The Financialisation of Urban Development and Associated Financial Risks in China
Lead Research Organisation:
University College London
Department Name: Bartlett Sch of Planning
Abstract
The Chinese financial system has fostered rapid economic growth in recent decades through so-called 'land-based financing' (tudi chaizhen) in housing, land and infrastructure development. The 'financialisation' of Chinese housing, land and infrastructure - the use of financial instruments to convert the built environment into investment opportunities - generates momentum and vitality in the Chinese economy and has led to wealth accumulation. Real estate financing instruments such as the real estate investment trust (REITS), mortgage securitisation, reverse mortgages and public-private partnerships (PPP) in infrastructure have been recently invented. On the other hand, traditional real estate financial products such as household mortgages and real estate loans benefit from new internet-based finance. Chinese real estate finance has now entered a phase of 'financial explosion'.
However, the concrete channels, complex arrangements and new instruments are not entirely known. This research project aims to investigate how housing, land and infrastructure are actually financed, what are the new financial instruments, to what extent there is a trend of 'financialisation', and what are the risks associated with this transformation. We examine the recent trend of financialisation in terms of the forms and extent of the involvement of both the formal and the unofficial ('shadow banking') sectors in real estate development. Recent developments in REITS and PPP will be examined to show the inflow of financial capital in housing, land, and infrastructure projects. We explore how the Chinese housing boom has been financed in the absence of a more developed financial system, and to what extent the financial sector has contributed to the overall appreciation of housing and land assets. We will also try to understand the potential impacts of financialisation on households, enterprises and local government finances (i.e. the issue of 'local debt') and what are the main factors affecting financial stability.
The project investigates three levels of financing mechanisms: projects and enterprises, local governments, and individual households. We choose six case cities: in the coastal region, Shanghai and Shenzhen; the central region: Zhengzhou and Changsha; the western region: Chongqing and Chengdu. At the project level, we will conduct in-depth interviews with developers, real estate agents and local government officials so as to understand the complex financial arrangements of these projects. At the local government (city) level, we will examine the institutional environment and policies regarding built environment finance, including the involvement of housing provident funds. At the household level, the project will conduct a survey of 3,000 homeowners in these cities to understand household access to the financial sector.
This research project will assess the recent trend of financialisation in Chinese housing, land and infrastructure sectors and provide a nuanced understanding of the changing financial mode, its dynamics and the new institutional environment. The project will examine emerging financial products and new channels in these sectors and their operational mechanisms. The project will focus on household financial behaviour to understand the new trend of financialisation of real estate and its impact on housing consumption, investment behaviour, and job preference. The project will further assess macroeconomic implications such as the impact on the Chinese financial system, financial product innovation, fiscal policies and company investment. Finally, these findings will lead to an assessment of the potential risks associated with financialisation and recommendations for risk management.
However, the concrete channels, complex arrangements and new instruments are not entirely known. This research project aims to investigate how housing, land and infrastructure are actually financed, what are the new financial instruments, to what extent there is a trend of 'financialisation', and what are the risks associated with this transformation. We examine the recent trend of financialisation in terms of the forms and extent of the involvement of both the formal and the unofficial ('shadow banking') sectors in real estate development. Recent developments in REITS and PPP will be examined to show the inflow of financial capital in housing, land, and infrastructure projects. We explore how the Chinese housing boom has been financed in the absence of a more developed financial system, and to what extent the financial sector has contributed to the overall appreciation of housing and land assets. We will also try to understand the potential impacts of financialisation on households, enterprises and local government finances (i.e. the issue of 'local debt') and what are the main factors affecting financial stability.
The project investigates three levels of financing mechanisms: projects and enterprises, local governments, and individual households. We choose six case cities: in the coastal region, Shanghai and Shenzhen; the central region: Zhengzhou and Changsha; the western region: Chongqing and Chengdu. At the project level, we will conduct in-depth interviews with developers, real estate agents and local government officials so as to understand the complex financial arrangements of these projects. At the local government (city) level, we will examine the institutional environment and policies regarding built environment finance, including the involvement of housing provident funds. At the household level, the project will conduct a survey of 3,000 homeowners in these cities to understand household access to the financial sector.
