No abstract

China's urban land reforms are being implemented within a framework of general economic reforms which are gradualist in nature. Thus, the urban land reforms are moving step by step towards the establishment of a land market. This gradualism is developing in association with a redefinition of central-local intergovernmental relations in the reform era, and with the advent of localism. In this context, gradual urban land reforms have become an implicit programme to nurture local enterprises and developers, a means of fostering local government-enterprise coalitions and an instrument to strengthen local government's position in local development. During the systematic transition toward a socialist market economy, booming Chinese cities are formulating informal local 'urban regimes' to compete for local growth by capitalizing on financial gains derived from a dual market of urban land and property development. Copyright Joint Editors and Blackwell Publishers Ltd 1999.

Rules and order in urban construction, and thus the relationship between the market and the state, are a fundamental issue for urban development. In China, a transition economy, marketization has been actively promoted under the economic reforms to replace central‐planning and has contributed significantly to the subsequent dynamic urban growth. However, the role of the state in defining an institutional framework for the market is lagging behind. Fiscal deficiency in conjunction with a pro‐growth position undermines the capacity of the local developmental state to exercise effective developmental controls. Without effective state enforcement of rules, market order does not emerge when uncertainty pervades the marketplace. The phenomenon of urban villages and the case of Luohu's redevelopment clearly show that the absence of the state both in constructing the market and as a third‐party gives rise to the logic of the commons or quasi‐commons in the land development market. Inferior and suboptimal developments ensue. En construction urbaine, les règles et la discipline, donc le rapport entre marché et État, constituent un aspect fondamental de l'aménagement des villes. Dans l'économie de transition chinoise, la commercialisation – activement stimulée par des réformes économiques visant à remplacer la planification centrale – a énormément contribuéà la dynamique de la croissance urbaine. Toutefois, le rôle de l'État dans la définition du cadre institutionnel du marché ne suit pas le rythme. Carences fiscales associées à une position favorable à la croissance empêchent l'État local moteur de développement de contrôler efficacement la croissance. Sans une application étatique effective des règles, il ne naït pas de discipline de marché, l'incertitude régnant. Le phénomène des villages urbains et le cas du réaménagement de Luohu montrent clairement que l'absence de l'État, tant dans l'élaboration du marché qu'en tant que tiers, introduit la logique des terrains communaux ou quasi‐communaux sur le marché de l'aménagement foncier. Il en résulte des équipements de second ordre, inférieurs à la qualité optimale.

There has been a fundamental institutional change during the transformation from the centrally controlled system to a market-oriented economy in China since the early 1980s. The socialist land use right as an institution of the out-going central planning system became an obstacle to the emerging land market for urban redevelopment, although land leasing as a new institution had created a real estate market primarily for the development of greenfield sites. From a case study of a district in Shanghai, it is discovered that rapid urban land redevelopment since 1992 has been greatly facilitated by the informal institution of a land development right. The land development right unlocks the process of land redevelopment in the central city, while the existing land users' land use right is taken care of during the gradual transition. Land use efficiency is improved to a great extent through land redevelopment to uses of higher productivity. However, the informal and insecure institution of the land development right induces hasty land redevelopment. Assisted by a capricious land use planning regime, the land development right yields sub-optimal development. Clarification of property rights is the goal for further institutional change.

Property rights play a key role in maintaining sustainable growth and in achieving efficient development. China's economic reforms have stimulated urban physical development through the commodification and marketization of land-use rights and building construction. Property rights over urban land have been decentralized, but the gradualist reform of state assets has not assigned and delineated property rights clearly between the principal and agents. Within a short space of time, Shanghai, a city in a transition economy, is facing a great property glut for the first time in its history. It is the two-tier incentive structure that has created the dynamics of Shanghai's urban physical development since 1980. The marketization of buildings makes property development a viable business. Capitalization on valued properties in the open domain motivates key actors in the development process to initiate redevelopment projects. Rapidly rising price benchmarks established by the booming property market escalate the urge to transform rents in the unsecured public domain to physical assets that are protected by the socialist use right. Copyright Joint Editors and Blackwell Publishers Ltd 2002.