Reproducing urban space with over-drafted capital: mega-events, local debts, and spectacular urbanism in China

Abstract

Existing studies of the growth of Chinese cities and the escalation of local debts have been done in separation. This research examines the growth and transformation of Chinese cities in relation to the practice of hosting mega-events as a means of capital mobilization and the expansion of local debts. An investigation of Guangzhou, the host city of the 2010 Asian Games, has identified an interesting trajectory in which hosting mega-events has been actively pursued as a strategy of capital accumulation to stimulate infrastructure-driven urbanization. The municipal government has managed to mobile resources from commercial banks to finance infrastructure projects and foster urban spatial restructuring through the establishment of a series of local government financing platforms (LGFPs). Because land was used as the principle assets injecting into LGPFs and as collateral to obtain bank loans, the revenue generated from land sales has been of great significance to support LGPFs. However, the uncertainty of the real estate market has made land revenue volatile, and contributed to huge local debts. Findings of this research cast doubt over the long-term sustainability of China's event-driven urbanization and further advance theoretical understanding of the diverse trajectories of urban growth in the era of global urbanism.