Forging growth by governing the market in reform-era urban China

• China’s reform takes a gradual and partial approach.
• The fiscal and land use reforms urge local states to trigger growth by governing land use market.
• The state involvement supports urban growth but also generates distortions.
• Sustainable urbanism requires further reforms with clear orientation and holistic framework.

China’s accelerating urban growth over the past decade has been examined from the perspectives of state devolution or place-making initiatives. Relatively little has been written to contextualize the burgeoning urbanism in China’s reform and the resultant changing relationship between state and market. Through an investigation of fiscal and land use reforms since the mid-1990s, this paper argues that China’s gradual and partial reform has fundamentally re-engineered local states from inward-looking market actors running business to entrepreneurial market governors controlling land supply. Though this transition has triggered urban growth by levering manufacturing and real estate capital, it has also introduced constraints for future urban development by generating inter-regional tensions and making further reforms politically difficult. This paper concludes that sustainable urbanism requires a more clearly oriented and more holistic reform framework.