Category Archives: Real estate

Housing, urban renewal and socio-spatial integration in Beijing

Hui, Xiaoxi (2013) Housing, urban renewal and socio-spatial integration: a study on rehabilitating the former socialistic public housing areas in Beijing. A+BE : Architecture and the Built Environment. 3(2) pp.1-796. doi:10.7480/abe.2013.2. (accessed 20 September 2013)

Based on the background of privatization, the former socialistic public housing areas in Beijing confront the ambiguity of their housing stock and the confusion of housing management. While they still accommodate the majority of urban residents and are identified by their good places, (social and programmatic) mixed communities, vibrant local life, and diversified housing types, they are facing the serious challenges of physical deterioration and social decline. Therefore, urban renewal was thought as an effective solution seeking to improve the living conditions in those neighborhoods. Nevertheless, urban renewal in itself is also a controversial issue. In order to solve the housing problem, the large-scale urban renewal in Beijing started at the beginning of the 1990s. The radical housing reform further boosted urban renewal, often in the form of wholesale reconstruction and linked to real estate development. The market-driven urban reconstruction resulted in the resident displacement, community destruction, disappearance of historical images and, more threatening, socio-spatial segregation. It encountered the rising criticism from scholars and activists and resistance from the residents. As a result, many housing renewal projects, including the reconstruction projects of former public housing areas, had to be stopped or suspended in Beijing after 2004. Nowadays there is a dilemma for the urban renewal of Beijing’s former public housing areas.

Read full text on A+BE

Sustainable Stockholm, Europe’s greenest city

Metzger, Jonathan and Olsson Amy Rader eds. (2014) Sustainable Stockholm: exploring urban sustainability in Europe’s greenest city. Routledge, 2014. 248 p.

Sustainable Stockholm provides a historical overview of Stockholm’s environmental development, and also discusses a number of cross-disciplinary themes presenting the urban sustainability work behind Stockholm’s unique position, and importantly the question of how well Stockholm’s practices can be exported and transposed to other places and contexts.

By using the case of Stockholm as the pivot of discussions, Sustainable Stockholm investigates the core issues of sustainable urban environmental development and planning, in all their entanglements. The book shows how intersecting fields such as urban planning and architecture, traffic planning, land-use regulation, building, waste management, regional development, water management, infrastructure engineering—together and in combination—have contributed to making Stockholm Europe’s “greenest” city.

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China’s low income urban housing

Cook, Ian G., Gu, Chaolin and Halsall, Jamie (2013) China’s low income urban housing . Asian Social Science. 9 (3) pp. 7-17. ISSN 1911-2017. DOI: 10.5539/ass.v9n3p7

In this paper, firstly the authors briefly outline the historical legacies of inner-city housing that are the focus for redevelopment today, and then summarise the legacy of mass housing built by the work-unit or danwei in the Maoist era. The bulk of the paper, however, is then concerned with the switch to privatisation (via ‘market socialism with Chinese characteristics’) in the Reform Period under Deng Xiaoping and his successors, and the role of land policy that forms an important constraint on housing provision. Demand for low-income housing is in part due to the continuation of the Maoist hukou registration system which acts as a major barrier to full participation in the housing market and consequently China’s cities now have a huge migrant non-hukou ‘floating population’ (liudong renkou) that must be housed via alternative means, preferably as cheaply and effectively as possible. There is also the situation of the ‘ant tribe’ of young low-paid college graduates to consider. For people like these renting in overcrowded conditions is one option, but because of China’s unique development trajectory, (driven by the Chinese Communist Party since the founding of the People’s Republic of China in 1949, self-help housing is not a major form of housing provision, therefore there are few examples to consider. Hence, we discuss several examples of China’s low income urban housing.

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China’s real estate prices continue to go up?

According to an article published by Bloomberg, housing prices are still rising in the main Chinese cities.

In 2011, the central government implemented measures to control real estate prices, but municipalities did not always enforce them as they financially depend on land sales.

May the new administration ease restrictive measures and increase the marketisation of real estate? But in this case, there is a risk of real estate bubble and social discontent.

Full text

Chinese eco-cities: a perspective of land-speculation-oriented local entrepreneurialism

Chien, Shiuh-Shen. (2013) Chinese eco-cities: a perspective of land-speculation-oriented local entrepreneurialism. China information, 27, pp 173-196.

