In-Situ Marginalisation: Social Impact of Chinese Mega-Projects

: This study offers a detailed analysis of an under-researched social problem of in-situ marginalisation and its causes by drawing on the concept of state entrepreneurialism. Our empirical data stem from the Lingang mega project in Shanghai and one of its neighbourhoods named Neighbourhood No.57 where we ﬁ nd that the residents have not been relocated but are instead suffering from declining public ser- vices and environmental quality from surrounding industrial developments. The root cause of this problem is the municipal government ’ s prioritisation of its strategic objectives of economic development over the livelihood of local residents. The strategic vision of the municipality has led to mass relocation in its early phases of development but in its later stages leaves many residents waiting for relocation whilst being gradually sur- rounded by industrial developments. Despite continued residential complaints and petitions, in-situ marginalisation is not resolved due to the institutional arrangement of Lingang, which has centralised planning and ﬁ nancing powers to newly created project-oriented state organisation. Social responsibilities have been relegated to lower-tiered governments in Lingang which have neither planning power nor the ﬁ nancial resources to resolve the problems of residents. By examining the case of Lingang, this paper pro- vides a different analytical framework for explaining the social problems emerging from China ’ s mega urban developments. Abstract: 本 文 运 用 “ 国 家 主义 ” (state entrepreneurialism) (in-situ marginalisation)


Introduction
There is growing scholarship that examines the social impacts of large-scale urban projects on local communities (Fainstein 2008;Hiller 1998;Lehrer and Laidley 2008;Olds 1998;Orueta and Fainstein 2008). Being referred to as the "conduits of neoliberal governance" (Tarazona Vento 2017:70), mega urban projects especially in the global North have been used as empirical evidence to showcase the This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. detrimental social effects of neoliberal urban politics. Many studies have associated the project-led approach of mega urban development with the displacement of marginalised residents, the gradual gentrification of localities and the emergence of a post-political society (Attuyer 2015;Lehrer and Laidley 2008;Olds 1998;Swyngedouw 2009;Swyngedouw et al. 2002;Tarazona Vento 2017;Watt 2013). Large-scale developments have also become a salient feature of Chinese urbanisation and many studies have highlighted the social problems such projects create Shin 2012;Wu et al. 2013;Zhang 2004). Most of the critique so far has been directed towards the process of mass relocating residents and its ensuing problems of forced displacements and conflicts over poor compensation (Hsing 2010;Shih 2010;Shin 2012;Zhang 2004). However, some recent studies argue that Chinese mega projects not only affect those who have been relocated but also negatively affect residents who remain grounded in their original residence (He et al. 2009;Shih 2017;Siu 2007). We use the term of insitu marginalisation (Shih 2017:394) to describe the problems experienced by residents who have not been relocated but instead suffer from a decline of their neighbourhood, social isolation and environmental pollution due to Chinese mega projects.
The purpose of this paper is to explore the problem of in-situ marginalisation as a major social impact of Chinese mega projects and its underlying causes. Our paper draws on the findings from Lingang new town, which is part of a growing number of peri-urban mega projects that have been developed in recent decades (Hsing 2010;Shen and Wu 2017;Wu and Phelps 2011). We contend that the theoretical framework of neoliberalisation whereby mega projects mainly serve to garner financial profits through land revalorisation (Brenner and Theodore 2002;Swyngedouw et al. 2002;Tarazona Vento 2017) cannot explain the social problems found in Lingang. Instead, we contend that the concept of "state entrepreneurialism", which emphasises the role of mega projects as a means to realise the state's strategic and political objectives (Wu 2018;Wu and Phelps 2011), has greater purchase in understanding what has led to the under-researched phenomenon of in-situ marginalisation in China.

The Social Impact of Mega Urban Projects
The proliferation of mega urban projects in the last few decades has resulted in worsening social inequality and the decline of the democratic decision-making process (Attuyer 2015;Hiller 2000;Lehrer and Laidley 2008;Olds 1998;Orueta and Fainstein 2008;Tarazona Vento 2017). The emergence and social impacts of mega projects are often attributed to the neoliberalisation of urban governance and entrepreneurial local states, which prioritise economic gain through land revalorisation over social objectives (Brenner and Theodore 2002;Lehrer and Laidley 2008;Orueta and Fainstein 2008;Swyngedouw et al. 2002). Explicit goals to profit from the increased land prices and to improve the tax basis (Swyngedouw et al. 2002) mean that the most vulnerable groups such as tenants without any formal rental contracts are the first to be displaced (Olds 1998). In the long term, such economic objectives lead to the gentrification of its surrounding areas (Watt 2013). Moreover, the reliance on the private sector and the increasingly more private-led governance of mega projects have resulted in the decline of public participation in the development of mega projects (Haila 2008;Lehrer and Laidley 2008;Tarazona Vento 2017). Formal participation processes only allow residents to discuss superficial concerns such as technical details of developments whilst avoiding substantial issues including the necessity of developing mega projects or the way such projects should be delivered (Attuyer 2015;Fainstein 2008;Lehrer and Laidley 2008). Consequently, interests of local residents and the wider public are often side-lined for the sake of creating financial profits for the growth coalition.
