The Impact of Land Rent Seeking and Dissipation During Institutional Transition on China’s Urbanization

Abstract

Rapid industrialization and urbanization have ushered in drastic urban change in China since the 1980s. Along with the reform in land-use rights, emerging land rent is contested vigorously between the urban developmental state and the rural collective/urban danwei with socialist land-use rights in the context of institutional transition. The contests have entailed land rent seeking and dissipation and, consequently, impacted fundamentally on the newly built urban spatial structures, manifested by the suburban sprawl in the less dynamic regions, peri-urban fragmented land uses, and overcompaction of the central cities in the dynamic municipalities. The newly created landed interests based upon new institution of land leasing are embedded intricately within the urban spatial structure, which will generate “unearned rent increment” and “inflicted rent reduction” in the course of constant progressive urban change. Failure in addressing these two issues and equity between the two will stall continuous urbanization while rural–urban migration is still proceeding.

Keywords

land rent China’s urbanization urban compaction peri-urban fragmentation suburban sprawl

Introduction

Urbanization was suppressed during the centrally controlled period 1949–1978, as the country pursued industrialization without an equal level of urbanization (Ma 1981). Urban residents accounted for 12.5% of the total population in 1950; the figure rose merely to 19.4% in 1980. The economic reforms since 1979 have unleashed tremendous bottom–up initiatives. Rapid urbanization has ensued ever since. In about 30 years (1982–2011), 475 million people were urbanized (see Table 1). Decentralization, both from top–down central planning to bottom–up market orientation and from the centralized control to local governance in the management of local economies, has put incentives in place for the local actors and emergent land markets to coordinate land development. In three decades (1980s–2000s), 36,000 square kilometers were converted from rural land to urban uses in the whole country, and cities, especially those in the Eastern Region, which is the most industrialized in the country, have been seeing dynamic and drastic spatial expansion. Whereas the Western Region has been the least buoyant in terms of urbanization (see Table 2).

Table 1.

Urbanization and Increase of Urban Population.

Year	1950	1980	1982	2011
Urbanization level (urban population as % of total)	12.5	19.4	21.4	51.3
Net increase of urban population (million)	93.4		475.0

Source. National Bureau of Statistics of China (NBSC) (2012); Shen (2005).

Table 2.

Urban Physical Expansion in Regions (Urban Built-Up Area, square kilometer).

Year	1981	1991	2001	2011	Increment
Mainland China	7,438.0	14,011.1	24,026.6	43,603.2	36,165.2^a
Eastern Region	—	6,200.4	11,987.0	23,579.4	17,379.0
Central Region	—	5,666.7	8,244.8	12,918.8	7,252.1
Western Region	—	2,143.0	3,794.8	7,105.0	4,962.0

Source. National Bureau of Statistics of China (NBSC) (1982, 1992, 2002, 2012).

It refers to the increment during the period 1981–2011; others are during the period 1991–2011.

This drastic turn occurred in the context of institutional change from land being “a means of production” to public land leasing. Commoditization and marketization of urban land have formally replaced the free allocation of land in all Chinese cities since 1988. Complementing an emerging market-oriented economy, public land leasing is legalized and becomes a norm for urban spatial expansion. During the institutional change along with the marketization of land resources, land rent emerges explicitly, and competition for land rent ensues. It is observed that competition under a transitional institution of land rights brings in rent seeking and consequent rent dissipation. The research objective of this article is therefore to examine the impact of land rent seeking and rent dissipation during the institutional change as the formulating factors on the spatial patterns of urbanization. Determined by the nature of the research objective that seeks insights into urban formation and reformation, this research, assisted by some secondary statistical data, is conducted based on in-depth primary case studies from the period 2010–2014 in the two rapidly urbanizing clusters in the Eastern Region, which are the Pearl River Delta, for the cases of Nanhai and Shenzhen, as well as the Yangtze River Delta, for the cases of Kunshan and Shanghai central city (see Figure 1). Land-use maps and data are retrieved from archives, and site visits are administered for field reconnaissance and interviews.

Figure 1.

Three regions in China and locations of the cases in the Yangtze River Delta and Pearl River Delta.

The structure of the article is as follows. Prior to the research objective highlighted, the introduction brings about the phenomenally rapid urbanization in China since the economic reforms. The article proceeds to establish a conceptual framework of land rent seeking under the transition of land rights in the following section. The section “The Rising Urban Developmental State and Traditional Rural Autonomous Collective” focuses on the two prominent stakeholders involved deeply in the process of transition of land rights—the urban developmental state representing the public owner of urban land as assets that is phasing in and the rural collective as the holder of socialist land-use rights that is phasing out. The sections “Urban Overcompaction: Coalition Between the Urban Developmental State, Developers, and Danweis with the Socialist Land-Use Rights” and “Peri-urban Fragmentation and Suburban Sprawl: Contest Between the Urban Developmental State and Rural Autonomous Collectives” are the key components of the article that address the three phenomena as the impact of transition of land rights on the urban spatial structure, namely, urban overcompaction, peri-urban fragmentation, and suburban sprawl. The section “An Initial Structure of Landed Interest Shaped by Institutional Transition and Its Implication for Further Urban Change” explains an initial structure of landed interests shaped by land rent dissipation and explores its implications for the progressive urban change when urbanization is still proceeding to accommodate rural–urban migrants.

The urban developmental state with a special interest in growth pursues land rent assiduously and indulges itself in speculative land development. Low-density suburban sprawl occurs as a result in those less dynamic regions where land competition is not so keen, and often the ambitious urban governments lead and spur urban development by building large new urban districts on the lands acquired from the rural collective. While in those dynamic municipalities where land scarcity is intensified, there is twofold contest for land rent. One is between the urban developmental state and urban danwei¹ land holders, and the other is between the urban developmental state and the rural autonomous collective. Peri-urban fragmentation and urban overcompaction occur as a result. Determined by the varied intensities of competition for land rent, the land development can be categorized into two general modes—one manipulated by the urban developmental state and the other negotiated between the urban state, rural collective, and urban danwei.

Land Rent Seeking Under Transition of Land Rights

Ricardo ([1821] 1951) demonstrated that rent for the more fertile land is derived from its advantage over the less fertile land and thus land rent is determined by the fertility differential. Von Thünen ([1826] 1966) developed the theory of land rent further based on location differential, suggesting that land rent should increase with the accessibility of land. Accessibility replaces fertility as the determinant of land rent, which yields the bid rent function in the urban context. Land rent is also considered as the value of land appropriated in the economic transactions, as the market price of land is interpreted as capitalized land rent in perpetuity. The gap between the potential land rent based on the “highest and best use” and the actual land rent capitalized under the present land use constitutes the land rent differential.

Capture of land rent differential gives landowners a sufficient incentive to develop or redevelop land. Land rent is delineated by the property rights over land as assets. How land rent differential is appropriated is determined by the institution of land rights, which further facilitates how rural transformation and urban reformation proceed in the process of urbanization. Property rights are a bundle of rights (the right to use, the right of capture benefits, the right to change the form and substance, and the right to transfer) that links an economic system with a political structure and a legal regime (Pejovich 1990; Reeve 1986). Property rights do not exist in an institutional vacuum. They are constrained by institutions and social norms that are devised by society to shape human interaction (North 1990).

