Urban China through the lens of neoliberalism: Is a conceptual twist enough?

Neoliberalism: The confounding case of China

In recent years, neoliberalism has been the subject of extensive critical analyses in geography, urban studies and the social sciences at large. Though definitions vary, neoliberalism is often understood as a stream of the liberal thought collective that elevates market over political, cultural and all other means of organising society (Brenner and Theodore, 2002; Ferguson, 2009; He and Wu, 2009; Lim, 2014; Lin and Zhang, 2017; Ong, 2007; Peck et al., 2009; Peck, 2010; Wu, 2008, 2010). In advanced capitalist economies and parts of the ex-colonies, it is primarily associated with a post-1970s’ attack on welfare states, deregulation, privatisation and other attempts at replacing state functions with market actors. There are great variations of neoliberalism in institutions and practices globally, and contestations are widespread. Thus Brenner et al. (2010) use the notion of neoliberalisation to capture the hybridity as well as the accumulative impact of neoliberal evolution in many world regions. Ong (2006, 2007) suggests that East and South-east Asian states selectively adopted neoliberalism through what she calls ‘assemblage’ practices.

China – an ‘emerging economy’ in the global theatre of capital accumulation – has been seen by many scholars as on the path of neoliberalisation. Fitting neoliberalism onto China requires significant conceptual twists, however. Harvey (2005) identified Deng’s China among the three other commonly recognised neoliberal states – Pinochet’s Chile, Thatcher’s Britain and Reagan’s America – although with ‘Chinese characteristics’. Yet, the Chinese economy has a high degree of direct state intervention, particularly but not exclusively through state-owned enterprises. The Chinese party-state has also been increasingly hostile to neoliberal ideology, especially when the role of the state in economic and social affairs is criticised. A number of writers thus view China as the biggest and most influential antithesis of and a genuine challenger to Western neoliberal capitalism (Horesh and Lim, 2017; Liebman and Milhaupt, 2015; Naughton and Tsai, 2015). Still others argue that the Chinese model is rooted in the traditional Confucian political meritocracy and is not on a converging track with Western liberal democracy (Bell, 2015; Zhao, 2015).

The hybridity and ambiguity of Chinese political economy have given rise to an array of contradictory labels such as state capitalism, authoritarian capitalism, market socialism, state neoliberalism, Guanxi capitalism and oligarchic corporate statism, to name just a few. Peck and Zhang (2013), after an exhaustive survey of the literature on variegated capitalism and China, conclude that the China model, if it exists, is ‘a complex and heterogeneous one and one that is maybe better appreciated by way of its paradoxes and contradictions than by reference to some singular logic or form of institutionalized equilibrium’ (Peck and Zhang, 2013: 386).

With few exceptions (Wang, 2009), mainland Chinese scholars have not had a strong voice in critical neoliberalism analysis. First, Chinese social science disciplines have not developed a critical tradition comparable to the Western academy, as many Chinese urban planners and geographers work on applied projects to provide advice to the governments of different levels. Secondly, the ideological landscape in China is distinct from the territories where neoliberalism is the reigning, albeit contested, ideology. At the 19th National Communist Party Congress in 2017, Chinese president Xi Jinping pledged that China would strive for ‘socialism with Chinese characteristics for a new era’ (Xinhua, 2017c), which reinforces the previous official rejection of neoliberalism. The Chinese government’s hostility towards Western thoughts has in general increased since the early 2000s, and the Communist Party has largely banned the promotion of (neo)liberalism in official media and restricted its teaching in universities (Buckley, 2013). Yet, (neo)liberalism continues to be the most influential discourse among intellectuals and in social media (Lei, 2017; Wang, 2012).

Outside mainland China, a growing number of scholars have applied critical neoliberal discourse to China. Wang and Liu (2015), after surveying the Anglophone literature on urban China, voiced their concern that China has become a site for applying or fine tuning Western social theories, rather than a site of knowledge production. This concern echoes the postcolonial literature that challenges the universalising tendency in Western social theories and advocates the Global South as sites of theoretical (de)/(re)construction (Robinson, 2011, 2015; Roy, 2016; Roy and Ong, 2011).

