (ha)	Percentage of the total
Built-up land	224.5	89.4
Residential	70.1	27.9
Economic development	109.2	43.5
Manufacturing	95.7	—
Commerce	13.5	—
Others (including roads and parks)	45.2	18.0
Agricultural land	18.5	7.4
River	8.0	3.2
Total	251.0	100.0

Source: Archives of Nanhai Planning Bureau.

Autonomous and independent LSCs make village economies self-contained. Every village has a substantial amount of land used for economic activities (mainly manufacturing) and its own housing areas for the villagers (see Tables 5 and 6). Two noticeable changes during the period 2000–09 are observed. The first phenomenon is that land for economic activities experiences a substantial surge over the period, increased by 1.4 times. In 2000, 45.3 ha land, accounting for 18.0 per cent of the total, was used for non-agricultural economic activities. The figure rose to 109.2 ha, representing 43.5 per cent of the total area in 2009. Xiabei is not an isolated case. In the whole of Nanhai, 31.0 per cent of the total land area, or 58.5 per cent of the total built-up area, was used for manufacturing. It is extraordinary and excessive that almost half of village land resources are used for manufacturing. Industrial productivity and thus rentals from industrial sites should have been low, so that more and more farmland was informally developed for industrial uses, in order to increase the taking of land rent differentials to satisfy the rising needs of the villagers. Low productivity of industrial land uses has wasted Xiabei village’s scarce land resources to the extent of sacrificing its environmental quality (see Figure 9).

Figure 9.

Land uses of five villages and administrative village committee, 2009.

According to the village’s statistics, there were 168 small manufacturing plants in operation in 2002. Each plant occupied a site of 2700 square metres on average. By 2009, the number of manufacturing plants had jumped to 382, at an average land size of 2500 square metres per plant. All of them were low-technology plants with simple equipment and low-cost labourers. Collective land leasing is considered as ‘illegal’ at worst or informal at best, and thus LSCs are not able to use the land in question as collateral to raise land development finance. The authors’ site reconnaissance has revealed that industrial sites are not properly serviced by necessary infrastructure of sewage and drainage, let alone land use planning that safeguards environmental quality. Factories are built at low cost and with a simple structure. Sub-standard industrial estates do not appeal to high-standard industrial tenants, and only those opportunistic low-standard pollution-prone factories are attracted, evidenced by their short-term leases (12-month term) and low productivity. It is common that, without waste treatment facilities, these plants discharge waste water and gases directly into the rivers and atmosphere, causing damage to the local ecological environment.

The second phenomenon is that land for residential uses increased by 27.9 per cent during the period. Residential land area per capita was 84.5 square metres in 2000. It increased to 105.2 square metres in 2009. There has been a strong and rising demand for housing from migrants. In 2008, the number of migrants was even 32.0 per cent more than the locals. Driven by this housing demand, LSCs converted farmland to residential land and allocated additional residential land parcels to village households. Housing space was built by the villagers and rented to migrant residents. As a result, village households could make rental incomes from the migrants who worked in the industries in the villages. It shows that LSCs and villagers are no longer engaged in agricultural and industrial production. LSCs have become entities of landlord economies, relying on rental incomes from industrial land leasing and housing space leasing.

5.3 Fragmented Urbanisation: Self-contained Development of the Autonomous LSCs in High-density Peri-urban Nanhai

Nanhai was a rural county in 1988 when urban and town centres only accounted for 1.4 per cent of the total built-up land, while rural built-up land amounted to 94.6 per cent of the total (irrigation infrastructure taking the remaining 4 per cent). During the period 1988–2000, 328.3 square km of land, or 30.6 per cent of the total territory, was converted from farmland to land for non-agricultural uses, among which 20.8 square km were for rural housing, 153.7 square km for industries and 60.8 square km for urban and town centres. Two phenomena stand out from the land use statistics in 2008 (see Table 8). The first is that bottom–up urbanisation is well pronounced as urban built-up land only accounts for one-third of the total and the remaining two-thirds belong to rural built-up land which is overwhelmingly used by rural housing and industries. The second is that industrialisation has been significantly propelling urbanisation, evident by industrial land amounting to 57.0 per cent of the total built-up land and the rural industries take three-quarters of it.

Table 8.

Land use change in Nanhai, 1988–2008

	1988		1996		2000		2008
	Area (ha)	As a percentage of the total built-up area	Area (ha)	As a percentage of the total built-up area	Area (ha)	As a percentage of the total built-up area	Area (ha)	As a percentage of the total built-up area	State-owned/collectively-owned (percentage)
Built-up land	12,374.2	100.0	32,122.1	100.0	45,203.6	100.0	58,418.2	100.0	34.8/65.2
Urban and town centres	177.7	1.4	4129.9	12.9	6255.1	13.8	4999.5	8.6	90.6/9.4
Rural housing	9323.6	75.3	9787.9	30.5	11,397.8	25.2	11,432.6	19.6	3.6/96.4
Industries	2384.8	19.3	12,179.9	37.9	17,747.8	39.3	33,279.8	57.0	25.5/74.5
Others: infrastructure such as roads	488.1	3.9	6024.3	18.8	9802.9	21.7	8706.3	14.9	90.8/9.2
Agricultural land	NA	—	78,968.0	—	57,623.2	—	39,878.6	—	0.0 /100.0
Farmland	—	—	41,609.3	—	22,115.6	—	12,612.9	—	—
Woodland	—	—	8397.8	—	8317.8	—	6524.9	—	—
Pasture	—	—	34.2	—	39.8	—	465.8	—	—
Water body	—	—	28,926.7	—	27,150.0	—	20,275.1	—	—
Unutilised land	—	—	3919.9	—	12,183.3	—	9093.2	—	—
Total	115,010	—	115,010	—	115,010	—	107,390	—	18.9 / 81.1

