Category Archives: Real estate

China and Europe: reconnecting across a new Silk Road

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Chen, Xiangming, Julia Mardeusz. (2015) China and Europe: reconnecting across a new Silk Road. The European Financial Review, February-March, pp. 5-12. URL: http://digitalrepository.trincoll.edu/cgi/viewcontent.cgi?article=1129&context=facpub [Retrieved 19 February 2015]
Since 2013, economic and trade relations between China and Europe have grown significantly. In this article, the authors look beyond conventional economic indicators, like trade, and political issues, like human rights, instead focusing on transport infrastructure, real estate and tourism to show that a new page is unfolding in the history of China-Europe relations.

Monique Abud

Centre d'études sur la Chine moderne et contemporaine, EHESS, Paris, France

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Killing Time

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Ping Pong

This photo was taken in November 2013 in Nanchuan district, Chongqing. Farmers have been relocated and concentrated in a remote area with little or no public transportation (as of the date when the photo was taken). The concentration of farmers’ homesteads usually takes place in order to optimise the use of arable land as farmers’ homes are scattered throughout the fields and this is an obstacle for the consolidation of arable land now taking place everywhere around the country. Other motivations include the preservation of the threshold of arable land set by the central government by recovering arable land, the improvement of rural infrastructures, and the search of a solution for the problem of the hollow villages (due to the massive migration of young people to the cities, many homesteads remain empty most of the time). A concentration of resources takes place, and farmers are relocated to newly built residential communities (xinxing nongcun shequ – 新型农村社区). Usually, farmers lease the new consolidated land to a cooperative, and some of them continue working the land as employees of the cooperative.

This case is very different. The local government has used the expropriated land in a more lucrative way for its budget, as it has managed to attract private investment (a real estate developer listed in the Hong Kong Stock Market), and develop a tourist town with houses dedicated to the upper-middle class of Chongqing who are in the look for a weekend retreat outside of the metropolitan area. Normally, the law interdicts urban residents to buy rural land but, through the intervention of the visible hand of the government, farmers’ land is expropriated and converted into state land. The miracle is performed. Profits are handsome for the local government, for the real estate developer and, by extension, for all the investors who put their savings into this company, and who will see the dividend payout increase as a result of the difficult-to-match-elsewhere performance of the company. The only ones who won’t make a penny are the original owners of the land.

As a result, the collective economic system is completely wiped out. Farmers will not recuperate their land, except if they buy it at the market price (unattainable after the development of the area). They have a sense of having been cheated. There have been barred from entering the new town, except for the few lucky ones who will be hired by the developer for gardening work. The construction of their new town miles away from the tourist area limits the possibility for entrepreneurism. Youngsters leave their ancestral land to look for a job in the city, and the old ones remain in the new town, which becomes a retirement town. Most of them do not have enough savings for paying the utilities’ bill and need to improvise outdoor kitchens. They live off the remittances from their offspring.

During the Third Plenum of the 18th Chinese Communist Party Congress held in Beijing in November 2013, the government announced plans to implement reforms regarding farmers’ construction land-use rights. The Chinese leadership finally agreed on the need to equate rural construction land use rights with urban construction land rights under the “same land same rights” principle (tongdi tongquan – 同地同权).1 Would farmers agree to sell their homesteads and be grouped in new residential communities given the choice to transfer their land use rights to whomever they wish?

 

  1. Decision of the Central Committee of the Communist Party to strengthen the important problems posed by the reform (zhonggong zhongyang guanyu quanmian shenhua gaige ruogan zhongda wenti de jueding– 中共中央关于全面深化改革若干重大问题的决定). http://www.hmdjw.gov.cn/article/show-4104.html. Last retrieved December 10, 2013. [↩]

Miguel Elosua

Spanish qualified lawyer; PhD in Chinese Law. UrbaChina Research Officer. Has lived in China since 2006.

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Flushing again in Ordos ?

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SEIWater is a scarce resource, especially in the arid plains of Inner Mongolia.

In 2003, the Stockholm Environment Institute in collaboration with a local district of Ordos started to implement a project of eco-sanitation and tested dry toilets. But this initiative came to an end in 2010.

