The long shadow of the state: financializing the Chinese city

Authors: Fulong Wu*, University College London
Topics: Urban Geography, China, Urban and Regional Planning
Keywords: Financialization, Chinese cities, urban governance
Session Type: Paper
Day: 4/9/2020
Start / End Time: 1:45 PM / 3:00 PM
Room: Plaza Ballroom F, Sheraton, Concourse Level
Presentation File: No File Uploaded

Despite the controversy over the meaning of financialization, there are two major dimensions to understand whether the city is financialized. This paper explores whether the Chinese city (increasingly) uses financial instruments to carry out its urban development tasks and whether the utilization of financial instruments imposes a financial logic over urban governance. Financializing the Chinese city involves creating land collaterals, converting development agencies into local government financial vehicles (LGFVs), extending shadow banking, diversifying financial conduits such as ‘fake equity, real debts’, securitizing local government debts, and financializing urban redevelopment to ‘deleverage’ the debt ratio of developers. Applying one instrument led to another wave of financialization, showing a financial logic in operation. However, financializing the Chinese city is engineered by the state through its credit expansion to cope with the global financial crisis and its ramifications for the entrepreneurial model of ‘export-oriented world factory’. It is a state-led financial turn.

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