Since the founding of the People’s Republic in 1949, urban land in China has been nationalized under the socialist centrally controlled system, whereas farmland owned by landlords was confiscated and redistributed to landless peasants under the Rural Land Reform. The Cooperative Movement in 1953, however, abolished the private ownership of farmland and replaced it with collective ownership. Although rural land is collectively “owned” ostensibly, rural communities “own” the land on the condition that it is only used for its own economic production (farming and nonfarming) and habitation. Therefore, collective “ownership” only suggests land-use rights over farmland in perpetuity to the rural community. (The nature of the collective land system is elaborated in the section “Ambiguity in Rural Collective Land Rights for Nonagricultural Development.”) State-owned urban land was allocated to users who were either agents of the state (danwei) or workers (employees of the state) through administration channels that did not charge users for land use.

It is reckoned that both in the city and the countryside, land was allocated to users based on the Marxist principle of land as “a means of production,” which suggests that land should not be considered as economic assets.² The notion of land being “a means of production” grants land-use rights only to occupiers, as the rights to derive income and to develop for better uses are considered attributes of land as assets. However, once land was allocated to users, the right to use land became entrenched. Users’ entitlement to urban land allocated became a unique institution that was incorporated in the formation of socialist cities during the centrally controlled era (1950–1980). Users held their land parcels virtually in perpetuity, which even prompted coinage of a unique term “socialist land use right” (Zhu 2004a). The socialist land-use right granted de facto ownership rights to the users. The rural collective’s right to use farmland seems perpetual, which is not questionable.

China’s economy and society have been in the process of transformation from plan controlled to market led since 1978. Commenting on the economic and political transition of former socialist Eastern European countries, Rapaczynski (1996) and Frye (2004) believed that private property rights emerge in response to market demand and the state capacity becomes effective only when market mechanisms are self-enforcing. It is the market that demands property rights and effective state. Commoditization and marketization of land are implemented after the grand market reform in China into its second decade (Yeh and Wu 1996). The 1988 amendments (Article 10) to the Constitution formally promulgate that state-owned land can be leased to developers or users for a fixed period of time after a payment of rental in lump sum. The invention of public land leasehold has explicitly made land economic assets. Property rights are clearly defined over the land supplied under the leasehold (Y. Tang 1989). An emerging urban land market has been evolving ever since (Zhu 2005).

An institutional transition from land as “a means of production” to land as economic assets has been unfolded along with the rapid urbanization in the background of gradual economic reforms. Gradualism as the key characteristic of the long-lasting economic reform leads to dualism that means a coexistence of old institutions that are phasing out and new ones phasing in (Lau, Qian, and Roland 2000; Naughton 1995). The new institution of public land leasehold is applied to new developments, and the old institution of land as “a means of production” embedded in the existing land stock is gradually phased out (Zhu 2005). Dualism induces rent seeking because of ambiguous relationship between the two land right regimes. Barzel (1989) postulated that if property rights are not perfectly delineated, some attributes will be in the public domain, subject to open access. Rent seeking occurs, followed by rent dissipation,³ when land rights are ambiguous. Rent seeking based on the prereform, old institutions of rural collective land-use rights and urban socialist land-use rights occurs among the stakeholders of urban governments, rural collectives, and the urban danweis. Being contested, openly or covertly, land rent will be capitalized hastily and injudiciously before the opportunity vanishes. Ambiguous delineation of land rights gives rise to a land development market where disordered competition for land rent prevails. The modes of land development will be subsequently configured by the contestation, which often results in suboptimal land development.

The Rising Urban Developmental State and Traditional Rural Autonomous Collective

The Urban Developmental State and Local Growth

The transformation from the centrally controlled system to a socialist market economy and from the closed socialist autarchy to an open economy with market orientation inevitably entails restructuring of economy and formation of new social relations. The new forces of decentralization, marketization, and political legitimization have transformed China’s local governments into local states with a strong inclination to development. No longer being passive agents of the central government under the centrally controlled regime, local municipalities are given more latitude in making decisions in managing their local economies and developing their cities, as the central government has been withdrawing from its central control on local urban development (see Table 3). Advancing development strategies that can stimulate local growth is an indispensable goal of local governments so that autonomous local governments are highly motivated to maximize local revenues to support local growth (Wong 1987, 1992). A capitalist developmental state is “a plan-rational economy with market-rational political institutions” (Johnson 1995, p. 28). “Embedded autonomy,” or insulation from political and social pressures, allows the developmental state to be relatively free from predation and rent seeking (Evans 1995). By this definition, China’s local governments have close links (embedded) to society, but it is not independent from the political and business interests of society (insulation) (Zhu 1999, 2002). China’s local governments have become an economic interest group with their own policy agenda—and thus the local developmental state (Zhu 2005).

Table 3.

The State Fiscal Allocation as a Percentage of the Local Municipal UMCF,^a 1980–2009.

Period	%
1980–1984	19.7
1985–1989	7.9
1990–1994	3.9
1995–1999	3.7
2000–2004	2.4
2005–2009	1.3

Source. China Ministry of Housing and Urban-Rural Development (CMHURD) (2009) . UMCF = Urban Maintenance and Construction Fund.

UMCF is a designated fund for building and maintaining urban infrastructure and facilities in the municipality.

Land rent differential created by the rapid economic growth that is unleashed by the economic reforms begins to drive urban expansion and redevelopment. With the strategic shift of development policy toward urbanization, the municipal UMCF has seen its volume growing tremendously, evidenced by its rising share in gross domestic product (GDP) from 0.7% (1980–1984) to 2.8% (2000–2004) (China Ministry of Housing and Urban-Rural Development [CMHURD] 2005; National Bureau of Statistics of China [NBSC] 2009). Land conveyance fees, or land rent, which come from urban land leasing and are mostly taken by the local municipal government at its disposal, have increasingly become an important financial source for the public investment in urban facilities and infrastructure (see Table 4). Land rent is keenly sought after and mobilized by the local developmental state to promote urban growth.

Table 4.

Land Conveyance Fees as a Percentage of Municipal UMCF, 2001–2011.

Year	%
2001	6.6
2003	11.9
2004	20.9
2006	24.9
2008	37.5
2011	55.9

Source. China Ministry of Housing and Urban-Rural Development (CMHURD) (2002–2012). UMCF = Urban Maintenance and Construction Fund.

Rural Autonomous Collectives and Nonagricultural Development

China being an ancient agricultural civilization, villages have always been a basic social unit in its rural regions. Due to farmland resources made increasingly scarce by the continuous population growth, villages in China had developed a keen sense of territoriality in the face of constricted economic opportunities and perennial political disorder. Based on clan and lineage, villages had become a basic autonomous socioeconomic unit, increasingly introverted, and suspicious of outsiders. There as close solidarity and coordination within the rural community that was managed by the village gentries before the 1949 revolution (Duara 1988; Skinner 1971). The People’s Commune Movement since 1949 has not changed the nature of China’s villages significantly. Villages remain an autonomous collective unit in the rural China, considered as “self-governing” bodies (Gao 1999). Moreover, villages have formally become a collective economic entity. Village’s social services (health, education, and welfare for the elderly) and infrastructure are still mainly the responsibilities of the village itself (Tsai 2007; Wong 1997). The Organic Law of Villagers’ Committees (1988) stipulated that villagers’ committees (cunmin weiyuanhui) are entrusted to manage village economic assets (including collective land) and social welfares on behalf of the whole village. Committee members are democratically elected directly by the villagers every three years. On top of annual general assembly, villagers can request the committee to convene ad hoc meetings to discuss urgent village matters. Therefore, committees’ management of village affairs is fully monitored by the villagers. The management capacity of villagers’ committees is often in direct proportion to the strength of collective nonagricultural economies.

