See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/344657044

Regional and urban planning for growth in China

Chapter · September 2020

CITATIONS READS

62 2,051

2 authors:

Zheng Wang Fulong Wu

SEE PROFILE SEE PROFILE

All content following this page was uploaded by Zheng Wang on 14 October 2020.

The user has requested enhancement of the downloaded file.

Zheng Wang

Department of Urban Studies and Planning, University of Sheffield, UK

Fulong Wu

Bartlett School of Planning, University College London, UK

Can be cited as: Wang Z., Wu F. 2020. “Regional and urban planning for growth in China”, in

International Encyclopedia of Geography: People, the Earth, Environment and Technology,

pp 1–8, edited by Richardson D., Castree N., Goodchild M. F., Kobayashi A., Liu W., and

Marston R. A., John Wiley and Sons Ltd. DOI: 10.1002/9781118786352.wbieg2021

Abstract

Chinese planning in the post-reform era is primarily concerned with stimulating economic

growth through urban developments. For cities, land sales revenue is an important source of

income and a key driver of gross domestic product (GDP) growth, which is a core criterion for

government career promotions. City planning involves creating an investment-friendly built

environment through nonstatutory spatial plans that can be used for place promotion.

Furthermore, economic growth helps to consolidate the state’s political power. Through the

state’s monopoly of land, local states are able to use land as collateral to deliver large urban

projects and reap the greatest financial benefits. The urban governance of strategically

important projects is also designed with a view to stimulating growth. Planning powers are

assigned to development-oriented state organizations whilst social responsibilities such as

relocating residents are delegated to district and subdistrict governments. National- and

regional-level planning has been strengthened in the past decade to address rampant urban

1
expansions and intense intercity competition which have had severe environmental and

socioeconomic consequences. Yet, regional planning is not about curbing growth but about

better coordinating it. However, due to insufficient and sometimes overlapping governance

responsibilities being distributed to three national ministries, the regulatory power of national

and regional planning is limited.

Keywords: Chinese planning; planning for growth; regional planning; state entrepreneurialism;

urban geography; urbanization

From socialist planning to post-reform planning for growth

Chinese urban and regional planning has changed significantly since the post-reform era,

starting in the 1980s. During China’s socialist era, urban planning largely played a

supplementary role by providing technical support, such as blueprints, to the objectives set out

by the state’s economic strategies (Wu 2015b). City planning was, for instance, used to assist

with the state-led industrialization goals. Another purpose of urban planning was to promote

the state through the construction of grand monuments in order to reflect the superiority and

achievements of socialism (Smith 2008). Since city planning during socialist China was not

designed to lead on and capture the benefits of urban development, investment in infrastructure

was considered a financial burden (Wu 2015b). Overall, during the socialist era, urban and

regional planning was assigned a complementary role that was outside of political processes.

This mentality toward planning changed considerably after the reform era, when China steadily

adopted a market-oriented approach toward the development of the economy. Urban planning

has changed from supplementing economic strategies with technical details to becoming a

crucial means for the state to stimulate economic growth (Wu 2015b; Wu, Zhang, and Wang

2
2015). Favorable spatial strategies can help attract business investments such as manufacturing

industries, which have become the key contributor to local gross domestic product (GDP)

growth. Yet it is important to point out that planning for economic growth does not necessarily

mean a retreat and weakening of the Chinese state. On the contrary, planning plays an important

role in allowing the state to maintain and expand its political power by making use of the market.

This system functions under a wider governance paradigm which we define as state

entrepreneurialism (Wu 2017; 2018). Under state entrepreneurialism, China’s “local

development and politics may not be limited to the growth machine and machine politics” (Wu

2018, 1385). Local development is not only dependent on GDP growth but may also be driven

by prospects of career promotions for city leaders, alignment with central government

strategies, and the improvement of people’s livelihoods. In China, economic development thus

serves wider purposes, especially as a means to strengthen the state through capital

accumulation, including increased tax revenue and land sales. The state’s monopoly over land

and its deployment of state-owned enterprises to finance and deliver development projects

allow it to be the greatest benefactor of urban development. Planning for growth in China thus

also means planning for the state.

