Does Land Finance Contraction Accelerate Urban Shrinkage? A Study Based on 84 Key Cities in China
Publication: Journal of Urban Planning and Development
Volume 146, Issue 4
Abstract
After approximately 30 years of sustained and rapid development, some Chinese cities have seen urban shrinkage marked by a decreasing population size. Land finance, which is the second public finance of local governments in China, influences urban development through capital and land supply. It is the primary source of funds for urban infrastructure construction and the driving force behind promoting urban boundary expansion. In the context of the overall downturn of domestic land finance, land finance contraction for shrinking cities may accelerate the further decline of population in these cities. This paper investigated 84 key cities across China between 2008 and 2015 and found that (1) the contraction of land finance has heterogeneous impacts on shrinking cities and nonshrinking cities, which, in turn, has significant catalytic effect on population loss in shrinking cities; and (2) the insufficient replenishment of capital caused by the contraction of land finance in shrinking cities has a more significant impact than the insufficient supply of land. Infrastructure investment has a complete mediation effect in this influencing mechanism.
Get full access to this article
View all available purchase options and get full access to this article.
Acknowledgments
The authors wish to express their sincere gratitude to the Humanities and Social Science Fund of the Ministry of Education of China (19YJCZH154), the Beijing Social Science Foundation (17GLB030), the Institute for China Sustainable Urbanization Tsinghua University (TUCSU-K-17013-01), the First Class Academic Discipline Construction Project of Central University of Finance and Economics (20190807-8), and the Fundamental Research Funds for the Central Universities (QL18012) for funding support for the research project on which this paper is based.
References
Baron, R. M., and D. A. Kenny. 1987. “The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations.” J. Personality Soc. Psychol. 51 (6): 1173–1182. https://doi.org/10.1037/0022-3514.51.6.1173.
Deng, T., D. Wang, Y. Yang, and H. Yang. 2019. “Shrinking cities in growing China: Did high speed rail further aggravate urban shrinkage?” Cities 86: 210–219. https://doi.org/10.1016/j.cities.2018.09.017.
Former Ministry of Land and Resources. 2017a. “China land and resources statistical yearbook.” Accessed May 22, 2019. http://data.cnki.net/yearbook/Single/N2018060076.
Former Ministry of Land and Resources. 2017b. “Database of land mortgage registration of 84 key cities in China.”
Gao, S. Q. 2015. “A review of researches on shrinking cities.” Urban Plann. Forum 3: 44–49.
Guo, S., and Y. Shi. 2018. “Infrastructure investment in China: A model of local government choice under land financing.” J. Asian Econ. 56: 24–35. https://doi.org/10.1016/j.asieco.2018.04.001.
Haase, A., A. Athanasopoulou, and D. Rink. 2016. “Urban shrinkage as an emerging concern for European policymaking.” Eur. Urban Reg. Stud. 23 (1): 103–107. https://doi.org/10.1177/0969776413481371.
Hartt, M. 2018. “Shifting perceptions in shrinking cities: The influence of governance, time and geography on local (In) action.” Int. Plann. Stud. 25 (2): 150–165. https://doi.org/10.1080/13563475.2018.1540296.
Howe, S. R., T. Bier, D. Allor, T. Finnerty, and P. Green. 1998. “The shrinking central city amidst growing suburbs: Case studies of Ohio’s inelastic cities.” Urban Geogr. 19 (8): 714–734. https://doi.org/10.2747/0272-3638.19.8.714.
Huang, D., and R. C. Chan. 2018. “On “land finance” in urban China: Theory and practice.” Habitat Int. 75: 96–104. https://doi.org/10.1016/j.habitatint.2018.03.002.
Lin, G. C., and F. Yi. 2011. “Urbanization of capital or capitalization on urban land? Land development and local public finance in urbanizing China.” Urban Geogr. 32 (1): 50–79. https://doi.org/10.2747/0272-3638.32.1.50.
Liu, S. Y. 2018. “Land system reform and economic structure transformation—An economic explanation of China’s 40 years of development experience.” China Land Sci. 238 (1): 3–12.
Long, Y., and K. Wu. 2015. “Shrinking localities in booming urbanization of China (2000–2010).” Modern Urban Res. 9: 26–35.
Long, Y., and K. Wu. 2016. “Shrinking cities in a rapidly urbanizing China.” Environ. Plann. A 48 (2): 220–222. https://doi.org/10.1177/0308518X15621631.
Manville, M., and D. Kuhlmann. 2018. “The social and fiscal consequences of urban decline: Evidence from large American cities, 1980–2010.” Urban Affairs Rev. 54 (3): 451–489. https://doi.org/10.1177/1078087416675741.