Arno Rosemarin and Guoyi Han explained in a short article the reasons why this poject was not continued.

Rosemarin, A. and Han, G. (2013, January).  Is urban ecological sanitation possible? Lessons from Erdos, China. Stockholm Environment Institute. Retrieved February 8, 2016 from http://www.sei-international.org/-news-archive/2542?format=pdf.

 

 

Sebastien Goulard

Ph.D. in political science (EHESS, Paris); M.A. in social sciences (EHESS, Paris); M.A. in international relations (IRIS, Paris), B.A. (Hons) in international political studies (ESE - Nottingham Trent University)

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Second homes in Hainan (II): social inequalities

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The second homes phenomenon not only increases the economic dependency to tourism and real estate sector in Hainan, but also aggravates social inequalities on the island.

In 2013, 40% of all residential real estate transactions were made by non locals. This figure reached 85% in Sanya, the island’s main resort city1. This means that few locals can now afford to buy their home in the southern coast of Hainan. Only wealthy mainlanders can do so.

The Hainanese society has a complex structure, and has long suffered from disparities; second homes may strengthen these inequalities.

Feng Chongyi and David Goodman2 note in the 90’s that the Hainanese society was divided between locals and mainlanders. With Hainan being granted the status of province in 1988, hundred thousand skilled workers flocked from mainland to the island where they were offered high positions in the local administrations and state owned companies.

The development of tourism and second homes in Hainan may deepen these divisions.

According to a study made by Wang, Wei and Li3, Sanya’s population is divided into three main groups that are the local residents (500,000 inhabitants), visitors (100,000) and non local residents  (200 000 inhabitants living in the city several weeks/months per year).

This new population does not only affect real estate prices, but also everyday product prices, this makes locals complain about inflation. The municipal government of Sanya has constantly readjusted the amount of allocation offered to its local residents.Social discontent in Hainan can lead to further tensions between locals and second home owners, and this may make the island’s image less attractive.

Another possible consequence of the second home boom in Hainan is the destruction of local cultural particularisms. With more mainlanders coming to Hainan, the island can lose its “art de vivre”. In the 90’s, one of the consequence of the massive coming of mainlanders to the Hainan was the weakening of Hainanese dialect.

Today, Hainan has for ambition to become a successful tourist destination, but can also do so by offering more than “the sea and sun package”, and so needs to promote its insular culture. And so an equilibirum needs to be found between the settling of second home owners from mainland and the preservation of local culture(s).

 

  1. “85% of Sanya’s residential properties sold to non-islanders”, Hainan government, March 13 2014. Retreived September 20, 2014 from http://en.visithainan.gov.cn/en/lynewsview_2929.htm [↩]
  2. Feng Chongyi and David, S. G. Goodman (1997), “ Hainan: communal politics and the struggle for identity”, in GOODMAN, David S. G. (ed.), China’s provinces in reform : class, community and political culture, London, New York: Routledge [↩]
  3. WANG Fei et al.(2013), “Equalization of public service facilities for tourist cities – case study of Sanya’s downtown public service facilities in the planning process”, ISOCARP [↩]

Sebastien Goulard

Ph.D. in political science (EHESS, Paris); M.A. in social sciences (EHESS, Paris); M.A. in international relations (IRIS, Paris), B.A. (Hons) in international political studies (ESE - Nottingham Trent University)

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Uxcester Garden City project

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David Rudlin of URBED was the winner of the Wolfson Economics Prize 2014, announced in September 2014, with the Uxcester Garden City project:

Vision:  We illustrate how the city of Uxcester could double its size by adding three substantial urban extensions each housing around 50,000 people. These lie within a zone 10km from the city centre and are configured as triangles with only the point touching the edge of the settlement. The farmland around the city is currently not accessible to the public and of little ecological value. The concept is that for every hectare of development another will be given back to the city as accessible public space, forests, lakes country parks etc… Each of these satellite extensions would be served by a tram or Bus Rapid Transit (BRT) running from the existing mainline station on disused lines and then switching to on-street running to loop through the new neighbourhoods. The housing would be developed incrementally to create space for small developers and self-builders alongside the volume housebuilders in a process that recreates the way that the great estates were built in London.   

