Abstract
China’s rapid economic development has urbanised a great number of rural villagers since the late 1970s. One of the significant challenges is that urbanisation entails incorporating autonomous villages into integrative cities. Village-led rural industrialisation safeguards villagers’ interests, but it gives rise to a fragmented industrial landscape and piecemeal farmland in the context of high-density small-area village settlements. Suboptimal land utilisation consumes more land resources than necessary to meet urbanisation needs and thus deteriorates environmental integrity. Townships have been leading industrialisation in the rural areas after the demise of collective manufacturing in the Yangtze River Delta. Actively pursued by the municipal and township governments, agglomeration of industrial land in Kunshan occurs during the transition of industrial ownership, which results in integrated urban built-up areas. Agglomeration of dispersed village settlements (where villagers are no longer engaged in farming) into compact urban quarters ensues, facilitated by the collective land rent arising from urbanisation. A new problem of inequality in entitlement to landed benefits between villages arises. Fair distribution of land rent as the benefit of urbanisation among villages calls for coordination at a higher level than the village.
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 large country. Physical changes caused by urbanisation are unprecedented in terms of their scale and complexity. Many rural counties have been transformed drastically in the dynamically growing coastal region where the Pearl River Delta (PRD) and the Yangtze River Delta (YRD) are the two rapidly urbanising regions. It is observed that there are two types of urbanisation spatially intermingled within the municipal regions. One is the top-down penetration of urban projects sponsored by the urban state; the other is the bottom-up rural industrialisation and non-agricultural development initiated by the rural collective. Village-based compartmentalised rural industrialisation and consequent fragmented non-agricultural landscape seem commonplace in many dynamically growing peri-urban areas, which creates urban sprawl with unique Chinese characteristics (Liu, 2004; Marton, 2000; Tian, 2015; Yuan et al., 2009).
Kunshan in the YRD is used as an enlightening case to examine how it has overcome the fragmentation and inequality that occurred during village-led rural industrialisation. Kunshan was a county in Suzhou municipality until 1989 when it was administratively designated as a county-level city. It is located to the east of Suzhou and to the west of Shanghai, sandwiched between two economic powerhouses in the YRD. This paper will elaborate how initially dispersed and uncompetitive village factories in Kunshan are replaced by high-value-added industries in the agglomerated urban industrial zones, which helps to achieve industrial spatial agglomeration, industrial advancement and environmental integrity. Sustainable urbanisation to make compact cities in the context of high population density (per capita land resource endowment far below the world average) and to bring equal landed-benefits to villages becomes a formidable challenge. An intriguing research question is, therefore, how compact and equitable urbanisation can be achieved in the high-density developing regions where bottom-up non-agricultural development led by autonomous small-area villages tends to give rise to fragmented urbanisation and inequality between villages. The main premise is that coordination and integration at an appropriate level are crucial for compact and equitable urbanisation.
Productive use of scarce land resources is crucial for developing countries, since if land resources are not used productively, the general economy accommodated by land resources can be adversely affected. Poor economic performance in less-developed countries often induces tension in social relations. Suboptimal use of limited land resources consumes more land than would otherwise be the case, and thus dwindling green land undermines environmental sustainability. Land rent that is created by local economic growth and public improvement in infrastructure and urban facilities have provided both opportunities and challenges to the endeavour of making Kunshan a compact city while maintaining equality in relation to the distribution of land rent during the progressive urbanisation. In the end, rural villages are integrated into urban communities. Moreover, economic change brings in social change. A rural county with mainly local villagers has been transformed into an urban municipality where migrants account for almost two-thirds of the total population.
Rural autonomy versus urban integration: Its impact on sustainable industrialisation and urbanisation
There is tension between bottom-up autonomy and top-down integration, which are two significant issues to urbanisation. The tension goes up when land scarcity is exacerbated by high population density. The differences between urban and rural communities lie in that the former are voluntary, open and interest-based, whereas the latter are involuntary, close and place-based. A village is usually autonomous and homogeneous in its social composition and members are bound by kinship and lineage. Urbanites are heterogeneous, making cities a mosaic of social worlds (Wirth, 1938). Urban places are interconnected, and a city with functionaries works as a whole. Thus, cities built by autonomous communities and developers as entities are integrative. Without appropriate planning coordination, city building tends to yield social segregation, suburban sprawl and gated housing estates (Duany et al., 2000; Roy and AlSayyad, 2004). Fierce competition for limited land resources in developing countries by autonomous actors without effective urban governance often results in spatial fragmentation (Firman, 1997; Leaf, 1999; McGee, 1991; Tian and Zhu, 2013; Zhu and Guo, 2014).