In this commentary, we critically interrogate recent empirical work that deploys the neoliberal lens to analyse urban China. We identify several specific areas where neoliberal analysis has been productive, although with significant limitations. We argue that, more generally, the neoliberal treatment of China’s urban transformation, with its preoccupation with capital and class logic, tends to obscure the nature of the entanglement of capital, state and society in China, especially the driving role of the state and the rapidly shifting configuration of Chinese society. Furthermore, we argue that the neoliberalism framework traps analysis of China within a Western frame of reference, hence marginalising the theoretical significance of the socio-political conditions and novel developments found in urban China. China’s uncomfortable fit with the framework of neoliberalism supports the need for innovative/alternative understandings of cities, and transformative theory-building that goes beyond treating Western social theories as the ultimate arbiter or yardstick.

Seeing Chinese cities through the neoliberal lens

At the risk of over-simplification and an incomplete inventory, listed below are some of the areas where neoliberal vocabulary and methodological treatments have been pronounced.

This is possibly the area where the neoliberal lens has been most extensively invoked and applied (He and Wu, 2009; Li and Chan, 2017; Lin, 2014; Lin and Zhang, 2017; Wu, 2008, 2010). Scholars have traced the process of land commodification and delineated key actors in the property market involved in urban development/redevelopment. The distinctive land tenure system in China, that is, state-owned urban land co-existing with collective-owned rural land, means that the neoliberalisation of land must be predicated upon the power of the state. Municipal governments are heavily dependent upon land finance and thus are strongly motivated to convert land from rural to urban use, or to redevelop urban land from low-value to high-value use (Lin, 2009). The converging interests of local governments and commercial developers forge a powerful coalition that follows the neoliberal logic of maximising capital return. Liao (2015) shows how local governments create financing vehicles to develop infrastructure and public services projects with the purpose of raising the commercial value of land. The enormous growth of local government financing vehicles (LGFVs), fuelled by state monopoly of land and easy access to loans from state-owned banks, has substantially strengthened the position of the state vis-a-vis the private sector. In the meantime, the financialisation of the housing market drives urban households to purchase houses as their main financial asset, fuelling waves of housing speculation across Chinese cities (Wu, 2008, 2010). Thus the ‘Chinese characteristics’ of land tenure end up driving a distinctively faster and larger scale of urban demolition/development, illustrative of Harvey’s (2005) concept of ‘accumulation by dispossession’, as powerful interests channel land take-over from farmers or lower-class residents into real estate projects for commercial or high-class uses.

What is unclear, however, is the stability of this pattern of state and capital coalition, and therefore the continued dominance of this neoliberal path. Signs of trouble abound. The dependence of local government on land finance has led to the excessive building of many ‘ghost towns’ across China and soaring local government debts (Lin, 2009, 2014). The highly speculative housing market has raised the costs of living in coastal China, undermining China’s competitiveness in the global economy. Since 2005, the Chinese government has launched several rounds of affordable housing construction, and in 2017 it started to promote government–resident joint ownership housing and rental properties, signalling adjustments from the earlier marketisation push (Xinhua, 2017a, 2017b). China’s anti-corruption campaign since 2013 has also shaken up some of the cozy relations between officials and commercial developers.

It is important to realise that China’s land commodification, though resembling neoliberalism in many ways, has been primarily a party-state rather than a capitalist class project (Horesh and Lim, 2017; Ong, 2007; Wu, 2016; Zhang, 2012, 2013). The party-state is fully capable, when it is deemed necessary, of changing direction when it perceives that the land commodification process threatens political, social or economic stability, or the legitimacy or even survival of the state. The private capital class remains persistently subservient to the ruling party elites, not the other way around. In other words, assuming that the neoliberal logic established in urban China since the 1990s will continue into the foreseeable future is rather untenable.