The role of planning for economic growth can be best observed at the city level, where planning

and land development are a vital source of revenue for municipal governments. Municipalities

have to shoulder a large share of local expenses such as public and social services, whilst the

tax-sharing system, introduced in the post-reform era, has significantly reduced the tax revenue

of city governments. Income from land sales is exempt from tax sharing and has thus become

a crucial way to finance public expenses and a way for city mayors to accumulate achievements

with a view to securing career promotions. At the city level, planning has been designed to

generate economic growth through creating a business- and investment-friendly built

3
environment. Yet, the strong reliance on land development to generate income has resulted in

fierce intercity competition and overdevelopment in many cities, requiring planning

interventions at a higher scale to manage urban growth in a more efficient manner. In its attempt

to coordinate urban growth and industrial developments, the central government has

rediscovered the importance of national- and regional-level planning. The roles of reducing

competition between different cities and coordinating urban development are mostly at the

national and regional tier of authority and can be interpreted as reclaiming some of the

development powers that have been previously devolved to city authorities. The emphasis of

national and regional planning, however, is not about reigning in economic growth, but to

better manage growth and avoid a race to the bottom by individual cities. Below we describe

in more detail the roles of planning at different scales, including the city, regional, and national

level.

Creating and shaping markets through urban planning

The ability of the Chinese state to plan and dominate the direction of urban transformation, as

well as to benefit financially and politically from urban development, relies heavily on its land

management system and its urban governance arrangement. With regards to the land

management system, the state can rely on its monopoly over land, which gives it the leverage

to finance and spearhead large-scale urban transformation and reap the greatest share of benefit

from urban development (Hsing 2010; Wu 2018). Known as land financing (Lin 2014; Tao et

al. 2010; Wu 2019), municipal governments would use land reserves as collateral to acquire

bank loans in order to finance new industrial developments aimed at attracting foreign and

domestic investments (Lin and Yi 2011). With a burgeoning industrial sector, the new

developments would attract more businesses as well as residential and commercial demand.

With the increased demand, land value would experience significant appreciation, allowing

4
local states to benefit from the sale of land for residential and commercial developments. Since

the 2008 financial crisis, land financing has transitioned into a new stage of land

financialization, where the objective is no longer about gaining revenue from land sales but

rather to use land as an asset to raise further financial capital (Wu 2019). The transition to land

financing was enabled by a stimulus package introduced by the central government allowing

local governments to use land to raise capital. This shift also became necessary as the

traditional land financing model no longer provided sufficient financial returns due to increased

compensation for relocated residents, amongst other reasons (for more about urban

financialization see wbieg2018). Under this land-based accumulation system, planning plays a

central role in designing development plans that align with this accumulation model and,

secondly, serves as very effective promotional material for the new industrial development

schemes. So-called strategic spatial plans, which do not hold a statutory status, have become

a primary tool to outline the vision of the municipal government. Also known as conceptual

plans, they are commonly used to convey the vision of local leaders and to promote the area as

an attractive investment opportunity. They would also assist in convincing the central

government to approve larger development schemes. Strategic spatial plans are not as detailed

as master plans in terms of land-use allocation, for example, and instead are much more growth-

oriented, focusing on economic functions and new developments. Considering the numerous

benefits of attracting industrial development, the majority of, if not all, local governments have

produced “nonstatutory” strategic plans (Wu 2015b).

China’s institutional arrangement has also been changed to optimize planning’s role in

stimulating economic growth. Especially for large-scale development projects that are

important for the strategic vision of the state, such as new towns (Shen and Wu 2017) or

transport hubs (Jiang, Waley, and Gonzalez 2016a), the power to plan has been given to newly

5
created state organizations specialized in urban development (Jiang, Waley, and Gonzalez

2016b; Wang and Wu 2019; Wu 2018). These state organizations take over planning and

development responsibilities which under normal circumstances are assigned to governments

at the district or subdistrict level. To allow these development-oriented state organizations to

fully concentrate on economic development, social responsibilities, such as health-care

provision and waste management, are separated from planning duties, which include

developing master plans and funding and delivering specific development projects (Jiang et al.

