LAND AND URBAN ECONOMIC GROWTH IN CHINA*

Authors


  • This paper is supported by funds from the Lincoln Institute of Land Policy. This paper is a part of collaboration between the Lincoln Institute of Land Policy and the Institute of China Land Survey and Planning at Ministry of Land and Resources, PRC. Juan Feng assisted in the collection and preparation of data. The authors are also grateful for Gregory K. Ingram, Ramon Lopez, and Lori Lynch for their comments and suggestions. Opinions and views expressed in this paper are solely those of the authors and not of the research sponsors. Responsibility for any errors rests with the authors.

Abstract

ABSTRACT Land to accommodate urban development in China is provided through requisitions by government officials, suggesting that land availability may be a constraint on urban economic growth. An econometric model of urban GDP growth suggests that land has constrained economic growth in coastal areas but not elsewhere. Elasticities calculated from the estimated coefficients indicate that land availability has a larger proportional impact on economic growth than domestic and foreign investment, labor supply, and government spending. The estimated parameters provide evidence about arbitrage opportunities created by discrepancies between urban land value and compensation for requisitioned rural land, suggesting rural unrest associated with conversion of farmland to urban uses may have some economic roots.

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