This research project will assess the recent trend of financialisation in Chinese housing, land and infrastructure sectors and provide a nuanced understanding of the changing financial mode, its dynamics and the new institutional environment. The project will examine emerging financial products and new channels in these sectors and their operational mechanisms. The project will focus on household financial behaviour to understand the new trend of financialisation of real estate and its impact on housing consumption, investment behaviour, and job preference. The project will further assess macroeconomic implications such as the impact on the Chinese financial system, financial product innovation, fiscal policies and company investment. Finally, these findings will lead to an assessment of the potential risks associated with financialisation and recommendations for risk management.
Planned Impact
The non-academic beneficiaries:
1. Chinese policy-makers in supervising the financial system and its reform (Ministry of Finance), housing development (Ministry of Housing, Urban and Rural Development, MoHURD), land management (Ministry of Land and Resources), resource allocation and five-year economic planning (National Development and Reform Commission). Knowledge of REITs and PPP in China is much needed for managing risk and proposing a feasible capital source for infrastructure development.
2. Local governments in China who are confronted with debt and the need for sustainable sources of funding housing, land and infrastructure development, in Shanghai, Shenzhen, Changsha, Zhengzhou, Chongqing, and Chengdu. These cities have either experienced fast house price inflation (Shanghai, Shenzhen) or have experimented with a new method of financing (Chongqing, Chengdu). The research will reveal the dynamics of price inflation and advise sustainable development approaches to these governments.
3. Chinese urban residents, who suffer a heavy burden of housing affordability. On the other hand, there are some households aggressively engaged in investment in the housing market through investment instruments and leverage. These financing behaviours could be risky to their own wealth accumulation if price fluctuation occurs. The project will reveal the true picture of aggressive housing finance behaviour and associated risks.
4. Companies investing in Chinese land and infrastructure projects. They may benefit from comparing different financial methods and associated risks with these approaches.
5. UK government such as the UK department for International Development (DfID), the UK department for Business, Innovation and Skills (BIS), and professional bodies such as the Royal Institute for Charted Surveyors (RICS) and the Royal Town Planning Institute (RTPI).
They will benefit through:
a. Improving evidence for decision and policy-making: our household survey evidence on access to the finance sector may expose a more accurate picture of financial leverage and debt at the local government and household levels. It will provide much needed information for recent policy efforts to transfer the leverage of the real estate market and local debt to households. The insights gained from the detailed analysis of household characteristics and their housing consumption and finance will benefit the real estate sector in advising on systematic risks and risk management. Our in-depth interviews with stakeholders in land and infrastructure development and developers will provide new information on emerging practices to financial oversight agencies and local governments.
b. Enhancing understanding by practitioners and policy makers of new financial instruments and their various practices in different cities. Our research bridges the knowledge gap between the built environment (housing, land and infrastructure) and the virtual environment (finance and capital flows).
c. Supporting the business understanding in the UK economic sector of the Chinese market and the potential risk associated with the underdeveloped financial market. In particular, the development of PPP may provide important potential for collaboration between Chinese and UK business sectors and the transfer of UK knowledge in finance and financial management to China. The research may justify the need and identify precise areas for financial risk management.
d. Enhancing public awareness of the use of financial instruments and their potential negative implications. This is vital in particular for middle-income groups who are increasingly attracted by new financial approaches for their housing consumption. While facing an affordability crisis, this group has also benefited from asset appreciation in the past and is thus beginning to change their perception of housing from accommodation to asset investment. But the risk has not been fully understood.
1. Chinese policy-makers in supervising the financial system and its reform (Ministry of Finance), housing development (Ministry of Housing, Urban and Rural Development, MoHURD), land management (Ministry of Land and Resources), resource allocation and five-year economic planning (National Development and Reform Commission). Knowledge of REITs and PPP in China is much needed for managing risk and proposing a feasible capital source for infrastructure development.
