a transitional city: the case study of shenzhen, china 1980-2005

A Transitional City:A Transitional City:the Case Study of Shenzhen, the Case Study of Shenzhen,

ChinaChina1980-20051980-2005

Liou XIE Liou XIE 謝里歐謝里歐Supervisor: Prof. Victor F.S. SitSupervisor: Prof. Victor F.S. Sit

The University of Hong KongThe University of Hong Kong

December 2007December 2007

International Conference on China’s Urban Land and Housing in the 21st Century, HKBU

22

ContentsContents

I.I. IntroductionIntroduction

II.II. Review of China’s Post-reform Review of China’s Post-reform DevelopmentDevelopment

III.III. Methodology and DataMethodology and Data

IV.IV. Transitional Drivers and their Impacts on Transitional Drivers and their Impacts on Shenzhen's Post-transition DevelopmentShenzhen's Post-transition Development

V.V. Transformations of Land Use PatternTransformations of Land Use Pattern

VI.VI. ConclusionConclusion

33

I. IntroductionI. Introduction

Transitional City:Transitional City:

CCities in countries that were formally under ities in countries that were formally under socialist ideology, but have then abolished state-socialist ideology, but have then abolished state-Socialism or launched reforms to loosen the one Socialism or launched reforms to loosen the one party control and have started to rely more on party control and have started to rely more on market mechanisms.market mechanisms.

44

I. IntroductionI. Introduction

Research Questions:Research Questions:

What are the key drivers of Shenzhen’s transitional What are the key drivers of Shenzhen’s transitional development? What are their impacts on Shenzhen’s urban development? What are their impacts on Shenzhen’s urban growth?growth?

How has the urban economy of Shenzhen been growing in How has the urban economy of Shenzhen been growing in the transitional era? How has urban land use been the transitional era? How has urban land use been expanding over the past twenty five years?expanding over the past twenty five years?

What are the characteristics of Shenzhen’s urban structure? What are the characteristics of Shenzhen’s urban structure? What are the differences between this structure and that of What are the differences between this structure and that of cities in socialist China before the transition?cities in socialist China before the transition?

Are there any differences between Shenzhen and the Are there any differences between Shenzhen and the contemporary transitional cities in Eastern Europe, as well contemporary transitional cities in Eastern Europe, as well as Western capitalist cities?as Western capitalist cities?

55

II. Review of China’s Post-II. Review of China’s Post-reform Developmentreform Development

Decentralization of powerDecentralization of power

Stability of political environmentStability of political environment

Reforms of land, housing and household Reforms of land, housing and household registration systemregistration system

Foreign Direct Investment: Global forcesForeign Direct Investment: Global forces

Market mechanismsMarket mechanisms

66

III. Methodology and DataIII. Methodology and Data

Government Reforms

FDI Changes

Urban Spatial Pattern

Urban Land UseStructure

Land Reforms

Not C

om

ple

ted

/Full

Marke

t

Housing Reforms

Population Changes

Changes of Urban Economy

77

IV. Transitional Drivers and their IV. Transitional Drivers and their ImpactsImpacts

Institutional and Policy Innovations:Institutional and Policy Innovations:– Start: a copy of the highly centralized and Start: a copy of the highly centralized and

unified management model of the socialist unified management model of the socialist administrative system of China since the 1950sadministrative system of China since the 1950s

– Seven rounds of government reforms: 1981-Seven rounds of government reforms: 1981-1982, 1983-1985, 1986-1987, 1988, 1991-1982, 1983-1985, 1986-1987, 1988, 1991-1993, 2001 and 2003-2004.1993, 2001 and 2003-2004.

– key characteristics:key characteristics: The first six rounds: streamlining government The first six rounds: streamlining government

organizations and stafforganizations and staff renovations of government function and relationship renovations of government function and relationship

between the government and enterprisesbetween the government and enterprises The seventh round in 2003: transformation from an The seventh round in 2003: transformation from an

administrative government to a service one administrative government to a service one

88


Policies and Changes of Land Market:Policies and Changes of Land Market:

– In 1988, In 1988, Regulations of the Shenzhen Special Economic Regulations of the Shenzhen Special Economic Zone on Land Management Zone on Land Management :: from allocation by the from allocation by the government, without conditions and free of charge to paid government, without conditions and free of charge to paid usage of land.usage of land.