2016b; Wang and Wu 2019). These development-oriented state organizations most commonly

appear in two forms, namely as Development Management Committees (DMC hereafter;

guanli weiyuan hui in Chinese) and Local Government Financing Vehicles (LGFV), which act

as the primary and major developer in China and are in essence state-owned enterprises (see

wbieg0180 on state-owned enterprises). For mega urban projects, the power to create master

plans and to approve planning permissions is often given to a newly created DMC, which also

takes on the role of the de facto local government. The key difference from a conventional local

government is that as a DMC, it is not required by law to deal with local residents and the often

difficult and conflict-laden process of relocating residents and governing relocated residents

(Wang and Wu 2019). These tasks are relegated to the district and subdistrict governments. On

the other hand, LGFV are state-owned enterprises specialized in financing and delivering

specific developments of mega projects. With regards to the land financing model, it is in fact

the LGFVs that acquire loans using state-owned land and carry out the development of projects

and the subsequent sale or management of the completed developments (Wu 2019). The

purpose of this development-oriented governance model is to enable city governments to fully

concentrate resources and efforts on delivering urban development and economic growth

without being tied down by social responsibilities such as managing residents.

6
Managing growth through national and regional planning

The unrestricted power of city governments to develop for economic growth has led to massive

urban expansions and uncontrolled urban sprawl. This is threatening to destroy China’s fragile

ecological system and has led to fierce intercity competition. Consequently, in the past decade,

the central government has introduced several policy interventions to limit urban developments

in certain regions. Regulation at the national level has become necessary because provincial

governments were only able to coordinate developments within their constitutional boundaries.

Yet, intercity competition is already taking place between cities located in different provinces

and has been elevated from an intercity to an interregional scale. However, national-level

planning in China is currently struggling to contain urban expansion due to its fragmented

governance structure. National plan-making powers are distributed amongst three central

government departments, each carrying out different conventional functions of planning but in

some cases also having overlapping jurisdictions. They include the Ministry of Housing and

Urban-Rural Development (MOHURD), the National Development and Reform Commission

(NDRC), and the Ministry of Land and Resources (MLR). MOHURD’s responsibilities are the

closest to the conventional functions of planning, and it also has the longest tradition in

producing urban plans. MOHURD is responsible for coordinating developments and providing

annual housing targets, whilst the MLR plays a more regulatory role concerned with ensuring

that rural land use is protected in China through the production of land-use plans. The NDRC

is in charge of approving the financing of large-scale urban developments and coordinating

developments at the regional scale. The NDRC’s role originates from the “planning

commission” of the socialist era, which was responsible for preparing five-year economic plans,

deciding the budget, and allocating funding for development (Wu 2015b).

7
MOHURD was the earliest ministry to produce a national-level plan that aimed to manage

China’s rampant urban growth, namely the National Urban System Plan (2005–2020). As the

first national-level urbanization and spatial development plan, the National Urban System Plan

analysed and identified different types of regions across China, including urban clusters and

major cities as well as areas with potential for urban growth (Li and Wu 2012, 95). On the basis

of this analysis, the plan then created different urbanization strategies, aiming to for instance

to reduce an overconcentration of developments along coastal areas. The plan also strove to

protect natural resources and ecological conditions in areas that the plan considered as

ecologically fragile through new regional spatial development guidelines. The National Urban

System Plan further stressed the importance of city-regions and outlined plans for the

development of cross-regional infrastructure. However, although MOHURD’s national plan

had provided some elaborate solutions to manage growth in a more holistic way, its influence

remained very limited because the national plan lacked an implementation mechanism. The

National Urban System Plan’s influence over city-level urban expansion was further

diminished because of China’s complex governance dynamics whereby MOHURD did not

have the authority to apply its planning strategy. Consequently, the urban system plan did not

attain a statutory status and is only considered as a nonstatutory guideline (Wu 2015b). The

second and arguably more effective plan at the national level is the National Main Functional

Area Plan (2005–2020) produced by the NDRC. The plan aimed to coordinate developments

at the regional scale in order firstly to control undesirable development, particularly in

ecologically fragile locations (Wu 2015b). Secondly, it wanted to reduce intercity competition

and instead focus resources and develop a spatially coherent strategy to meet growth targets.

The plan identifies four main functional areas: the prioritized development area, the optimized

development area, the constrained development area, and the forbidden development area.

