Institutional innovation for urban village renewal in Mainland China

China has been experiencing rapid urban development but urban renewal projects on collective rural land often inflicts social conflicts. This article examines an innovative villagers' committee-led land readjustment model which was applied for urban village renewal. As shown in the case study of “renewal of old village” project in Yiwu, the bottom-up model empowered villagers to design and implement their own relocation scheme. With a transparent and socially acceptable relocation scheme, the villagers willingly participated in the project for a fairer share of potential profit of the project. The local government could also achieve multiple goals like increasing land use efficiency and providing basic infrastructure and communal amenities in the renewed neighborhoods without any actual financial investment. The empowerment of villagers' committees is an innovative and successful experiment in urban village renewal representing the best interest of rural communities.