Keywords

5.1 Research Findings

In this research, there is a clear connection between governance in redeveloping Guangzhou and Chinese style authoritarian regime. This connection is the key to understand resilient governance in Guangzhou. And it is the focus of this research.

5.1.1 Institutional Background

The institutional background governing urban redevelopment is based on the governmental relationship between Guangzhou and Beijing. At the organisational level, the 1994 reform of distribution of fiscal income between the central and local state resulted in fewer resources at the municipal level with more duties, such as requirements to provide a healthy lifestyle, education and urban infrastructures. The Guangzhou government needed to increase its fiscal income to fix the mismatch between fewer resources and more duties.

At the individual level, the municipal leaders were eager to be promoted by the leaders in the central level; this promotion depended on local economic performance to some degree. Therefore, the local state had strong incentives to create a pro-growth regime in Guangzhou. These incentives are supported by a group of institutional arrangements.

Housing reform after 1998 stopped the free distribution process of housing in work-units; people had to buy commercial properties in the real estate market. This market became prosperous after 2000 as indicated by the significantly increased property prices. This prosperity led to enormous demand in the land-leasing market where the local state was the only seller holding a monopoly on rents. Income from the land-leasing market contributed to fiscal income and supported economic growth at the municipal level.

Urban redevelopment plays a crucial part in both the real estate market and land market. Urban planning, as a professional tool employed by the local state or developers, could increase land values in terms of high-quality design, advertisements, high density and changing land functions. In such an institutional framework, a land-oriented growth and redevelopment context has been formulated.

5.1.2 Three Phases of Governance in Urban Redevelopment

Based on the institutional background, governance modes can be analysed with empirical data from Guangzhou. Attention here focuses on what has happened in urban redevelopment. There are three phases with different patterns of governance: 1 the Primitive Market Phase (1990–1998); 2 the Pure Government Phase (1998–2006); and 3 the Multiple Players Phase (2006–2015).

The Primitive Market Mode (1990–1998) was close to the market mode of governance in several ways: a huge amount of small-scale developers were active in redevelopment with less exclusive control or monopoly in the hands of a single entity; the redevelopment process had relaxed regulations in terms of planning; the use of a contract was the main method to define relationships between entities; negotiation was the main mechanism to solve conflicts; developers had relatively more power in terms of decision-making in different stages.

The Pure Government Phase (1998–2006) had a semi-hierarchical mode of governance. Agendas of redevelopment were established by the local state mainly by political considerations; the majority of investment in projects was supported by public funding; construction works were contracted out to construction companies under the supervision of governmental sectors; a fewer number and smaller scale of redevelopment projects were built in this phase because of the limited amount of public investment.

The Multiple Players Phase (2006–2015) have more characteristics close to the network mode of governance. This Phase involved more diverse players in the process of redevelopment, such as actors from mass media and voluntary sectors. Their attendance had increased resources of social groups from redeveloped communities; exchanges of resources between public and private sectors were more frequent. Therefore, entities from the local state, market and communities are interdependent in their interaction; various coalitions between groups were established. However, the local political leaders were still powerful exercising control of the direction of redevelopment even when other actors had become stronger than before.

5.1.3 Resilient Governance of Urban Redevelopment in Guangzhou

The third part of research aims to provide understanding of the purpose of changes in governance mode; attention focuses on why such changes have happened. The main purpose here is to pursue economic growth in various developmental environments. First of all, Guangzhou is the capital of the Guangdong Province and the pioneer of reform after 1978; these factors bring about more autonomy in the Guangzhou government to make their own decisions in governing redevelopment. Therefore the governance mode in Guangzhou has more possibilities for change.

In the 1990s, the local state had less regulation than later to control the land-leasing process. In such processes, negotiation was the most popular method to transfer land use rights to developers. This method often meant cheaper prices for land and more profitable prospects for redevelopment. This factor contributed to the formulation of the semi-market mode of governance in the Primitive Market Phase (1990–1998) when market forces were active and dominant in this phase.

At the same time, the lack of capital in Guangzhou also supported the dominant role of market forces in this phase. National urban policy at this stage had restricted the extension of urban territory, which led to more incentives to redevelop old towns than to develop new cities. After 2000, the territory of Guangzhou was extended from 1443.6 to 3718.5 km2. New space for development had become available while the cost in developing rural areas was cheaper than redeveloping old urban areas because there were fewer compensation fees in rural space.

The urban planning system in this stage had provided guidance to urban sprawl towards the south and east of Guangzhou. Therefore, urban redevelopment in old towns had less significance for construction and growth; the local state had dislodged developers from urban redevelopment and redevelopment had become less active in the semi-hierarchical mode of the Pure Government Phase (1998–2006).

