Fubing Su

Land Leasing and Local Public Finance in China’s Regional Development: Evidence from Prefecture-level Cities

By analysing the evolution of local governments’ roles in different periods of China’s growth in transition, this paper explores local fiscal incentives to use subsidised land and infrastructure as key instruments in regional competition for manufacturing investment since the mid 1990s. Local land development behaviour is related to China’s current land use institutions and intergovernmental arrangements. On the basis of panel data covering prefectural-level cities from 1999 to 2003, the paper empirically identifies and compares the fiscal impacts of different forms of land leasing (by negotiation versus by auction/tender). Policy implications are drawn from this analysis, for the further reform of China’s urban land system and fiscal institutions.By analysing the evolution of local governments’ roles in different periods of China’s growth in transition, this paper explores local fiscal incentives to use subsidised land and infrastructure as key instruments in regional competition for manufacturing investment since the mid 1990s. Local land development behaviour is related to China’s current land use institutions and intergovernmental arrangements. On the basis of panel data covering prefectural-level cities from 1999 to 2003, the paper empirically identifies and compares the fiscal impacts of different forms of land leasing (by negotiation versus by auction/tender). Policy implications are drawn from this analysis, for the further reform of China’s urban land system and fiscal institutions.

Rural Housing Consumption and Social Stratification in Transitional China: Evidence from a National Survey

Safe and affordable housing is accepted as a basic right in the modern world. Studies on transitional societies have demonstrated how politicized the housing market can become and how housing consumption is determined by both economic forces and public rules. Rural housing in China offers a unique institutional environment. While residential land is collectively owned and allocated, villagers have the freedom to make decisions with regard to construction space. Drawing on a large national survey, this paper provides the first systematic analysis of the consequences of these different institutional rules. In terms of housing resources, residential land is distributed in a relatively equitable fashion, but the building of structures on that land is defined by a higher degree of social stratification. These findings extend the current literature and confirm the power of institutional rules in housing consumption.

State Fragmentation and Rights Contestation: Rural Land Development Rights in China

The functionalist reasoning of institutional changes builds on individual rationality and explains institutional changes from the demand side. While insightful, a comprehensive understanding also needs to take into account the supply side. The state, as the ultimate supplier of institutional changes, plays the pivotal role of agency; therefore, its willingness and ability decide how such regime change occurs and what particular form the new regime takes. Since the mid-1990s, the Chinese economy has embarked on a path of rapid industrialization and urbanization. The contestation over rural land development rights in China offers an excellent case to illuminate the importance of state agency in institutional changes. Drawing on case studies in Chinas three major urbanizing regions, this article analyzes how villages brought their own land directly to the land market and reaped handsome profits. We argue that the three successful cases, Nanhai in Guangdong, Kunshan in Jiangsu and Zhenggezhuang in Beijing, all represent a product of active agency on the supply side. The Chinese states fragmented authority provides a favorable institutional environment for such changes.

The China model withering? Institutional roots of China’s local developmentalism

China’s new development wave since the mid-1990s is distinguishable by its strong urbanism. Urban governments, particularly at municipal and county levels, rushed to build industrial parks. Urban landscape was also fundamentally transformed by their massive investments in infrastructures – both residential and commercial properties. How to explain local governments’ continuing drive for development? Why has this particular policy combination gained traction among local officials? We approach these questions by making a simple assumption about local governments as revenue maximisers. Their desires for more revenues are constrained by two institutional changes. Vertically, the central government recentralised the fiscal system, leaving local governments in fiscal shortages. Liberalisation and regional competition in the late 1990s further exacerbated their revenue imperative. The land regime provided the final institutional link that enabled local officials to leverage urban infrastructure and real estate for industrial expansion. This study can shed some light on the ongoing debate about China’s development model in the urban literature.

Grain Procurement, Tax Instrument and Peasant Burdens during China's Rural Transition

In this paper, we argue that Chinas grain procurement system as a major instrument in rural taxation survived the communes and lost its importance only gradually in recent years. However, as agricultural liberalization progressed, the traditional tax instruments of ‘tax deduction prior to grain procurement payment’ and implicit taxation through ‘price scissors’ gradually eroded. Under such a circumstance, local governments in agriculture-based regions resorted to informal fees collected directly from individual rural households while the more industrialized regions shifted to non-agricultural taxes that are less costly in terms of tax collection. Empirical evidence based on a large panel data set supports our hypotheses of rural taxation in China.

China and Natural Resource Curse in Developing Countries: Empirical Evidence from a Cross-country Study

Chinas rising demand for natural resources and its growing presence in many poor and resource-rich countries have been criticized for promoting neo-colonialism in the 21st century. Using panel data for 135 developing countries from 1995 to 2007, the present paper empirically evaluates the validity of such claims. Our findings do not support the resource curse thesis in the areas of industrialization and economic growth. Moreover, the effect of resources is conditional on the initial quality of political institutions in a country.