Whilst the dominant discourse on mega projects is mostly based on empirical studies from the global North, mega projects have also proliferated in Asian countries (Shatkin 2017;Sonn et al. 2017) whereby China has emerged as a hotbed for large-scale urban projects (Jiang et al. 2016a;Li and Chiu 2018;Shen and Wu 2017;Wu and Waley 2018). However, increasingly more studies express doubt that the concept of neoliberalisation is suited to explain the Chinese urban development process (Wu 2018;Wu and Phelps 2011). In China, large-scale displacement and forced evictions from mega developments such as the Shanghai Expo or the Beijing 2008 Olympic games continue to be of great concern (Shin 2012;Zhang 2017). Land expropriation has displaced millions of residents in order to make space for new developments (Shin 2012;Wu et al. 2013). Large numbers of forced evictions and poor compensation schemes have also led to severe conflicts between residents and the state (Shih 2010;Zhang 2004). Following large numbers of complaints from residents, the state has improved and standardised its compensation scheme, especially in large cities such as Shanghai (Shih 2010). However, problems continue to exist as relocated residents are still uprooted from their former neighbourhoods because compensation properties are located in remote areas with poorly serviced infrastructure . Due to high property prices in the inner cities and insufficient monetary compensation, displaced residents are unable to buy another property in the same area. In recent years, the proliferation of mega projects in peri-urban areas in the form of new towns, industrial development zones or science parks (Hsing 2010;Shen and Wu 2017;Wu and Phelps 2011) has also led to the relocation of many residents living in urban peripheries. However, the experience of relocation in peri-urban areas has been more mixed. Studies found both negative experiences of displacement and residents complaining about the lack of employment ) and more positive responses about improved living standards (Li and Song 2009). Hsing's (2010) research in rural Beijing revealed that the government is much keener to develop in the rural areas of cities. Firstly, the amount of land acquired for the same amount of money in rural areas is much higher than in the inner city and also because officials think "it is easier to deal with peasants than urbanites" (Hsing 2010:93). Often the resistance of villagers is considerably weaker as their demand for compensation is lower and therefore easier to satisfy (Hsing 2010;Shih 2017). Furthermore, the conversion of farmland to urban land has also taken away the source of living for landless farmers who instead have to rely on renting out properties to migrants and take on other jobs in cases where the rental income is not sufficient (He et al. 2009;).

Beyond Physical Displacement: In-Situ Marginalisation in China
Another considerably less documented but equally severe social problem is the phenomenon of in-situ marginalisation. In this study, we broadly define in-situ marginalisation as a process whereby residents are not being physically uprooted by urban (re)development but instead experience a gradual decline of their physical and social living environment over time. Residents are trapped within this worsening environment and lack the ability to halt the decline themselves. In-situ marginalisation can take on many different forms of decline ranging from environmental pollution to declining physical environments. Unlike physical displacement, processes of in-situ marginalisation are often (but does not always have to be) hidden from the public eye and less visible by nature. The process can occur both in peri-urban areas (Shih 2017) and inner cities such as in Shanghai's physically deprived urban villages which are subjected to strict building regulations that prevent homeowners from improving their housing quality (Wu 2016). In peri-urban areas, in-situ marginalisation often involves residents being surrounded by industrial developments and exposure to pollution as well as isolation from other parts of the area and the new development itself. Research in different Chinese cities shows that large-scale urban expansion projects have not led to mass-relocation of rural villagers (He et al. 2009;Shih 2017;Siu 2007). Instead rural residents were allowed to stay in their original village, although their farmland had been expropriated by the state for industrial development. Having lost their stable income through farming, residents had to rely on other more unreliable sources of income such as renting out properties to migrants or working on low-paid menial jobs such as collecting trash (He et al. 2009;Shih 2017). Shih (2017) finds that some villages were gradually surrounded by industrial developments which adversely affected residents' health over time. Our study argues that the cause of in-situ marginalisation is strongly associated with China's urban governance approach, which Wu (2018) describes as state entrepreneurialism. The next section provides a definition of state entrepreneurialism and explains how it has produced in-situ marginalisation.