2. Local governments in China who are confronted with debt and the need for sustainable sources of funding housing, land and infrastructure development, in Shanghai, Shenzhen, Changsha, Zhengzhou, Chongqing, and Chengdu. These cities have either experienced fast house price inflation (Shanghai, Shenzhen) or have experimented with a new method of financing (Chongqing, Chengdu). The research will reveal the dynamics of price inflation and advise sustainable development approaches to these governments.
3. Chinese urban residents, who suffer a heavy burden of housing affordability. On the other hand, there are some households aggressively engaged in investment in the housing market through investment instruments and leverage. These financing behaviours could be risky to their own wealth accumulation if price fluctuation occurs. The project will reveal the true picture of aggressive housing finance behaviour and associated risks.
4. Companies investing in Chinese land and infrastructure projects. They may benefit from comparing different financial methods and associated risks with these approaches.
5. UK government such as the UK department for International Development (DfID), the UK department for Business, Innovation and Skills (BIS), and professional bodies such as the Royal Institute for Charted Surveyors (RICS) and the Royal Town Planning Institute (RTPI).
They will benefit through:
a. Improving evidence for decision and policy-making: our household survey evidence on access to the finance sector may expose a more accurate picture of financial leverage and debt at the local government and household levels. It will provide much needed information for recent policy efforts to transfer the leverage of the real estate market and local debt to households. The insights gained from the detailed analysis of household characteristics and their housing consumption and finance will benefit the real estate sector in advising on systematic risks and risk management. Our in-depth interviews with stakeholders in land and infrastructure development and developers will provide new information on emerging practices to financial oversight agencies and local governments.
b. Enhancing understanding by practitioners and policy makers of new financial instruments and their various practices in different cities. Our research bridges the knowledge gap between the built environment (housing, land and infrastructure) and the virtual environment (finance and capital flows).
c. Supporting the business understanding in the UK economic sector of the Chinese market and the potential risk associated with the underdeveloped financial market. In particular, the development of PPP may provide important potential for collaboration between Chinese and UK business sectors and the transfer of UK knowledge in finance and financial management to China. The research may justify the need and identify precise areas for financial risk management.
d. Enhancing public awareness of the use of financial instruments and their potential negative implications. This is vital in particular for middle-income groups who are increasingly attracted by new financial approaches for their housing consumption. While facing an affordability crisis, this group has also benefited from asset appreciation in the past and is thus beginning to change their perception of housing from accommodation to asset investment. But the risk has not been fully understood.
Organisations
Publications
Chen J
(2022)
Housing and land financialization under the state ownership of land in China
in Land Use Policy
Feng Y
(2022)
The development of local government financial vehicles in China: A case study of Jiaxing Chengtou
in Land Use Policy
Feng Y
(2022)
Shanghai municipal investment corporation: Extending government power through financialization under state entrepreneurialism
in Environment and Planning C: Politics and Space
Feng Y
(2021)
Changing roles of the state in the financialization of urban development through chengtou in China
in Regional Studies
Li Z
(2021)
A multi-scalar view of urban financialization: urban development and local government bonds in China
in Regional Studies
Lu T
(2019)
The Meaning of "Private Governance" in Urban China: Researching Residents' Preferences and Satisfaction
in Urban Policy and Research
Lu T
(2019)
The variegated role of the state in different gated neighbourhoods in China
in Urban Studies
Lu T
(2018)
Place attachment in gated neighbourhoods in China: Evidence from Wenzhou
in Geoforum
Meng S
(2023)
Intergenerational financial support for homeownership and co-residence in Chinese cities
in Cities
| Description | We have analysed several processes of financialisation: housing, land and infrastructure development. In addition, we aimed to identify the sources of financial risks associated with China's financialisation. Key findings in these sectors will be summarised and then the overall theoretical and intellectual contributions will be highlighted. First, housing financialisation. While the literature on the financialisation of housing predominantly refers to mortgaged and securitised homeownership and the penetration of capital into subsidised rental housing, the form of housing financialisation in China is variegated. In China, housing commodification and privatisation have led to the prevalence of homeownership. The financialisation of housing is characterised by making owner-occupied housing a major financial asset for household wealth. The development of the owner-occupied housing sector under fast