Sociospatial Differentiation in Urban China: Evidence from Shanghai's Real Estate Markets

Abstract

Market-oriented economic reform has led to an increase in social stratification in urban China. The reform of state-owned enterprises has meant that millions of workers have been ‘laid-off’, while the emergence of a private sector is creating thousands of ‘new rich’. Little is known about the spatial implications of the reform. The huge contrast between commercially developed housing estates and dilapidated inner-city areas is easily seen. However, there is a lack of systematic understanding of the extent to which urban space is differentiated in postreform China. The main obstacle to this understanding is the lack of small-area demographic data. Moreover, spatial data at a high resolution often remain confidential and hence underutilised. The author uses data from Shanghai's real estate market to examine the spatial differentiation of housing prices, so as to shed light on the transformation of urban space. The pattern identified by the analysis of price distribution and the contribution of the environment to property price is remarkably similar to the mental images of ‘upper end’ and ‘lower end’ that are commonly used in Shanghai dialect. Based on this research, three implications are suggested. First, the foremost impact of housing commodification is the revitalisation of the presocialist spatial division, because the socialist transformation of the built environment is never complete. Second, further sociospatial differentiation brought about by commercial development will be built upon the continuation of urban fabric. Third, privatisation of real estate itself becomes a source of sociospatial differentiation, because through the real estate market households are able to capitalise properties that were not distributed equally during the socialist period.