In the next phase, the Multiple Players Phase (2006–2015), stricter and stricter control over conversion from agricultural land to construction land in rural areas meant redeveloping old towns was more reasonable than before. Urban redevelopment became a hot spot again. In these two phases network style governance has involved more social actors such as communities, voluntary organisations and mass media. This is due to the rise of market style mass media and the awareness of historical preservation in Guangzhou after 2003.

The popular idea of legitimacy of governmental activities has also changed. The general population have become suspicious of the behaviour of the local state; the municipal government needs to empower the communities to express their interests in legitimate governmental behaviour.

In addition to these structural factors, the mayors of Guangzhou have strong influences on governance modes; especially the mayors in the first two phases, Mr. Ziliu Li and Mr. Shusen Lin, who have significant styles of governance. Their ages, political experiences, personalities and preferences have strongly contributed to the governance styles adopted in the first two phases. The influence of the mayors is characteristic of the Guangzhou case.

Various factors have different importance in diverse phases. In the Primitive Market Phase (1990–1998), factors from the economic dimension, outside scale and individual aspect (mayors) might be more influential than others. In the Pure Government Phase (1998–2006), the political dimension, outside scale and individual aspect might be more influential than others. In the Multiple Players (2006–2015), the social dimension, inside scale and structural aspect might be more influential than others. The relative importance of these factors has been discussed in ‘6.6 conclusion: adaptive governance mode for growth’.

Every factor mentioned above has influenced the governance modes under the pro-growth mechanism. This means the governance mode in specific phases has been changed to adapt to changing political, economic and social circumstances. The purpose or logic for this adaptation is to maximise economic growth under political, economic and social constraints. The modes of governance have changed dramatically while the logic behind these modes has not changed. However, this section has only explained the incentives and directions of changes in governance modes; the possibilities and capacities of Guangzhou to change governance mode to fit changing circumstances needs further investigation.

5.2 Comparing Guangzhou to Other Chinese Cities

The Guangzhou case is part of the transformation of Chinese cities in the last 25 years. Table 5.1 above summarises the process of urban redevelopment in China which seems to be a gradual transformation from a planning system to a market system, from a centralised system to a more decentralised system, with more and more factors and social groups included in such a process Wu (2015).

Table 5.1 Periodization of Chinese urban redevelopment
Full size table

In Wu’s theory, the years after 1990 can be divided into three phases. The first one is before the 1998 Asian Financial Crisis. In this phase, capital from work-units and public funding have improved the living conditions of citizens on a limited scale. There is no consideration of income from the perspective of the local state.

The second phase (1998–2008) has involved the local authority in the pursuit of fiscal income by land-leasing. The entrepreneurial local state has been formulated. Developers have become active in this phase.

In the third phase after 2008, the local state focuses more concern on the upgrading of the local economic structure in redevelopment in addition to pursuit of direct fiscal income. State backed investment platforms have been established as important financial approaches to support local growth.

In another paper, Zhai and Wu (2009) have summarised urban redevelopment in Chinese cities from 1949. They maintain that the phase after 1990 should be divided into two phases, a transition phase with real estate development (1990–2000), and rapid and comprehensive redevelopment after 2000. In the first phase, real estate development has become an important strategy for the local authority to stimulate economic growth. The local state functions as an economic actor rather than a political actor. Institutions involved in redevelopment have been improved. More and more stakeholders have been involved. In the second phase (2000 to date) there are more comprehensive and sustainable elements in urban redevelopment, such as a harmonious society and sustainable cities which are important targets.

These two divisions of the phase have some similarities because both of them tried to connect the urban redevelopment of Chinese cities with national and global changes to adapt to such changes, especially the global elements, such as the financial crisis in Asian counties. In these statements about the redevelop Chinese cities, the most important similarity is the pursuit of economic growth by the local authorities. They are entrepreneurial actors aiming to maximise their interest in governing urban activities. Secondly, developers in the real estate industry are important actors in growth-oriented redevelopment projects. Cooperation between the local state and developers is a common phenomenon. Thirdly, more and more elements are included in urban redevelopment, such as financial departments and social entities.

The Guangzhou case has some similarities with the ideas of Zhai and Wu (2009) and Wu (2015). Firstly, the state plays a central role in any period. The central state provides the national policy and builds up a context for local development; the local state employs different strategies to adapt to changed environments, nationally or globally. Secondly, the tendency of changing governance modes leads towards a more comprehensive and inclusive redevelopment process. More social and cultural elements are included in governance practice. Thirdly, such a tendency for changes appears more at the level of governance, but not at the level of meta governance. The logic and dynamics of designing, context and reproduction have not been changed. For instance, Wu’s (2015) statement about the local changes follows the logic of the entrepreneurial local state in any phase of redevelopment.