Transition of governance over rural non-agricultural development
China’s villages are a traditional social organisation with a very long history. Due to farmland resources made increasingly scarce by the continuous population growth over time, villages have developed a keen sense of territoriality in the face of constricted economic opportunities and perennial political disorder. Based on clan and lineage, villages have become basic autonomous and self-contained socio-economic units. There was close solidarity and coordination within the rural community that was managed by the village gentries before the 1949 revolution (Duara, 1988; Skinner, 1971). New members are only either born or married into a village where there is almost no room for outside migrants. Villages, unlike cities, are traditionally egalitarian but not open to non-members. Considered as ‘self-governing’ bodies (Gao, 1999), villages are responsible for their own social services (health, education and elderly welfare) and infrastructure construction (Tsai, 2007; Wong, 1997). Villages have also become the basic collective economic organisation in rural China since the 1949 revolution and People’s Commune movement.
Though the dismantling of People’s Communes in the early 1980s decentralised collective agriculture to individual household farming, rural industrialisation, a new stimulus for the rural development, bolstered the collective nature of villages. Nevertheless, village-led rural industrialisation had ground to a halt since the mid-1990s while private enterprises and joint ventures gradually took over (Che and Qian, 1998). The prospects of villages’ economies were dampened by the demise of collective industrialisation, but another opportunity soon emerged as collective land became potentially valuable when urbanisation penetrated into rural areas adjacent to the urban peripheries. Farmland can be converted to industrial land to be let to inward manufacturing, and thus extracted land rent becomes villages’ revenues.
Rural China is managed by a three-tiered governance system: township, administrative village and natural village. Villages remain as autonomous units for agricultural production and social development. The township government is at the top of the rural-collective hierarchical governance and at the bottom of the urban-state governance system, an interface between the urban and rural societies. Serving villages and managing rural development, townships are members of the collective. Collective ownership of rural land, established soon after the founding of the People’s Republic that abolished private land ownership, has become a defining moment for the villages in the socialist era. Nevertheless, China’s collective land is a unique institution. The idiosyncrasy of 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. Land is owned by the rural community on the condition that it is only used for its own 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. Moreover, ownership of rural land is vested with the collective entities at three hierarchical levels (township, administrative village and natural village) (Smil, 1999; Tang, 2009). Collective landownership is thus ambiguous to its nominal owners, as how much each entity is entitled to has never been clearly delineated.
For rural non-agricultural development, extraction of collective land rent is a contentious and competitive matter due to ambiguity in relation to the peculiar collective land ownership, which has further implication for the mode of rural industrialisation. It is observed that, in general, clans are rooted more deeply in the villages of Southern China than in those of Northern China because of differences in geography, regional politics and local culture (Qin, 1998, 2003; Zhou, 1998). It is usual in the PRD that clan-based natural villages are the basic units holding collective land for rural development. In the YRD, it is the norm that administrative villages are the basic units managing agricultural production. In the era of post-TVE non-agricultural development, natural villages remain the leading force in the PRD, while it is often the township that coordinates industrialisation led by private firms and inward investments in the YRD (Lin, 2015). Collective land for non-agricultural growth is managed by townships, and township industrial zones remain collectively owned.
In the era of rural non-agricultural development, townships in the YRD as a unit in the municipal governance system are the least stable entities in relation to the municipality and villages. The boundaries of the municipality and villages cannot be easily altered, as these entities have strong senses of territoriality. The jurisdiction of townships, especially of those urbanising townships, can be conveniently adjusted, and thus townships tend not to become independent stakeholders with place-based vested interests. Townships do not have their own fiscal bases from which fees and taxes are collected, either. Therefore, townships are not a political entity. They serve villages and have responsibility for rural development; they also have to convey the central policies downwards and ensure coordinated municipal development.