 Abstract

This article aims to critically review the recent phenomenon of eco-cities in China which has captured the attention of the city authorities since the 2000s. At the time of writing, more than 200 eco-city projects have been proposed, are under construction, or have even been partly or fully implemented. Many of these eco-cities are not retro-fitted development plans in the downtown areas but are new large-scale land development projects on the outskirts of municipalities. The impetus behind the current Chinese ‘new-town-style’ eco-cities can be viewed as the third round of post-Mao land development isomorphism. The first – development zones – took place in the 1980s, and the second – college towns – started from the late 1990s. In the post-Mao context, Chinese local entrepreneurialism, which is characterized by (1) inter-scalar strategies to formally and informally pursue projects and (2) novel discourses that seek to legitimize projects, is actually motivated by land finance. Therefore, Chinese eco-cities driven by land-speculation-oriented local entrepreneurialism are very likely to be yet another manifestation of spatial development fervour, which contributes to further local extra-budgetary revenue and generates social conflict as opposed to sustainable development.

Read full text on Sage Journals online (restricted access)

 

 

Urban history and urban development in China

Xue, Qian. 2013, March 8. Urban history : a knowledge base for urban development.
http://www.csstoday.net/ywpd/News/52897.html (accessed 9 July 2013).

 Starting from 2013, the Hangzhou Cultural and Historical Research Association will embark on a five year Wuhan Changjiang Bridge, 1957project investigating various aspects of the city’s history, including industrial development, urban construction, transportation development, etc. It is expected to provide knowledge and referential experience for current urban development.

Since the 1980s, China’s rapid urbanization has drawn more and more scholars toward the study of urban history; research on Shanghai, Tianjin, Chongqing and Wuhan has achieved significant results.

Chinese urban history studies grow fast

According to incomplete statistics, during the period from 1979 to 2010, publications on Chinese urban history totaled more than 2,000 volumes.
Professor Li Changli at the Institute of Modern History at the Chinese Academy of Social Sciences,  said that in the past 20 or more years, the urban development in China has inspired many new topics and subfields among urban historian. Research in the area is blossoming. Particularly in recent years, publications of Chinese urban history have seen greater serialization, covered a broader range of issues and reached a more international audience.

Urban history is a branch of history.  It originated in the 1920s in the west and saw a revival in the 1960s; till 1980s, the subject had only gradually drawn attention from Chinese academia. He Yimin, vice president of the Chinese Urban History Association and director of the Institute of Urban Studies at Sichuan University, noted that China’s social development, urbanization, industrialization and modernization are the driving forces of Urban History Studies. Scholars often take major emerging cities such as Shanghai, Tianjin, Chongqing and Wuhan as original research subjects; today, their research is developing quickly.

Read more on Social Sciences in China Press

 

Urban Village

Urban Village (chengzhongcun - 城中村), Elosua Miguel

 

Urban villages have proliferated in almost every Chinese city as consequence of the urban sprawl commanded by local governments, sometimes with the purpose of financing their budgets. They expose the imperfections of the double property system, where the government has a monopoly of the primary land market. The term “urban village” (chengzhongcun – 城中村)refers to the situation where the city ends up encircling the village. Most of the farmland has been expropriated and urbanized, and only the villagers’ original homesteads remain. Soaring real estate prices in the surrounding city reduce the possibility of an eventual expropriation and redevelopment of the area.

Urban Village 2 (chengzhongcun - 城中村), Elosua Miguel

In the meantime, the original residents make a good profit from renting rooms, mostly to migrant workers who have restricted access to urban formal housing, due to the high prices, and the lack of stable jobs and tax returns. Housing conditions are precarious and villagers are not keen to invest much money, hoping for an eventual expropriation. Buildings like the one in these photos date from the 1950s.  They are made of mud bricks and have dirt floors, water leakages are frequent, and some lack running water. The average rent is around 50€ for a 15 square meter room. Migrant workers adrift on the fringes of citizenship.

 

Urban Village 3 (chengzhongcun - 城中村), Elosua Miguel

New university cities

Yunnan University New Campus, Elosua Miguel

Chenggong University City is situated in Chenggong district, Luoyang town (chenggong qu luoyang zhen – 呈贡区洛羊镇), 24 kilometres from the city proper. It covers an area of 43 square kilometres, almost half the size of Kunming in 2007, which gives an idea of the significance of the project. The plan was approved in 2003 as part of the development of the new East of Kunming city. Ideally, it will attract not only students from Yunnan province, as well as other provinces in China, but also students from abroad, notably from South Asia. Once the project is finished, the new University City will have the capacity to host more than 150 thousand students. The total investment for the project is estimated at 10 billion RMB (1.6 billion USD). Construction work lasted six years, from 2004 to 2010. Seven universities have already moved to the new campus town.