Compared with other Chinese cities, Guangzhou has two main differences in terms of governance. Firstly, it is more fragmented than other Chinese cities in terms of the distribution of resources and power. For instance, Guangzhou has more urban villages than other Chinese cities, especially compared with Shanghai. This is because the Guangzhou government is more tolerant than other local authorities; more urban villages have been demolished in other Chinese cities.

Existing urban villages in Guangzhou have their own collectively owned land and massive properties in these lands. These lands and properties have large economic values within the villagers’ hands. Such values are fragmented into villages and bring bargaining power to the villages when they need to negotiate with local authorities. For this reason, demolishing these villages is much more difficult than doing so in Beijing and Shanghai. Therefore, villages have joined the coalition of redevelopment. The Guangzhou governance is more inclusive for non-public actors.

Secondly, the Guangzhou case displays a more discontinued picture about governing urban redevelopment between phases. Other Chinese cities have more continuous patterns of governance. This is because the Guangzhou governance style is more resilient than in other Chinese cities. Behind the market, hierarchy and network mode, there is a market mode as meta-mode to change its governance mode between various modes in specific contexts. This market-oriented meta-mode has several aspects.

Guangzhou is more adaptive to the changed environment by changing its governance modes. This is market-style behaviour in a real market environment while hierarchy and network have less flexibility in changed circumstances. In Guangzhou market entities have always been active, even in the Pure Government Phase (1998–2006). In this phase, the local authority operates urban redevelopment by market-style governing skills in mega project such as the Inner Loop Redevelopment.

In addition, private developers have found opportunities in this phase. They operate redevelopment in SOEs which are not controlled by the local authorities. Some of these developers, such as Fuli, have grown up into the largest real estate enterprises in China. Fili won its first capital in redeveloping old SOEs in the Pure Government Phase.

5.3 Limits of This Research and Areas for Future Research

This research displays the political nature of urban redevelopment in Guangzhou from 1990 to 2015 from the perspective of governance. There are two major limits of my research. First, it is a large scale research which includes hundreds of square kilometres of space and spans a time of 25 years. It is very challenging to analyse such a temporal and spatial scale in one research; so many details about actors, institutions, events and projects have happened. This huge amount of information is hard to collect; after collection, choosing among the collected data is also difficult; displaying the chosen data to form a structural narrative is full of uncertainty. There might be a large amount of data which have been missed because of the limits of time, resources and capacity of the researcher.

Secondly, governing urban redevelopment in Guangzhou is one case of urban governance in Chinese cities in the last 25 years. Do other Chinese cities have similar processes and mechanisms or not? Because my research is focused on Guangzhou and has less concern with other cities, even if there is a comparison between Guangzhou and other Chinese cities this comparison is unbalanced, much more attention has been directed to Guangzhou than to other cities. The answer to this question is unclear. The original aim of this research is to investigate the nature of urban politics in the Chinese authoritarian regime; the answer from urban redevelopment might be problematic.

With some limits, the whole research displays that the governance mode of Guangzhou has been changed several times to adapt to changed political, economic and social environments. This mode is resilient to maximise growth in various conditions. This resilience seems to increase the capacity of the communist regime to continue its ruling by economic performance.

In the changing process of governance, it is more and more open, inclusive and transparent; such changes are progressive according to Western standards. However, such a strong capacity of adaptation and the process of improvement might meet their limitations. It means changes in the future may have conflicts with the essence of the one-party state system. Therefore, ‘where is the limit of adaptive capacity of China’s authoritarian regime’ is an interesting question. Both prosperity and the collapse of this country are possible.

This question requires further research; it also needs more time to observe what the future for such a special regime is. It is also a great experience for a human being to explore the possibility of governance. This is the first possible direction of future research about the latest development in governing urban redevelopment.

At the same time, it might be interesting to expand this research to evaluate results of urban redevelopment. This research is more about the process of redeveloping; however, the cause-effect relations between processes and consequences are crucial to understand the nature of governance in redevelopment. Evaluating economic, social, cultural and environmental outcomes of redevelopment projects are important to improve the governance activities as practical issues. This is the second possibility for further study in terms of expanding research to other topics in the same field.

Furthermore, this research is more about power relations in interaction in urban redevelopment among entities from the state, the market and communities; however, the production of knowledge in these redevelopments is also important. This is because knowledge is essential for actors to make decisions in the governance structure; it is a deeper level of governance. This is the third potential research agenda in terms of understanding the deeper nature of governance. In short, the future research should follow the latest developments in reality, expand the field of research to unknown areas and look in more depth at the nature of governance. They are all middle-scale research objectives.

If I can go further, the next crucial questions will be: Is it possible to surpass the dualistic discussion between authoritarian and democratic governance in human society to discuss appropriate governance modes? If it is possible, what are the fundamental elements to answer such a question? In fact, this book aims to explore these two questions; but I do not have the capacity to find appropriate answers. It will be interesting to see what can be found in the future.