Villagers in the less dynamic regions and less accessible areas remain in farming as they have been laboring for hundreds of years, whereas villages close to cities in the regions with established industrial and market networks have been diversified into nonagricultural economies. One of the effects of the Great Leap Forward (1958–1960) was the initiation of rural industrialization, in which “commune–brigade enterprises” (shedui qiye) were created to support agricultural production using local materials and labor (Byrd and Lin 1990). The new market-driven regime of the Household Production Responsibility System (HPRS)⁴ constituted a powerful engine in the rural economy, and there was, thereafter, significant improvement in farm productivity (Putterman 1993). The problem of surplus labor soon emerged because of the improvements in farming efficiency. The township–village enterprises (TVEs) thus flourished, providing industrial employment to those made redundant from farming, or else peasants in the less developed regions without TVEs have to migrate to cities to search for nonagricultural jobs.

Rural industrialization, a new stimulus for the rural development, has changed the fortune of many villages. Bottom–up, village-owned manufacturing creates jobs for the poor peasants, and generates revenues for the improvement of social services and infrastructure in the villages. Market-driven rural industries flourished since the early 1980s in the dynamic industrial regions (S.-D. Chang and Kwok 1990). In 1994, production of TVEs represented about 38% of the nation’s total industrial product, whereas it was only 9% in 1978 (C. Chang and Wang 1994). Collective rural industries had become the backbone of the county economy and significantly improved villagers’ quality of life.

Rural collective industrialization expanded energetically until the mid-1990s when manufacturing became increasingly globalized in China. Rudimentary village enterprises faced increasingly hard competition from inward foreign and private firms that had industrial expertise and updated technologies. Unable to compete in the market, village industries were either bankrupt or privatized consequently (Che and Qian 1998; Vermeer 1999). In 2011, production of TVEs only accounted for 1.3% of nation’s total industrial product (NBSC 2012). In Nanhai (in the Pearl River Delta), the village industries contributed 31.2% to the total industrial output in 1984, and the share rose to the peak at 50.2% in 1998 (Nanhai Bureau of Development Planning and Statistics [NHBDPS] 1998). Then it declined drastically to 2.9% in 2008, whereas the foreign and private enterprises’ industrial output as a percentage of the total jumped from 40.9% (1998) to 96.4% (2008) (NHBDPS 1998, 2009). In Kunshan (in the Yangtze River Delta), the share in the total industrial output contributed by TVEs increased from 59.5% (1985) to 74.9% (1995) and then dropped drastically to a negligible 0.2% (2010) (Kunshan Bureau of Development Planning and Statistics [KSBDPS] 1986, 1996, 2012). Phenomenal rise of rural industries has, nevertheless, improved the life of numerous peasants significantly. Unexpected fall of rural industries have also led to a new form of rural growth.

With the decline and demise of rural collective industries, village economies in the urbanizing regions have increasingly been relying on land rent. Over the eras of People’s Commune and rural industrialization, villages have built some collectively owned land and premises used for nonagricultural purposes. Village-owned enterprises may have died, but land underneath and buildings above can be rented out as valuable assets. Some local governments adopt a compromising policy that 10%–15% of acquired collective land for urbanization should be returned to the villages for the collective to conduct nonagricultural, income-yielding activities. As a result, nonagricultural land held by the villages tacitly becomes collective assets with full property rights. A new mode of collective economies in the form of land shareholding cooperatives has emerged (Sun, Luo, and Zhao 2010; Zhao et al. 2009). These cooperatives are essentially for villages to capitalize on land rent enhanced by industrialization and urbanization. Land leasing businesses enhanced by urbanization have become villages’ new collective economy. Of the total Kunshan village economic revenues in 2012, land-related rental income accounted for 42.8%, whereas the income contributed by village enterprises only represented 14.4% on average (Office of Rural Works/Kunshan Municipal Government [ORW/KMG] 2013). Land rent represented 78.1% and village business operations 18.9% of the total collective revenues in the villages of Shishan in 2013, one of the townships in Nanhai (Nanhai Rural Work Office [NHRWO] 2014). Villages have become a rentier class.

Urban Overcompaction: Coalition Between the Urban Developmental State, Developers, and Danweis with the Socialist Land-Use Rights

From 1954 to 1984, urban land was virtually free goods allocated through administrative directives without mediation of the pricing mechanism. Free resources encouraged users to overconsume without considering affordability and limitation of land resources. Land squandering was prevalent as a result (Fung 1981). As there was no compensation, there was no incentive to relinquish occupied land. Land-use structure in urban built-up areas was made rigid, as it was very hard, if not impossible, for land-use change to occur. Prereform urban built-up areas had to be restructured so as to serve the reforming urban economy. An urban land redevelopment process had to be unlocked by eliminating supply-side constraints upheld by the old land-use regime. To replace the socialist land-use right with the leasehold-based land rights, the former’s status of de facto ownership rights was tactically recognized. Relinquishing the land-use right was compensated for on the basis of negotiation. The compensation to the sitting land users drew from the land rent differential of the redeveloped land parcel in question. To compensate the displaced residents in the usually high-density central residential quarters and encourage the danwei land users to vacate their sites as if they were entitled to full property rights, as well as to be able to appropriate sufficient land rent as fiscal revenues by the urban developmental state as the de jure owner, planning control over land-use density on the sites under redevelopment was often revised upward so as to increase the land rent differential requested by the urban government.

Demsetz (1967) believed that property rights should be clarified when externalities have to be internalized. Ex ante designation of land uses and development parameters maintains the interests of land rent in relation to the neighborhood spatial structure. If development control is highly discretionary and capricious without observing appropriate procedure, uncurbed individual rent-seeking deeds⁵ generate negative externalities that cause land rent dissipation in the neighborhood, especially when urban density and land-use intensity are on the rise. Aggregation of externalities with no internalization brings the land market to the brink of the commons where individuals seeking personal gains lead to depletion of resources as a result of overconsumption and underinvestment that harm the public benefit.

A survey revealed that during the period 1992–2000, land redevelopment carried out in Jing’an District, Shanghai, amounted to 260 projects on land parcels adding up to a total area of 135.7 hectares, accounting for 17.8% of the total area of the district (762 hectares). In 135.7 hectares, there were 88.5 hectares (65.2%) residential land and 35.7 hectares (26.3%) industrial land (see Figure 2). The process of land redevelopment was full of bargaining between the sitting land users, developers, and planning authority, resulting in redevelopment at higher density than what zoning had prescribed. According to a sample of 23 cases from a census of 260 redevelopment projects, the incidence of those projects with discrepancies in planning parameters between initial planning requirements and final completion accounted for 53.3% of the total! The total building stock was 9.08 million square meters by 1990 in Jing’an, and it grew to 17.5 million square meters by 2012. The gross plot ratio rose from 1.19 (1990) to 2.30 (2012), the district physical density increasing by 93% over the period, almost doubling the physical density over the two decades with an astonishingly high population density at 33,600 persons per square kilometer (Shanghai Municipal Bureau of Statistics [SMBS] 1991, 2013).