University towns have been proliferating all over the country since the turn of the new century. They are part of a central government plan, launched in 2000, which calls for 50 new university towns to be built in city suburbs. The reasons for this initiative may seem obvious: along with the dramatic increase in the number of students pursuing higher studies, land prices within city centres have soared. This makes it difficult for universities to expand their facilities and capacities. At the same time, selling off old campuses brings sizable capital gains that allow for the acquisition of large terrains in the outskirts of urbanizing cities. (Sometimes it is the government who expropriates the old campus, and the academic institution gets land in the new campus town as a part of the compensation). There is intense competition between universities to attract students, and the curricula have expanded dramatically. Almost every university now offers a degree in business management (including the lucrative MBA). Consequently, capacity has become paramount.

Some of the universities that have moved into new campus cities, such as Yunnan University, are included in Project 211 (the name stands for 21st century, top 100 universities). The aim of the project is to promote the development and reputation of the Chinese higher education system. Both national and local governments are involved, allocating large amounts of funding to different purposes, such as updating installations. There is also the more selective Project 985, which originally included only nine universities (the so-called C9 League), but was enlarged later to thirty-nine, none of them in Yunnan province.

In order to finance its ambitious new campus, Yunnan University has also sold most of the old campuses that were located in downtown Kunming. The only campus that remains is protected as a heritage site. The university was founded in 1923, and was the oldest in West China. It sits in an unmatched location facing Green Lake Park (cuihu gongyuan – 翠湖公园), and is surrounded by venerable ginkgo trees and teeming flora.

Yunnan University

The new University City has been built on arable land, something that some locals frown upon since, allegedly, the project was to include the use of a large area of wasteland.1 Considering the size of the area that is now occupied by the new campuses, it is easy to imagine the enormous expropriation procedures that have been carried out. (Before the University City was built, the area was occupied by five villages). The central government enhanced the plan to build university towns with a number of favourable policies that would help to overcome hurdles such as expropriation procedures or financing. Expropriated farmers remain the biggest issue to be dealt with. Once farmers are dispossessed of their land, they lose their livelihood. The compensation may allow them to buy a new house, but it won’t provide them with a new job. The lack of higher education is a major impediment. A number of training programs are usually implemented to facilitate job reinsertion for farmers (as guardians or gardeners in many cases). According to a survey carried out in 2011, 2) young farmers were optimistic about the construction of the campus city and were willing to join training programs. However, the older ones found it difficult to join these programs and expressed concern about their future. The provision of old age protection schemes would solve this problem, but only partly. When farmers no longer have their land, the dignity of having an occupation is difficult to make up for.

The local government has financed the new University City’s urbanisation work. A number of buses and a new subway line connect the new university town with Kunming.   A large area of the expropriated land will eventually be used to build commercial and residential spaces.  Currently, a number of local vendors, perhaps former farmers, have set up informal stalls to cater to the University City’s new residents.  This is a significant niche market, as the area still lacks many services to satisfy the needs of its new inhabitants.  (The above-mentioned study proposes the implementation of soft financing policies for former farmers willing to become entrepreneurs.)  The name of the new town very precisely describes who these new residents are, at least for the moment: university students.  Streets are almost empty, which is a common feature in many new cities that are urbanised before the need arises. As one Chinese scholar pointed out, “there is more urbanised land than people in China.”  In the case of the new university towns, students seem to have been sent out like advanced parties to settle new territory, even before a number of basic services have been provided for.  Perhaps this is the best way: after all, with classes to attend and individual studying to do, students hardly have time to venture outside the campus in any case.

 

  1. chenggong daxue cheng – 呈贡大学城 http://baike.baidu.com/view/1365972.htm Last retrieved on April 18, 2013. []
  2. miao mingming, zhouyunlong, “daxue cheng” jianshe dui zhoubian nongmin yingxiang diaocha——yi kunming chenggong “daxue cheng” weili – 缪明明, 周云龙, “大学城”建设对周边农民影响调查——以昆明呈贡”大学城”为例. Industrial & Science Tribune, 2011, 10 (1 []

Real estate speculation and its social consequences

SPECIAL FEATURE Edited by Natacha Aveline-Dubach

China Perspectives 2013, 2.

