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| Causes of urban sprawl in China
In discussing causes of sprawl, American researchers have listed market forces, problematic public policy, and the American culture (“the American character”), as main contributors. Government policy on taxation, public spending, and infrastructure provision have especially been questioned (Richmond, 1995; Katz and Bernstein, 1998). In China, we found factors which are similar to the American case. Disproportional urban land growth was almost non- existent before the reform. Land was public property; land transfer and changing land uses were all adminis- trative decisions, not economic actions. No market forces were involved because no land market existed. When a factory needed land for a new workshop, it applied for and gained land from local government with token reimbursement to farmers. Since land was “free of charge”, no one could make any profit from land development or land transference. The real estate industry had been totally removed from the Chinese economy by the beginning of the 1956 “Socialization Movement”. Also, since more than 80 percent of the urban population lived in public housing, no concept 129 of a “housing market” existed in urban areas. Property exchange and transference did exist in rural areas where 99% of the residents owned their homes, but housing construction was for self-consumption rather than for profit. Because land was also owned by the public collectively in rural areas, it was still almost free of charge. Moreover, from the demand side, as a developing country, China had extremely limited capital to invest in urban development projects, except on “productive projects” such as factories and power stations, so land demand was limited. The Chinese government adopted a strict urban population control policy that eliminated the possibility of free rural-to-urban migration, thus significantly reducing the demand for new housing developments in urban areas. The conse- quence of these policies was low levels of urbaniz- ation, low demand for land, and limited urban growth. Since the introduction of the market economy after reform, the economic value of land has been fully recognized in China. All land-related policies are based on the understanding that land is a primary economic element and should generate revenue for the government. The 1982 Constitution recognized two kinds of land ownership: urban land is the pro- perty of the state and rural land is collectively owned by villagers. With additional amendments, the 1988 Constitution was the first national document that lega- lized the separation of land ownership from land use rights; it also allowed the transference of land use rights. The State Council passed the Regulation of Urban Land Use Rights in 1988 and enacted the regu- lation in 1990 (China Academy of Social Science, 1992). The 1988 Constitution and the Regulation laid the foundation for land policy in the post-reform era. Although there is still no privately-owned land in China today, a land market has been created and land use rights entered the market, under the policy of sep- aration of use rights from ownership (Dowall, 1993; Li, 1997; Yeh and Wu, 1996). Land became a main source of profits for real estate companies, villages, individual farmers, and government of all levels as well. These interest groups thus emerged with the rebirth of land as a market force in China. From the demand side, while wealthy foreign investors seek land for their projects, urban residents try their best to improve their living conditions, and rural–urban migrants look for basic housing in cities. Under the pressure of high demand, land prices have skyrocketed. For instance, in Shanghai, acquisition cost of one Mu (a Chinese land measurement unit, one Mu equals 0.16 acre) of land was about US$90 in the early 1970s, and then increased to US$ 2,700 in 1988 and US$183,342 in the Special Economic Zone in 1995 (Shanghai Municipal Statistics Bureau, 1988, and from interviews). In the decision-making structure, the reforms have decentralized a considerable amount of decision power to localities and enterprises, which has signifi- cant impacts on land disposition, and ultimately on |