Compact cities and equality during urbanisation
The compact city approach is considered to be one of the effective measures for making cities sustainable (Jabareen, 2006; Jenks et al., 1996), though there is a counter-proposition that it is the process of city building, not the physical urban forms, that makes cities sustainable (Neuman, 2005). It also appears that in certain socioeconomic circumstances high density breeds crime, vandalism and social irresponsibility (Fuerst and Petty, 1991), and high density is even unpopular in the United States where most people prefer low-density living (Gordon and Richardson, 1997). Despite those issues, the compact city approach has several qualities that contribute to urban sustainability. Urban sprawl in the form of low-density scattered development is defined as ‘uncoordinated growth’ or growth coordinated at the individual development level (Batty et al., 2003). Containing urban sprawl helps conserve the countryside, save natural and agricultural land for future generations and reduce energy consumption and greenhouse gas emissions through shorter travel distances (Buxton, 2000; Cervero, 1998; Ewing, 1997; Elkin et al., 1991).
High density supports effective public transport modes and efficient provision of utilities and infrastructure, and thus is conducive to social interactions and social equity (Burton, 2000). As a result of high efficiency in land use, which is crucial for the land-scarce high population density Asian cities, additional open and green spaces can be created to enhance biodiversity (Swanwick et al., 2003). Very high population density in China suggests acute land scarcity, which makes compact cities a necessity rather than a choice. Social and economic developments are, to a great extent, equivalent to industrialisation and urbanisation. China’s cities are still expanding while a great magnitude of rural-to-urban migration is expected. Expanding urban spatial capacity is critical for cities to accommodate rapidly growing urban economies and new incoming migrants with supporting infrastructure and physical structures.
Autonomy impinges on equality in urbanisation as well. One of the most striking examples is that autonomous gated communities induce social segregation. Rural autonomy can generate spatial inequality between villages in the process of urbanisation. Autonomous villages are pertinent to the independent and self-reliant economy of agriculture. In the same region with similar natural endowments, agricultural productivity tends to be equal between villages as long as land holdings per villager do not vary substantively. Villages as autonomous units for the agricultural economy work effectively according to the principle of subsidiarity. Urbanisation enhances land rent substantially, but rising urban land rent is, however, not spatially distributed evenly across villages. Those villages in good locations capitalise on land rent much more than those in not-so-good locations. Reliance on land rent enhanced by the progressive urbanisation during the transition to non-agricultural economies creates inequality between villages (Shi, 2000). On top of urban-rural inequality being a persistent feature over a long history in China (Whyte, 2010), rural-rural income gaps are widening between those villages in peri-urban areas and those in remote locations, even within the boundary of the same municipality.
Economic change: Moving from village-initiated industrialisation to township/municipality-coordinated manufacturing
Economic and social progress in Kunshan since the 1980s has been one of the great success stories in China in the context of economic liberation and globalised production (see Table 1). The rural agricultural county economy has been significantly transformed into an urban industrial economy, with agriculture only accounting for a negligible 1% of the city GDP in 2010, while farming was still the main pillar (44%) in 1980. The substantially expanded economy as of 2010 not only supported the city’s local population of 0.7 million, but also accommodated 1.2 million migrant workers. All this drastic economic change started from meagre rural industries in the early 1970s.
Economic, social and physical changes over the period 1970–2010, Kunshan.
Source: KSBDPS (1970–2011).
Market-driven rural industries had flourished since the early 1980s in the dynamic industrial regions to provide industrial employment to those made redundant from farming (Chang and Kwok, 1990). The contribution of rural industries to the total rural income overtook that of agriculture in 1987 at the national level (Oi, 1999), which should count as the most important hallmark in the long history of agrarian China. Being an agrarian civilisation, China has been industrialising. In 1994, production of township–village enterprises represented about 38% of the nation’s total industrial product, whereas it was only 9% in 1978 (Chang and Wang, 1994). Collective rural industries had become the backbone of the county economy and significantly improved villagers’ quality of life.
Kunshan had been a typical county where rural economies predominated. Agriculture and retail services accounted for 58% and 23% of the county GDP in 1970, respectively (KSBDPS, 1970). The development of rural industries in Kunshan picked up its pace from the early 1980s when the problem of surplus rural labourers loomed large because of its small land holding per capita. It became imperative to expand non-agricultural economies, and manufacturing seemed the only choice. Villages made tremendous bottom-up efforts to bring in industrial expertise from elsewhere (Marton, 2000). The efforts paid off quickly. There were 335 TVEs in operation in 1985, accounting for 67.7% of the total 495 industrial firms in Kunshan, and manufacturing contributed 50% to the county GDP, while agriculture contributed 31% (KSBDPS, 1985).