urbanisation and constrained land supply led to a property boom. Housing value appreciation has stimulated housing investment through household savings, mortgages and housing provident funds. Despite a still relatively low level of housing mortgages, both the absolute volume of mortgages and the proportion of mortgage value in GDP are rapidly rising. The financialisation of housing has become a critical component in China's overall development model, which relies on investment in the built environment. In China, the essence of housing financialisation is not mortgage securitisation but making owner-occupied housing into an investable asset. This has increased households' investment in housing and more broadly in property, which has significant impacts on the Chinese economy. For a long time, the Chinese economy was under-financialised because interest rates were controlled by the state. Savings were the major form of household wealth, and state-owned banks were the dominant players in the financial market. Through housing commodification, housing has become a financial asset. The process is broadly similar to 'assetisation'. Households are willing to endure a relatively high financial burden for their housing purchases. The massive privatisation of public housing greatly increased household assets, paving the way to financialisation. Through the housing presale system which allows developers to make use of housing purchase deposits, the production of housing has been able to expand its capital source in addition to bank loans. Housing financialisation is thus a process of increasing household investment in housing instead of mortgage securitisation. In addition to the owner-occupied housing sector, the research project also examined the rental sector, specifically, 'long-term apartment rental'. We find that the development of this form of rental housing has been driven by both changing housing policies and financialisation. The central government promoted rental housing to solve the problem of housing affordability. The private rental sector became a development and investment opportunity. Rental housing management companies induce tenants to pay a lump sum rental with a discounted rent. Tenants are encouraged to take out so-called 'rental loans' (i.e. rental mortgages) from internet-based financial platforms (P2P). Financial institutions, in particular venture capital, see the sector as a promising investment opportunity. The rental mortgage creates a capital pool for rental companies to raise more investment from venture capital to expand their businesses aggressively. However, some rental businesses did not have a viable business model. Such rental companies hoped to increase their scale of business to attract additional investment. Some went bust, while their tenants still had to continue to pay back their rental loans to the financial platforms. Our research highlights the financial risk of the 'long-term apartment rental', which is part of housing financialisation. Overall, the financialisation of housing has emerged as a tool used by the state to promote capital accumulation and finance urban development in China. Second, land financialisation. Related to the financialisation of housing is the financialisation of land. There is a growing body of literature on land reform and land-driven urbanisation in China. The contribution of land proceeds to Chinese local public finances and infrastructure development is well noted; this is usually referred to as 'land finance'. Our research reveals the obscure processes of creating land mortgages, through which local governments and developers use land assets to obtain bank loans. One particular practice is the injection by local governments of undeveloped land into the land reserve in order to obtain development loans ('land mortgaging'). The practice of land mortgaging has accelerated since the Global Financial Crisis in 2008. But mortgages based on land reserves have been forbidden since 2016, because local governments were basically using underdeveloped and untitled land as 'collateral' to raise capital and increase infrastructure investment but at the same time as a way of hiding local government debt. This research project uncovers the critical role of land mortgaging as a financial instrument. The instrument is applied through collaboration between the local government and its development agencies (i.e. various local development platforms, such as Urban Development and Investment Corporations, chengtou, see below). The introduction of the land mortgage was not to promote land financialisation by the state. Instead, the practice, or more generally shadow banking, is an outcome of the state's strategy for coping with the Global Financial Crisis and complex interactions between central and local governments. Local government was required to find matching capital for the 4 trillion Yuan stimulus package. This discovery contributes to a nuanced understanding of land financialisation beyond being a process driven by the financial sector. Our research suggests the need to understand the financial context of land financialisation. The wide spread of land financialisation through land mortgaging has pushed up land prices and led to greater financial risks. Third, infrastructure financialisation. The research project examined infrastructure development and further the financialisation of urban development. While the research proposal initially identified real estate investment trusts (REITS) as a possible financial