The Increasing Financialization of China's Urbanization

This paper provides a heuristic framework to address issues about China's on- going urbanization in relation to the role of land and built environment as triggers for economic growth and to the increasing inancialization of urban production. While a dominant field of literature highlights the interrelation between land and capital within a specific institutional setting between Central and local governments, it argues to include other key linkages between in rastructures, property development and fnance to understand China's recent exponential urban growth. It first places the current con- sequent local governments'debt into perspective along with the evolution of financial circuits for urban infrastructures resulting from Central Government policy and re- gulation changes. Next, and in line with the real estate literature that highlights the key role of demand, it develops an original understanding of the financialization of urban production from the perspective of China's property industry. Besides the role of humeownership policies since 1998 which boosted urban production based on use value, various ways of the transformation of property into financial assets have oc- curred. Chinese households as the main investors hawe not only been able to directly Invest in housing and in non-housing by purchasing flats or coanmercial property but indirectly by increasing investments in special purpose vehicles such as trust ank and funds finance and new kinds of investment platforms. In both cases, Central Govern- ment macropolicies, both stimulating and restricting from 2008-2016, have gone in hand with increasing financialization processes for local governments'debt, urban infrastructure financing and real estate.