Popularity: Extending an existing city solves some problems but creates others. The greatest of these will be the task of winning over the existing community, which is likely to be articulate and honed by years of experience resisting development. We suggest a ‘Social Contract’ that would address the concerns of this community. Rather than a future spent fighting years of ill-planned development, the Garden City would offer the prospect of a clear 40 year vision that accommodates development while minimising its impact. The satellite extensions are planned to minimise their visual impact, to create a green grid of accessible open space and to generate investment in new transport infrastructure and city centre facilities to benefit the whole of the community. The aim is to re-frame the argument by getting cities to bid to be designated as a Garden City as they currently bid for City of Culture. 

Economic Viability and Governance:  In the absence of large scale subsidy the only solution to the economics of the Garden City is what Ebenezer Howard called the ‘unearned increment’. We are proposing a deal for landowners in which they trade a small chance of securing a housing consent on their land, for a guarantee of receiving existing use value plus substantial compensation and a financial stake in the Garden City Trust. We have assumed that the land will be brought at an average cost of £350,000 per hectare, 20 times its current agricultural value but only 15% of its value as housing land. The economics of the scheme are based on these differentials. We have assumed that, by extending an existing town rather than building from scratch we can reduce the infrastructure bill from £80,000 to £60,000 per unit. Even assuming that half of the land acquired is used as open space, this still generates sufficient value to fund this level of infrastructure spending. By selling the sites to developers at a fixed price and providing the infrastructure collectively, a market incentive will be created to invest in the quality of the housing.   

The process would be managed by the Garden City Trust that would be owned jointly by the local councils, central government, the local community and land owners – and their stakes would have a tradable capital value. The Garden City Trust would be vested with the land, would commission masterplanning work and then use the equity of the land to raise a Bond to fund the initial investment in infrastructure. Development would take place on a rolling programme with the early land receipts being reinvested. The experience in Holland suggests that such a rolling programme can procure infrastructure investment three times greater that the value of the initial bond.    

We describe the seven ages of the Garden City Trust from its conception and birth through its infancy and adolescence to maturity, middle age and eventually retirement. Over time the role of the trust will evolve as it moves from the development stage to the management phase where it will be structured to enable the local community to take on the stewardship of their neighbourhoods. Rising values over the life of the project will allow initial investments to be repaid. This is not a new model, it is the modern day equivalent of the great estates like Grosvenor or The Bournville Village Trust. 

Our model addresses the weaknesses in the system that have made it so difficult to match the quality of the schemes we admire on the continent. We have debated as a team whether we are being too ambitious with the size of the settlement we are proposing. However nationally we need to increase housing production by the equivalent of one Milton Keynes every year. We therefore need bold strokes to radically increase the rate at which we are building and Uxcester provides a model to do just this. 

For more information on URBED and the submission, click here: http://www.urbed.coop/wolfson-economic-prize

Miguel Elosua

Spanish qualified lawyer; PhD in Chinese Law. UrbaChina Research Officer. Has lived in China since 2006.

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Second homes in Hainan (I): reducing dependency.

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As noted in a previous post, the second home phenomenon in China is quite different from the one in Western countries. Most of them are not exactly holiday homes, but are bought for other purposes. On exception may be Hainan: the southern island is presented as a major tourist destination and so the island has attracted thousands of Mainlanders who wish to spend a few weeks per year under the sun. But second home acquisitions in Hainan are also motivated by speculation. Per consequence, this phenomenon needs be carefully scrutinized by local authorities, and more actions should be taken to reduce the local dependency to the real estate sector.

In the past, in the early years of reforms, Hainan was doomed by real estate speculation and this partly caused the economic turmoil the island experienced in the late 90’s.

Since then, the island has been recovering thanks to the development of tourism.  With tourism and the rising of Chinese middle-class, second homes have appeared in Hainan. According to Wang Xiaoxiaà in in 2006, 25,000 second homes could be found Haikou1.

