Impacts of land finance on urban sprawl in China: The case of Chongqing

Abstract

Uneven land reform and entangled land-use regulations are extensively regarded as the key to urban sprawl in large cities in China. Although the significance of land issues has been substantially recognized, conflicts regarding land finance seem to be a generally under-evaluated factor in explaining the phenomenon of urban sprawl. This study conducted an extensive literature research and proposed a conceptual framework to demonstrate the effects of land financial incentives on urban sprawl in China. Urban sprawl in China manifests in multiple forms, such as leapfrogged industrial parks, low-density residential communities that are discontinuous from existing urban centers, and chaotic peri-urban informal development. These forms of urban sprawl may be closely associated with failures in government and market forces under the land financial incentives. We used this framework to analyze the experiences of Chongqing and found that local governments have heavily relied on land finance through the proactive approach of land leasing. Stimulated by the incentives, Chongqing has accelerated its urban development beyond the existing restrictions of natural barriers and sprawled toward the peri-urban areas. The causes of urban sprawl were highlighted from the inherent impulses and conflicts of land finance, such as the oversupply of underpriced industrial land at the current loss of land finance, overreliance on the continuously increasing land finance from residential land, and fierce competition on slicing the pie of land finance through formal and informal means. The proposed framework and the challenges of anti-sprawl policies were also discussed.