tool, we found through fieldwork that REITS were not a major instrument in China, as REITS have only been experimental. Rather, Urban Development and Investment Corporations (chengtou) have become local government financial vehicles (LGFVs) since the Global Financial Crisis. Similar to housing, land is treated as a financial asset and thus plays an important role in credit expansion and the financing of urban development in China. From the history of urban development, we find that the adoption of a fiscal stimulus package as the crisis management and development strategy of the state triggered land financialisation. The project conducted in-depth case studies (for example, Jiaxing Chengtou and Shanghai Chengtou) and understands how chengtou have become LGFVs. The project finds that Jiaxing Chengtou mainly uses bank loans and bonds to finance land and infrastructure development. To borrow from the capital market, Jiaxing Chengtou collateralised the state land allocated by the local government. Through the model of 'build, operate and transfer' (BOT), the ability to raise capital is further enhanced. However, Jiaxing Chengtou had to resort to further borrowing in order to pay back its loans. Our research confirms that local government debt and financial risks are connected to those of LGFVs. 'Excessive' borrowing through LGFVs in China led to increased concerns over financial risk and hence the central government tightened the regulation of LGFVs. As a result, Jiaxing Chengtou has been detached from the local government and become an 'independent' state-owned enterprise. It has been merged with other enterprises to form a development and investment group but still maintains its connection with the government. The group has gained the capacity to access overseas bond markets and acts as a financial instrument for the local government, though in theory chengtou debt is no longer counted as government debt. Through the study of Shanghai Chengtou, the project reveals that infrastructure financialisation reflects a corporate form of governance which extends state power through financialisation. Shanghai Chengtou has become a corporatised intermediary to manage state assets, seek funding and guide urban development projects. Financial methods are used to fulfil these aims. In short, it is very significant that chengtou rather than REITs have become the major financial instrument to raise finance for urban development. The chengtou has been under the steer of the state. Although the chengtou is now legally an independent economic entity, it maintains connections with the government through the shareholding structure and plays an important role in urban development for the government. Besides LGFVs, we examined a special financial tool, the 'government-guided investment fund' (GGIF). This kind of fund is initiated by the central or local government but financed mainly by state-owned banks. The fund applies the business model of the private equity fund and venture capital. The government endorses the fund to raise capital from the capital market. The funds are used to support strategic infrastructure development (e.g. railway, science and technological development, and emerging industries). The emergence of the 'government-guided investment fund' indicates the shift from direct funding through the government's fiscal budget to an indirect financialised approach through the 'investment fund', revealing the changing operations and trends of the financialisation of the state in China. Compared with the mainstream approach of chengtou, GGIFs share some similarities but even more clearly reflect the nature of using financial instruments to implement state development strategies. In terms of the implication of financialisation for governance and financial risks, this project explores whether the Chinese city (increasingly) uses financial instruments to carry out its urban development tasks and whether the utilisation of financial instruments imposes a financial logic on urban governance. As mentioned previously, financialising the Chinese city involves creating land collateral, converting development agencies into local government financial vehicles (LGFVs), extending shadow banking, diversifying financial conduits such as 'fake equity, real debts', securitising local government debts, and financialising urban redevelopment to 'deleverage', i.e. reduce the debt ratio of developers. Applying one instrument has led to another financial tool, showing that a financial logic is indeed in operation. However, financialising the Chinese city has been engineered by the state through its fiscal / credit expansion to cope with the Global Financial Crisis and the ramifications of being the export-oriented world factory. It is a state-led financial turn. Our project makes clear the important role of the state in the process of financialisation. In addition to our original research plan that covers housing, land and infrastructure financialisation, the project also investigated local government bonds (LGBs) and the financialisation of the state. LGBs introduce a distinct financialisation process because the local governments are able to use a securitised form of debt-financing in addition to land-based finance. The central government strengthened the procedure of bond issuance approval and monitoring, which led to a multi-scalar governance of financialisation. The state not only facilitates financialisation but also executes statecraft to control financial risks. Theoretical and intellectual contribution. 