Rural industries became the backbone of the county economy. The share in the total industrial output contributed by the TVEs increased from 59.5% (1985) to 70.6% (1990) and further to 74.9% (1995) (KSBDPS, 1985, 1990, 1995). An important pattern was noteworthy that, over the period 1985–1995, in the rural industrialisation led by the township and village industries, the share of village industries in the total industrial output decreased continuously (from 25.2% to 19.8%), while the share of township industries increased consistently (from 34.3% to 55.1%) (KSBDPS, 1985–1995). It was commonplace for township enterprises to preside over village factories in the YRD during its rural industrialisation (Lin, 2015). A few explanations are available. The sense of clanship was not particularly entrenched in the YRD villages, and non-agricultural development had not necessarily to be village-centred (Zhou, 1998). Setting up plants needed external industrial expertise and serviced sites, which was better coordinated at township level. It was clear that Kunshan townships took the leading role in rural industrialisation from the beginning. The other two significant shifts identified were an irreversible decline of village industries relatively (before 1995) and absolutely (after 1995) and the emergence of industrial zones managed by municipal and town governments.
Rudimentary rural industries faced increasingly fierce competition from inward foreign and private investments which had industrial expertise and technologies and understood modern business management and marketing strategies. Privately-owned enterprises and joint ventures gradually took over, while collective village factories had withered, either bankrupt or privatised, since the mid-1990s (Che and Qian, 1998; Vermeer, 1999). The number of collectively-owned factories as a percentage of total industrial firms in Kunshan county dropped significantly over the period 1985–2010: from 67.7% (1985) to 5.0% (2000) and further to 0.2% (2010) (KSBDPS, 1985–2010). Industrialisation has been shifted predominantly to inward foreign direct investments and joint-ventures (71.3% in 2000; 90.0% in 2010) ever since (KSBDPS, 2001–2011).
Village enterprises were scattered in the countryside. Inward and private investments were located in industrial zones planned and built by the county and township governments. The Kunshan Economic and Technological Development Zone (KETDZ) was developed adventurously and covertly by the Kunshan government initially in 1984 in Yushan, the urban downtown core of the county. It was named the New Industrial Zone (gongye xinqu) in the beginning, at a size of 3.75 km2 (Chien, 2007). Its development zone status was only recognised ex-post by the provincial government in 1990 and the central government in 1992 when KETDZ began to enjoy preferential open-door policies (Wei, 2010). With the status of special development zone, foreign investments flooded in. KETDZ expanded its size to 6.18 km2 (1991) and 10.38 km2 (1992). Subsequently, all 20 townships within Kunshan municipality designated their own town industrial zones (gongye xiaoqu) in the mid-1990s (Marton, 2000). The mode of rural industrialisation has clearly shifted from that initiated by the village collectives to that coordinated by the county/townships.
The industrial landscape has evolved from scattered village factories to concentrated city industrial zones (KETDZ) and town industrial zones. Factories are agglomerated to the industrial zones. Further industrial agglomeration occurred as KETDZ gathered strength and grew unabated because of favourable industrial policies and infrastructure. By 2011, KETDZ accounted for 60.3% of total industrial output in Kunshan, and village industries had lost their competitiveness completely (0.2%), while the former was 43.2% and the latter 2.1% in 2001, respectively (KSBDPS, 2002–2012).
Spatial change: From rural fragmentation to urban integration
Fragmentation in farming and rural industrialisation
Because of a large rural population as compared to a limited availability of arable land, scarcity of farmland is prevalent in China’s villages. The household responsibility system since 1983 has incentivised farmers to improve agricultural productivity, but land fragmentation has deteriorated as limited farmland is further divided among village households (Hu, 1997; Nguyen et al., 1996). Numerous irregular and piecemeal land plots make installation of farming infrastructure, such as irrigation, difficult and costly. Fragmented land holdings make agricultural economies underproductive. Non-agricultural development initiated by rural industrialisation has changed the destiny of many villages that are trapped in subsistence farming.
