Financialization in the making of the new Wuhan
Introduction
Planetary urbanization has gained a great deal of attention during the past several decades. Within the avalanche of new literature, the speedy urbanization of the Global South is seen as important to the production of comparative knowledge or even the remaking of extant theories that were mainly built upon the experiences of the Global North (Fernandez and Aalbers, 2019, Mawdsley 2018, Robinson, 2016; Roy and Ong, 2011; Steel et al., 2017). Among these cases, China is typical. With the largest population and second largest economy in the world, China enjoyed unprecedented growth during the last four decades, to the extent that its urbanization rate increased from a mere 20 % in 1980 to approximately 60 % in 2018. The size of China’s urban population increased from approximately 200 million in 1980 to more than 800 million in 2018, and the built-up area of cities increased to approximately 150,000 sq. km in 2017 (Gong et al., 2019). How did China achieve new urban construction on such a huge scale? A great deal of literature has already shed light upon China’s urbanization and spatial production (Wu, 2016), including various topics, facets, and subjects such as globalization, land and housing development, urban poverty and socio-spatial inequality, and rural migrants (He and Qian, 2017). Fewer have examined the modalities of urban production from the financial perspective (Lin, 2014; Lin and Zhang, 2015), and it is important to decode the financial mechanisms of contemporary geography and urban development across different contexts (AlShehabi and Suroor, 2016; Adisson, 2018; Baker et al., 2016; Berrisford et al., 2018; Beswick and Penny, 2018; Bon, 2015; Bresnihan, 2016; Buckley and Hanieh, 2014; Büdenbender and Aalbers, 2019; Christophers, 2017; Coq-Huelva 2013, Loon et al., 2019; Mbiba, 2017; Peck, 2017; Pike and Pollard, 2010; Pike et al., 2019). Though some underscore the macrostructural impacts of financialization upon city making, far fewer consider the “actually existing process” of the financialized city making in China (Wu, 2020; Theurillat, 2017). We know little about the ways in which local governments have become embedded within or interacted with the financial system, and it is not certain why such efforts are made. Moreover, most studies concentrate on large coastal cities such as Beijing, Shanghai, and Guangzhou; few touches on cities in the central or western regions, yet unprecedented new urban constructions are taking place there as well, and the application of financial tools could be even more intensive (Sun et al., 2017). For these reasons, this study focuses on Wuhan, the capital city of both Hubei Province and central China, through a careful examination of three typical cases to disclose the modalities of financializing city making. We articulate the micro-process of city making in Wuhan, the roles of the local governments, their strategic arrangements, and the financial tools in use to accomplish these three projects. In this way, we will contribute to the knowledge on the dynamic interactions between financialization and contemporary urban spatial production, and place it in the context of emerging Chinese cities.
The sections of this article are organized as follows. First, we review recent literature examining the relationship between financialization and city making. We then articulate the importance of “planning centrality” and the role of local states in order to better understand the situation of Chinese cities. Financialized city making not only indicates speculative urbanism, it also involves the planning aims and strategic arrangements of local governments, which resort to various methods and make different efforts to access financial resources. In the next section, we introduce our research method. In the empirical section, we will concentrate on three specific cases, ZA, ELG, and 27 RBD, to show the “actually existing process” of financialization underlying these new spatial productions. We will further discuss the issue of state entrepreneurialism and financialization, drawing conclusions in the final section.
Section snippets
Financialization and city making: a literature review
In recent decades, the rise of finance has gained such tremendous attention that the term “financialization” has become as widely used as that of “globalization” or “neoliberalism”. As a “structural transformation of economies, firms (including financial institutions), states, and households” due to “…increasing dominance of finance actors, markets, practices, measurements, and narratives” (Fields, 2017, p. 3), financialization has significant implications for state governance, accumulation
Analytical framework and research design
Our case studies focus on Wuhan, the capital city of Hubei Province and the largest city in central China (Han and Wu, 2004). With an administrative area of approximately 8500 sq. km and a total population of approximately 12 million (2018), Wuhan is also one of the largest cities in China. Recently, Wuhan was named one of China’s national central cities and included in the national Yangtze River Economic Belt strategy, both of which indicate the city’s significance. Moreover, Wuhan is marked
Financialization and the making of the new Wuhan
The financialization of Wuhan’s (re)making dates back to the early 1980s, a time of difficulty in maintaining its infrastructural system; Wuhan’s situation deteriorated with the influx of millions of rural migrants following China’s market-oriented reforms. Forced by the crisis, Wuhan started to attract investments and FDIs in order to invest in infrastructural construction. It was not until 2000, however, that vast changes appeared: in that year, Wuhan was put into a national strategy to
Zhongshan Avenue and East Lake Greenway
How does the local government of Wuhan fund its projects? Zhongshan Avenue (ZA) and East Lake Greenway (ELG) are typical cases. Constructed in the early 20th century, ZA is one of the main streets running through Hankou, parallel to the Yangtze River (Fig. 1). With a length of approximately 4.7 km and an area of approximately 2.5 sq. km, ZA went through the concession territories of Wuhan and became Wuhan’s political, economic, and cultural center in the pre-1949 era. After a century of
Riverside Business District (RBD)
Here, we consider another new project in Wuhan, 27 Riverside Business District (RBD), to articulate the modality of the local government’s direct involvement in the process of urban development and construction, largely with the help of financial tools.
Historically, the site of RBD, with its approximately 83.6 ha, was a train assembly factory with both warehouses and workers’ residential communities. Located in the northeast part of central Wuhan, the site is near the No. 2 Yangtze River
Discussion and conclusions
In this paper we place the financialization of urban spaces in the context of emerging Chinese cities to differentiate and contextualize the modality and actual process of built environment financialization. We contribute to the literature by highlighting the close relationship between planning aims and the financialization of urban spaces in post-reform Chinese cities. The making of the new Wuhan has featured a process of financialization underlain by strategic arrangements of the local
CRediT authorship contribution statement
Xiaofan Luan: Investigation, Methodology, Software, Writing - original draft. Zhigang Li: Supervision, Conceptualization, Visualization, Writing - review & editing.
Acknowledgement
This study was funded by the National Science Foundation of China, Grant Nos. 41422103, 41501121, and 41771167.
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