Conceptualising State Entrepreneurialism and In-Situ Marginalisation
An increasing number of studies have highlighted the dominant role of the state in defining China's urban governance (Jiang et al. 2016b;Li and Chiu 2018;Shatkin 2017;Wu 2018). Drawing on the concept of "state entrepreneurialism", Wu (2018Wu ( :1385 argues that China's "local development and politics may not be limited to the growth machine and machine politics". Whilst in the US and Europe, private corporations dominate urban developments (Fainstein 2008;Lehrer and Laidley 2008;Swyngedouw et al. 2002), in China it is the state and in particular municipal level governments that introduce, develop and deploy "market instruments and engages in market-like entrepreneurial activities" (Wu 2018(Wu :1384. The state gives its "officials, usually at the local level within a defined jurisdiction territory, the power and capacities to conduct economic development, for the prospect of their political career and economic growth. Consequently, the state is transformed into an entrepreneurial market agency-known as 'state entrepreneurialism'" (Wu 2017:160). Despite the commodification in China, the market therefore does not dominate or weaken the state but instead helps to further consolidate the state's power. Mega projects initiated by lower levels of government such as district governments tend to have profit-oriented goals such as land value capture through land sales (Li and Chiu 2018;Wu and Waley 2018). On the other hand, many mega projects especially initiated by municipal, regional or even national level governments (for example Xiong'An New Area) have more strategic objectives such as restructuring the industrial sector, alignment with central government policies (Wu 2018(Wu :1385 and competing with neighbouring cities (Jiang et al. 2016a). Although the specific objectives of Chinese mega projects may vary, they tend to focus on uplifting the economy and ultimately serve to consolidate the state's power. For instance, the Shanghai Hongqiao project aims to become the new CBD in the Yangtze River Delta region and to stimulate the economy of Shanghai's underdeveloped peri-urban districts (Jiang et al. 2016a).
With regards to how in-situ marginalisation in peri-urban areas is associated with state entrepreneurialism, we contend that the root cause lies with the state's prioritisation of its own political and economic objectives over the social aspects of urban developments. This is reflected in the way Chinese mega projects are developed, whereby the state makes use of three key mechanisms to realise its strategic objectives, which in turn have resulted in in-situ marginalisation.
Land Development Model. In China the state has to rely on its monopoly over land to initiate and finance large-scale developments (Chung et al. 2018;Hsing 2010;Wu 2018) and tends to involve the following process. The state would use land as collateral to borrow money from state-owned banks and then use the loan to firstly relocate rural residents and acquire land for the construction of industrial developments and basic infrastructure such as roads (Chung et al. 2018). The land value of industrial development and infrastructure is considerably lower than residential developments, yet the local state has to build them first in order to attract businesses to move to the area which in turn would generate more residential and commercial demand. At the early stage of the development, the state does not actually make any profit and would have to rely on the subsequent sale of land for residential and commercial developments to make a profit. Industrial developments and especially basic infrastructure require a vast amount of land (Hsing 2010) and to ensure the future supply of such land in case demand increases, local governments would often designate large areas as industrial zones. Yet, in practice, despite being designated as industrial zones, it would often take years for it to be fully developed. To save expenses, not all local residents are relocated at once and many would remain grounded, particularly those In-Situ Marginalisation which are hard or expensive to relocate (Shih 2017). The remaining residents will be relocated if demand for industrial development picks up, but since this could take years and is dependent on the success of the project, many residents are stuck in limbo until then whilst their surrounding is gradually being redeveloped for industrial uses.
Relevance of Resident Groups to the State's Strategic Objectives. Chinese mega projects under state entrepreneurialism serve to realise objectives for capital accumulation and consolidation of political power and are not welfare projects that extend public services to its population (Wu 2018(Wu :1392. Chinese mega projects thus differ from more socially progressive and state-led mega projects such as the British new towns developed in the 1960s, which focused on providing affordable housing and social mix (Forsyth 2019). The amount of benefit and degree of care the Chinese state extends to its residents depend on how relevant residents are for the realisation of the state's strategic objectives. If native residents live in areas that are vital for developing the mega project, the state will provide generous compensation packages in order to convince residents to move away as soon as possible. The increasingly more generous compensation towards residents (Shih 2010) is therefore selective and more an attempt to foreground resistance instead of pure benevolence of the state (Kan 2019). However, once the "obstacle" of residents has been relocated from the site, the state also halts its care for the relocated residents as can be seen from the lack of employment and community facilities for relocated residents Zhang et al. 2018). Another resident group that is of great relevance to the strategic objectives of the state are prospective new residents with high levels of education and technical skills. For instance, this can be observed from the Chinese government's recent strategic vision to foster indigenous science innovation, which has resulted in a large number of new science parks (Miao 2017;Miao and Hall 2014;Zhang and Wu 2012). Although some cities used science parks as a guise to generate land revenue (Miao 2017;Miao and Hall 2014), one core objective for such science parks is to attract researchers and other highly skilled residents to move to the science park. Considered as a highly successful science park by the national government, Zhangjiang Science Park in Pudong offers a series of benefits, including start up grants, tax relief and subsidised housing to high-skilled people to move to Zhangjiang (Zhang 2015).
In contrast, resident groups that are not vital to the realisation of the state's vision receive little benefit from the development project. This includes residents who are neither located in areas vital for the realisation of the mega project nor occupy an amount of land that is critical for the delivery of industrial developments. Such resident groups do not receive any form of compensation or offers of relocation. Under such circumstances, rural villages closer to the city centre and surrounded by developments such as residential areas and commercial properties tend to become urban villages where their residents have lost their land and instead have to rely on renting out their properties to rural migrants (He et al. 2009;Shih 2017). In comparison, rural villages in more remote areas that have lost their farmland and are located in industrial zones experience in-situ marginalisation, including problems of environmental pollution from nearby factories and decline of amenities and basic infrastructure.