Scholars such as Keith et al. (2014), Li and Chan (2017) and Wu (2016) have challenged the neoliberal interpretation of China’s urban development. Hsing (2010) uses the notion of ‘urbanisation of the local state’ to describe local state roles in the commodification of land and the consolidation of territorial authority. This framework locates the state rather than capital as the central driver and suggests that its policies are guided by the visions of urban modernity of the state leaders. While the visions reflect the arbitrary power of the state, these are also malleable, and subject to shifting rationalities, priorities or forces at different geographical scales, rather than the inevitable logic of capital accumulation.

Class and politics have been a central theme of critical neoliberal analyses. David Harvey (2005: 19, 159–165) argues that neoliberalism is a class political project to restore, or create anew in the case of China, the power of economic elites. Chinese cities under Mao used to be characterised by a relatively egalitarian space with little social stratification. This has changed dramatically since the era of reform in the 1980s. As social classes re-emerge in China, the urban space has been reconfigured from clusters organised by employers (danwei) to growing class differentiation (Ma and Wu, 2004). Pow’s (2007, 2017) works show how Shanghai’s gated communities construct exclusive spaces to produce a middle-class ideal of life and how sensory ‘othering’ is used to preserve and regulate class spaces. Other urban scholars have also documented the growing inequality of urban spaces in China (Ong and Zhang, 2008). For example, Huang and Yi (2014) highlight the plight of migrant workers whose low-income, marginal jobs are compounded by exclusionary state regulation and periodic clearance, relegating them to marginal underground spaces in urban China. In sum, even without the large-scale urban ghettos common in other cities of the Global South, Chinese cities increasingly resemble neoliberal urban spaces, with marginal space for the poor and gated communities for rich or middle-class residents.

Yet, the production of class space, epitomised by the residential complexes, is not necessarily consistent with class positions in the globalised economy (Zhang, 2008). The legacy of danwei housing means that a large portion of property owners in the most expensive Chinese cities such as Beijing and Shanghai acquired their current properties through socialist legacy, or through property compensation for farmers in the urban fringe. The fact that many younger, better educated and higher-income residents are facing steep barriers to entering the property market has also motivated Chinese governments to increase the supply of affordable housing to allow new blood into the urban elite class.

Moreover, current research on stratified urban spaces is conducted mainly in China’s largest cities where there are prohibitive housing prices. With 90 per cent of Chinese households owning homes, far higher than in most other economies (Trading Economics, n.d.), it is presumptuous to view smaller cities as simply smaller versions of Shanghai and Beijing. Lin and Gaubatz’s (2017) study on Wenzhou, for example, explores the exclusion of migrant communities from other city residents along the lines of long hours of work in factory zones, distinct consumption patterns and insecure legal status rather than difference in income levels. From these examples, we may see that neoliberal class politics does not completely or even largely describe the political and social nexus of power in organising spaces in urban China.

Scholars in the tradition of Michel Foucault argue that neoliberalism should be seen as a form of governmentality (Ong, 2006, 2007). Researchers have examined how neoliberal consciousness, value and subjectivity are produced in China (Jeffery, 2009; Sigley, 2006; Zhang, 2008). While the official Chinese rhetoric is hostile to neoliberalism, Chinese citizens in the last 30 years have been indoctrinated through family, education, work and consumption to internalise some of the neoliberal principles of marketisation of the individual so that self-improvement, individual responsibilities, competition and consumption have become widely accepted social norms. Unlike the case in the West, though, neoliberalism subjectivity has to coexist and compete with deeply rooted Chinese cultural values and party-state socialist doctrines (Wan, 2016). Keith et al. (2014) argue that neoliberal economic life is individualised and dis-embedded, while the China model is relational and situated, thus it would be premature to expect China to be moving inevitably in a neoliberal direction.