Martinez-Fernandez, C., I. Audirac, S. Fol, and E. Cunningham-Sabot. 2012. “Shrinking cities: Urban challenges of globalization.” Int. J. Urban Reg. Res. 36 (2): 213–225. https://doi.org/10.1111/j.1468-2427.2011.01092.x.
Martinez-Fernandez, C., T. Weyman, S. Fol, I. Audirac, E. Cunningham-Sabot, T. Wiechmann, and H. Yahagi. 2016. “Shrinking cities in Australia, Japan, Europe and the USA: From a global process to local policy responses.” Progress Plann. 105: 1–48. https://doi.org/10.1016/j.progress.2014.10.001.
Matanle, P. 2008. “Shrinking Sado: Education, employment and the decline of Japan’s rural regions.” In Vol. 3 of Shrinking cities-complete works, edited by P. Oswalt, 42–53. Berlin: Project Office Philipp Oswalt.
Pallagst, K. 2009. The future of shrinking cities: Problems, patterns and strategies of urban transformation in a global context. SAE Technical Papers. Berkeley, CA: Berkeley Institute of Urban and Regional Development, Univ. of California.
Qun, W., L. Yongle, and Y. Siqi. 2015. “The incentives of China’s urban land finance.” Land Use Policy 42: 432–442. https://doi.org/10.1016/j.landusepol.2014.08.015.
Reckien, D., and C. Martinez-Fernandez. 2011. “Why do cities shrink?” Eur. Plann. Stud. 19 (8): 1375–1397. https://doi.org/10.1080/09654313.2011.593333.
Rybczynski, W., and P. D. Linneman. 1999. “How to save our shrinking cities.” Public Interest 135: 30–44.
Schetke, S., and D. Haase. 2008. “Multi-criteria assessment of socio-environmental aspects in shrinking cities. Experiences from eastern Germany.” Environ. Impact Assess. Rev. 28 (7): 483–503. https://doi.org/10.1016/j.eiar.2007.09.004.
State Statistical Bureau. 2017. “China city statistical yearbook.” Accessed May 22, 2019. http://data.cnki.net/Yearbook/Single/N2010042092.
Wang, Y., and H. Fukuda. 2019. “Sustainable urban regeneration for shrinking cities: A case from Japan.” Sustainability 11 (5): 1505. https://doi.org/10.3390/su11051505.
Wang, Y. B., and Y. Tang. 2013. “Discrepancy of land finance in different areas and its transformation in China.” China Popul. Resour. Environ. 23 (10): 151–159.
Weaver, R., and C. Holtkamp. 2015. “Geographical approaches to understanding urban decline: From evolutionary theory to political economy…and back?” Geogr. Compass 9 (5): 286–302. https://doi.org/10.1111/gec3.12211.
Wolff, M., and T. Wiechmann. 2018. “Urban growth and decline: Europe’s shrinking cities in a comparative perspective 1990–2010.” Eur. Urban Reg. Stud. 25 (2): 122–139. https://doi.org/10.1177/0969776417694680.
Xu, B., and D. L. Pang. 2014. “Growth and recession: A study of international urban contraction and its implications for China.” Economist 4: 5–13.
Yang, Z. S., and Y. Y. Sun. 2015. “Phenomenon, process and problems of urban contraction.” Human Geogr. 4: 6–10.
Ye, L., and A. M. Wu. 2014. “Urbanization, land development, and land financing: Evidence from Chinese cities.” J. Urban Affairs 36 (Suppl. 1): 354–368. https://doi.org/10.1111/juaf.12105.
Zhang, C. P., G. N. Mi, X. Z. Huang, and Y. Y. Qian. 2018. “The challenge of contraction: The end of an expansionary society or the beginning of adjustment?” J. Public Admin. 4: 1–16.
Zhang, J., L. X. Yang, and F. Xin. 2016. “Is real estate holding back Chinese innovation?—Interpretation based on the term structure of loans in the financial system.” Manage. World 5: 64–80.
Zhang, W., F. F. Shan, C. G. Zheng, and R. Hu. 2019. “Multi-dimensional identification of urban contraction in China and analysis of its driving mechanism.” Urban Dev. Res. 26 (3): 32–40.
Zheng, S. Q., W. Z. Sun, J. Wu, and Y. Wu. 2014. “Growing wealth with land and raising land with money—Research on investment and financing mode of urban construction with Chinese characteristics.” Econ. Res. 8: 14–27.
Information & Authors
Information
Published In
Journal of Urban Planning and Development
Volume 146 • Issue 4 • December 2020
Copyright
© 2020 American Society of Civil Engineers.
History
Received: Sep 27, 2019
Accepted: Jun 1, 2020
Published online: Aug 18, 2020
Published in print: Dec 1, 2020
Discussion open until: Jan 18, 2021
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.