Editorial by Natacha Aveline-Dubach

China is undergoing intense urbanisation at a rate largely surpassing anything Asia has experienced and the magnitude of which might well have a lasting effect on the global economy. Some 350 million rural residents are expected to move into urban areas by 2025. If current trends persist, 221 cities could have populations surpassing one million by 2025 – against 35 in Europe now – of which 23 could have more than five million. This urbanisation phenomenon poses a major challenge to the building industry and opens up formidable investment potential. In dealing with real estate issues in China, academic literature has largely focused on land use as a means of capital accumulation by local authorities, conflicts over expropriation procedures, or distortions in land use – especially wasteful use of farmland. However, little is known of the workings of property markets and the modalities of action in that industry. This special feature aims to open new paths of reflection on the structuring effects of property dynamics in China’s urbanisation.

Rooted in Deng Xiaoping-era reforms, China’s property market really took off in the 1990s with the growth of a private housing market. In just a few years, official steps to externalise the real estate of work units transformed thousands of people into owner-occupants. This has been accompanied by a marked rise in property prices in coastal cities. Is this because of speculative activities, or do these spurts stem from the Chinese productive system’s economic performance? The media have reported on extreme instances of real estate oversupply in several places, the most spectacular being the Ordos “ghost city” in Inner Mongolia. Mylène Gaulard notes these supplydemand distortions and defends the bubble hypothesis. She points to the abnormally high property-price/income ratio and to rising real estate debt in the Chinese economy. She traces the origin of speculative activities to 1994, when there was a convergence of fiscal recentralisation, an upsurge in local collectives’ indebtedness based on land collateral, and housing commodification… Read the full text of the editorial

Changes in the Chinese Property Market: An indicator of the difficulties faced by local authorities – Mylène Gaulard

(Download PDF)

ABSTRACT: For the past decade, China has faced an extremely sharp rise in property prices and increasingly large investments made in this sector. Although some economists consider this change to be no more than the result of the increase in urban salaries that has gone hand-in-hand with China’s strong economic growth, this article will show that it is in fact a “property bubble” resulting from the speculative activities of certain economic agents operating in this sector. Local authorities play a major role in this, especially in their efforts to increase their income, and their behaviour needs to be analysed in order to better understand that a bursting of this bubble might expose economic problems of a far deeper structural nature than those usually identified.

Challenges and Opportunities Facing China’s Urban Development in the New Era: A statistical and spatial analysis – Han Ruibo, Wang Linna

ABSTRACT: The acceleration of urban expansion has greatly impacted the study of China’s urban system, and the urban function at the national level has largely been characterised by the spatial distribution and evolution of cities. In order to understand the dynamics of urban development in China, it is necessary to analyse the history of city evolution and understand the context in which that evolution took place. The first section of this paper introduces the urbanisation process in China since the 1950s in order to demonstrate the origins of China’s recenturbanisation patterns. Subsequently, the structural transitions of city scaling and urban clusters are presented by employing Rank-size Analysis and satellite imagery, followed by the challenges brought about by these changes. Finally, the spatial distribution and transition patterns of China’s urban system are analysed using Centrographic Analysis.

Finance Capital Launches an Assault on Chinese Real Estate – Natacha Aveline-Dubach

ABSTRACT: Over the past two decades, global market finance has taken root in China to seek property investment. This article examines the spatialities and anchorage methods of finance capital within Chinese national territory. It highlights the spatial and sectoral differences in the composition of property portfolios as a function of the return/risk coupling. These differences are exacerbated by a split in the geographical origin of the funds, which determines differentiated conditions of access to land and management of the investment time horizon of the assets portfolios. The penetration of finance capital into urban space tends to increase the fragmentation and functional specialisation of districts, a phenomenon fostered by entrepreneurial urban policies. As a result, urban projects are becoming standardised in terms of both design and program. They are increasingly governed by external references that favour the expansion of multinationals and transform lifestyles and consumer habits.

Commodity Housing and the Socio-spatial Structure in Guangzhou – A study based on estate-level residential property prices – Ryanne Flock, Werner Breitung, and Li Lixun

ABSTRACT: Commodity housing has become a major engine of urban restructuring and social change in China. It is alleged to aid growing residential segregation and urban fragmentation. In this context, housing price is viewed as an important sorting mechanism. This article investigates this claim by looking at Guangzhou’s housing market and analysing data of 797 commercial housing estates. It analyses the development of commodity housing and the trends of housing prices in the city and maps the locational patterns of high, middle, or low housing affordability within this sector.