In 2010 was launched an ambitious plan to transform Hainan into an international destination by 2020. This decision boosted the housing sector on the island, but for fear of overheating, the local government limited the number of acquisitions one may purchased in Hainan. In spite of these measures, the island experienced a strong increase of real estate prices, and Sanya, Hainan’s main resort city, has become the 5th most expensive Chinese city.

For the local authorities, real estate and construction have gradually become their main financial resources. For the first semester 2014, more than one third of the provincial GDP was produced by real estate, this figure reached nearly three-fourths in Sanya2.

This causes the whole economy of Hainan to be very dependent on real estate.  And the bad news is that real estate in Hainan is very volatile and speculative. Most real estate programmes do not answer local housing demands but target wealthy Mainlanders, and since the beginning of this year, sales have started to drop.

This should drive the local government of Hainan to reconsider its strategy and diversify the island’s economic activities.

————

I have studied this aspect of the development of tourism in Hainan in my Ph.D. dissertation entitled “Les politiques de développement regional d’une zone périphérique chinoise, le cas de la province de Hainan (Regional development policies in a Chinese peripheral region: the case of Hainan province). This dissertation was defended on December, 18, 2014, and will soon be available online.

  1. WANG Xiaoxiao (2006), The second home phenomenon in Haikou, Master thesis, University of Waterloo, Canada. Retreived December 20, 2015 from http://etd.uwaterloo.ca/etd/x42wang2006.pdf [↩]
  2. DOI, Noriyuki (2014), ‘Chinese housing prices still sliding’, Nikkei Asian review, August, 24. Retreived September 20, 2014 from http://asia.nikkei.com/Politics-Economy/Economy/Chinese-housing-prices-still-sliding [↩]

Sebastien Goulard

Ph.D. in political science (EHESS, Paris); M.A. in social sciences (EHESS, Paris); M.A. in international relations (IRIS, Paris), B.A. (Hons) in international political studies (ESE - Nottingham Trent University)

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Arts, culture and the making of global cities

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Arts, Culture And The Making Of Global CitiesLily Kong , Ching Chia-ho , Chou Tsu-Lung (2015), Arts, culture and the making of global cities. Creating new urban landscapes in Asia, Edward Elgar, 272 p.

Contents

  1.  Arts spaces, new urban landscapes and global cultural cities
  2. The National Grand Theatre in a city of monuments: discourse and reality in the construction of Beijing’s new cultural space
  3. Rivalling Beijing and the world: realizing Shanghai’s ambitions through cultural infrastructure
  4. Hong Kong’s dilemmas and the changing fates of West Kowloon Cultural District
  5. The making of a ?Renaissance City’: building cultural monuments in Singapore
  6. In search of new homes: the absent new cultural monument in Taipei
  7. Cultural creativity, clustering and the state in Beijing
  8. Remaking Shanghai’s old industrial spaces: the growth and growth of creative precincts
  9. Factories and animal depots: the ?new’ old spaces for the arts in Hong Kong
  10. Reusing old factory spaces in Taipei: the challenges of developing cultural
  11. From education to enterprise in Singapore: converting old schools to new artistic and aesthetic use
  12. Culture, globalization and urban landscapes References Index

Further information

Jacqueline Nivard

Jacqueline Nivard, Centre d'études sur la Chine moderne et contemporaine

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Urban spatial restructuring, event-led development and scalar politics

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Hyun Bang Shin (2014) Urban spatial restructuring, event-led development and scalar politics. Urban Studies, November 2014 vol. 51 no. 14. DOI:10.1177/0042098013515031.

This paper uses Guangzhou’s experience of hosting the 2010 Asian Games to illustrate Guangzhou’s engagement with scalar politics. This includes concurrent processes of intra-regional restructuring to position Guangzhou as a central city in south China and a ‘negotiated scale-jump’ to connect with the world under conditions negotiated in part with the overarching strong central state, testing the limit of Guangzhou’s geopolitical expansion. Guangzhou’s attempts were aided further by using the Asian Games as a vehicle for addressing condensed urban spatial restructuring to enhance its own production/accumulation capacities, and for facilitating urban redevelopment projects to achieve a ‘global’ appearance and exploit the city’s real estate development potential. Guangzhou’s experience of hosting the Games provides important lessons for expanding our understanding of how regional cities may pursue their development goals under the strong central state and how event-led development contributes to this.

