Funding China's Urban Infrastructure: Revenue Structure and Financing Approaches

Abstract

Urban infrastructure has become increasingly important in China with its rapid urbanization and economic development. However, many questions remain unanswered about how different levels of governments in China gather financial resources to fund its urban infrastructure development, and whether the system is sufficient or sustainable. This article examines financial resources for China's urban infrastructure investment in recent decades. First, the article traces the history of China's urban infrastructure investment since 1949. Second, using data mainly from the China Urban Construction Yearbook (2000–2008), it examines revenue structure and financial approaches for China's urban infrastructure finance, its recent trends and patterns, and disparities across provinces. Finally, the article evaluates unique characteristics of the China-style urban infrastructure investment, and discusses some issues regarding the use of quasi-governmental authorities and land transfer fees.