Project-Oriented Governance and Devolvement of Social Responsibilities. The state's land development model and its differentiated treatment towards different resident groups explain the emergence of in-situ marginalisation as a spatial and social phenomenon. However, the question remains as to why the state has not responded to this problem for so long despite serious resident complaints and public petitions (Shih 2017). To answer this question, it is necessary to consider the specific institutional arrangement that was put in place to govern Chinese mega projects. To ensure that the development outcomes of the project align with the strategic objectives of the state, at the city level, the government usually adds two types of "special-purpose and project-oriented" state organisations to the existing institutional hierarchy of the mega project (Jiang et al. 2016a(Jiang et al. :1937. The first type of state organisation takes the form of a State Owned Development Corporation (henceforth SODC), 1 which is essentially a state-owned enterprise specialised in urban development. Akin to private developers, SODCs are in charge of funding and delivering specific development projects . SODCs are given the power of primary land development and allowed to use land as collateral to acquire loans from state-owned banks (Li and Chiu 2018). Profits generated from development and land conveyance fees are also collected by SODCs. In practice, the SODC is the key mechanism to carry out the "land finance" model and to allow the state to finance large infrastructure projects through land value capture (Li and Chiu 2018). The second type of state organisation takes on quasi-governmental responsibilities, including the creation of the masterplan and development policies as well as approving planning applications (Jiang et al. 2016b;Wu and Phelps 2011). In recent years, this type of organisation is often called the "management committee" (guanli weiyuanhui or guanweihui in short). The key reason why the management committee cannot be considered as a fully fledged government is because in many cases it does not need to take on any responsibilities of governing local residents (Jiang et al. 2016b). The responsibility of governing local residents is devolved to the existing district and sub-district government who are in charge of delivering services such as waste management, policing, social service and health care. The district and subdistrict governments are also responsible for relocating residents. The division of labour between the project-oriented state organisations and the existing local governments is very clear and does not overlap a lot, although in the case of relocating residents there is some degree of collaboration. Usually, the SODC is responsible for funding the compensation of relocated residents whilst the subdistrict government is charged with the "dirty work" of actually relocating residents (Jiang et al. 2016b:33).
Under this institutional arrangement, SODCs and the management committees are free of any social responsibilities towards residents and are not held accountable by the municipality for any complaints by residents. The state's response to In-Situ Marginalisation the contestation arising from dissatisfied residents is to devolve its social responsibilities to lower levels of governments. However, this centralisation of planning and economic power to state organisations directly administered by the municipality coupled with the devolvement of social responsibilities to lower tier governments is problematic. Under this model, district and sub-district governments, which are much more aware of the local context, do not have any planning power themselves and cannot pre-empt problems of in-situ marginalisation by for instance incorporating residents' needs into the masterplan of mega projects. Furthermore, district and sub-district governments do not receive direct financial benefits from the mega project, which sometimes lead to tensions between the district government and the project-oriented state organisations (Jiang et al. 2016b). Under this model, lower-tiered governments in charge of residents are therefore in no position to compensate or relocate residents suffering from in-situ marginalisation by themselves.

Research Methodology
This paper draws on the case of Lingang New Town in Shanghai and one of its neighbourhoods called Neighbourhood No.57 to illustrate the causal relationship between China's state entrepreneurial governance and the social problem of insitu marginalisation. One key objective for the research on Lingang was to understand the underlying motivation for developing this mega urban project, how it was governed and its social impacts on local residents. This required a qualitative methodological approach that involved five fieldtrips to Lingang between September 2015 and November 2017. Research methods include ethnographic field observations, document analysis, attending organised events by the Lingang authorities and 51 semi-structured interviews. Interviewees included residents, planners, government officials at the municipal, district and township level, private developers and international firms and lasted between 30 minutes and two hours. To research the social impact of Lingang New Town, we draw on a range of official and internal reports and other written materials, including the official masterplan for Lingang, all versions of Lingang's governance policies, internal population and development reports as well as current special policies for the development of Lingang. We also conducted semi-structured interviews with a total of 16 residents, including residents who have been relocated and those who are still living in their original homes. With regards to residents who have not been relocated, this study mainly draws on the case of Neighbourhood No.57 (a pseudonym), where we interviewed seven residents including native residents, migrant residents, one landlord and a staff member of the residential association. The research team visited Neighbourhood No.57 five times between June 2016 and November 2017 and also collected other forms of qualitative materials, including field observations, informal visits to the factories surrounding the neighbourhood, photos of the surrounding neighbourhood as well as informal conversations with other local residents. In addition, we conducted interviews with a range of state organisations involved in Lingang and Neighbourhood No.57, including government officials working at the municipal level, former staff members of the Nanhui district and current officials of the Pudong district government as well as planners working in Lingang's township governments. In addition, we interviewed senior officials of the Lingang Development Management Committee (henceforth LDMC) and seven SODCs operating in Lingang as well as senior staff of two major private development companies which have invested in Lingang.