– In 2001, the In 2001, the Provisions on Land Trading Market of Shenzhen Provisions on Land Trading Market of Shenzhen :: a tangible land market is established and all transactions a tangible land market is established and all transactions in land use right must take place publicly in the land market in land use right must take place publicly in the land market

– Channels of land acquirement:Channels of land acquirement: mutual agreementmutual agreement invited competitive biddinginvited competitive bidding public auctionpublic auction listing (started from 2004)listing (started from 2004)

99


Areas of Allocated Land in Shenzhen, divided by allocation Areas of Allocated Land in Shenzhen, divided by allocation methods, 1994-2004 methods, 1994-2004

0

2

4

6

8

10

12

14

16

18

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

km2

via agreement via competitive bidding via public auction

1010


Policies and Changes in Housing:Policies and Changes in Housing:– Focus: to change the form of allocation of housing Focus: to change the form of allocation of housing

from a physical allocation system to a from a physical allocation system to a monetarilized system.monetarilized system.

– Key events:Key events: In 1988, the In 1988, the Reform Scheme for housing in Shenzhen Reform Scheme for housing in Shenzhen

Special Economic ZoneSpecial Economic Zone : to achieve commercialization of : to achieve commercialization of housing housing

In 1989, the Shenzhen Housing Trading Center was In 1989, the Shenzhen Housing Trading Center was establishedestablished

A system of Housing Provident Fund was also established A system of Housing Provident Fund was also established in 1992in 1992

In 1999, the In 1999, the Several Provisions on the Form of Housing Several Provisions on the Form of Housing System for Government and Public Institutions in System for Government and Public Institutions in ShenzhenShenzhen

1111


– Generally, there are three types of houses now in Generally, there are three types of houses now in Shenzhen:Shenzhen: Policy-oriented housing: affordable housing (Policy-oriented housing: affordable housing ( 经济适用房经济适用房 ), ),

comfortable housing (comfortable housing ( 安居房安居房 ) and low rent housing () and low rent housing ( 廉租房廉租房 ).). Commodity-oriented housing: market commodity houses Commodity-oriented housing: market commodity houses

constructed by real estate developers and supplied for the constructed by real estate developers and supplied for the whole societywhole society

Others: Self-constructed housesOthers: Self-constructed houses– The per capita gross living space in Shenzhen had The per capita gross living space in Shenzhen had

improved from 6.6 mimproved from 6.6 m22 in 1980 to 18.3 m in 1980 to 18.3 m22 in 2005. in 2005.– In 2005, the total construction floor area was 245.4 million In 2005, the total construction floor area was 245.4 million

mm22:: 10%: capital construction, technical updates and 10%: capital construction, technical updates and

transformation (including policy-oriented housing)transformation (including policy-oriented housing) 25.5%: real estate developers25.5%: real estate developers 64.5%: other ways (including rural collective units, villagers’ 64.5%: other ways (including rural collective units, villagers’

own houses and other self-funded construction)own houses and other self-funded construction)– The SEZ had made a big stride in its transition from plan to The SEZ had made a big stride in its transition from plan to

market in housing provision. market in housing provision.

1212


Policies and Changes of FDIPolicies and Changes of FDI– Forms and industries of investment Forms and industries of investment – Favorable taxes Favorable taxes – Use of land Use of land – Sales of products Sales of products – Foreign exchange control Foreign exchange control – Other preferential policies Other preferential policies

1313


Total FDI and Contribution of FDI to GDP in Shenzhen, 1980-Total FDI and Contribution of FDI to GDP in Shenzhen, 1980-20052005

0

500

1000

1500

2000

2500

3000

3500

4000

1980 1985 1990 1995 2000 2005

mill

ion

US

D

0

5

10

15

20

25

30

35

%

FDI FDI/GDP

1414


Industrial Structure of FDI in Shenzhen, 1986-2005Industrial Structure of FDI in Shenzhen, 1986-2005

0%

20%

40%

60%

80%

100%

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Farming, Forestry, Animal Husbandryand Fishery