China’s Regional Strategy and Challenges in East Asia – Joseph Y.S. Cheng

ABSTRACT: China has rapidly developed a sophisticated regionalism strategy in East Asia. Minimising the region’s “China threat” perception has been a significant consideration in this strategy. Unfortunately, the ongoing escalation of tension concerning territorial disputes over the Diaoyutai / Senkaku Islands and the South China Sea, initiated by a series of high-profile naval exercises in the latter half of 2010, has reinforced the “China threat” perception and bolstered the hedging strategies of countries in the region. China is aware of its relative disadvantage, and it has been keeping its options open while allowing ASEAN to maintain the initiative.

 

国五条细则比较

自2013年起,中国大陆各地开始实施「国务院常务会议的五项加强房地产市场调控的政策措施」,简称国五条,主要内容包括:

  1. 要求各级城市要按照保持房价基本稳定的原则。
  2. 严格执行商品住房限购措施,在各城市中规划限购区域、限购住房类型、购房资格审查等方面,按统一要求完善限购措施。
  3. 增加普通商品住房及用地供应。
  4. 加快保障性安居工程规划建设。全面落实2013年城镇保障性安居工程基本建成470万套、新开工630万套的任务。
  5. 加强市场监管。加强商品房预售管理,严格执行商品房销售明码标价规定。

而从2013年2月起,中国大陆各级城市开始推出国五条的细则,以下为我们整理出各城市的国五条细则摘要:

限購令比較

数据来源: 《北京市人民政府办公厅贯彻落实”国务院办公厅关于继续做好房地产市场调控工作的通知” 精神进一步做好本市房地产市场调控工作的通知》、《昆明市人民政府办公厅关于继续做好房地产市场调控工作的通知》、《上海市人民政府办公厅关于继续做好房地产市场调控工作的通知》、《重庆市人民政府办公厅关于继续做好房地产市场调控工作的通知》

Gentrification in Peking and Paris (I)

Haussmann

“We sense that it is to no purpose to regret the old Paris now, the historical and thinking Paris, whose last exhalations we are now witnessing; the artistic and philosophical Paris (…) where there were once groups, neighbours, neighbourhoods, traditions; where expropriations did not constantly trouble old relationships and the most cherished habits, where the artisan, who is now barred from the city centre by a merciless system, used to live next to the financier (…) Our eyes are full of tears, crying for this old Paris, especially when we see the intolerable “hotellerie”, the expensive confusion, the triumphant vulgarity, the terrible materialism that we are to bequeath to our nephews (…)”

This is an extract from one of the articles written by the journalist Jules Ferry in “Les comptes fantastiques d’Haussmann”. He denounces the colossal work to renovate Paris that was undertaken by Baron Haussmann during his 17 years as prefect of the city (1853-1870). The rebuilding of the city continued well after the end of the Second Empire under the direction of Haussmann’s collaborators, as Haussmann himself was dismissed following the severe criticism he received from his contemporaries. This renovation of Paris was probably the most dramatic of all the transformations the city has undergone to date. Paris had hardly changed for almost three centuries. Modernization brought gas lighting, wide avenues, clean water, modern sewage treatment, trees, public parks, fountains, hospitals, to name but a few changes.

After reading this extract one cannot help but reflect on the disadvantages of the phenomenal transformations that Chinese cities have undergone during the last two decades, in particular the capital, Beijing. In terms that remind us of July Ferry, some of the residents who lived in the thousands of hutong that were once the heartbeat of the city, and are now disappearing, lament their displacement from their inner-city neighbourhoods: “Nowadays, people say that high-level cadres live around the second ring road, while paupers live around the sixth ring road (…).1 It has been calculated that by 2007, approximately 1.5 million Beijing residents had been relocated to suburban areas as a consequence of the rebuilding of the city.2 Many officials are offering words of warning regarding the destruction of the historic architectural heritage: “The traditional streets and ancient buildings are disappearing under the bulldozer”.3 Likewise, the NGO Beijing Cultural Heritage Protection Center is working to raise awareness and help protect the cultural heritage (http://en.bjchp.org).