Notes: The total land area of Nanhai was 1150.1 square km until 2003 when a fairly urbanised township of 76.2 square km was severed off. Since then, Nanhai has a land area of 1073.9 square km.

Source: Archives of Nanhai Planning Bureau.

As a result of rural urbanisation, peri-urban Nanhai has become substantially fragmented in terms of its spatial structure. There are 1776 natural villages in total, out of which 1541 villages have set up LSCs. On average, each village or LSC has an area of about 41 ha. LSC-based land development has produced 1868 industrial land patches spatially dispersed and farmland has been disintegrated into 1862 patches (see Figure 10). Self-contained development of the small villages in terms of land area due to land scarcity and high population density creates, in aggregate, a fragmented peri-urban area.

Figure 10.

Fragmented spatial distribution of residential and industrial land areas in Nanhai, 2008.

This bottom–up urbanisation may have reflected the interests of the rural communities. However, very limited land resources are not efficiently utilised in the best interest of long-term sustainability. The self-contained mode of village-based industrialisation impedes the economic provision of industrial infrastructure (such as waste water treatment and other necessary services) which is essential for the improvement of industrial productivity. Poor-quality industrialisation jeopardises the fragile ecological environment. Houses and factories are intensively mixed up in small villages. Polluting and hazardous plants are widely spatially dispersed, exacerbating the living environment of village communities. One notorious case was reported that one village in Nanhai had become a recycling centre for British plastic waste. Villagers as young as 14 made a meagre living by reprocessing mountains of toxic rubbish.

It is not exaggerating to claim that the whole of Nanhai is a big industrial site. Land used by manufacturing accounts for 57.0 per cent of the total built-up land area, or 332.8 square km which represent 31.0 per cent of Nanhai’s total territory. Three-quarters of the industrial land is located in LSCs. Excessive land development for manufacturing is caused by the informal institution of collective land leasing. The precious land assets are used extremely inefficiently—land which could otherwise be used for social purposes, or remain as open space. Neither the formal institution of LSCs nor the informal institution of collective land leasing supports the long-term sustainable urbanisation in the context of high population density. Further institutional change is called for.

7. Conclusion

Rapid urbanisation in the high-density regions suggests a great challenge to the effective utilisation of scarce land resources, as the influx of additional migrants exacerbates the magnitude of population pressure on the environment. This challenge is well reflected in the peri-urban areas where significant economic, social and environmental transitions occur, together with the transition of landownership from the rural collective to the urban state. The Nanhai model emphasises the participation of multiple actors in urbanisation, and grants villages autonomy in the management of their own economies and communities. Because land held by the collectives accounts for the great majority (81.1 per cent of the total), local villagers are effectively given preference over other actors in land development. As a result, natural villages evolve into LSCs that become the key driving force for bottom–up urbanisation.

Villages as a basic social and economic unit and family-based production for rural China are conducive to agricultural farming. This premise may not be valid when villages are industrialised and urbanised in the peri-urban regions. Bottom–up urbanisation has its own merits as it reflects the interests of local communities. Local villagers’ interests are well taken care of, unlike in other localities where villagers are reportedly sidelined (Brown, 2009; Epstein, 2009). Its negative impact on the ecological and built-up environments cannot be ignored, nevertheless. Urbanisation is considerably fragmented as a result of village-based land development by the autonomous LSCs, small in land area, which compromises industrial productivity and the integrity of urbanisation. The peri-urbanisation is further complicated by the informal institution of collective land leasing that has induced short-term land exploitation and sub-optimal land development. As a result, LSCs have become mainly landlords without their own substantive economies.

Decentralisation and empowerment of local communities are essential for inclusive development. However, a balance between rural autonomy and urban integrity has to be maintained to ensure sustainable urbanisation in the high-density developing regions. Co-ordination of bottom–up urbanisation beyond the village and at the level of the township seems appropriate. It is indisputable that sustainability for developing countries hinges on their economic sustainability which, in turn, relies to a large extent on the efficiency of their economic development. Inefficient economic development wastes resources unnecessarily and thus adds to tension in social relations (between locals and new migrants, in particular) and heightens pressure on the environment. Deficiency of wealth often leads to social injustice and environmental unsustainability.

Footnotes

Funding

This research is sponsored by the Global Asia Institute, National University of Singapore. Grant No.: R-297-000-109-133.

Notes

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