Lingang New Town and In-Situ Marginalisation in Neighbourhood No.57 Lingang new town was initiated in 2002 as part of Shanghai's masterplan to develop nine new towns in the suburban and peri-urban areas of the city (see Figure 1 for its location). Lingang covers an area of 315 km 2 and includes one new main residential town as well as four industrial zones (see Figure 2 for Lingang's land-use map). The main residential town of Lingang is called Nanhui main town and comprises an area of 67.76 km 2 , which has been entirely reclaimed from the sea. Apart from the main town, Lingang also has four industrial zones with a combined size of 241 km 2 , including the main industrial zone, the heavy-equipment manufacturing zone, Fengxian industrial zone and the comprehensive zone. So far, the most built-up area is the heavy-equipment manufacturing zone developed by the SODC called Lingang Group, whilst the remaining industrial zones are still largely undeveloped. Lingang new town is currently governed by the LDMC, which is a state organisation directly governed by the Shanghai municipality. Interviews with senior officials of the LDMC and Lingang's SODCs reveal that currently the biggest challenge for them comes from residents who have not been displaced but are requesting to be relocated, as well as the Lingang authorities' inability to accommodate these requests (Interviews with LDMC and Lingang Group officials, May and June 2016). Interviews reveal that many residents have resorted to large-scale public petitions in front of the Lingang authority buildings and even surrounded factories within the Lingang industrial zone in order to request their relocation (Interviews with Lingang Group and Lingang residents, August 2016). Local officials argue that whilst poor housing conditions and overcrowding are major reasons, there are also many residents seeking to capitalise on the development and to trade their rural houses, which cannot be resold, for relocation properties 2 that can be either rented out or sold at market value (Interviews with LDMC, township government officials, November 2016). However, another key reason seldom mentioned by government officials is the fact that there are still residents in the industrial zone who have not been relocated and are living in neighbourhoods located in close proximity to heavy industrial factories. One ongoing case of relocation dispute is Neighbourhood No.57, which is located in one of Lingang's industrial development zones with around 2000 households currently. Neighbourhood No.57 was built to serve as the residential neighbourhood for a state-owned farm which opened in the early 1970s and consisted of work-unit housing 3 for the staff members working in the state-owned farm. The state-owned farm itself covered an area of around 9.4 km 2 , which apart from Neighbourhood No.57 consisted mainly of agricultural land use and focused on the production of fruits and vegetables amongst others. The farm experienced some of its busiest times during the late 1970s and 1980s, when more than 8000 farmers worked and lived in Neighbourhood No.57. In the early 1990s, due to growing financial losses, the state-owned farm was privatised and sold to a major private Chinese food and beverage manufacturing corporation. It was also during this time that the work-unit housing was privatised and sold to its occupants at a discounted rate ( Residents also complain about the gradual loss of basic public amenities due to the decline of the local population's spending power. Since Lingang's initiation, many residents who could afford it have already left the neighbourhood and other nearby settlements were also gradually relocated, leaving only Neighbourhood No.57 behind. The resulting decline of public services often forced residents to travel for long hours in order to access basic facilities: Back then this place was very good, we had schools, hospitals, banks and post offices. Now there is nothing left, only the residents ... There are no hospitals or schools here. There is not even a bank here. The elderly people here are really suffering. In order to get cash from the bank, they need to go to the nearby town and [one time] on their way back, they were robbed. (Resident B in Neighbourhood No.57, August 2016) Over the years, a small group of resident representatives have continued to complain to the township government's petition office and on one occasion the leader of the township government also visited the affected neighbourhood and personally promised to look for a quick solution. However, according to local residents, this dispute has been going on for more than a decade. Despite the many promises made, the SODC in charge of the industrial area where Neighbourhood No.57 is located, only came up with a proposal to resolve this issue in 2016. The largest reason for this sudden responsiveness is because only in 2016 residents In-Situ Marginalisation have started to threaten the township government with a large-scale public petition, where more than 400 elderly residents would surround the buildings of the township government, the LDMC and the relevant SODC (Interview with resident D in Neighbourhood No.57, August 2016). Upon this threat, the LDMC swiftly requested the relevant SODC to come up with a solution. After two months, the SODC proposed to develop a new relocation neighbourhood close to other existing relocation settlements. Unlike conventional relocation, however, the SODC would only allow affected residents to exchange their existing property with one relocation property without any further compensation. Furthermore, properties in Neighbourhood No.57 would not be demolished as many of them are still being used as private dormitories for the migrants working in nearby factories. Residents and the leader of the residential committee of Neighbourhood No.57 welcomed this proposal and the LDMC even identified the piece of land where the new relocation settlements will be built. However, the hard won progress was halted when the municipal government rejected the proposal (Interview with resident A in Neighbourhood No.57, August 2016). Due to the intervention of the municipal government, the LDMC and the SODC now plan to provide monetary compensation to affected residents but according to residents there are no concrete plans of when and how much should be compensated.