Hutongs (Drum and Bell tower neighbourhood), Elosua Miguel

This zoning of social classes or sociospatial reorganization as a result of urban redevelopment is a common feature in both the case of 19th century Paris and modern Beijing. Insufficient compensation prevents residents from staying in central Beijing. Gated compounds where non-residents are excluded likewise proliferate downtown. In Paris, rising rents also drove workers out of the city. It has been said that Haussmann wanted to place populations that were likely to revolt in areas outside of Paris (the city had a turbulent history of revolts, the last one just a few years before the renovations began). The working classes were forced to move to areas ignored by the renovation work. In Beijing, on the contrary, displaced residents have generally seen their housing quality improved, because they have usually moved into newly-built residences which, although far from the city centre, are modern and comfortable.

Obviously, there is also much dissimilarity in the urbanization of 19th century Paris and that of Beijing. In particular, Beijing’s rate of urbanization was only 20% in 1986. It had an urban population of less than one million at that time. Rural counties that served as its food basket made up the greatest part of the city area.4 Paris renovation works, on the other hand, were mainly carried out in the heart of the city. The city’s expansion has always been restrained by its enclosures; it has pushed out beyond only six enclosures in eight centuries, all the while maintaining its circular shape.5

(The second part of the article will be published next Friday)

  1. Hyun Bang Shin (2008) Residential redevelopment and social impacts in Beijing, Wu Fulong, (ed.) China’s emerging cities: the making of new urbanism. Routledge contemporary China series. London, UK []
  2. Campanella, Thomas (2008) The Concrete Dragon. Princeton Architectural Press []
  3. Shan Jixiang, director of China’s State Administration of Cultural Heritage, Xinhua News Agency. June 2, 2006 []
  4. Victor F. S. Sit (2009) Chinese City and Urbanism, Evolution and Development, World Scientific []
  5. Eric Hazan (2002), L’invention de Paris, Editions du Seuil, Paris []

China Housing Development Report (2012-13)

In December 2012, the National Academy of Economic Strategy, at the Chinese Academy of Social Sciences (CASS) published the China Housing Development Report (2012-13), edited by Ni Pengfei, an UrbaChina member and Director of the Urban and Real Estate Economy Research Unit in the Institute of Finance and Trade Economics at the Chinese Academy of Social Sciences.

During the online press conference for China Housing Development Report (2012-13), Professor Ni summarized the report in five key points:

  1. In 2012, investment growth in Chinese real estate fell behind that of 2010 and 2011. The growth rate in housing investment between January and October 2012 was 15.7%, whereas the 2011 rate was approximately 30%. In 2012, there was a 7.7% increase in the macroeconomic situation in China. In other words, despite a 15% decline in housing investment, China’s economy, on the whole, rose by 7.7%. This suggests that the macroeconomic situation in China was temporarily released from its overdependence on the real estate market.
  2. Unlike the country’s per capita income, which steadily increased, property prices dropped significantly in 2012, which shows that, compared to the progressive overall economy, housing prices experienced a downward trend.
  3. Generally, the 2013 housing market is tipped to progress smoothly despite some small oscillations. However, macroeconomic management must be carried out satisfactorily, lest housing prices in some cities continue to rise while those in other cities fall, which would put the country’s economy on the edge of a collapse.
  4. The goal of the real estate sector in 2013 is to avert a sharp rise, followed by a severe plunge, in the housing market.
  5. The 2013 the real estate market must be strictly regulated.

At the end of the report, Professor Ni made some recommendations. Among them were: inflicting harsh punishment on those responsible for rumours and speculation in the housing industry, enforcing a policy for setting purchase quotas, ending the pre-sale system in housing and stemming the excessive increase in what were, previously, low housing prices.

Reference: Ni Pengfei 倪鹏飞 (2012),  Zhongguo zhufang fazhan baogao中国住房发展报告 , Social Science Academic Press.

Managing the development of underground shopping malls

High real estate prices in Chinese cities have led land developers to look into the possibilities provided by underground space. Yu Ronghua, Chen Zhilong (University of Science and Technology of Nanjing) and Ye Quanyi1  describe the new underground shopping malls that have been built in China, but point out that this model is not always successful and vacancy rates are still quite high in many cases.

According to the authors, the opening of underground shopping centres is a consequence of the new utilization of underground space. Many of these shopping malls were actually military facilities, but civil defence air-raid shelters have become unnecessary in a peaceful environment. Because of high real estate pressure, these facilities have been transformed into commercial units. The creation of new subway lines in China’s large cities has also increased the amount of available underground space. Nevertheless, despite rapid urbanization, some underground malls remain partially empty.