Industry

Geoglogical Prospecting

Construction

Transportation, Postal andTelecommunications Services

Commerce, Catering Services, MaterialsSupply, Marketing and Storage

Real Estate Management and SocialServices

Health Care, Sports and social Welfare

Education, Culture and Arts, Radio, Filmand Television

Scientif ic Research and PolytechnicalServices

Banking and Insurance

Government Agencies, Party Agenciesand Social Organizations

Others

1515


Policies and Changes of PopulationPolicies and Changes of Population– ““Floating City”: in 2005, 78% of the Floating City”: in 2005, 78% of the

total residents in Shenzhen were total residents in Shenzhen were holding temporary residence cards.holding temporary residence cards.

– Phases of population policy:Phases of population policy: 1980-1986: phase of 1980-1986: phase of no controlno control 1987-2001: phase of 1987-2001: phase of planned controlplanned control 2002-present: phase of 2002-present: phase of innovative reformsinnovative reforms

– Talents: mass and cheap labor Talents: mass and cheap labor high-high-tech talents tech talents management personnel management personnel

1616


Distribution of Employment in Shenzhen by Sector, in selected Distribution of Employment in Shenzhen by Sector, in selected years. years.

0%

20%

40%

60%

80%

100%

Tertiary Sector 24.16 32.21 41.77 41.83

Secondary Sector 69.76 66.01 56.97 57.72

Primary Sector 6.07 1.78 1.26 0.45

1990 1995 2000 2005

1717


Phase I Preparation: 1980-1985Phase I Preparation: 1980-1985 Phase II Taking-off: 1986-1995Phase II Taking-off: 1986-1995 Phase III Steady growth: 1996-2005 Phase III Steady growth: 1996-2005

Phase I Phase II Phase IIIPhase I Phase II Phase III

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V. Transformations of Land Use V. Transformations of Land Use PatternPattern

The settlements were The settlements were small in size and laid out small in size and laid out along the railway and along the railway and main roads, concentrated main roads, concentrated in the Luohu area.in the Luohu area.

The total population was The total population was only 0.31 million, with a only 0.31 million, with a total GDP of 196.38 total GDP of 196.38 million RMB.million RMB.

139,500 of people were 139,500 of people were with employment, 68% of with employment, 68% of which were laborers of which were laborers of town and village. town and village.

1919

V. Transformations of Land Use V. Transformations of Land Use PatternPattern

2020

IndustriIndustrial Land al Land Use:Use:

2121

IndustriIndustrial Land al Land Use:Use:

2222

ResidentiResidential Land al Land Use:Use:

2323

ResidentiResidential Land al Land Use:Use:

2424

CommerciCommercial Land al Land Use:Use:

2525

CommerciCommercial Land al Land Use:Use:

2626

Current Urban Structure of Current Urban Structure of ShenzhenShenzhen

2727

VI. ConclusionVI. Conclusion The decentralization of power has given the local The decentralization of power has given the local

government more decision-making authority and stimulated government more decision-making authority and stimulated the growth of a proactive government keen on improving its the growth of a proactive government keen on improving its development conditions and dealing with problems development conditions and dealing with problems encountered.encountered.

The land reform brought a large amount of revenue for the The land reform brought a large amount of revenue for the local government which enabled them to improve the urban local government which enabled them to improve the urban infrastructure for future and better development. At the infrastructure for future and better development. At the same time, it activated the real estate industry.same time, it activated the real estate industry.

The reform of household registration system allowed people The reform of household registration system allowed people to move from rural areas of China to the city of Shenzhen. to move from rural areas of China to the city of Shenzhen. While the reform of housing broke the connection of While the reform of housing broke the connection of employers with their work-units and allowed them to move employers with their work-units and allowed them to move to wherever they like within the city.to wherever they like within the city.

2828

VI. ConclusionVI. Conclusion As the key impetus of Shenzhen’s post-reform development, As the key impetus of Shenzhen’s post-reform development,

FDI brought with it the world’s advanced technologies and FDI brought with it the world’s advanced technologies and management skills as well as new viewpoints and lifestyles. management skills as well as new viewpoints and lifestyles. However, As the transitional urban economy of Shenzhen However, As the transitional urban economy of Shenzhen gradually matures, the significance of FDI and its gradually matures, the significance of FDI and its contribution to GDP has also declined. contribution to GDP has also declined.

