Chinese Urbanism in Global Context PLAN A6526 Columbia University Prof. Weiping Wu Implications of Land Finance

Key themes Impact of land financing on metropolitan spatial structure Drivers of spatial expansion More dispersed or compact development in the future? Implications for real estate market Local government interest in property development Connection with housing boom

Urban expansion China added 23,700 sq. km of urban land 2000- 2010 Rest of East Asia combined only added 4,800 sq. km

Mechanisms of urban expansion Redevelopment within central city New housing construction outside central city, including gated communities Industrial relocation New industrial and high-tech parks Satellite towns Land urbanization v. pop. urbanization

Driving suburbanization Land finance “Upgrade” administrative status of locality “Local accumulation is dependent on sales and development, while the local state apparatus grows along with urban expansion.” Capital accumulation financialization of homeownership new town projects leverage bank loans capital switching West to new Chinese investment zones

Impact on housing Supply mismatch Housing bubbles supply focuses on high/luxury end supply of low-to-middle housing insufficient Housing bubbles Housing investments exceeded 8% of GDP Real estate as investment (asset rich, cash poor) Affordability (lack of) mortgage require at least 30% down payment

Land and housing prices in sync Source: Su and Tao 2010.

Housing and household wealth Source: https://jugglingdynamite.com/2012/10/03/as-chinas-economy-slows-real- estate-bubble-looms/

China in global context

Chinese cities in global context