Apart from the forbidden development area, where the ecological conditions are considered so

8
fragile and valuable that no development is allowed at all, the three remaining categories all

allowed urban development to varying degrees (Fan et al. 2012; Li and Wu 2012). The NDRC

National Main Functional Area plan also lacked statutory status but has managed to exert some

level of influence over municipal governments because the NDRC is in charge of distributing

financial resources for city-level developments and setting economic targets.

In addition to regulatory procedures at the national level, the NDRC and MOHURD, as well

as provincial authorities, have introduced a series of interregional and regional strategic plans

aimed at controlling rapid urban expansion. It is important to note, however, that the objective

of these regional plans is not to curb economic growth but rather to reintroduce a more coherent

order of spatial development. The hope is that regional plans can deliver economic growth in

a more coordinated manner. Two notable examples of such regional strategic plans are the

cross-provincial Yangtze River Delta Regional Plan and Pearl River Delta Urban Cluster

Coordination Plan.

The Pearl River Delta has been known for its export-oriented industrial developments, which

are driven by municipal bottom-up developments (Sit and Yang 1997). Intense pursuit of GDP

growth using industrial-led urban expansion has resulted in a dispersed and unbalanced growth

across the province that the Guangdong province government struggled to contain on its own

(Xu and Yeh 2005). As a response, the Pearl River Delta Urban Cluster Coordination Plan was

jointly produced by the Guangdong provincial government and MOHURD (Xu 2008). The

Urban Cluster Coordination Plan marked the first top-down and regulation-based regional

spatial plan to enable a more coordinated regional approach toward urban development.

Amongst other measures, the plan listed compulsory requirements such as the need to identify

areas for green belts and transport corridors. The plan also provided supplementary activities

9
to ensure that it would be put into practice by city governments, offering joint meetings

between city mayors, and guidance over how lower-tier spatial plans developed by cities could

efficiently incorporate the Urban Cluster Coordination Plan. Aside from controlling rampant

and uncoordinated urban expansions, the plan also hoped to foster the competitiveness of the

Pearl River Delta as a whole. By designating one core area, three development belts, and five

development axes within the region, the plan aimed to steer industrial developments into

particular areas within the river delta. The Pearl River Delta Urban Cluster Coordination Plan

is a significant example reflecting the central government’s difficult and mostly ineffectual

balancing act aimed at containing uncoordinated urban sprawl whilst maintaining economic

growth as a whole.

Current challenges and future directions

Chinese urban and regional planning in the post-reform era has mostly been concerned with

delivering economic growth for the state and subsequently attempting to reduce the negative

consequences of an entrepreneurial urban development approach that relies on land financing.

However, despite the numerous efforts of central and regional-level governments, the rapid

loss of rural and arable land and fierce intercity competition remain key challenges as China

gradually moves into a new normal of slower economic growth. Planning for growth has

significantly contributed to the economic prosperity of China, but its negative consequences

are also numerous and significant. Extensive damage to the natural environment and air and

water pollution are only a few of the resulting environmental problems (Chung, Zhang, and

Wu 2018; Han, Currell, and Cao 2016; Vennemo et al. 2009; and see wbieg0550 for

information on current environmental hazards). More recent policy incentives to plan for the

environment through major projects such as eco-cities (Caprotti 2014b; Wu 2012) and green

ways (Chung et al. 2018) have shown that the Chinese state is acutely aware of its

10
environmental problems. However, with economic growth and land financing still at the heart

of flagship eco-developments (Caprotti 2014a; Chung et al. 2018), it remains to be seen

whether environmental priorities set up by the central government can be effectively

implemented at the local level (for more information about environmental planning in general

see wbieg0668). With respect to social challenges, urbanization during the 1990s and the 2000s

was characterized by mass relocation, often involving forced evictions and conflicts between

the state and residents due to poor compensation (Shin 2009; Zhang 2004). The state reacted

with improved compensation and the development of resettlement neighborhoods for relocated

residents (Shih 2010; Zhang, Wu, and Zhong 2018), leading to fewer instances of forced

evictions and public resistance. However, there is growing evidence suggesting that the social

impacts of urban expansion are changing from overt forms of forced dispossession to more

covert problems. They include an unequal distribution of benefits for dispossessed rural

villagers (Kan 2019), unemployment amongst resettled residents (Jiang, Waley, and Gonzalez