Read full text article (restricted access)

Author’s personal website: http://urbancommune.net/

Miguel Elosua

Spanish qualified lawyer; PhD in Chinese Law. UrbaChina Research Officer. Has lived in China since 2006.

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A kindergarten surrounded by rubble at a demolition site in Xi’an

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Kindergarten

A kindergarten at a demolition site in the city of Xi’an, Shaanxi province. The photo was taken by China Stringer Network and published by Reuters on 8 December 2014.

According to the local government, the kindergarten has been running without a license and will be forced to shut down. The owner of the school signed the 20-year lease agreement three months before the demolition work started. On 8 December, the mother of a 2 and a half year old toddler went to the school to ask for a fee reimbursement. Apparently, she had not payed attention to the surrounding area when registering her infant and actually quite liked the environment.

 

Miguel Elosua

Spanish qualified lawyer; PhD in Chinese Law. UrbaChina Research Officer. Has lived in China since 2006.

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城市规划原理 (Principles of urban planning)

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4th edition of the volume edited by a team of professors from the Tongji University, with Li Dehua (李德华) as chief editor. Published by Zhongguo jianzhu gongye chubanshe (中国建筑工业出版社) in 2010.

PUP

《高校城市规划专业指导委员会规划推荐教材:城市规划原理(第4版)》系统地阐述了城乡规划的基本原理、规划设计的原则和方法，以及规划设计的经济问题。主要内容分22章叙述，包括城市与城市化、城市规划思想发展、城市规划体制、城市规划的价值观、生态与环境、经济与产业、人口与社会、历史与文化、技术与信息、城市规划的类型与编制内容、城市用地分类及其适用性评价、城乡区域规划、总体规划、控制性详细规划、城市交通与道路系统、城市生态与环境规划、城市工程系统规划、城乡住区规划、城市设计、城市遗产保护与城市复兴、城市开发规划、城市规划管理。

Miguel Elosua

Spanish qualified lawyer; PhD in Chinese Law. UrbaChina Research Officer. Has lived in China since 2006.

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Arrival city: how the largest migration in history is reshaping our world

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Arrival City: How the Largest Migration in History is Reshaping Our World. Book written by Doug Saunders, and published by Knopf Canada (September 21, 2010).

Arrival city

What will be remembered about our century, more than anything except perhaps changes to the climate, is the final shift of human populations from agricultural life to cities, the effects of which are being felt around the world. Arrival City gives us an on-the-ground view of this phenomenon—from Maryland to Shenzhen, from thefavelas of Rio to the shanty towns of Mumbai, from Los Angeles to Nairobi.

Doug Saunders introduces us to the migrants themselves, and with the aid of their stories elucidates their essential part in the economic fabric. He makes clear that the cities and nations that provide citizenship and opportunity to migrants stand to benefit as the migrant class evolves into a middle class, and he explains why those that ignore these people will see increased social unrest, poverty, and religious fundamentalism.

 

 

 

Miguel Elosua

Spanish qualified lawyer; PhD in Chinese Law. UrbaChina Research Officer. Has lived in China since 2006.

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When fiscal recentralisation meets urban reforms

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Fu, Qiang. (2014) When fiscal recentralisation meets urban reforms : prefectural landfinance and its association with access to housing in urban China. Urban Studies. Prepublished October, 8, 2014. DOI: 10.1177/0042098014552760

By retrieving household-level information from 127,938 household heads and fiscal data from 177 prefectures located in eastern and central China, this research quantifies the net association between land finance and urban housing tenure. While the results demonstrate that in 2005 China’s urban housing market remained stratified and simultaneously favoured individuals possessing economic, political and human capital, the key finding is that, net of other household- and prefecture-level effects, land finance is significantly and negatively associated with local homeownership. Moreover, both the demand and supply sides of the urban housing market contribute to such net association. By demonstrating the internal links between urban housing and local finance, this research not only provides a more holistic view of housing stratification during institutionalchanges but also lends empirical support to conceptual frameworks that explain a territory-based coalition between local governments and selective enterprises.

