ABSTRACT Motivated by the newly established Chinese urban land markets, we develop a theoretical model that unifies the “closed” and “open” features of the classical monocentric city model. The model features interactions between permanent urban residents and migrants and exhibits a distinctive equilibrium pattern. The theoretical model is tested empirically, using recent Chinese city-level data. The empirical findings indicate that market forces now play an important role in urban expansion and land price formation, while various forms of government planning are still influential. Our results show that migrants exert a less pronounced impact than the classical “open” city model has suggested.