However, because of low landholdings per village and thus small-area villages, village-based industrialisation has generated dreadful problems of industrial sprawl in the form of fragmented industrial sites and farming lands, which compromises the environmental integrity as well as industrial and agricultural productivity. It was revealed in 1990 data that an average administrative village in Kunshan, composed of several natural villages, had 1200 villagers in an area of 200 ha (KSBDPS, 1990). Village autonomous development is a laudable mode that safeguards villagers’ interests, but fragmented rural industrialisation is unsustainable with factories and workshops scattered all over the countryside (cuncun diaohuo, chuchu maoyan) (Long et al., 2009; Pei, 2005). A Fragstats 1 patch analysis reveals that when only accounting for 3.2% of the total county territory in 1989, the built-up area of 29.6 km2 was split into 598 patches and the size of each patch was only 4.9 ha on average (see Figure 1).
Built-up areas in Kunshan, 1989.
Spatial integration driven by industrial advancement
The agglomeration of industrial space improves economies of scale for industrial production, which is also critical to the economic and effective provision of infrastructure. It also facilitates the structural upgrading of manufacturing. Structural change of manufacturing is defined as a process where some sectors flourish and others decline. It can be attributed to factors of economies of scale, technological innovation, industrial linkage and government policies. Since 1998, Kunshan’s manufacturing structure has undergone drastic changes as low-value-added labour-intensive sectors 2 decline continuously while high-value-added technology-intensive sectors 3 expand consistently. As a percentage of the total industrial output, the labour-intensive sectors declined from 59.7% (1998) to 16.6% (2010); the technology-intensive sectors increased from 13.9% (1998) to 63.5% (2010) (KSBDPS, 1998–2011). This favourable change shows that the advancement has made manufacturing increasingly productive. Enhanced productivity helps to increase wages to workers. Industrial output per worker was ¥215,800 in 2000, and it grew drastically to ¥664,900 in 2010, achieving an annual increase rate of 11.9% on average (KSBDPS, 1990–2011).
Collectively-owned factories in the villages were gradually closed down during the industrial restructuring, and inward private firms preferred industrial zones where quality infrastructure was provided. Yet, there were still too many industrial zones for a small municipality, as there were 22 townships in Kunshan prior to 1990 and each town had at least one industrial zone (Marton, 2000). Restructuring of township jurisdiction was carried out in 1990 when 22 townships were consolidated to 20, and then to 15 in 2001 and further to 10 in 2004 (KSBDPS, 1985, 1990, 2002, 2006). It is noted that the jurisdiction of three townships in the south (which is more rural in nature in comparison to the rest of the county) remained unchanged over the same period, and drastic restructuring occurred to those urbanising townships around the county central area (see Figure 2). It shows the administration system changing from rural to urban in nature. The changing share of industrial output in each township as a percentage of the total municipal industrial output demonstrates that consolidation of townships has facilitated industrial agglomeration remarkably (see Figure 2). The gap between the lowest and the highest township industrial outputs was widening over the period 1995–2011 (see Table 2). The spatial division of agricultural and industrial townships has become distinctive.
Industrial agglomeration from rural factories to industrial zones.
Statistical characteristics of townships’ industrial output as % of total municipal industrial output, 1995 and 2011.
Note: The dispersion index is a measure of statistical dispersion of a set of data. It is between one and zero. Zero stands for perfect dispersion, each township having an equal share of industrial output. One denotes absolute agglomeration, one township having all industrial output.
Source: KSBDPS (1995–2012).
The important contribution of the spatial agglomeration of industries to sustainable urbanisation is that it helps enhance environmental integrity. Rapid industrialisation and urbanisation inevitably consume a large amount of farmland and open fields. Industrial agglomeration makes a city compact and thus converts less farmland into urban built-up land than would otherwise be the case. Kunshan achieves an economy of ¥210 billion GDP with a total built-up area of 262.3 km2 that accounts for 28.3% of the total municipal land area (KSBDPS, 2011). Another Fragstats patch analysis shows that the average size of non-agricultural patches reached 33.0 ha in 2010 and that the total patch numbers declined from 1384 (2000) to 795 (2010) (see Figure 3).
