Redeveloping collective land in urban China : transitional institutions, negotiation process, and planning effectiveness

Abstract

The redevelopment of collective land in Chinese cities has reached a deadlock under the traditional public mode of state expropriation. Therefore, with the support of the central government, some cities have carried out institutional innovation and proposed land redevelopment modes that increased private sector participation. However, Shenzhen is the only city that has adopted both an innovative public mode (i.e., government-led land readjustment) and a private mode (i.e., market-driven urban renewal) to achieve large-scale collective land redevelopment. The following questions are raised: 1) What are the key motivations for the government to adopt a public mode when a private mode coexists? 2) Which mode leads to better governance outcomes regarding effectiveness and efficiency? 3) What are the key factors and how do they affect the outcomes? This study addresses the following deficiencies in the existing literature: 1) lack of systematic comparison of public and private modes under a public leasehold land system; 2) underexplored effects of land redevelopment modes on effectiveness and efficiency; 3) limited understanding of the interplay between land redevelopment modes, planning rules, value capture mechanisms and key stakeholders’ behaviours, and their combined impacts at the project level; 4) lack of quantitative analysis. It not only attempts to reveal the governance transformation of land redevelopment in Chinese cities, but also joins the international discussion on the comparison of land redevelopment modes. Based on the quantitative analysis of all the projects that accomplished land assembly between 2012 and 2020 in Shenzhen, and a detailed comparison of redevelopment processes between two projects under the two modes respectively, the following conclusions were drawn. First, the public mode in Shenzhen was driven by the government’s intention to acquire more land to generate land revenue and better control land supply, reflecting path dependency of Chinese local governments in managing land redevelopment. Second, in terms of implementing public projects, the public mode is not necessarily more effective than the private mode. Its effectiveness is largely affected by the government’s primary goals and actual control over land redevelopment. Under the public mode, local governments pursue more land rather than implement public projects, while strong statutory control over development and appropriate incentives help achieve comprehensive public goals under the private mode. Third, a quantitative comparison of the efficiency of the two modes combined with planning impacts shows that government-led land readjustment makes better use of public financial resources than market-driven urban renewal. Fourth, compared with the private mode, the government’s deep participation and exclusion of private developers at the early stages of land redevelopment in the public mode, enhance the government’s bargaining power, leading to higher levels of public value capturing and stronger control over planning. These effects are achieved through changes in information and coalitions among key stakeholders. Fifth, the institutional arrangements at the operational level such as land assembly, plan-making, planning approval and decentralisation policies were interrelated and systematically determined. These factors jointly influence public value capturing and planning control.