Figure 2.

Land redevelopment projects in Jing’an District, Shanghai, 1992–2000.

Many major and provincial capital cities fall into the category of overcompaction in their central areas by a yardstick of urban population density at 10,000 persons per square kilometer (indexed as 1.0)—Guangzhou (Yuexiu) (3.3), Beijing (Xicheng) (2.6), Tianjin (Hedong) (2.5), Wuhan (Jianghan) (2.1), Hangzhou (Shangcheng) (2.0), and Shenzhen (Futian) (1.7) (NBSC 2014). In Shenzhen, one of the prominently dynamic cities in the Pearl River Delta, the density of Luohu (its historical old quarter) measured by plot ratio was below 2.0 in the early 1980s. The 1989 master plan stipulated that the plot ratio should not exceed 3.0 for the redevelopment of Luohu. However, the subsequent redevelopment had substantially intensified land use to the extent where density stood at 4.3 by 2000 (Zhu 2004b). Guangzhou, the capital of Guangdong Province, saw its building density in its central city increased by 4.1 times during 1978–2001 and further 0.9 time during 2002–2013 (Guangzhou Municipal Bureau of Statistics [GMBS] 2014).

Peri-urban Fragmentation and Suburban Sprawl: Contest Between the Urban Developmental State and Rural Autonomous Collectives

Ambiguity in Rural Collective Land Rights for Nonagricultural Development

China’s rural collective land system is a unique institution. Collective land rights are 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 nonagricultural activities without approval from the government at the county level or above. Although the right to use rural land for farming and residing is secured and unchallengeable, the right to develop rural land for the collective nonagricultural economies should be granted by the urban state (Byrd and Lin 1990). The right to alienate collective land-use rights is restricted to the situation where the other party in the transaction is the state (G. C. S. Lin and Ho 2005).

According to the Land Management Law (1986), agricultural land demanded by urbanization should be legally acquired by the urban government before its leasehold is sold to a developer for a land lease premium based on the new land use and necessary urban infrastructure is installed. Conversion of collective land to the state requires compensation to be paid to the collective for giving up land-use rights. The compensation is based on the land rent from existing land uses—that is, agricultural farming—instead of the potential rent derived from the new urban land use. Therefore, there is a great deal of land rent differential—the gap between the potential land rent and actual land rent capitalized under the present land use—in view of a huge amount of rural land converted nationwide for urban uses (see Table 2).

Under the People’s Commune regime during the central planning era, a three-tiered governance system (commune, brigade, and team) was established to administer rural China. Since the collective farming was replaced by the HPRS in the early 1980s, the three-tiered entities have been renamed as township (xiang/zhen), administrative village (xingzhengcun), and natural village (zirancun), respectively (Ho 2001). The Organic Law of Villagers’ Committees (1988) by the central government promulgated that the administrative village should be the basic unit for the rural autonomous social and economic governance. However, in Southern China where clan and lineage remain strong, natural villages predominantly become the basic unit. Rural land rights are vested with the collective entities at three hierarchical levels (township, administrative village, natural village), but how much each entity is entitled to have has never been clearly delineated. An official maxim describes owners of the collective land as sanji suoyou, dui wei jichu (collective ownership belonging to three entities, and with the team being the basic holder).⁶

The collective land rights are not questionable when the collective is mainly engaged in farming and cottage industries. When the locality where the collective is situated is urbanizing, the collective landownership becomes problematic in the face of land conversion and accentuated land rent, as the term collective landownership connotes full property rights instead of “a means of production.” Overt challenges to the urban government’s farmland acquisition are abundant on one hand. Covert (nominally illegal) land developments for nonagricultural activities by the collectives themselves are rampant on the other hand, as the official policy to rural bottom–up, nonfarming economies is generally supportive. Ambiguity and ambivalence breed rent seeking.

Land Rent Grabbing: Low-Density Suburban Sprawl

In those less dynamic areas like the Central and Western Regions, rural nonagricultural growth is far less progressive than in the Eastern Region, and the regions become the main origins sending out rural–urban migrants who amounted to 26.4% of the total rural population in 2013, rising from 1.5% in 1990 to 6.3% in 2000 (http://www.stats.gov.cn/tjsj/zxfb/201405/t20140512_551585.html, accessed on April 25, 2015; NBSC 2014). Industrialization and urbanization in these areas are chiefly led by the urban governments. Land rent has become a significant source of municipal revenues, and capitalization on emerging land rent has become a forceful incentive facilitating urban expansion. The strategic concept plan, a nonstatutory plan, was initiated firstly by some coastal cities that experienced dynamic growth in the early 1990s. It has been adopted since by many other cities that envision ambitious spatial expansion to the future. Whereas spatial expansion in some dynamic, growing cities is driven by the real demand of drastic economic growth, rapid increments of urban area in other cities are rather speculative and unjustifiable. The strategic concept plan is mainly to plan or expand a spatial structure so as to accommodate anticipated dynamic growth of urban economies ostensibly. Grabbing land rent from the conversion of rural land to urban uses is the real pursuit. Excessive land rent taking is caused by the ambiguous delineation of property rights over state-owned land between the principal (the central government on behalf of all the people) and agents (local governments that manage municipal land resources), the so-called principal–agent problems (Jensen and Meckling 1976).

Equipped with the strategic concept plan, the local municipal government is legitimized to be bold in its large-scale appropriation of farmland with the objective of facilitating rapid urbanization. Many large-scale urban expansion projects are deemed out of proportion in relation to the actual demands. Because of the nature of land rent grabbing, low-density urban sprawl appears in the peripheries of many cities. It was reported that about 50-odd cities had built new university districts⁷ by 2005 (http://www.landscapecn.com/news/html/news/detail.asp?id=29730, accessed on July 11, 2006); 36 cities were pursuing the so-called new central business districts (CBDs) in 2003, instead of consolidating the existing city centers (http://news.soufun.com/2003-04-16/150448.htm, accessed on July 11, 2006). In 2003, there were 174 cities with a population exceeding one million; 33 cities with a population more than two million (NBSC 2005). New CBDs and university districts are only justified for those large cities with millions of population. The amount of land (36,000 square kilometer) designated for 3,837 newly planned industrial development zones in total nationwide (http://www.china.com.cn/chinese/2003/Dec/454237.htm, access on April 15, 2016) even exceeds the total existing urban built-up area of 30,406 square kilometer in the country (2004) (NBSC 2005). Many large underutilized or even vacant sites manifest wasteful sprawl in the suburbs.

If the physical density of cities is below 50% of the yardstick of urban population density at 10,000 persons per square kilometer, those cities are named “ghost towns.” There were 33 cities receiving the “ghost town” title in 2015 (http://china.huanqiu.com/article/2015-11/8006492_2.html, accessed on December 8, 2015). There were 12 cities only reaching 27% – 40% of the standard density and 21 cities 42%–50%. There were 25 of those “ghost towns” in the Western and Central Regions. On average, urban physical density is only of 88% of the yardstick for the cities in the Central Region and 70% in the Western Region in 2013 (NBSC 2014).