1) The project finds that housing, land and infrastructure financialisation are linked. Previous studies have tended to treat these sectors separately, for example, housing financialisation as due to financial deregulation and the 'great wall of money' that seeks housing as high-quality collateral. The Chinese case reveals that housing financialisation is part of overall change in capital accumulation and urban development; households treat housing as a (future) financial asset and finance housing purchase through converting savings into assets, which in turn has led to land financialisation and financing infrastructure development. 2) The project finds that financialisation is state-led and state-centred. China's financialisation has been accelerated by the Asian and Global Financial Crises through the state's coping strategies. The actual operations, as revealed in the Chinese 'land mortgage', chengtou, the government-guided investment fund and other financial instruments such as chengtou bonds and local government bonds, are closely related to the state or operated by state development agencies. 3) China's financialisation has not been triggered by financial deregulation and the rising financial sector; but rather it is a result of the state's fiscal expansion. Fiscal expansion has been implemented through local governments and has fostered the financialised way of urban development and emerging 'informal' financial conduits, financial practices and shadow banking off the balance sheet of the bank. These findings have significant implications because they contradict and thus contribute to the understanding of financialisation as a process led by the financial sector. The 'unexpected' finding that China's financialisation is a state-centred and state-led financial turn is significant. The project reveals some salient features of financialization in China. First, China's financialisation is achieved under 'state entrepreneurialism' that creates a market-like environment for state financial actors to operate. Second, the Chinese financial system is bank-based institution, which demonstrates 'financial repression'. The local government uses various development and investment platforms to connect with the financial system. Third, these platforms, typically as chengtou, combine developmental purposes and financing purposes. They are not pure financial vehicles. That is, financial operation is only a tool rather than the end. Fourth, financialization is not a unidirectional process in which the financial sector rises and the state declines. Facing alarming local government debts, the central government has had to strengthen regulatory control over local financing activities. Fifth, state-led financialisation has transformed the state itself. creating a multiscalar state governance. |
| Exploitation Route | The real estate development sector and the Chinese government (local and national governments) in the long term are becoming aware of financial risks and exploring new approaches of development. The research project mainly focuses on China and reveals the financial operations and outcomes of urban development (in particular in housing, land and infrastructure). It has implications for other countries in the Global South, in terms of the financialisation of land (e.g. land grab in the Global South), social rental and informal housing finance. |
| Sectors | Environment,Financial Services, and Management Consultancy,Government, Democracy and Justice |
| URL | https://Urban-China.Org |
| Description | The research project has generated economic and social impacts. First, in terms of economic impacts, the project examined changing financing practices in housing, land and urban development and identified the risks associated with these changing practices. The project reveals the linkage between the financialisation of housing, land and urban development. This significant finding has generated an economic impact in that it not only suggests the risks associated with greater financial involvement but also identifies the source of financial risks because these risks are related to each other and the role of the state in financing urban development. Second, this research has impacted Chinese governments by helping them understand the source of systematic risk. The systematic risk is actually linked to the state and its development strategies. Various urban development strategies and their financing needs have led to using financial instruments to finance development. Further, the 'de-leverage' policy ironically increased the extent of financial operation, particularly through urban development and investment bonds (or chengtou bonds) and local government bonds. Although the former is regarded as a corporate bond, while the latter is a quasi-treasury bond, and their issuances are subject to different financial monitoring, the risk is that the rapid increase in bond issuance may not be back-up by financial incomes. The local government debt issue has not been fully solved. This research has also identified the role of the state in financialisation and increased the awareness of financial risks for policymakers and practitioners, particularly in the rental housing sector. Knowledge of financialisation in these sectors is fragmented. The project creates an impact by interacting with real estate developers, rental housing management companies, real estate professionals and central and local government officials to bring together an overall understanding of