Patterns of growth in Chinese cities : Implications of the land lease

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

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Author(s)

  • Paul M. Anglin
  • David Dale-Johnson
  • Yanmin Gao
  • Guozhong Zhu

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)87-107
Journal / PublicationJournal of Urban Economics
Volume83
Online published14 Aug 2014
Publication statusPublished - Sept 2014

Abstract

A special feature of China's housing market is land use rights in the form of land leasehold contracts granted by the government. We consider an equilibrium model in which a representative developer may choose to redevelop existing centrally located housing or to develop new housing at the periphery of the city. We show that as the city grows, the land leasehold system results in the city center being developed less intensely and more land being used on the outskirts of the city when compared to a fee simple environment. Thus, cities in China are likely to be relatively more spread out, with city centers relatively older than would be the case with "fee simple" ownership. Our model suggests that excess residential land use is about 6 percent. In addition, compared with the ownership case, housing supply will grow more quickly in the near future, but more slowly later on during the transition of the Chinese economy. Parallel to the supply growth pattern, equilibrium price grows relative slowly in the near future, but more quickly later on. While we focus on residential uses, we believe our model can be applied to other land uses.

Research Area(s)

  • China, Ground lease, Housing age, Population density, Urban development

Citation Format(s)

Patterns of growth in Chinese cities: Implications of the land lease. / Anglin, Paul M.; Dale-Johnson, David; Gao, Yanmin et al.
In: Journal of Urban Economics, Vol. 83, 09.2014, p. 87-107.

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review