Fragmented Peri-urbanization Caused by Land Rent Seeking

In those dynamic regions such as the Pearl River Delta and Yangtze River Delta, there are two fronts in urbanization. One is urban projects managed by the urban state; the other is rural nonagricultural developments initiated by the village collective. Ambiguously delineated collective land rights in the context of urbanization generate disordered rent seeking. Land rent is keenly sought after in the context of twofold competition between the rural collective and the urban state, and between the joint nominal “owners” (township, administrative village, and natural village) within the rural community. In the name of stimulating village economies, many land development projects are carried out under the disguise of legitimate provision of premises for village economic activities such as rural industries. As a matter of fact, land parcels are developed to be rented to outside industrialists after the unexpected demise of rural industries since the mid-1990s. Village houses, meant for self-occupation, are rebuilt at a much large scale so as to have spare space to be rented out. Using land as assets, rather than as “a means of production,” is not considered legitimate by the state, and thus, land development for the purpose of rent taking is clandestine, informal, and opportunistic. Land development often becomes a preemptive measure against potential rent appropriation by other stakeholders, resulting in land development for the sake of rent seeking.

The top–down penetration of urban projects sponsored by the urban state spatially intermingles with the bottom–up rural land developments initiated by the village collective in the peri-urban areas. Villages could covertly conduct land development for nonagricultural uses only within their own jurisdictions. Because of high population density and acute land scarcity, villages tend to be small in area. Autonomous and compartmentalized village land development results in fragmented urbanization due to diverse interests in land and thus various modes of land development, whereas land-use planning across village boundaries does not exist in the rural domain of autonomous villages. It should not be a cause for concern if population density is low. Various modes of land development actually give rise to diversity in the built-up environment. But it becomes a serious challenge when population density is very high and land scarcity is acutely severe. Environmental integrity and optimal utilization of scarce land resources are seriously compromised.

Two rapidly urbanizing peri-urban counties, Nanhai and Kunshan, show the grave fragmentation of urban and industrial development. Nanhai is located to the immediate West of Guangzhou, the capital city of Guangdong Province, in the Pearl River Delta. With a total area of 1,074 square kilometer occupied by 1,839 villages, it had 1,868 industrial land patches spatially dispersed, and farmland was disintegrated into 1,862 patches (2008) (see Figure 3). Kunshan is located to the East of Suzhou and to the West of Shanghai, sandwiched between the two economic powerhouses in the Yangtze River Delta. With a total area of 927 square kilometer shared by 1,888 villages, Kunshan produced 1,711 patches of fragmented farmland (2010) (see Figure 4). The intense mixture of agricultural and nonagricultural land use is conducive neither to farming nor to the quality of urban living. This bottom–up urbanization may have reflected the interests of individual rural communities. However, very limited land resources are not productively utilized in the best interest of long-term sustainability. Self-contained mode of village-based industrialization impedes the economic provision of industrial infrastructure (such as waste water treatment and other necessary services) that is essential for productive manufacturing (see also a Shenzhen case provided by Lai et al. 2014). Poor quality industrialization jeopardizes the fragile ecological environment.

Figure 3.

Land development in Nanhai, 1990–2008.

Figure 4.

Land development in Kunshan, 1989–2010.

Land Rent Seeking Under Rural Autonomy: Social Inequality

Demand for rural land conversion for urban uses by an expanding urban economy makes collective land potentially valuable. Not spatially distributed evenly across villages, however, rising land rent is determined by location-specific advantages. Land rent increases significantly at accessible locations with good quality infrastructure. Only those villages at good locations can capitalize on land rent, and their collective economies can ride on the progressive urbanization. Nevertheless, reliance on land rent in the transition to nonagricultural economies generates inequality between villages. Income gaps are widening between those villages at the peri-urban areas and those at remote locations even within the same municipality. The statistics of village collective incomes reveal a great deal of disparity between villages in Kunshan and Nanhai. In terms of the village income from land rent, the highest was more than 800 times of the lowest in Kunshan. The Gini coefficient measuring inequality between villages’ land rent income reached .593 (2012). The total collective income shows a disparity between villages to a lesser extent (Gini = .420), as other sources of village revenues do not rely on location-specific advantages specifically (ORW/KMG 2013). In Nanhai, which is reliant on land rent greatly, Gini coefficients in terms of villages’ land rent income and villages’ total collective incomes in Shishan township reached .721 and .608 (2013), respectively (NHRWO 2014) (see Figure 5).

Figure 5.

Disparity between village collective incomes in Nanhai and Kunshan.

Moreover, differentiation in benefiting from industrialization and urbanization between the local villagers and migrant workers arises. Migrant workers only receive wages from industrial employment, whereas local villagers can claim land rent on top of wages. The growing village nonagricultural economy widens the gap between the local villagers’ income and the migrant workers’ welfare. Both migrant workers and local villagers are peasants originally. The only difference between the two is that the former come from the inland provinces mostly in the Central and Western Regions where the agricultural farming still dominates, whereas the latter are fortunate enough to be in a dynamic industrializing region. Because of favorable locations, Nanhai and Kunshan villagers earn additional incomes derived from land rent on top of their nonagricultural wages.

Urban–rural inequality has been a persistent feature over a long time in China (Whyte 2010). Peasants and farmers with meager farm landholdings were a synonym for poverty, though urban poverty was not less prevalent. Li and Wu (2008) claimed that the market-oriented transition and rapid urbanization in the past three decades have made China one of the most unequal countries in the world. Discrimination against rural migrants and social segregation in the cities are not uncommon indeed. The institution of urban hukou⁸ and urban–rural divide are the underlining explanatory factors. However, since the economic reforms, in the regions with dynamic economic growth like the coastal belt from the North to the South, urban–rural income gaps are diminishing between urban residents and rural villagers in the peri-urban areas, evidenced by the peri-urban villagers’ rising income from the nonagricultural sectors and land rent. To maintain the entitlement to continuous income from land rent, many peri-urban villagers refuse to convert their rural hukou to urban one that was coveted earlier. The sociospatial differentiation and segregation between the locals and migrants in the rural peri-urban areas are surprisingly as serious as those in the city.

Village entitlement to land rent should be held responsible for rural-rural divide caused by urbanization. In the same region with similar natural endowments, agricultural productivity tends to be equal between villages as long as landholdings per villager do not vary substantively. Urbanization has changed this equilibrium. Manufacturing and services are spatially centralized, and land values are determined by the factor of location. Even within a small municipality, land values vary widely between districts or townships. It has been shown that in high-density urbanizing regions, distribution of rising land rent derived from urbanization is an important matter for social justice. Land rent cannot be taken by the locals only. Land rent has to be distributed fairly among all stakeholders, whether they are locals or migrants. Land rent can be put to good use for the provision of public and social goods, rather than consumed as club goods, so that everyone can benefit from those goods that make a decent urban environment with adequate infrastructure and affordable social housing. Therefore, locals, as well as migrants, can live in urbanized settlements equally.

