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Land Financing-Led Urbanization in China: Evolution, Scale and Lessons

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  • Minquan Liu
  • Yuming Cui

Abstract

The role of land financing in China’s rapid urbanization and economic development in recent decades has been much debated. This paper reviews and discusses the emergence and evolution of land financing both as a source of revenue and as a financing vehicle for local governments in China, and the contribution it makes to rapid urbanization in the country through its impact on the real estate sector. Urbanization as a possible independent driver for a country’s economic development is also discussed, using China’s case as a concrete example. The paper further touches on the possible reference value of the Chinese case to other countries, taking into account both the preconditions for a successful land financing strategy, and inherent risks with such a strategy. The contribution of land financing to local governments’ debt burden in China, which has recently been an international concern, is also discussed.

Suggested Citation

  • Minquan Liu & Yuming Cui, 2023. "Land Financing-Led Urbanization in China: Evolution, Scale and Lessons," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 15(6), pages 1-54, June.
    • Handle: RePEc:ibn:ijefaa:v:15:y:2023:i:6:p:54
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    References listed on IDEAS

    as
    1. Hui Jin & Isabel Rial, 2016. "Regulating Local Government Financing Vehicles and Public-Private Partnerships in China," IMF Working Papers 2016/187, International Monetary Fund.
    2. Miss Yinqiu Lu & Tao Sun, 2013. "Local Government Financing Platforms in China: A Fortune or Misfortune?," IMF Working Papers 2013/243, International Monetary Fund.
    3. Peng Wang & Zinan Shao & Jian Wang & Qun Wu, 2021. "The impact of land finance on urban land use efficiency: A panel threshold model for Chinese provinces," Growth and Change, Wiley Blackwell, vol. 52(1), pages 310-331, March.
    4. Minquan Liu, 2011. "Understanding the Pattern of Growth and Equity in the People’s Republic of China," Development Economics Working Papers 23205, East Asian Bureau of Economic Research.
    5. Liu, Minquan, 2011. "Understanding the Pattern of Growth and Equity in the People’s Republic of China," ADBI Working Papers 331, Asian Development Bank Institute.
    6. Wen Wang & Fangzhi Ye, 2016. "The Political Economy of Land Finance in China," Public Budgeting & Finance, Wiley Blackwell, vol. 36(2), pages 91-110, June.
    7. Minquan Liu, 2011. "Understanding the Pattern of Growth and Equity in the People’s Republic of China," Macroeconomics Working Papers 23205, East Asian Bureau of Economic Research.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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