In-Situ Marginalisation Under State Entrepreneurialism
There are two important questions arising from the case of Neighbourhood No.57. Firstly, what has led to the emergence of places such as Neighbourhood No.57 in Lingang, and secondly why have these problems persisted for so many years despite continued complaints and petitions by affected residents? We believe that the core cause lies with the Shanghai municipality, which has prioritised the central government's and its own strategic and political objectives over the welfare of Lingang residents. The development of Lingang was motivated by two major factors. In year 2000, Lingang was conceived as a harbour city with the specific objective of supporting China's first deep-water harbour on Yangshan Island, which would compete against other Asian cities with deep-water harbours such as Pusan and Singapore (Interview with a former senior LDMC official, August 2016). The harbour city would provide supporting infrastructure to Yangshan, including commercial services, housing and functions such as the transfer from cargo freight to road transport (LDMC 2005). Initially in the first round of the masterplan, Lingang was conceived as a harbour city of around 200,000 residents and a size of 50-60 km 2 , which would largely stem from land reclamation (Interview with former senior Lingang official, August 2016). However, before the masterplan of Lingang was formalised, the size of Lingang was further expanded to 315 km 2 as the development coincided with Shanghai municipality's strategy to upgrade its industrial sector. By the end of the 1990s, the Shanghai municipality had realised that the city was in need of a new strategic vision for its increasingly stagnating industrial sector and in light of growing competition from other Chinese cities such as Kunshan or Suzhou. Following several rounds of consultations with international firms including McKinsey, AT Kearney and Nomura Research Institute, the Shanghai municipality decided to focus on the development of the heavy equipment manufacturing industry, which required a lot of land (SDRC 2003). The decision was made to locate the heavy equipment manufacturing industry to Lingang as it still had abundant and cheap land for development (Interview with former senior LDMC official, August 2016). Some of Shanghai's existing industries, which were faring quite well but in need of more land to expand, such as the car-manufacturing industry, were also located to Lingang (LDMC 2005). To realise these two key strategic objectives, the Shanghai municipality used several methods that are representative of state entrepreneurialism. The following sections will elaborate on these methods and how they have resulted in in-situ marginalisation in places such as Neighbourhood No.57.

Land Financing and the Growing Irrelevance of Indigenous Residents in Lingang
To realise the two strategic objectives, like most of China's mega projects, Lingang's SODCs made use of the land financing model to fund the initial relocation of residents and the development of the industrial zone (Interview with senior Lingang Group official, June 2016). The Lingang Group had to first relocate large numbers of residents in the industrial zone in order to fund the development of basic infrastructure and factory units for the heavy equipment-manufacturing zone. An internal document reveals that in Lingang around 64,000 rural residents (around 21,000 households) have been relocated by 2012 (Lingang internal document 2012). To remove any potential conflicts with residents arising from poor compensation, the SODCs focused a lot of their resources on developing relocation properties. By 2012 around 4 million m 2 of relocation properties were constructed compared with 1 million m 2 of housing units sold at market price. In Lingang, relocation properties were constructed along with a series of new public amenities, including schools, libraries and community centres as well as two major shopping malls, all located in the industrial zone of Lingang (Lingang internal document 2012). Relocated residents were allocated housing in the same township, often only a few kilometres away from their original home (Interviews with relocated residents, June and August 2016). Relocated residents were entitled to relocation properties, which are calculated based on 40 m 2 per person, although households with only one child would receive an additional 40 m 2 . For example, a household consisting of two parents and a child (including those over the age of 18 but still registered with their hukou in the same household) would receive a total of 160 m 2 . The household could choose to buy one large property of 160 m 2 or purchase more than one property with sizes ranging between 100 and 60 m 2 . In many cases, rural residents opt for two properties, one for their own accommodation and the other one either for their children or for renting out (Interviews with relocated residents, June 2016). Resident opinions are mixed, with some residents stating that their income has increased post relocation whilst others complain about rising living costs and lack of employment for local residents (Interviews with relocated residents, June 2016). According to Lingang officials, there was no major local resistance or conflicts and 90% of residents were In-Situ Marginalisation satisfied with the relocation, although officials also admitted that there were some cases of conflicts with residents who refused to be relocated (Interviews with township, LDMC and Lingang Group officials, June 2016).
In contrast to those who have been relocated, the relationship between the Lingang authorities and residents who have not been relocated is much more conflict laden, as exemplified by Neighbourhood No.57. Yet,Neighbourhood No.57 is not a unique case in Lingang and there are several more farms suffering from similar problems according to residents (Interview with resident C, Neighbourhood No.57, August 2016). Recent population numbers by an internal government report seem to support this claim as the most built up township located in the industrial zone still has more than 20,000 residents who have not been relocated (Internal government report 2017).