The rise of CBD in the city center. Office and service The rise of CBD in the city center. Office and service function is increasing in CBD. Production activities are function is increasing in CBD. Production activities are decentralized to the outer ring, i.e. decentralized to the outer ring, i.e. guanwaiguanwai..

Sub-centers are formed in major transportation Sub-centers are formed in major transportation conjunctions, forming a multi-core system.conjunctions, forming a multi-core system.

2929

Contrasting Characteristics of the former Socialist City and Shenzhen, as a Transitional City of ChinaContrasting Characteristics of the former Socialist City and Shenzhen, as a Transitional City of China

Socialist Chinese City Socialist Chinese City Shenzhen, China Shenzhen, China

UrbanizationUrbanization - industrialization without urbanization- industrialization without urbanization- strict control over rural-urban migration- strict control over rural-urban migration- planned and controlled mass migration, such - planned and controlled mass migration, such as as shangshan xiaxiangshangshan xiaxiang

- Fast urbanization- Fast urbanization- reforms of the household registration - reforms of the household registration system loosened the strict control of system loosened the strict control of rural-urban migrationrural-urban migration- suburbanization- suburbanization

Urban Urban FunctionFunction

- production - production - consumption- consumption

Government Government FunctionFunction

- direct control of the development through - direct control of the development through central planningcentral planning- administrator - administrator

- proactive role of the urban - proactive role of the urban governmnetgovernmnet- indirect supervision- indirect supervision- service provider- service provider

Urban Urban EconomyEconomy

- Predominance of productive activities- Predominance of productive activities- Depression of non-productive activities, such - Depression of non-productive activities, such as commercial and service sectors, etc.as commercial and service sectors, etc.- No clear division of labor- No clear division of labor- a closed and self-sufficient system with high - a closed and self-sufficient system with high military concern.military concern.

- Growth of the tertiary sector.- Growth of the tertiary sector.- Rise of informal sector- Rise of informal sector- explosion of consumerism - explosion of consumerism

Urban Urban Spatial Spatial StructureStructure

- Urban planning and urban design, seeking - Urban planning and urban design, seeking optimum city size and urban structure (but optimum city size and urban structure (but actually, agglomeration became a major actually, agglomeration became a major characteristic)characteristic)- Characterized by squares and monumental - Characterized by squares and monumental places at the centreplaces at the centre- Great uniformities of spatial distribution- Great uniformities of spatial distribution- Community based on workplaces- Community based on workplaces

- the old commercial center and the - the old commercial center and the new CBD form the dual-center of the new CBD form the dual-center of the city.city.- a variety of buildings and - a variety of buildings and construction. Tall buildings change the construction. Tall buildings change the skyline of the city.skyline of the city.- polycentric- polycentric- Community based on residence - Community based on residence

Society Society /Urbanism/Urbanism

- less urbanism- less urbanism- the workers are highly dependent on their - the workers are highly dependent on their workplaceworkplace- elimination of the bourgeoisie - elimination of the bourgeoisie

- Changing from a socialist rank order - Changing from a socialist rank order to an emergent class-based to an emergent class-based stratification.stratification.- Reduction of workers’ dependency - Reduction of workers’ dependency on the workplaces on the workplaces

3030

Contrasting Characteristics of the Western Capitalist City, the Transitional City in the EE and Shenzhen, as a Transitional City Contrasting Characteristics of the Western Capitalist City, the Transitional City in the EE and Shenzhen, as a Transitional City of Chinaof China

Transitional City in the EE Transitional City in the EE Shenzhen, China Shenzhen, China Western Capitalist CityWestern Capitalist City

Dynamics Dynamics - “Big Bang” approach: abandoning the - “Big Bang” approach: abandoning the socialist ideology overnightsocialist ideology overnight

- market regulation - market regulation

- stable political environment with - stable political environment with the Communist Party remaining at the Communist Party remaining at the center of powerthe center of power

- non-complete market mechanism - non-complete market mechanism

- Market Forces- Market Forces

- democratic political - democratic political systemsystem

- advancement in - advancement in technologytechnology

TransformatiTransformation on

- fast and complete privatization- fast and complete privatization

- unregulated market mechanism- unregulated market mechanism

- deindustrialization- deindustrialization

- economic globalization- economic globalization

- housing reforms- housing reforms

- land and housing reforms- land and housing reforms

- emergence of market forces- emergence of market forces

- loosen control of rural-urban - loosen control of rural-urban migration migration

/ /

Urban Urban EconomyEconomy

- “vacuum period”- “vacuum period”

- not very much strong draw of foreign - not very much strong draw of foreign investmentinvestment

- street trading - street trading

- Growth of the tertiary sector.- Growth of the tertiary sector.