Built-up areas in Kunshan, 2010.
Land rent: The opportunities and challenges of making a compact city and maintaining equality during urbanisation
Rural social solidarity in the face of urban economic competition
The de-agriculturisation of rural employment has become irreversible since the economic reforms launched in the early 1980s. Sixty-three percent of rural labourers were engaged in agriculture in 1985, and the percentage declined to 9% in 2010 (KSBDPS, 1985–2010). TVEs created industrial jobs and initiated the rural employment shift. Many peasants gave up farming and shifted to the manufacturing and service sectors, though most of them still lived in the villages so that they could ‘leave the fields without leaving the countryside, and enter the factories without entering the city’ (litu bu lixiang, jinchang bu jincheng). It was convenient, as factory jobs were in the village and villagers could still do part-time farming in the busy crop sowing and harvesting seasons.
Since the closure of village factories from the mid-1990s onwards, industrialisation driven by the KETDZ and town industrial zones has greatly speeded up the pace of urbanisation. TVEs are meant as part and parcel of the self-contained village economy, providing jobs chiefly to the villagers. With ambitious business strategies, inward manufacturing firms aim to expand their enterprises and reach out to the global market for their products. Jobs are offered to those who are the most competitive in the labour market, and Kunshan’s successful industrialisation has brought in a large number of qualified migrant workers who have even outnumbered the locals since 2005 (see Table 1). Though many more non-agricultural jobs are provided by the modern industrial firms than were by TVEs earlier, competition in the job market has become keener as workers are more mobile now than in the 1980s. Only the young and energetic can secure placements in the firms. Under open competition, some villagers may find it hard to join the urban workforce. The significant economic change from agricultural to non-agricultural work brings drastic social change to the villages. In the villages, the right to work for every capable member was guaranteed, and there was no competition between village members. Hence, the traditional function of villages as social safety nets needs to be maintained during urbanisation in order to help those who cannot cope with the economic change. The collective village economy remains crucial during the transition.
Village collective economies have been withering after collective farming was replaced by household farming and the collapse of TVEs. Villages as a traditional rural social entity are in danger of disintegration without social supports buttressed by a collective economy. Rural industrialisation was not promising in helping the villages. Ironically, urbanisation provides new opportunities to the village collective. Because of urbanisation that generates substantial non-agricultural demand for land, land rent in those villages close to town and city centres has been enhanced by the economic growth and urbanisation. Of the total Kunshan village economic revenues in 2012, land-related rental income accounted for 42.8%, while the income contributed by village enterprises only represented 14.4% on average (ORW/KMG, 2013). A new mode of collective economies in the form of shareholding cooperatives has emerged in the economically advanced regions (Sun et al., 2010; Zhao et al., 2009). Three types of shareholding cooperatives on land rent have been set up in the Kunshan villages since the early 2000s: real estate investment, 4 community property 5 and farmland. 6 Only villagers are eligible to be members of these cooperatives, and the cooperatives are essentially for villages to capitalise on land rent enhanced by industrialisation, so that they can benefit from urbanisation.
Making up for the loss of TVEs, land rent derived from village lands becomes the new backbone of the village collective economy. By the end of 2011, there were 147 real estate investment shareholding cooperatives, and their shareholders accounted for 19.8% of the total rural households. Almost all rural households benefited from 132 community property shareholding cooperatives. There were 119 farmland shareholding cooperatives in Kunshan. In three rural townships (Dianshanhu, Zhouzhuang and Jinxi), 83.6% of the total rural households joined the farmland shareholding cooperatives. Overall, 92% of the total sown land in Kunshan has been in the cooperatives (ORW/KMG, 2013).
Land rent: Facilitating spatial compactness and inducing rural-rural inequality
An influx of migrant workers has created great demand for housing, urban services and facilities, which constitutes a significant force driving spatial urbanisation. City and town centres have been expanding with non-agricultural jobs and new incoming residents. More than three quarters of migrant workers concentrated in tier I and II towns in 2011; 53.7% in tier I and 24.3% in tier II, respectively. Only one in five migrant workers lived in tier III and IV towns; 15.2% in tier III and 6.7% in tier IV, respectively (see Figure 2). Following industrial agglomeration and migrant workers to the town centres, the local villagers find the mode ‘leaving the fields without leaving the countryside and entering the factories without entering the city’ increasingly obsolete. It calls for the spatial restructuring of rural village living. Village living is naturally dispersed and decentralised because of traditional household farming. Land scarcity in Kunshan has created a high density of village settlements at 2.26 villages per square kilometre (2007), or per 44 hectares, per village. Being common in the countryside with high population density, rural sprawl in the form of fragmented farmland and village settlements tends to compromise environmental integrity and impede the efficient and sufficient provision of village infrastructure. As a result, rural living quality has not been able to improve because of small-scale subsistence farming.