The above summary shows that in the areas of urban spatial forms or processes, social division and subjectivity, urban China indeed intersects with neoliberal practices elsewhere. However, such intersections do not necessarily predict the direction of neoliberalisation. Szelényi (1991) suggests that China’s transition from a centrally planned economy to a mixed market economy, and the Western transition from Keynesianism to neoliberalism, are two types of marketisation occurring in opposite directions. The crucial enabling factor of the Chinese state, while always entangled with capital, also has to negotiate, inside and outside the ruling elites, with other priorities and imperatives. As Ong (2007: 4) warns, ‘neoliberalism with a small “n” is a technology of governing “free subjects” that co-exists with other political rationalities’.

For example, China has turned to urban sustainability as a result of geopolitical insecurity with its growing dependence on imported energy, a crisis of legitimacy with heightening public discontent over pollution and the techno-nationalist desire to leapfrog the West on green technology. The sustainability mandate, although entangled with capital interests and shared unevenly across different geographical scales (Zhou, 2015, 2017), has led to the promotion of green buildings and eco-cities, investment in public infrastructure and restrictions on private vehicles, measures going far beyond the neoliberal compass.

What is missed when we apply neoliberalism to China

An even bigger concern in applying a neoliberal framework of analysis to China is that it selects only those areas in urban China showing resemblance to the West, while some of the novel features or fundamental social conditions of Chinese cities are subordinated or ignored. Here, even the ‘variegated’ or ‘assemblage’ version does not save neoliberalism in its selective legibility. Take urban public space as an example. Western scholars tend to view public space as a locus of civil actions. Gaubatz’s (2008) study of Chinese public space found that state ownership of urban land in China makes such a distinction less relevant. The meaning and utilisation of public spaces can only be contextualised through Chinese historical evolution. Boland and Zhu’s (2012) work on public participation in the green community in Guangzhou introduces the role of unique semi-official institution-neighbourhood communities in mediating the state and public – institutions ill-fitted to the typology of Arnstein’s (1969) ladder of participation. These spatial and temporal features, falling outside of urban experiences elsewhere, are concrete examples of how concepts and theories widely accepted in the West calibrate poorly with social practices in China.

Chinese cities also display novel developments that may well pioneer the future trends of cities. These are often not on urban scholars’ radars, either because of a lack of precedence elsewhere or because of a mismatch with the prism of neoliberalism. For example, state investment in telecommunication infrastructure and affordable smartphones pioneered by Chinese companies led to an unprecedented boom in the digitisation of Chinese lives (Zhou et al., 2016). In 2016, China conducted 42% of global e-commerce and processed 11 times more mobile payments than the United States, a scale scarcely comprehensible in any single advanced economy (MGI, 2017). More profound than the scale of the digital economy, however, are the changing structures of capital mobilisation, social networks and state intervention. Cellphone-based financial transactions have facilitated the activities of grassroots entrepreneurs and transformed inter- and intra-city networks and urban spaces. For example, in coastal China, many towns and villages have become so-called Taobao villages, with numerous family or clan-based businesses specialising in producing or marketing on e-commerce networks for the domestic and international markets (Lin et al., 2016). A typical neoliberal reading may interpret such phenomena as capital invading previously non-commercialised rural spaces. Yet, most such places have long been commercialised and have endured decades of outmigration to urban industrial centres. The Taobao platform mobilises in situ small capital and draws in returned migrants to form decentralised industrialisation and reverse urbanisation. Taking the emergence of Taobao villages as a cue, the Chinese government now exhorts the leading e-commerce platform providers such as Alibaba and Jingdong to use their marketing power for state projects of rural poverty alleviation and small-town development (Quartz, n.d.). The intersections between grassroots entrepreneurs, dynamic platform companies, technically-enabled inclusive financial structure, clan-based business networks and state antipoverty programmes offer a novel twist on urban development.

In a further example, cellphone technology has also facilitated the development of the dockless shared bicycle, invented by private Chinese companies in 2016. In two years, the shared bike appeared in 170 Chinese cities and has become the third most popular mode of public transportation. While this could be read as a story of venture capital speculation, shared bike programmes have reversed the previously relentless gains of the private automobile as a means of urban transportation. More importantly, they have initiated debates over the public nature of urban transportation by raising the stakes of the management of public spaces, public transit and urban design (Yin and Tan, 2017).

