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The causal structure of land finance, commercial housing, and social housing in China

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  • Chenghua Jin
  • Mack Joong Choi

Abstract

China has implemented the dual housing supply system consisting of commercial housing provided by the private sector and social housing provided by the public sector. Since commercial housing and social housing are mediated by the land finance of local governments, however, an increase in the supply of commercial housing contributes to the income of the land finance, which may, in turn, increase the public expenditure on the supply of social housing. Though the supply of commercial housing has increased and the size of the land finance has expanded in the process of rapid urbanization in China, however, statistics do not support that the supply of social housing has increased in proportion to the supply of commercial housing. The purpose of this paper is to empirically analyse the relationship among commercial housing supply, social housing supply, and the land finance in order to verify whether the two housing types are in the indirect, complementary relationship mediated by the land finance or in the direct, substitutive relationship. The cross-sectional data is used across 274 cities in China, based on the annual average values between 2009 and 2014 regarding each city's size of land finance and the amount of land supplied for construction purposes, which includes commercial housing and economic comfortable housing. By the path analysis results that commercial housing and ECH are not in the complementary relationship mediated by the land finance, but in the substitutive relationship as they have to compete each other to secure the limited land resources.

Suggested Citation

  • Chenghua Jin & Mack Joong Choi, 2019. "The causal structure of land finance, commercial housing, and social housing in China," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 23(2), pages 286-299, April.
  • Handle: RePEc:taf:rjusxx:v:23:y:2019:i:2:p:286-299
    DOI: 10.1080/12265934.2019.1568285
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    Citations

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    Cited by:

    1. Xinhai Lu & Mingxu Bai & Bing Kuang & Danling Chen, 2021. "Unlocking the Relationship between Land Finance and Regional Integration," Land, MDPI, vol. 10(9), pages 1-17, August.
    2. Kai Zhang & Yan Chen & Lifeng Wu, 2019. "Grey Spectrum Analysis of Air Quality Index and Housing Price in Handan," Complexity, Hindawi, vol. 2019, pages 1-6, November.
    3. Junhua Chen & Na Liu, 2022. "The impact of fiscal decentralization on the efficiency in social housing provision: Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3404-3418, December.
    4. Weiwei Li & Lisheng Weng & Kaixu Zhao & Sidong Zhao & Ping Zhang, 2021. "Research on the Evaluation of Real Estate Inventory Management in China," Land, MDPI, vol. 10(12), pages 1-29, November.
    5. Ziqi Zhou & Yung Yau, 2021. "The Small Property Rights Housing Institution in Mainland China: The Perspective of Substitutability of Institutional Functions," Land, MDPI, vol. 10(9), pages 1-19, August.
    6. Xiaotong Li & Ying Li & Jinlan Ni & Jia Yuan, 2022. "Master development, land appreciation, and government finance: Evidence from the Disney project in Shanghai," Papers in Regional Science, Wiley Blackwell, vol. 101(4), pages 1027-1046, August.
    7. Xiaoying Bai & Wenheng Wu & Limeng Liu & Wanying Shang & Haixia Dong, 2024. "Spatio-Temporal Evolution and Implications of Urban Residential Space Based on the New Commercial Housing in Xi’an, China, 2006–2022," Sustainability, MDPI, vol. 16(19), pages 1-21, September.
    8. Peihong Wang & Kerun Li & Wenbing Zhang, 2024. "China’s New Housing Security Model: Evaluation of the Job–Housing Balance in Affordable Rental Housing, Shanghai," Land, MDPI, vol. 13(7), pages 1-26, July.
    9. Bowen Zhang & Weimin Guo & Zhaolian Xing & Ren Zhou, 2022. "Current Situation and Sustainable Renewal Strategies of Public Space in Chinese Old Communities," Sustainability, MDPI, vol. 14(11), pages 1-20, May.

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