Town industrial zones and KETDZ made industrialisation spatially compact, but disparities between centrally located industrial jobs and dispersed and evenly distributed rural industrial workers in the whole municipality revealed that rural workers were commuting long distances for daily working (see Table 3). Most rural workers still lived in their village houses because they did not have an additional place to stay in the town. In comparison with urban households, rural households actually have an affordable housing option as they are entitled to free land lots for building their family houses. According to the Land Management Law (1988), land for housing is allocated on a per household basis, one household being given one housing lot at a size determined by the local conditions of land availability (see: http://www.law-lib.com/LAW/law_view.asp?id=95544, accessed 3 March 2014). Village housing lots are meant for own use, and are not considered as assets for lease or sale on the open market.
Agglomerated industrial jobs and dispersed rural industrial workers.
Note: The dispersion index is a measure of statistical dispersion of a set of data. It is between one and zero. Zero stands for perfect dispersion, each township having an equal share of industrial output, or equal share of rural industrial labour. One denotes absolute agglomeration, one township having all industrial output, or all rural industrial labour.
Source: KSBDPS (2004, 2011).
Demand for rural land conversion for urban use by an expanding urban economy makes village land potentially valuable. Strong urban economies and healthy government fiscal revenues allow the municipal government to offer villagers an option for exchanging their rural houses for urban apartments on the basis of equal floor areas. Villagers do not have full property rights over their rural houses as they cannot lease and sell the houses, and thus rural houses do not have explicit market value. Conversely, there are full property rights over urban apartments and urban housing can be transacted in the open market. The exchange proposal has been well received as a fair deal. Rural houses tend to be spacious. One spacious rural house can usually exchange for three compact urban apartments. Two additional urban apartments ensure housing for unmarried children, and the housing assets provide a safety net for village families who abandon farming and land and opt for urban living. It is the enhanced land rent from rural village housing lots that facilitates the voluntary agglomeration of dispersed rural village houses into compact urban residential quarters. By 2012 in Yushan town, 81.1% of rural households were no longer engaged in farming at all, and 61.9% of rural households had moved to urban housing quarters in the town centre, rising from 54.8% one year earlier (2011) (see: http://news.ksgs.net/201212/28/newscon3812.html).
However, entitlement to landed benefits enhanced by urbanisation is not equally distributed between villages. The statistics of 162 administrative villages reveal a great deal of disparity in collective incomes from land rent between villages in Kunshan. In terms of the village income in land rent, the highest was more than 800 times that of the lowest. The Gini coefficient measuring inequality between villages reached 0.593. The total collective income shows a disparity between villages to a lesser extent, as other sources of village revenues do not enjoy location-specific advantages (see Table 4). It is revealed by the 2012 statistics that in those industrialised townships (Kaifaqu, Huaqiao and Qiandeng), 34.6% of their rural households participated in property investment shareholding cooperatives. But in those rural townships (Zhouzhuang, Jinxi and Dianshanhu), only 8.6% of their total rural households had sufficient capital to participate (KSBDPS, 2013; ORW/KMG, 2013). The institution of village autonomy should be held responsible for rural-rural inequality caused by land rent generated by urbanisation.
Statistical characteristics of the total collective income and land rental income of 162 villages, Kunshan, 2012 (¥ thousand).
Note: The Gini coefficient is a measure of statistical dispersion of a set of data. It is between one and zero. Zero stands for perfect equality, while one denotes absolute inequality.
Source: ORW/KMG (2013).