Read full text on Sage Journals Online (restricted access)

 

Monique Abud

Centre d'études sur la Chine moderne et contemporaine, EHESS, Paris, France

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The Oxford Companion to the Economics of China

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Shenggen Fan, S M Ravi Kanbur, Shang-Jin Wei, Xiaobo Zhang (2014). The Oxford companion to the economics of China.(2014),  The Oxford Companion to the Economics of China, 656 p., 33 Figures, 8 Tables. Also available as ebook.

Jacqueline Nivard

Jacqueline Nivard, Centre d'études sur la Chine moderne et contemporaine

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”Understanding China’s urbanization from the perspective of the real estate industry “

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aagAnnual meeting of the Association of American Geographers (AAG) 2015, Chicago, April 21-25
Call for papers : Special session ”Understanding China’s urbanization from the perspective of the real estate industry “, sponsored by the China specialty group

Organized by Natacha Aveline (CNRS/University Paris I-Panthéon Sorbonne) and Thierry Theurillat (University Neuchatel, Switzerland)
China’s real estate industry has become a major pillar of China’s economy. The past decade has seen a widespread increase of land and real estate values, followed by downward trends in some cities. This has raised discussions amongst scholars on the possibility that China was experiencing a property ‘bubble’ (see for example Zhou, 2005; Liu and Sun, 2009; Jianling, 2010; Wu et al., 2012).

However, this scholarship tends to favor a macro approach based on data analysis of property prices at city level, ignoring the complex mechanisms that are at work in the process of land development and building construction. Such mechanisms include: financial channels to the real estate industry; institutional and organizational arrangements underlying property development; differentiated access to primary resources for building construction (especially land and finance) according to the developer’s status. Starting from the assumption that these aspects play a significant role in the formation of property prices, this special session intends to shed light on the various processes of value creation in China’s cities, while contributing to the debate on the so-called ‘speculative bubble’ (or more precisely, ‘bubbles’. (Aveline-Dubach, 2014).

During the 2000s, China’s urbanization was clearly identified as an economic model based on land income for local government and related to the political and institutional changes since 1978 (Aglietta and Bai, 2013; Keith et al., 2014). With decentralized decision-making processes often based on interpersonal relations (Zhu, 2005 ; Li and Li, 2011), many scholars emphasized the role of the state and debated about the nature of the “emerging neoliberal urbanism” in China (He et Fu, 2005 et 2009 ; Cartier, 2011 ; Zhu, 2011). The ‘entrepreneurial’ approach of the local state and the formation of “local growth coalitions” (Zhu, 1999) with local developers, some of them being state-owned enterprises, have been identified as key features of local real estate dynamics in China (He et Wu, 2009; Wu, 2010; Cartier, 2011 ; Zhu, 2011). However, the institutional and cultural specificities of the demand for property have seldom been addressed (Hu, 2013) as scholars have focused on public finance (Gaulard, 2013; Wong, 2013).

In order to have a more integrated and transversal approach of the mechanisms involved in China’s urban production, this special session would welcome papers dealing with the following topics: real estate and urban production (e.g. role and business models of development and construction groups in China; evolution of national and local regulatory frameworks regarding land development and building construction), urban financing both on domestic and international levels (e.g. banking finance, trust financing, foreign direct investment, financial markets and stock exchange) and the role of the households for the urban property/ownership (residential and non-residential property).

Abstracts of 250 words (maximum) should be submitted to Natacha Aveline-Dubach (aveline@jp.cnrs.fr) and Thierry Theurillat (thierry.theurillat@unine.ch) by October 30. Please remember to include your name, institutional affiliation and contact details on your submission.

Sebastien Goulard

Ph.D. in political science (EHESS, Paris); M.A. in social sciences (EHESS, Paris); M.A. in international relations (IRIS, Paris), B.A. (Hons) in international political studies (ESE - Nottingham Trent University)

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