However, Lingang, having completed the basic infrastructure of the heavy equipment manufacturing zone, no longer needs to relocate residents on a large scale. Since the completion of the early phases of land-intensive developments of Lingang, residents would only be relocated if investment for a specific project has been secured: In terms of the overall relocation policies, there have also been some changes. Back then, you were basically allowed to relocate residents on a large scale. All you needed was to show your masterplan and say that the land has been designated for urban development. But now you have to have a specific project first in order to get permission to relocate residents. This actually makes a lot of sense in terms of being effective. At the early stage of development, you need a lot of land in order to construct the entire basic infrastructure, but now this is not necessary so the change of relocation policy is not a big problem [for us]. (Interview with a senior Lingang Group official, September 2015) Instead, the LDMC and Lingang Group are now shifting their focus towards attracting high-skilled "talented" workers to the new town as part of their strategy to upgrade Lingang's industrial zones to a high-tech manufacturing cluster. Strategies to attract highly skilled workers to Lingang include the provision of subsidised housing, tax relief, the prospect of gaining a Shanghai hukou and a range of other benefits (Shanghai Municipal Government 2016). Given these changes in Lingang's strategic focus, indigenous residents in places like Neighbourhood No.57 have lost their relevance to the project and will only be relocated if any specific new projects require their land.

The Creation of Project-Oriented State Organisations in Lingang
Before the initiation of the project, it was the district and township governments that were in charge of urban development and the social governance of the areas that would later become Lingang (see Figure 3). Township governments were responsible for local residents as well as the urban development of their townships and they were governed by Nanhui district government. However, in order to ensure the successful development of Lingang, the municipality decided to create two types of new state organisations to take charge of urban development of Lingang (Figure 3). The municipality took away the power of planning Lingang from the township and district governments and gave it to these two new organisations, which were directly governed by the municipality. The first new state organisation is the LDMC, which was introduced to Lingang as the new government authority responsible for implementing the masterplan of Lingang. The LDMC took over the district and township governments' responsibilities of urban development and managing the budget of Lingang's development, as well as the rights to issue various forms of permissions including building and planning permissions (Shanghai Municipal Government 2003). Secondly, SODCs were parachuted into Lingang. SODCs took on the role of the main developer of Lingang and included tasks of coming up with specific development proposals, financing the projects and attracting new investors. Initially, two SODCs were created for Lingang, namely the Shanghai Lingang Economic Development (Group) Co., Ltd (in short Lingang Group) responsible for developing the industrial zone and the Harbour City Group responsible for Nanhui main town. Government officials who have a rich experience in delivering important development projects for the municipality have specially been assigned to lead both these new state organisations. The district government of Nanhui (annexed into Pudong district since 2008) and its township governments were excluded from the planning and development of Lingang. The reason is because Nanhui district government and its township governments were regarded by the municipality as lacking in urban development experience and thus incapable of developing a project of such importance (Interview with former senior planner at LDMC, August 2016).
A further measure taken to ensure the effective development of Lingang was to put the township governments in charge of the social management and social governance of the Lingang population. Nanhui district government was responsible for allocating the budget to the township governments to fund the social management and social governance of Lingang. Social management in this case includes the responsibility to provide public services such as health care and waste management. Social governance involves the relocation of residents, the demolition of existing neighbourhoods and dealing with the requests and complaints of local residents. Township governments have to visit and convince affected residents, whilst the SODCs, as the main developers of Lingang, would pay for the cost of relocation (Shanghai Municipal Government 2003).
The most important reason for the relegation of social duties to the district and township governments was to allow the LDMC to focus all its energy on developing Lingang. Due to this relegation, the development of Lingang, especially in the early years, was highly efficient as it was planned and managed only by a handful of officials who were directly managed by the municipality: In the first five or six years, there were very few people [in Lingang], it was a very efficient team, everyone working in Lingang. Our collaboration with the development corporations was very good, the ones developing Lingang and the ones managing the development are in the same family. If there is anything then we could discuss it and come to an agreement ... most issues would be solved in a few days. (Interview with a former senior planner at the LDMC, August 2016) However, this institutional arrangement had some major caveats. Firstly, the LDMC, the SODCs and the municipality paid little attention to the livelihood of residents when devising the masterplan for Lingang due to their strong focus on the strategic aspects of Lingang. This is reflected in the way the LDMC defines its own duties: "Our purpose is very simple, namely to coordinate and plan developments, coordinating the financing, and coordinating large projects, that is it. Other smaller issues we give them to the township governments" (Interview with a senior LDMC officer, August 2016). Consequently, existing Five-Year Plans of Lingang made no mention of how to improve the livelihood of residents, the provision of employment to those who have lost their farmland or how to support residents living in the industrial zone suffering the decline of environmental quality and public services (LDMC 2005(LDMC , 2012(LDMC , 2016. The prioritisation of strategic objectives over the needs and livelihood of local residents during the plan-making process of Lingang was also clearly felt by residents of Neighbourhood No.57: "You will not find any residents on the urban plans of the municipal government. According to them this place is just the industrial zone now and this neighbourhood has already vanished" (Resident C in Neighbourhood No.57, August 2016).