Subsidiarity: The appropriate level of coordination for high density urbanisation
Urbanisation has changed the social equilibrium maintained by autonomous rural villages. Villages are no longer autonomous units in an era of industrialisation and urbanisation. Cities are made in an integrative manner. According to the principle of subsidiarity, decisions should be made at the lowest level possible and the highest level necessary. In a high-density developing region, autonomy at too low a level will lead to fragmented development, with farmland and built-up land spatially intermingled and excessively piecemealed. An intensive mixture of urban and rural land uses is conducive to neither urban living nor rural farming, as efficient provision of infrastructure for living and farming requires compact urban areas and integrated rural farmland. For the sake of equality during urbanisation, the coordination for urban development has to go beyond the level of villages.
Kunshan municipal government has been successfully building up its fiscal capacity along with the extraordinary industrialisation. Its fiscal revenues stood at 5.0% and 7.5% of the GDP during the periods 1991–1995 and 1996–2000, respectively. In the 21st century, the government revenues reached new heights at 14.8% (2001–2005) and 19.3% (2006–2010) of the municipal GDP (KSBDPS, 1996–2011). With government investments, two striking landmarks are worth highlighting to demonstrate the achievement of a county-level city in its quality urbanisation. The first is the Kunshan Industrial Technology Research Institute established in 2008. It is the first of its kind for a county-level city where its government is committed to scientific industrial research and technological development. The second is the Duke Kunshan University that is jointly run by Duke University and Wuhan University with its campus provided by the Kunshan government. It is the first university in Kunshan to provide tertiary education to its young people.
Being aware of village inequality, the municipal government duly intervened by exercising fiscal transfers to support those low-income villages. After municipal fiscal transfers to the villages in the names of farmland conservation and ecological protection, minimum and mean levels of village collective income rose significantly. 7 Fiscal transfers have mitigated village inequality to a great extent, demonstrated by a Gini coefficient of 0.303, improved from 0.420 before the fiscal transfers (see Table 4). Coordinated by the township government, those villages in less urbanised locations are given opportunities to participate in urban property investment projects at more urbanised locations, so as to increase village collective incomes from property investment shareholding cooperatives (see note 4).
Conclusion
Rural non-agricultural development driven by the autonomous village industries has improved the quality of village life, but it also gives rise to a fragmented industrial landscape and piecemealed farmland in the context of high-density small-area village settlements. Sustainable urbanisation is in jeopardy. During the transition of industrial ownership, collectively-owned village industries are phased out and replaced by privately-owned inward and outside investments in the township-led industrial zones. Industrial agglomeration helps to stimulate industrial advancement and maintain environmental integrity. Productive industrialisation creates quality jobs so as to improve workers’ wellbeing, and minimises usage of valuable land resources that can be retained for ecological quality. With 262.3 km2 of built-up land, Kunshan sustains a compact city with densities of 7200 residents/km2, and 0.8 billion GDP economy/km2 (2010) (KSBDPS, 2011). The model of Kunshan, a typical county-level city in the YRD, should serve as good practice to China, especially its coastal region, where judicious use of scarce land resources is critical for its sustainable urbanisation.
Urbanisation, which generates land rent, gives a new lifeline to the declining collective village economy after the collapse of TVEs. However, because of location-specific advantages, land rent creates inequality between villages. On the one hand, it has become a new social problem, demanding coordination at a level higher than the village to deal with fair distribution of land rent which is fundamentally created by local economic growth and public improvement in infrastructure and urban facilities. The fiscal capacity of the urban state is the crucial factor for making urbanisation equitable. On the other hand, land rent is harnessed to expedite the process of agglomeration of dispersed village houses into compact urban residential quarters.
The decentralisation and empowerment of local communities are essential for inclusive urbanisation. However, a balance between rural autonomy and urban integrity has to be maintained so as to ensure sustainable urbanisation in the high-density developing regions. Coordination of the bottom-up urbanisation beyond the village and at a higher level of township seems appropriate for making a compact city and maintaining equality when rural villages are incorporated into urban communities. It is indisputable that sustainability for developing countries hinges on their economic sustainability which, in turn, relies to a large extent on the productive use of their very scarce land resources. Underperforming economic development wastes resources unnecessarily, and thus adds to tension in social relations (between locals and new migrants, in particular) and increases pressure on the environment.
Footnotes
Acknowledgements
The assistance of Dr Yan Guo, Mr Yizhong Yao and Dr Lingyun Fan are greatly appreciated.
Funding
This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.