The above two examples provide evidence of innovative practices in urban China. Here, the transformation of the urban system and space is not driven by the straightforward rolling out of the global neoliberal agenda and the hollowing out of the state, as hypothesised in the theory of neoliberalisation, but instead by a spontaneous recombination and reconfiguration of the urbanising society at the grassroots level in response to changing societal needs and priorities, facilitated by new technology and an interventionist state. The potential these phenomena generate is not fully exposed under a neoliberal lens. Here, viewing the world as on an inevitable, albeit uneven, process of neoliberalisation obscures or distorts innovative practices, and suppresses creative theorisation of urban development outside of the Western comfort zone.

We are not against the application of neoliberal vocabulary and methodology to explain developments in urban China; rather, we are against its adoption as a master narrative in theoretical articulations and representations, either as a model or as a foil. We contend that, instead of viewing Chinese urban development as a variant of neoliberalism, neoliberalism itself should be viewed as a variant of many potential political and economic arrangements in the world. Robinson (2015) has called for openness of urban theoretical endeavour in cities around the world. Leitner and Sheppard (2016) argue for provincialising urban theories and extending the ecosystem of knowledge production to make the necessary space for multiple theories across cases, irrespective of where these theories originate and by whom. Peck advocates a mid-level ‘conjunctural’ urban analysis, sensitive to contextual complexity ‘all the way down’ vertically and appropriate for interrogation across multiple cases and sites horizontally, as preferable to both ‘rigid nomothetic determinism’ and ‘freestyle exceptionalism’ (Peck, 2015: 179).

This commentary illustrates the limits and blind spots in critical neoliberalist readings of urban China, whose vast scale, heterogeneity and rapid evolution should provide fruitful ground for new insights and transformative theory formation. In our view, the way forward is for urban scholars, China specialists or not, to avoid the trap of seeing late capitalism across the Atlantic as the producer of urban theories and China as the consumer, with a mandate to clarify and justify its (ir)relevance to Western-based theoretical norms. This requires a fundamental change, the adoption of a mindset that takes urban China seriously as an important quarry for the fashioning of novel and original urban theories that do not privilege a neoliberalist frame of reference.

There is no shortage of examples to illustrate the great potential of urban China as a site of original theory production: early work on the ‘economisation’ of urbanisation (Chan, 1992; Kirkby, 1985), the conception of ‘local state corporatism’ (Oi, 1995), market transition theory (Nee, 1989) and ‘the urbanisation of local states’ (Hsing, 2010) is all characterised by a strong explanatory power, derived not only from a conscientious sensitivity to Chinese contexts but also a courageous determination to reach across time and across space seeking critical engagements with a general audience beyond China. Just as the theory of Third World political ecology, originated from the experiences of the Global South, has proved able to reshape powerfully theoretical terrain in the Global North, and has transformed itself into a widely applicable theory of regional political ecology, there is no reason why theorisation of Chinese practices and urban experiences cannot find a way to ‘theorise back’ to the hegemonic power of the West (Yeung and Lin, 2013).

We call upon urban scholars within and outside China to open-mindedly venture into a trading zone of critical engaged pluralism, taking seriously those patterns, processes and practices of ‘the others’ living outside of the neoliberal ‘comfort zone’, so that ‘we are willing to listen to others without denying or suppressing the otherness of the other’ (Barnes and Sheppard, 2010: 194). We also urge those holding the power and authorities of knowledge production and exchange – leading scholars, publishers, journal editors, editorial board members and reviewers alike – to broaden their theoretical lens; to embrace and value the many variegated and indigenous novel developments elsewhere; to celebrate a ‘worldly’ theorisation of global urbanism and planetary urbanisation in which a decentring trend materially and intellectually is underway.