Housing provision restructuring and state-led financialisation in post-global recession China

Abstract

The latest global financial crisis has triggered a four trillion RMB stimulus package in China (Sum, 2013), which invested largely in the urban built environment such as urban infrastructure and the real estate industry. This short-term yet intense bailout plan has ostensibly led to ‘ghost estates’, skyrocketing housing price, and pandemic civil resistance (cf. He and Xue, 2014; Wu, 2015). Both the stimulus package and the long-lasting ‘deficit financing’ associated with China’s fast-track urbanisation (Harvey, 2005) have accumulated unsustainable heavy debt burden for the local governments (Naughton, 2015; Ren, 2015). In order to cope with these deadlocks, urban housing provision has undergone a dramatic restructuring in China. Firstly, the very harsh top-down ‘purchase restriction order’ has been enforced to curb speculative investment flooding into the high-end housing market. Secondly, massive evictions under the banner of ‘shantytown redevelopment schemes’ and ambitious plans of affordable housing provision have simultaneously taken place. These processes have created supply and demand for the low-end housing market and stimulate large-scale urban redevelopment.