Institutional uncertainty, fragmented urbanization and spatial lock-in of the peri-urban area of China: A case of industrial land redevelopment in Panyu

Institutional arrangements can exert significant impact on land use and the spatial pattern for a region. Since the reform opening, the Pearl River Delta (PRD) area of China has witnessed an explosive amount of bottom-up rural industrialization. This situation has given rise to a fragmented urbanized landscape in peri-urban areas. In 2009 the Guangdong government initiated a comprehensive urban and rural redevelopment plan known as the Three-Renewal Policy. This paper begins with an analysis of the double-track land system and their impact on fragmented urbanization in peri-urban areas. Taking a typical peri-urban area such as the Panyu district of Guangzhou as a case study, this paper demonstrates the industrial land redevelopment practice created by the Three-Renewal Policy. The paper argues that the existing fragmented land use pattern in Panyu has been somewhat locked in, and the redevelopment of rural industrial land has been difficult due to historical institutional uncertainty and path dependency. The uncertainty caused by volatile redevelopment policies, absence of trust between local government and villagers, long-time reliance of villages on land leasing income, and high transaction costs to achieve consensus among villages serve as key barriers to redevelopment. These problems have led to a prolonged redevelopment process and low participation of villages. The results suggest that further institutional change and more collaboration among various parties are necessary to overcome the current barriers of spatial lock-in to push forward the redevelopment of collective industrial land.