For land developers, underground shopping malls can be a golden opportunity, as the developers do not have to pay land use rights and are also exonerated from land appreciation taxes. Despite these advantages, not all projects are successful, and vacancy rates can be quite high in some underground shopping malls. This can, of course, be attributed in some cases to external factors such as a poor choice of location, but the authors place the blame primarily on mismanagement of underground spaces and short-sightedness on the part of land developers. After receiving operation rights from the government, land developers sell these rights to individual shop owners – at a huge profit.  But individual shop owners do not have the experience and financial resources to develop their activities. By selling operation rights to multiple owners, instead of leasing them, land developers lose control over the management of the underground shopping malls; this leads to the duplication of shops and a lack of cohesion in the shopping centres – and ultimately, high vacancy rates.

The authors believe that the failure of underground shopping malls can be explained by the absence of a national set of regulations governing these shopping centres: cities and provinces have different rules. The authors also argued that without uniform regulations, the sale and management of underground spaces remain opaque. A national regulation limiting the sale of operating rights to individual shop owners might be one possible solution to this problem.

Another issue, which this article does not fully address, is the continuing interests of the army in underground construction. It seems obvious that these underground shopping malls are (thankfully) very unlikely ever to be used again as air-raid shelters.  This being the case, why does the army still intervene in this sector? This only makes the issue of underground construction even more opaque. It also creates a situation of unfair competition between those who have developed their programmes through acquisition from municipal governments (and are thus subject to municipal regulations), and those who have received operation rights from the army (and thus are not subject to any regulations).  The ownership of underground space should be transferred to urban local governments, who will then put out tenders for underground development projects.

The authors call for a clarification of the policies regulating the sale and management of underground spaces. There should be no distinction between underground shopping malls and other shopping centres.  Local government authorities should not be directly involved in land development, but should better monitor this sector. The authors also warn local governments about the scarcity of underground spaces, and the possible consequences of underground construction on the environment: underground construction should be better planned, and this task should be performed by local authorities.

We fully agree with the authors that the underground land development sector must be made more transparent, and thus more efficient.  In our view, the Chinese authorities should look at what has been done in Hong Kong, where MTR, the company in charge of the subway network has developed successful underground commercial complexes along the lines it manages. This experience may be useful for the future of underground shopping malls in China.

Finally, it will always be in a city’s interests to strictly manage underground construction, as a poorly managed shopping centre will affect its image. If a shopping mall is half-empty, with closed shops, consumers will look for another place to take their custom; this will have consequences on other local shops, thus devitalizing an entire district. We join the authors of this article in appealing to local governments to focus on the regulation and planning tasks before them.

  1. YU Ronghua, CHEN Zhilong, YE Quanyi (2011). Research on Development Pattern of Underground Shopping Malls in China. Management Science and Engineering, 5-4, 16-20. http://www.cscanada.net/index.php/mse/article/view/j.mse.1913035X20110504.1888 (accessed January 20, 2013)  []

袁志刚教授谈「土地指标交易对于新型城镇化的意义」

此篇内容经袁志刚教授同意转载,转载自袁志刚教授的博客 

产权分离、自由交易的机制是我国改革开放三十年来的关键经验,也是社会主义公有制与市场机制达成的有效平衡。通过将土地使用权剥离出来,至今已形成了国有土地使用权市场和农地承包经营权市场,迅速提升了用地效率,也支撑了我国二十余年的快速城市化。然而,随着城市存量用地逐渐开发殆尽,地区经济增长和城市发展愈发依赖和受制于土地供应,这是未来中国城市发展必须破解的困境。

近年来,浙江、安徽、成都、重庆等地开展的土地指标交易再一次实践了产权分离、自由交易的逻辑。首先来看看故事发生的背景。我国通过土地规划实行严格的土地用途管制,指标控制是主要的手段。土地指标,即农地转为城市建设用地指标,是地方政府在规划期内能够征收的农地的上限。这个指标是由国家至省、省至市县层层分解的,具有典型的计划经济特征。行政手段配置资源的常见后果是资源错配:由于区域经济发展不平衡,发达地区的指标往往不够用,而欠发达地区往往因指标富余而粗放利用土地。因为土地资源是城市发展的重要动力,土地指标对于地方政府的重要性不言而喻。所以地方政府开始想法设法扩大可以动用的土地指标,最近沸沸扬扬的“农民被上楼”、“周口平坟事件”都是在上述背景下矛盾的集中爆发。