- Rise of informal sector- Rise of informal sector

- explosion of consumerism- explosion of consumerism

- street trading- street trading

- predominance of tertiary - predominance of tertiary sector, particularly sector, particularly producer services. producer services.

Urban Form Urban Form - compact, with slightly less - compact, with slightly less homogeneityhomogeneity

- Western style CBD- Western style CBD

- a zone of mixed socio-economic - a zone of mixed socio-economic clustersclusters

- Subcenters are scattered in strategic - Subcenters are scattered in strategic locationslocations

- A large amount of agricultural land in - A large amount of agricultural land in suburban zone is turned into residential suburban zone is turned into residential and commercial usesand commercial uses

- Industrial activities are also - Industrial activities are also decentralized to the outer zone decentralized to the outer zone

- the old commercial center and - the old commercial center and the new CBD form the dual-center the new CBD form the dual-center of the city.of the city.

- a variety of buildings and - a variety of buildings and construction. Tall buildings change construction. Tall buildings change the skyline of the city.the skyline of the city.

- polycentric- polycentric

- decentralization of urban - decentralization of urban activities and suburbanization activities and suburbanization changed agricultural land use in changed agricultural land use in the outer zone the outer zone

- CBD, as the hub for - CBD, as the hub for commercial, social, political commercial, social, political and cultural lifeand cultural life

- residential segregation- residential segregation

- suburbanization- suburbanization

- polycentric - polycentric

Society Society /Urbanism/Urbanism

- Changing from a socialist rank - Changing from a socialist rank order to an emergent class-based order to an emergent class-based stratification.stratification.

- Reduction of workers’ - Reduction of workers’ dependency on the workplaces dependency on the workplaces

- personal choices- personal choices

3131

DiscussionsDiscussions In this study, the characteristics of Shenzhen as a transitional Chinese In this study, the characteristics of Shenzhen as a transitional Chinese

city have been summarized. However, due to the time limitations and city have been summarized. However, due to the time limitations and research scope, we have not the opportunity to further investigate research scope, we have not the opportunity to further investigate social aspects of Shenzhen as a transitional city. social aspects of Shenzhen as a transitional city.

Comparisons of the transitional city of Shenzhen, Eastern Europe and Comparisons of the transitional city of Shenzhen, Eastern Europe and the Western capitalist cities shed some light on the differences the Western capitalist cities shed some light on the differences between these cities. The analysis is rather superficial due to the lack between these cities. The analysis is rather superficial due to the lack of availability of data in the literature and materials. However, this of availability of data in the literature and materials. However, this topic is of importance and requires further investigation in future.topic is of importance and requires further investigation in future.

Shenzhen may not be a typical example of the Chinese transitional Shenzhen may not be a typical example of the Chinese transitional cities. However, it serves as an individual case of the contemporary cities. However, it serves as an individual case of the contemporary Chinese city.Chinese city.

This is a pioneering study on exploring the characteristics and This is a pioneering study on exploring the characteristics and distinctions of a specific transitional city in a rapidly-developing distinctions of a specific transitional city in a rapidly-developing China. We have achieved our purposes as set out in the research China. We have achieved our purposes as set out in the research plan.plan.

In turn, it shows that similar case studies on other cities in transitional In turn, it shows that similar case studies on other cities in transitional China are needed. Hopefully, with these additional efforts, we may China are needed. Hopefully, with these additional efforts, we may arrive at a better understanding of the Chinese contemporary cities arrive at a better understanding of the Chinese contemporary cities as a new type of city.as a new type of city.

a transitional city: the case study of shenzhen, china 1980-2005

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