The Logic of China’s Rezoning
September 24, 2015 by Blog Editor
By Warren Lu
As urbanization emerges as one of the Central Government’s top concerns in recent years, the trend of administrative division adjustment has also become popular among municipal cities in China.
In expanding urban areas and aiming for the new stage of development, municipal cities tend to choose rezoning (turning counties and county-level cities into districts) as a tool for stimulating future growth.
According to official records of Ministry of Civil Affairs of the Peoples’ Republic of China, there are overall 529 items of administrative division adjustment (county and above county-level) all over China from 1999-2014.
Let’s divide 529 items into three categories: cancel county or county-level cities, combining counties and county-level cities to form new municipal cities, changes names of counties and turn counties or county-level cities into districts (rezoning).
Rezoning: On the Upward Climb
Data shows that, comparing with other three types of adjustments, rezoning itself has an opposite trend: it became popular in the first three years of the 21st century and during 2004-2010, there were only 4 cases of rezoning. However, after 2011, rezoning had an obvious upward trend with its peak of 19 cases (highest after 1999) in 2014.
Three Major Reasons
I look into all 29 rezoning cases based on interviews with local officials and government documents during 2011-2014, and conclude three major reasons for China’s rezoning:
1. The weak radiation of the original urban area has become a disadvantage in cities’ next development stage.
2. Cities need to build a larger urban area for industrial upgrading and transformation.
3. Increasing urbanization rate by a sharp growth of urban population
More specifically, what benefits can municipal cities get from rezoning? A more powerful urban area with stronger radiation.
After rezoning, in 2013 Suzhou statistical yearbook, urban area created 736.95 billion GDP, while counties (county-level cities) had 760.12 bn. Suzhou’s new urban area occupies more than 50% of Suzhou’s overall GDP (the corresponding data used to be 38%). A larger and stronger urban area provides more authority to municipal government over district and county government. Municipal government has a wider area in planning and selling lands. Suzhou’s urban area reached 2742 km2 from 1650 km2 after rezoning3.
In 29 cities’ rezoning cases, 28 cases mentioned the intention of enlarging urban area (the only exception was Chongqing) for the development of urban economics. Besides, redistribution of fiscal revenue will be able to bring municipal city more fiscal revenue.This is because generally speaking, a county level government is able to keep a larger proportion of fiscal revenue then district government.
Urban population has been used as an indicator in dividing city levels and in measuring the ability in constructing infrastructure. For example, the State Council issued the new categories in dividing city levels based on urban population at the end of 2014. The first level includes cities that have more than 10 million urban population; the second level includes cities who have urban population between 5 million to 10million. Different city levels are able to enjoy different level of policy dividends. The approval of Metro planning calls for more than 3 million urban population.
In conclusion, as traditional development model—taking advantages of cheap labor, cheap industrial land strong manufacturing industry—reaches its bottleneck, provinces are increasingly transiting into development models, especially for more advanced provinces like Zhejiang, Jiangsu, Guangdong (Guangdong Provincial Government allows municipal cities who only have one district to carry out rezoning plan).
The rezoning plan is consistent with the plan of building metropolitan areas : thus the accelerated popularity of rezoning in recent years.