financialisation in China since the Global Financial Crisis. The in-depth study of the Chinese urban development and investment corporation (chengtou) as a local government financial vehicle reinforces the recent policy shift to regulate 'excessive' and under-regulated financialisation (through off-balance-sheet lending and shadow banking ) and to introduce local government bonds for a centrally managed process of financialisation. The study of government-guided investment funds (GGIF) identifies the process of state-led financialisation, and this creates a policy impact by revealing the nature of financialisation, because inside China policy makers have not recognised that the operation of GGIF is actually a process of financialisation. Third, the project has achieved its impacts through wide and multiple dissemination methods and engagement with Chinese policy makers, think tanks, and university researchers. The project has demonstrated impacts through invited keynote speakers in professional meetings, invited public lectures in major Chinese universities and exchanges with the Chinese planning profession, real estate development profession and local governments. For example, the project delivered keynotes to the annual meeting of the European Real Estate Society (2017), the Beijing Forum (2017), the Annual Urban Geography Meeting of the China Geography Society (2018), and the Regional Studies Association Global Conference in China (2018), Urban Geography plenary lecture at the Annual Meeting of AAG (2021), and Habitat Forum (INHAF) at India (2021). The project co-organised the first FinGeo Global Conference in Beijing (2019) in which researchers, policy makers and a major development corporation in Beijing participated. Because this is a joint project of ESRC-NSFC, the impact pathway has been strengthened by collaboration with Chinese partners and local contacts with the central and local governments in China. Through interaction with the Ministry of Housing, Urban and Rural Development (MOHURD), the project disseminated the research findings to policy makers in housing development. The Chinese partner served as an advisor for MOHURD and influences housing policy (especially rental housing) and the policies related to Housing Provident Funds. The ESRC-NSFC partner delivered two internal reports to the central government and received notification from key leaders. One report was submitted to the Vice Mayor of Shanghai and received official notification. The project organised impact meetings in which officials from MOHURD, Shanghai local government officials, the real estate association and major real estate developers (e.g. Vanke and Polly) participated. The impact forum entitled the First Liveable Cities Forum in Oct 2019 has created significant impacts on central and local government in housing policies and real estate professionals. Through Chinese collaborators, the project has published several articles in Chinese newspapers about rental housing and financial risks. The impact of this research has become more obvious as China's property companies such as Evergrande run into the debt crisis, indicating the potential financial risk. Second, in terms of social impacts, the project reveals the implications of financial risks for ordinary households, especially risks associated with so-called 'long-term apartment rental' (a private rental sector that uses 'rental loans'). The project has also increased public awareness of financial risks through TV presentation by a Chinese partner. The project raised the debate over housing affordability under financialisation in Chinese media. The study reveals the connection between housing purchase, land development and infrastructure provision, and thus the risks for individual households should be understood within the larger picture of financialisation. De-financialisation policies ('de-leverage') in 2015 managed to reduce developers' debt ratio but at the same time accelerated the financialisation of housing. The financial risks continue to exist in the household sector. The project's social impact is its enhanced understanding of household risks. The Chinese partner organised a series of public and professional engagement activities about the development of rental housing in China. In addition to economic and social impacts, the research has enhanced research capacities in the DAC list country (China). The team involved female researchers and many collaborators from China. The research project has facilitated the establishment of a joint centre of MOHURD-Shanghai Jiaotong University Housing and Urban-Rural Development Research Centre. The research particularly enhanced female early career researchers in Chinese partner organisations through the research into long-term rental housing. |
| First Year Of Impact | 2017 |
| Sector | Environment,Financial Services, and Management Consultancy,Government, Democracy and Justice |
| Impact Types | Societal,Economic,Policy & public services |
| Description | The Third Human Geography Summer School, China. |
| Geographic Reach | Asia |
| Policy Influence Type | Influenced training of practitioners or researchers |
| Impact | This is a major summer school organised by a Chinese research institute for doctoral postgraduates and young academics in China in urban geography. The event was in Guangzhou, PRC. The financialisation of urban development and the redevelopment of migrant settlements are key topics in the summer school. There were about 250 participants. |