An Initial Structure of Landed Interest Shaped by Institutional Transition and Its Implication for Further Urban Change

An Initial Structure of Landed Interests Shaped by Land Rent Dissipation

During the transition from land as “a means of production” to land as an asset, land rent seeking under transitional ambiguous land rights gives rise to land rent dissipation. There are three types of rent dissipation taking place in the process of urbanization. The first occurs in peri-urbanization where ambiguous property rights over collective land induce disordered competition among the stakeholders for land rent (referring to the section “Fragmented Peri-urbanization Caused by Land Rent Seeking”). Consequent fragmented structure of land use without land-use planning that ensures provision of public goods and facilities seriously compromises environmental integrity and optimal utilization of scarce land resources, a symptom of land rent dissipation (Lai et al. 2014; Zhu and Hu 2009). The second happens in the redevelopment of built-up central cities constructed under the old institution of land as “a means of production” (referring to the section “Urban Overcompaction: Coalition Between the Urban Developmental State, Developers, and Danweis with the Socialist Land-Use Rights”). The danwei land users bargain for more land rent differential than the density prescribed by zoning before they would relinquish their socialist land-use rights. Altering zoning regulations informally and covertly imposes social costs on the neighborhood, constituting an act of rent seeking. Gains to the existing land users are at the expense of losses to other land users in the neighborhood. As a result, physical density in the central cities grows much higher than what the capacity of infrastructure allows. Overcompaction of the built-up areas lower the environmental quality, thus land rent dissipation.

The third occurs in the acquisition of farmland where rent dissipation takes place in the form of a large quantity of vacant or underused greenfield land (referring to the section “Land Rent Grabbing: Low-Density Suburban Sprawl”) because of ambiguous delineation of property rights over land between the principal and agents—that is, between the people (represented by the central state) and local governments. Decentralization advocated by the economic reforms separates ownership from control, which gives decision-making power to agents that tend to pursue their own interests. Mayors need to legitimize their positions by their performance in office and to pave the way for the progress of their political careers. Limited and uncertain tenure of mayorship cannot afford a long-term agenda for sustainable urban development. Short-term quantitative instead of long-term qualitative urban changes are pursued as a result. Visible new urban districts and appropriation of land rent differential suit the best interest of local governments (agents), whereas the interest of the people (principal) are undermined.

Implication of the Structure of Landed Interests for Progressive Urban Change

An initial structure of landed interests according to the new institution of land leasing has been formulated. Appropriation of land rent under leasehold should be less problematic and contestable than it was under prior transitional land rights because property rights over land are clearly defined. However, continuous urban change in the future can be implicated by the landed interests structured under phased-out transitional land rights. As a result of rent seeking, vacant, undeveloped land parcels in the suburbs because of underpriced land sales amount to private land hoarding. Along with rapid urbanization, demand for land will sooner or later catch up and create windfall gains to those who hold lands. Entitlement to windfall gains in land rent becomes a disputable issue. Fragmented structure of land uses and overcompaction make further spatial change a strenuous endeavor in the peri-urban areas and central cities, as delicate balance in landed interests is susceptible to slightest spatial change (Y. Lin, Hao, and Geertman 2015). Necessary installation of urban amenities and social facilities will either cause betterment (parks, mass rapid transit stations, etc.) or worsenment (substations, incinerators, etc.) in the urban neighborhoods, giving rise to inequity if externality issues are not addressed. Those affected negatively will resist change rigorously if their concerns are not dealt with, which stalls progressive urbanization. Resisting changes or holding out for maintaining the status quo is the property rights situation known as the anticommons where multiple landowners have effective rights excluding each other from effective utilization of land resources (Buchanan and Yoon 2000; Heller 1998). Holding out by a small minority of the status quo is a tragedy for progressive urbanization where rural–urban migration is still proceeding. Urban residents only account for about 50% of the total population right now.

Instruments for recapture of betterment (unearned rent increment)⁹ and mitigation of worsenment (inflicted rent reduction)¹⁰ are critical to ensure equity during continuous urbanization. A mechanism of windfalls for wipeouts can be useful to address unintended redistribution of land rent caused by public actions like government projects and regulations (Brown 1999; Grant 1999; Hagman and Misczynski 1978; Healey, Purdue, and Ennis 1995). Stiglitz (1977) demonstrated that under certain conditions, spending by the government on public goods (urban infrastructure and amenities) will increase aggregate land rent by an equal amount. It is dubbed as “Henry George theorem,” suggesting that unearned increment in land rent should be recouped by the state and used for financing public goods (George [1881] 2009). It is advocated that betterment should be recaptured by the state so as to benefit the general public, as well as to compensate for worsenment inflicted by some public projects. It is the principle of internalization of externalities, whether positive or negative.

Conclusion

Rapid industrialization since the launch of economic reforms in the late 1970s has been propelling urbanization drastically in China where tremendous urban changes have occurred and a population of 475 million and an area of 36,000 square kilometer were urbanized over the period 1982–2011 (see Tables 1 and 2). The urban land reform as a component of grand economic changes transforms the institution of land rights from land as “a means of production” to land as an asset. Emerging land rent is contested rigorously basically between two key stakeholders—the urban governments and existing land users holding socialist land-use rights—during the institutional transition. The former are the pro-growth local developmental state, whereas the latter are the status quo interests intending to appropriate land rent as much as they could in the capacity of socialist land-use right holders. Appropriation of land rent during institutional transition induces land rent seeking, and consequent land rent dissipation that is shown by suboptimal urban spatial structures in the forms of the suburban sprawl, peri-urban fragmented land uses, and overcompaction of the central cities.

The suboptimal urban spatial structures pose grave challenges to the future urban change, as the embedded, initially intricate interests of land rent will resist land-use change leading to optimal land utilization if “unearned rent increment” is not captured and “inflicted rent reduction” is not compensated adequately by the government on behalf of the general public. If these two issues are unaddressed, the urban change will cause inequity in the urban neighborhoods. The progressive urbanization that benefits numerous rural–urban migrants will be stalled. Optimal land utilization is necessary to maximize the provision of building spaces per unit area of land in high-density Asian cities (Glaeser 2011). Suboptimal land utilization either exacerbates building shortages or consumes more land resources than would otherwise be the case to meet building needs driven by the rapid urbanization and thus worsens land scarcity.

As limited land resources are made artificially scarcer by suboptimal land utilization, dramatic increase of land rent will result in significant political implications. Rising land prices push up urban living cost, which hits low-income groups particularly hard. Entitlement of the status quo to land rent as place-based exclusive benefits deteriorates social inequality between newcomers and existing residents. Rent dissipation compromises the capacity of urban governments to provide the economically disadvantaged with affordable social housing that is already underprovided in many cities. Due to unregulated competition for land rent, rampant NIMBYism will make land development highly expensive and encourage speculative investment in the real estate.

Footnotes

Acknowledgements

This paper would not be possibly published without the constructive comments and suggestions of the editors and reviewers. I greatly appreciate the intellectual exchange. The usual disclaimers apply.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

Author Biography

Jieming Zhu is professor at Tongji University while serving as chief planner of Shanghai Tongji Urban Planning and Design Institute. He is also expert advisor to Urban Planning Commission, Municipal Government of Guangzhou, China. His research interests lie in institutional analysis of urban development in the transitional economy and urban planning in high-density, low-income Asian cities.

