The secondary circuit of capital and the making of the suburban property boom in postcrisis Chinese cities

Abstract

Drawing on Harvey’s capital switching thesis, this study develops a heterodox approach from a crucial perspective to China’s post-2016 nationwide property boom. We trace the roots of this suburban property boom to the 2008 global financial crisis and investigate its nature as a solution to China’s post-2008 overaccumulation crisis. By scrutinising the serial policies formed at the central level, we unpack the continuous endeavours of the state in channelling excessive capital into city building and sustaining capital circulation in and out of land. Next, using Jiangyou as a case study and adopting Harvey’s theorisation of making the suburban property boom a state-mediated sociopolitical process to enable the realisation of surplus value in the secondary circuit of capital, we reveal why and how the local state collaborated with the central state, financial institutions and developers to create the suburban property boom. This study presents the actually existing secondary circuit of capital that occurred outside the Western context and in contemporary postcrisis capitalism and develops a state-centric approach to the secondary circuit of capital by bridging regulationist state theory and capital switch theory.