2018), and the in situ marginalization of peri-urban communities whereby residents are not

relocated but instead are trapped in their physically deteriorating neighborhoods (Wang and

Wu 2019). How urban development can also benefit the millions of internal migrants in China

who contribute to the economy through their cheap labor but receive little in return is also an

important issue that Chinese urban planning will have to address (see wbieg0809 for more on

internal migration). With regards to the economy, research indicates that intense intercity

competition and failed urban expansion projects have resulted in growing debts of city

governments (Wu 2019) and a volatile housing market at risk of another major housing bubble

(Wu 2015a). Having failed to deliver significant improvements with its existing national-level

plans, the central state has introduced significant changes to the governance structure of

planning at the national level. One key change has been the transfer of planning responsibilities

from MOHURD to the newly created Ministry of Natural Resources, indicating a stronger

11
emphasis on the regulatory role of planning. Performance criteria for cadre promotions are also

gradually changing, with environmental protection and long-lasting improvements to the urban

fabric increasingly becoming priorities alongside GDP growth, especially in more affluent

regions, whilst poverty alleviation remains the top priority in poorer regions. Furthermore, the

state is trying to introduce a property tax for homeowners in order to reduce its reliance on land

financing (Liu 2019), but, as with all the aforementioned policy changes, this endeavor is still

in its early stages and faces many hurdles ahead.

References

Caprotti, F. 2014a. “Critical Research on Eco-cities? A Walk through the Sino-Singapore

Tianjin Eco-City, China.” Cities, 36: 10–17.

Caprotti, F. 2014b. “Eco-urbanism and the Eco-city, or, Denying the Right to the City?”

Antipode, 46(5): 1285–1303.

Chung, C.K.L, F. Zhang, and F. Wu. 2018. “Negotiating Green Space with Landed Interests:

The Urban Political Ecology of Greenway in the Pearl River Delta, China.” Antipode,

50(4): 891–909.

Fan, J., W. Sun, Z. Yang, et al. 2012. “Focusing on the Major Function-Oriented Zone: A New

Spatial Planning Approach and Practice in China and Its 12th Five-Year Plan.” Asia

Pacific Viewpoint, 53(1): 86–96.

Han, D., M.J. Currell, and G. Cao. 2016. “Deep Challenges for China’s War on Water

Pollution.” Environmental Pollution, 218: 1222–1233.

Hsing, Y. 2010. The Great Urban Transformation: Politics of Land and Property in China.

Oxford: Oxford University Press.

12
Jiang, Y., P. Waley, and S. Gonzalez. 2016a. “Shanghai Swings: The Hongqiao Project and

Competitive Urbanism in the Yangtze River Delta.” Environment and Planning A,

48(10): 1928–1947.

Jiang, Y., P. Waley, and S. Gonzalez. 2016b. “Shifting Land-based Coalitions in Shanghai’s

Second Hub.” Cities, 52: 30–38.

Jiang, Y., P. Waley, and S. Gonzalez. 2018. “‘Nice Apartments, No Jobs’: How Former

Villagers Experienced Displacement and Resettlement in the Western Suburbs of

Shanghai.” Urban Studies, 55(14): 3202–3217.

Kan, K. 2019. “Accumulation without Dispossession? Land Commodification and Rent

Extraction in Peri-urban China.” International Journal of Urban and Regional

Research, 43(4): 633–648.

Li, Y., and F. Wu. 2012. “The Transformation of Regional Governance in China: The

Rescaling of Statehood.” Progress in Planning, 78(2): 55–99.

Lin, G.C.S. 2014. “China’s Landed Urbanization: Neoliberalizing Politics, Land

Commodification, and Municipal Finance in the Growth of Metropolises.”

Environment and Planning A, 46(8): 1814–1835.

Lin, G.C.S., and F. Yi. 2011. “Urbanization of Capital or Capitalization on Urban Land? Land

Development and Local Public Finance in Urbanizing China.” Urban Geography,

32(1): 50–79.

Liu, Z. 2019. “Land-based Finance and Property Tax in China.” Area Development and Policy,

4(4): 367–381.