References

Barzel

Yoram

. 1989. Economic Analysis of Property Rights. Cambridge: Cambridge Univ. Press.

Brown

Harry G.

1999. “Land Speculation and Land-Value Taxation.” In Land-Value Taxation: The Equitable and Efficient Source of Public Finance, edited by Wenzer

Kenneth C.

, 46–57. Armonk: M.E. Sharpe.

Buchanan

James M.

Yoon

Yong J.

2000. “Symmetric Tragedies: Commons and Anticommons.” Journal of Law & Economics 43:1–13.

Byrd

William A.

Qingsong

Lin

, eds. 1990. China’s Rural Industry: Structure, Development and Reform. New York: Oxford Univ. Press.

Chang

Chun

Wang

Yijiang

. 1994. “The Nature of the Township-Village Enterprise.” Journal of Comparative Economics 19:434–52.

Chang

Sen-Dou

Kwok

Reginald Yin-Wang

. 1990. “The Urbanization of Rural China.” In Chinese Urban Reform: What Model Now? edited by Kwok

Reginald Yin-Wang

Parish

William L.

Yeh

Anthony G. O.

Xueqiang

, 140–57. Armonk: M.E. Sharpe.

Che

Jiahua

Qian

Yingyi

. 1998. “Insecure Property Rights and Government Ownership of Firms.” Quarterly Journal of Economics 113 (2): 467–96.

China Ministry of Housing and Urban-Rural Development. 2002–2012. China Urban Construction Statistics Yearbook, 2001-2011. Zhongguo Chengshi Jianshe Tongji Nianbao. Beijing: China Architecture and Building Press. (In Chinese)

Demsetz

Harold

. 1967. “Toward a Theory of Property Rights.” The American Economic Review 57 (2): 347–59.

10.

Duara

Prasenjit

. 1988. Culture, Power, and the State: Rural North China, 1900-1942. Stanford: Stanford Univ. Press.

11.

Evans

Peter B.

1995. Embedded Autonomy: States and Industrial Transformation. Princeton: Princeton Univ. Press.

12.

Frye

Timothy

. 2004. “Credible Commitment and Property Rights: Evidence from Russia.” American Political Science Review 98 (3): 453–66.

13.

Fung

Ka I.

1981. “Urban Sprawl in China: Some Causative Factors.” In Urban Development in Modern China, edited by Ma

Laurence J. C.

Hanten

Edward W.

, 194–221. Boulder: Westview Press.

14.

Gao

Mobo C. F.

1999. Gao Village: A Portrait of Rural Life in Modern China. Honolulu: Univ. of Hawaii Press.

15.

George

Henry

. (1881) 2009. Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy. Cambridge: Cambridge Univ. Press.

16.

Glaeser

Edward L.

2011. Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier. New York: Penguin Press.

17.

Grant

Malcolm

. 1999. “Compensation and Betterment.” In British Planning: 50 Years of Urban and Regional Policy, edited by Cullingworth

J. Barry

, 62–75. London: The Athlone Press.

18.

Guangzhou Municipal Bureau of Statistics. 2014. Statistical Yearbook of Guangzhou, 2013. Beijing: China Statistical Publishing House. (In Chinese)

19.

Hagman

Donald G.

Misczynski

Dean J.

, eds. 1978. Windfalls for Wipeouts: Land Value Capture and Compensation. Chicago: American Society of Planning Officials.

20.

Healey

Patsy

Purdue

Michael

Ennis

Frank

. 1995. Negotiating Development: Rationales and Practice for Development Obligations and Planning Gain. London: E & FN Spon.

21.

Heller

Michael A.

1998. “The Tragedy of the Anticommons: Property in the Transition from Marx to Markets.” Harvard Law Review 111:621–88.

22.

Peter

. 2001. “Who Owns China’s Land? Property Rights and Deliberate Institutional Ambiguity.” The China Quarterly 166:394–421.

23.

Jensen

Michael C.

Meckling

William H.

1976. “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure.” Journal of Financial Economics 3 (4): 305–60.

24.

Johnson

Chalmers A.

1995. Japan: Who Governs? The Rise of the Developmental State. New York: W.W. Norton.

25.

Kunshan Bureau of Development Planning and Statistics. 1986. Kunshan Statistical Yearbook, 1985. Kunshan: Kunshan Press. (In Chinese)

26.

Kunshan Bureau of Development Planning and Statistics. 1996. Kunshan Statistical Yearbook, 1995. Kunshan: Kunshan Press. (In Chinese)

27.

Kunshan Bureau of Development Planning and Statistics. 2012. Kunshan Statistical Yearbook, 2011. Kunshan: Kunshan Press. (In Chinese)

28.

Lai

Yani

Peng

Bin

Lin

Yanliu

. 2014. “Industrial Land Development in Urban Villages in China: A Property Rights Perspective.” Habitat International 41:185–94.

29.

Land Management Law .1986. http://www.lawyee.org/Act/Act_Display.asp?RID=29466, accessed on April 15, 2016.

30.

Lau

Lawrence J.

Qian

Yingyi

Roland

Gérard

. 2000. “Reform Without Losers: An Interpretation of China’s Dual-Track Approach to Transition.” Journal of Political Economy 108:120–43.

31.

Bin

. 1993. “Danwei Culture as Urban Culture in Modern China: The Case of Beijing from 1949 to 1979.” In Urban Anthropology in China, edited by Guldin

Gregory E.

Southall

Aidan W.

, 345–52. Leiden: E.J. Brill.

32.

Zhigang

Fulong

. 2008. “Tenure-Based Residential Segregation in Post-reform Chinese Cities: A Case Study of Shanghai.” Transactions of the Institute of British Geographers 33 (3): 404–19.

33.

Lin

George C. S.

Forthcoming. “The Redevelopment of China’s Construction Land: Practising Land Property Rights in Cities Through Renewals.” The China Quarterly.

34.

Lin

George C. S.

Samuel P. S.

2005. “The State, Land System, and Land Development Processes in Contemporary China.” Annals of the Association of American Geographers 95 (2): 411–36.

35.

Lin

Yanliu

Hao

Geertman

Stan

. 2015. “A Conceptual Framework on Modes of Governance for the Regeneration of Chinese ‘Villages in the City.’” Urban Studies 52 (10): 1774–90.

36.

Laurence J. C.

1981. “Introduction: The City in Modern China.” In Urban Development in Modern China, edited by Ma

Laurence J. C.

Hanten

Edward W.

, 1–18. Boulder: Westview Press.

37.

Mill

John Stuart

. 1878. Principles of Political Economy: With Some of Their Applications to Social Philosophy. London: Longmans, Green, Reader and Dryer.

38.

Nanhai Bureau of Development Planning and Statistics. 1998. Nanhai’s Statistical Yearbook, 1997. Foshan: Nanhai Press. (In Chinese)

39.

Nanhai Bureau of Development Planning and Statistics. 2009. Nanhai’s Statistical Yearbook, 2008. Foshan: Nanhai Press. (In Chinese)

40.