土地用途管制并非我国所独有,发达市场经济国家的土地用途管制的严格程度比起我国来,有过之而无不及。为了消解管制的负外部性,美国、英国等已经构建出一套相当规范的土地发展权转移制度,也就是将一块土地进行非农开发的权利(发展权)通过市场机制转移到另一块土地,从而保障土地所有者的权利。这种发展权转移制度与我国实践的土地指标交易有相通之处。上世纪90年代末开始的地区土地指标交易探索有很多叫法,如“折抵指标有偿调剂”、“基本农田易地代保”、“易地补充耕地”、“土地产权交易”、“地票”等等。在本质上,都是建立了一个土地附加产权市场:将土地进行非农开发的权利(土地指标)从土地产权束中剥离出来,形成跨区域市场,发达地区购入指标获得城市扩张所需的土地资源,欠发达地区卖出指标获得经济发展所需的资金。如此可消解土地指标在不同地区的刚性约束,促成资源有效配置,有助于实现区域结构优化和区域经济均衡。

十八大提出的新型城镇化战略意味着未来中国将发生大量农村人口转移,进城定居资本是搁在这些新城市人面前的首要问题。除了承包的农地之外,农民的手中最大的财富是宅基地房。在宅基地买卖受限的情况下,如何让这个固定的房产、地产流动起来,装入进城农民的口袋呢?土地指标交易平台的搭建可以在用途管制的前提下,让资产流动起来。具体地,进城农民的宅基地复垦为农地,农地承包权还归农户,但是可以合法有偿流转,这是一笔财富;节约下的土地指标可以买卖流通,这又是一笔财富。如此,可成全人、地两方面的跨区域流动。

然而,目前各地区的土地指标交易实践还存在不少致命伤,这也是中央在推广土地指标交易上犹豫不决的主要原因。一是复垦土地的质量,如土壤肥力,难以监控,所以在机制设计上,需要解决如何让信息自动筛选出来的问题。如保留部分指标费作为指标卖出地区的保证金,以复垦农地的年产出为衡量标准或许是可行的办法;二是如何确保地方政府不越权,如浙江等地是政府定价土地指标、主导买卖,存在压价的问题。因此,必须要构建公开、透明的交易平台,确保政府之手仅限于组织、管理和监督,余下的工作,靠市场之手自动平衡。

袁志刚教授近期出版书籍包括: «城乡统筹劳动力市场建设与国家竞争力研究», «中国居民消费前沿问题研究» 等书,其他有关袁志刚教授的著作请点击此连结

Chengdu’s gigantic building

Sebastien Blanc (2012, December 21). China is building a structure 20 times bigger than the Sydney Opera House. Business Insider.

A thousand kilometres from the nearest coast a towering glass wave rolls over  the plains of Sichuan, the roof of what Chinese officials say will be the  world’s largest standalone structure.

The 100-metre-high “New Century Global Centre” is a symbol of the spread of  China’s boom, 500 metres long and 400 metres wide, with 1.7 million square  metres of floor space, big enough to hold 20 Sydney Opera Houses according to local authorities.

By comparison the Pentagon in Washington — still one of the world’s largest  office buildings — is barely a third of the size with a mere 600,000 square  metres of floor space.

The Global Centre is just a few kilometres from the US consulate where the  police chief of Chongqing fled to seek asylum, triggering the fall of his patron  Bo Xilai and exposing the biggest scandal to rock China’s Communist Party for  years.

But it represents a different side of China, where lower costs and government  subsidies are still fuelling double-digit growth in Chengdu, the capital of  Sichuan province.

The city of 14 million people plans to expand its subway from two lines to 10  by 2020, build a new airport and become a new Silicon Valley.

The Global Centre will house offices, conference rooms, a university complex,  two commercial centres, two five star hotels, an IMAX cinema, a “Mediterranean  village”, a skating rink and a pirate ship, among other attractions.

About 400,000 square metres will be devoted to shopping, most of the outlets  high-end luxury brands.

Despite Chengdu being around 1,000 kilometres from the sea the complex has a  marine theme, with fountains, a huge water park and an artificial beach,  accented by the undulating roof, meant to resemble a wave.

“This is an ocean city built by man,” said guide Liu Xun. “There will be  1,000 rooms (in the hotel) and all will have seaside views.”

 Full text available on Business Insider: http://www.businessinsider.com/new-century-global-centre-chengdu-china-2012-12