Shen, J., and F. Wu. 2017. “The Suburb as a Space of Capital Accumulation: The Development

of New Towns in Shanghai, China.” Antipode, 49(3): 761–780.

13
Shih, M. 2010. “The Evolving Law of Disputed Relocation: Constructing Inner-City Renewal

Practices in Shanghai, 1990–2005.” International Journal of Urban and Regional

Research, 34(2): 350–364.

Shin, H.B. 2009. “Residential Redevelopment and the Entrepreneurial Local State: The

Implications of Beijing’s Shifting Emphasis on Urban Redevelopment Policies.” Urban

Studies, 46(13): 2815–2839.

Sit, V.F.S., and C. Yang. 1997. “Foreign-Investment-Induced Exo-urbanisation in the Pearl

River Delta, China.” Urban Studies, 34(4): 647–677.

Smith, C.J. 2008. “Monumentality in Urban Design: The Case of China.” Eurasian Geography

and Economics, 49(3): 263–279.

Tao, R., F. Su, M. Liu, and G. Cao. 2010. “Land Leasing and Local Public Finance in China’s

Regional Development: Evidence from Prefecture-level Cities.” Urban Studies, 47(10):

2217–2236.

Vennemo, H.K., K. Aunan, H. Lindhjem, and H.M. Seip. 2009. “Environmental Pollution in

China: Status and Trends.” Review of Environmental Economics and Policy, 3(2): 209–

230.

Wang, Z., and F. Wu. 2019. “In-situ Marginalisation: Social Impact of Chinese Mega-projects.”

Antipode, 51(5): 1640–1663.

Wu, F. 2012. “China’s Eco-cities.” Geoforum, 43(2): 169–171.

Wu, F. 2015a. “Commodification and Housing Market Cycles in Chinese Cities.” International

Journal of Housing Policy, 15(1): 6–26.

Wu, F. 2015b. Planning for Growth: Urban and Regional Planning in China. Routledge:

London.

14
Wu, F. 2017. “State Entrepreneurialism in Urban China: A Critique of the Neoliberal City.” In

Debating the Neoliberal City, edited by G. Pinson and C.M. Journel, 153–173.

Abingdon: Routledge.

Wu, F. 2018. “Planning Centrality, Market Instruments: Governing Chinese Urban

Transformation under State Entrepreneurialism.” Urban Studies, 55(7): 1383–1399.

Wu, F. 2019. “Land Financialisation and the Financing of Urban Development in China.” Land

Use Policy. In Press, DOI:10.1016/j.landusepol.2019.104412.

Wu, F., F. Zhang, and Z. Wang. 2015. “Planning China’s Future: How Planners Contribute to

Growth and Development.” RTPI Research Report 12.

Zhang, L. 2004. “Forced from Home: Property Rights, Civic Activism, and the Politics of

Relocation in China.” Urban Anthropology and Studies of Cultural Systems and World

Economic Development, 33(2/4): 247–281.

Zhang, M., W. Wu, and W. Zhong. 2018. “Agency and Social Construction of Space under

Top-down Planning: Resettled Rural Residents in China.” Urban Studies, 55(7): 1541–

1560.

Xu, J. 2008. “Governing City-Regions in China: Theoretical Issues and Perspectives for

Regional Strategic Planning.” The Town Planning Review, 79(2–3): 157–185.

Xu, J., and A.G. Yeh. 2005. “City Repositioning and Competitiveness Building in Regional

Development: New Development Strategies in Guangzhou, China.” International

Journal of Urban and Regional Research, 29(2): 283–308.

Further reading

Li Y, Wu F, 2012, “The transformation of regional governance in China: The rescaling of

statehood” Progress in Planning 78(2) 55–99.

15
 Wang Z, Wu F, 2019, “In-situ marginalisation: Social impact of Chinese mega-projects”

Antipode 51(5) 1640–1663

Wu F, 2015 Planning for Growth : Urban and Regional Planning in China. Routledge: London

Wu F, 2019, “Land financialisation and the financing of urban development in China” Land

Use Policy. In Press, DOI:10.1016/j.landusepol.2019.104412.

Wu F, 2020, “Adding new narratives to the urban imagination: An introduction to ‘New

directions of urban studies in China’” Urban Studies 57(3) 459–472.

16

View publication stats