The land finance model jeopardizes China's sustainable development

• China has achieved the brilliant urban development by large government investment.
• The phenomenon of “Ghost town” occurred across China implied the risk threatening the sustainable development.
• Land Finance model in local land administration maintains the rapid urban development.

China is undergoing rapid urbanization accompanied by rapid urban development and migration of rural populations to the cities. Because local governments are selling land to compensate for an unbalanced tax system that provides them with insufficient budgets, urban expansion is booming around the country. However, this form of land finance has grown out of control, in some cases producing uninhabited “ghost towns”, without any feedback from institutions that would limit the problem. Simultaneously, social problems have arisen from a failure to compensate the land's former residents for loss of their land and future livelihood, thereby jeopardizing China's social stability. This under-recognized contradiction created by urbanization is endangering China's environment and its socioeconomic development, and will endanger other developing countries seeking to emulate China's urbanization model.