| Description | ChinaUrban: Rethinking China's model of urban governance |
| Amount | € 2,500,000 (EUR) |
| Funding ID | 832845 |
| Organisation | European Research Council (ERC) |
| Sector | Public |
| Country | Belgium |
| Start | 01/2020 |
| End | 12/2024 |
| Description | Conference on financial geography and financialisation |
| Form Of Engagement Activity | Participation in an activity, workshop or similar |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Professional Practitioners |
| Results and Impact | The First FinGeo Global Conference has been co-organised in Beijing Normal University. The research associate Dr Fenghua Pan from the project has returned to Beijing Normal University where he is now an Associate Professor. The conference is jointly organised with China partner at Shanghai Jiaotong University. The conference involves speakers from industries (e.g. policy makers and development industries). The conference fostered interaction between the research team with real estate practitioners, policy makers, and senior managers from a Beijing development corporation. This was followed up by a field trip to the development site by the team and a meeting with these development officials. |
| Year(s) Of Engagement Activity | 2019 |
| Description | Expert consultant meeting by the Development Research Centre of Shanghai Municipal Government |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Policymakers/politicians |
| Results and Impact | As an expert invited to a consultant meeting of the DRC of Shanghai municipal government, for understanding major development challenges facing Shanghai and the next phase of development strategies. The meeting was organised by DRC to feedback into the preparation of the mayor's government report in late 2017. |
| Year(s) Of Engagement Activity | 2017 |
| Description | Impact Workshop |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Policymakers/politicians |
| Results and Impact | This is the First Liveable City Forum, involving policy makers from the Ministry of Housing and Urban-Rural Development, professionals from China Real Estate Association, China Real Estate Evaluator Association, and developers (e.g. Vanke), the media (China Construction Newspaper), held in Shanghai Jiaotong University. |
| Year(s) Of Engagement Activity | 2019 |
| Description | Internal report to the central government (China) by China partner Prof Jie Chen |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | National |
| Primary Audience | Policymakers/politicians |
| Results and Impact | Chinese partner Prof Jie Chen submitted several internal reports to Chinese central government on housing development, investment, and financialisation. Two have been officially notified on April and December 2019 by China central government and Shanghai municipal government as the proof that these reports were notified by the key leaders in the central government. |
| Year(s) Of Engagement Activity | 2019 |
| Description | Professional engagement meeting |
| Form Of Engagement Activity | Participation in an activity, workshop or similar |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Professional Practitioners |
| Results and Impact | About 100 Real estate professional practitioners and government policy maker attended the workshop on Rental Housing Market Governance. The workshop was organised by China PI Prof Jie Chen in association with Shanghai Real Estate Economics Association. Keynotes include China's rental housing market consultant companies, real estate developers, and government advisor in regulation. |
| Year(s) Of Engagement Activity | 2018 |
| Description | TV program / public lecture by Chinese partner Prof Jie Chen in Phenix TV |
| Form Of Engagement Activity | A broadcast e.g. TV/radio/film/podcast (other than news/press) |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Media (as a channel to the public) |
| Results and Impact | This is a TV program (the Century Forum for a public lecture) given by Chinese partner Prof Jie Chen on 28 Oct 2017. |
| Year(s) Of Engagement Activity | 2017 |
| URL | https://www.sohu.com/a/202210557_99902483 |
| Description | Urban Geography Plenary Lecture, AAG |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Professional Practitioners |
| Results and Impact | The plenary lecture at the Annual Meeting of American Association of Geographers presented the financialization in China to a wider international audience who includes both researchers and practitioners in broad studies of financialization and related financial risks. |
| Year(s) Of Engagement Activity | 2021 |
| Description | Yong Scholar Form talk |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Postgraduate students |
| Results and Impact | This keynote was delivered to Yong Scholar Forum of China organised by Wuhan University which helped the postgraduate and post-doctoral researchers develop their career in planning and design profession and the understanding of financial roles in urban development in China. |
| Year(s) Of Engagement Activity | 2021 |
| Description | presentation and panellist at Institute of Chinese Studies & Habitat Forum (INHAF), India |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Policymakers/politicians |
| Results and Impact | The talk was given to Indian Habitat Forum and Institute of China Studies with practitioners in real estate sector and government policy makers. The panel discussion disseminates the experience and financial risks of China urban development. |
| Year(s) Of Engagement Activity | 2021 |