Land, Debt, and Socialist Market Economy of China

Abstract

Is China's development model an alternative to the Western model? The public ownership of land is the major character of the market economy of China. China's local governments take the land under their regional control as the startup asset, playing an active role in promoting China's industrialization and urbanization. One cannot understand China's model without understanding its development logic, involving land, debt, and local government. This chapter makes an in-depth observation the role of land and the financing based on land played in the cycle of capital flow that feeds China's development. Land financing is responsible for debt accumulation on the local government level, especially the period after the financial crisis of 2008. This chapter points out the paradoxical nature of China's dual-track system of land ownership and analyzes its inherent problems in the context of China's contemporary political-economic arrangement.