Nanhai Rural Work Office. 2014. Nanhai Rural Statistics Yearbook, 2013. Foshan: Nanhai Press. (In Chinese)

41.

National Bureau of Statistics of China. 1982. China Urban Construction Statistical Yearbook, 1981. Beijing: China Statistical Publishing House. (In Chinese)

42.

National Bureau of Statistics of China. 1992. China Urban Construction Statistical Yearbook, 1991. Beijing: China Statistical Publishing House. (In Chinese)

43.

National Bureau of Statistics of China. 1996. China Urban Construction Statistical Yearbook, 1995. Beijing: China Statistical Publishing House. (In Chinese)

44.

National Bureau of Statistics of China. 2002. China Urban Construction Statistical Yearbook, 2001. Beijing: China Statistical Publishing House. (In Chinese)

45.

National Bureau of Statistics of China. 2005. China Urban Construction Statistical Yearbook, 2004. Beijing: China Statistical Publishing House. (In Chinese)

46.

National Bureau of Statistics of China. 2009. China Statistical Yearbook, 2008. Beijing: China Statistical Publishing House. (In Chinese)

47.

National Bureau of Statistics of China. 2012. China Urban Construction Statistical Yearbook, 2011. Beijing: China Statistical Publishing House. (In Chinese)

48.

National Bureau of Statistics of China. 2014. China Urban Construction Statistical Yearbook, 2013. Beijing: China Statistical Publishing House. (In Chinese)

49.

Naughton

Barry

. 1995. Growing Out of the Plan: Chinese Economic Reform, 1978–1993. Cambridge: Cambridge Univ. Press.

50.

North

Douglass C.

1990. Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge Univ. Press.

51.

Office of Rural Works/Kunshan Municipal Government. 2013. Statistics of Village Economies. Kunshan: Office of Rural Works/Kunshan Municipal Government. (In Chinese)

52.

Pejovich

Svetozar

. 1990. The Economics of Property Rights: Towards a Theory of Comparative Systems. Dordrecht: Kluwer Academic.

53.

Putterman

Louis G.

1993. Continuity and Change in China’s Rural Development: Collective and Reform Eras in Perspective. New York: Oxford Univ. Press.

54.

Rapaczynski

Andrzej

. 1996. “The Roles of the State and the Market in Establishing Property Rights.” The Journal of Economic Perspectives 10 (2): 87–103.

55.

Reeve

Andrew

. 1986. Property. London: Macmillan.

56.

Ricardo

David

. (1821) 1951. On the Principles of Political Economy and Taxation. Cambridge: Cambridge Univ. Press.

57.

Shanghai Municipal Bureau of Statistics. 1991–2001. Statistical Yearbook of Shanghai, 1990-2000. Beijing: China Statistical Publishing House. (In Chinese)

58.

Shanghai Municipal Bureau of Statistics. 2013. Statistical Yearbook of Shanghai, 2012. Beijing: China Statistical Publishing House. (In Chinese)

59.

Shen

Jianfa.

2005. “Counting Urban Population in Chinese Censuses 1953–2000: Changing Definitions, Problems and Solutions.” Population, Space and Place 11 (5): 381–400.

60.

Skinner

G. William

. 1971. “Chinese Peasants and the Closed Community: An Open and Shut Case.” Comparative Studies in Society and History 13 (3): 270–81.

61.

Stiglitz

Joseph

. 1977. “The Theory of Local Public Goods.” In The Economics of Public Services, edited by Feldstein

Martin S.

Inman

Robert P.

, 274–333. London: McMillan.

62.

Sun

Zhonghua

Luo

Hanya

Zhao

Kun

. 2010. “A Report on Rural Land Shareholding Cooperatives in Jiangsu Province” [guanyu Jiangsu nongcun tudi hezuoshe fazhan qingkuang de diaoyan baogao]. Agricultural Economic Issues/Nongye Jingji Wenti 8:30–35. (In Chinese)

63.

The Organic Law of Villagers’ Committees. 1988. (http://www.npc.gov.cn/wxzl/gongbao/1987-11/24/content_1481517.htm, accessed on April 15, 2016)

64.

Tang

Junjuan

. 2009. “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). Archives World 4:17–21. (In Chinese)

65.

Tang

Yunbin

. 1989. “Urban Land Use in China: Policy Issues and Options.” Land Use Policy 6:53–63.

66.

Tsai

Lily L.

2007. “Solidary Groups, Informal Accountability, and Local Public Goods Provision in Rural China.” American Political Science Review 101 (2): 355–72.

67.

Vermeer

Eduard B.

1999. “Shareholding Cooperatives: A Property Rights Analysis.” In Property Rights and Economic Reform in China, edited by Oi

Jean C.

Walder

Andrew G.

, 123–44. Stanford: Stanford Univ. Press.

68.

Von Thünen

Johann Heinrich

. (1826) 1966. The Isolated State, an English Edition of Der Isolierte Staat. Translated by Wartenberg

C. M.

Oxford: Pergamon Press.

69.

Whyte

Martin K

, ed. 2010. One Country, Two Societies: Rural-Urban Inequality in Contemporary China. Cambridge: Harvard Univ. Press.

70.

Wong

Christine P. W.

1987. “Between Plan and Market: The Role of the Local Sector in Post-Mao China.” Journal of Comparative Economics 11:385–98.

71.

Wong

Christine P. W.

1992. “Fiscal Reform and Local Industrialization: The Problematic Sequencing of Reform in Post-Mao China.” Modern China 18 (2): 197–227.

72.

Wong

Christine P. W.

1997. “Rural Public Finance.” In Financing Local Government in the People’s Republic of China, edited by Wong

Christine P. W.

, 167–212. Hong Kong: Oxford Univ. Press.

73.

Yeh

Anthony G. O.

Fulong

. 1996. “The New Land Development Process and Urban Development in Chinese Cities.” International Journal of Urban and Regional Research 20 (2): 330–53.

74.

Zhao

Develtere

Patrick

Cui

Zhiyuan

Wang

Dongbin

. 2009. “New Co-operatives in China: The Emergence of an Indigenous Model of Social Enterprises.” Paper presented at the EMES conference on Social Enterprises Trento, Italy, July 1–4.

75.

Zhu

Jieming

. 1999. “Local Growth Coalition: The Context and Implications of China’s Gradualist Urban Land Reforms.” International Journal of Urban and Regional Research 23 (3): 534–48.

76.

Zhu

Jieming

. 2002. “Urban Development Under Ambiguous Property Rights.” International Journal of Urban and Regional Research 26 (1): 41–57.

77.

Zhu

Jieming

. 2004a.“From Land Use Right to Land Development Right: Institutional Change in China’s Urban Development.” Urban Studies 41 (7): 1249–67.

78.

Zhu

Jieming

. 2004b. “Local Developmental State and Order in China’s Urban Development During Transition.” International Journal of Urban and Regional Research 28 (2): 424–47.

79.

Zhu

Jieming

. 2005. “A Transitional Institution for the Emerging Land Market in Urban China.” Urban Studies 42 (8): 1369–90.

80.

Zhu

Jieming

Tingting

. 2009. “Disordered Land Rent Competition in China’s Peri-urbanization: Case Study of Beiqijia Township, Beijing.” Environment and Planning A 41:1639–46.