Spatial mismatch in post-reform urban China: A case study of a relocated state-owned enterprise in Guangzhou

Accompanying rapid urbanization and economic transformation, the reconstruction of inner city in urban China has been taking place during recent decades. However, the social and geographic inequality resulted from such reconstruction and experienced by minority groups has received less attention to date. To address this, a case study using individual-level data based on a survey of a relocated state-owned enterprise (SOE) in Guangzhou was conducted. The study shows that similar to other cities in the world, the spatial mismatch that results in long and time-consuming commuting as well as lower quality of life exists. It has considerable adverse impact on the low- and middle-income employees of the relocated enterprise. However, it was not social or racial segregation but institutional transformation that brought about the spatial mismatch in China. Based on the dual economic system in China, both the planned and market systems played important roles in the enterprise's relocation and their employees' daily lives. Institutional barriers associated with the welfare system had a great impact on the geographic immobility of its employees. These include the retirement and medical insurance systems inherited from the planned economy and the supply of work unit buses, which rendered employees more attached to and dependent on their enterprise. However, these provisions were big burdens to the enterprise which reduced their profit and led to lower spatial mobility of its lower-income employees.