Devolvement of Social Responsibilities to Lower-Tier Governments
The relegation of social governance responsibilities to the district and township governments has also led to internal tensions, which largely originate from the unequal distribution of development benefits and social responsibilities. On the one hand, the official municipal decree on the governance of Lingang does not require the LDMC and SODCs to solve any problems of the local population (Shanghai municipal government 2003(Shanghai municipal government , 2013. In other words, there is no legal obligation for the LDMC and the SODCs to respond to complaints by local residents. Especially for the SODCs there was a lot of unwillingness to solve local problems due to the high costs involved. For example, the case of Neighbourhood No.57 would require the SODC to pay 2.6 billion Yuan, which is a major challenge for the LDMC and the relevant SODC (Senior official at the SODC responsible for Neighbourhood No.57, June 2016). Coupled with the fact that the land of Neighbourhood No.57 has not been identified for any new business investments, it would mean that the SODC would have to shoulder the cost on its own. However, our research also suggests that the SODC, responsible for the industrial zone where Neighbourhood No.57 is located, is a company registered on the Chinese stock market with total assets over 80 billion Yuan. In this sense, we believe that whilst the relocation cost is a heavy burden for the SODC, it is nonetheless financially feasible. A more plausible reason may be because the performance of SODCs in Lingang is measured by whether they are able to generate GDP growth (Senior planner at Lingang Group, June 2016) and not by their ability to resolve local social problems.
On the other hand, the township governments and the district government are obliged to address local problems but do not have the economic power to do so as they only receive a fraction of Lingang's tax income whilst also giving up large parts of their land: In order to support the development of Lingang, the heavy equipment manufacturing zone has for instance taken up more than 20 km 2 of land from the Nicheng township. In terms of administrative responsibilities, they all belong to the township government but in terms of the tax income for all the businesses that have settled here, that income belongs to the industrial zone and therefore belongs to the Lingang Group. So, although these businesses and industries are situated in the administrative area of this township, the taxes they pay do not belong to us. The businesses also take up many local resources such as land, water, electricity, but mainly land. (Nicheng township officer, November 2016) According to the township officer, the total size of Nicheng is around 60 km 2 whereby the SODCs have taken up half of the land (around 20 km 2 for the industrial zone and 10 km 2 for the logistics zone). In addition, the township also had to provide around 8 km 2 land for the development of relocation settlements for displaced residents. Despite the large amount of land the townships had to give up for the Lingang project, they received little of the tax income and therefore had little resources to carry out their own developments or respond to local problems. The SODCs, who receive most of the tax, would only bring small benefits for the township and its residents: The maximum they [the SODCs] do is to maybe solve a few issues of employment and also maybe improve the whole image of our area a little. But if you ask me how much benefit we the local government and the local people have received then I think this issue is still up for debate. (Nicheng township officer, November 2016) The negative impact of Lingang's institutional arrangement became particularly apparent when in 2009 Lingang's original district government of Nanhui was annexed to the Pudong New District government. Although it is unclear whether Lingang was a major reason for the annexation of Nanhui, it was clear that the municipality hoped for Pudong district to help attract more residents to Lingang's main town with their more advanced development expertise and rich financial resources (Xiong 2013). For Pudong district, however, Lingang brought more responsibilities than benefits and Pudong's willingness to invest into Lingang and to solve local problems was limited. The fact that the LDMC and the Lingang Group, two of Lingang's most powerful state organisations, remained under the direct administration of the municipality (Shanghai Municipal Government 2013) meant that Pudong did not have free reign over Lingang and was in the same disadvantaged position as its predecessor. Consequently, there is little cooperation between all the state organisations and governments in Lingang because they have different interests and are keen to externalise any responsibilities. A township officer explains this complicated situation from the township government's viewpoint: Basically it is like we have two fathers. One father is the Pudong New District government and the other father is LDMC ... From Pudong New District's viewpoint, Lingang is not even their biological son, it is an area directly managed by the municipality ... The government is also an economic man (homo economicus, jingji ren), so Pudong thinks that they still have so many other towns and places that need to be developed so they do not necessarily have to invest into Lingang ... Pudong thinks that we [the Lingang townships] have the LDMC as our other father who can take care of us. So, if we have any requests or problems, with the help of LDMC we can place our requests directly to the municipal government. Also, the LDMC and Pudong District ... they are not direct relatives ... so there will be a natural difference in terms of their priorities, interests and responsibilities. (Interview with township officer, November 2016) The township officer further explains that officially Lingang is enjoying the support from both the municipality and district government but in reality nobody is willing to provide substantial investment into the area especially for solving the problems of local residents: Being governed by multiple agencies will have an impact on the progress of some issues especially in terms of social governance. The result is that everyone tries to avoid their own duties. The district government does not care, the LDMC does not care, so in the end nobody cares. Both are thinking that the issues should be taken care of by the other party and not by themselves ... This is a very difficult situation and we [the township government] are stuck in the middle of this and both sides do not care about us. (Interview with township officer, November 2016) For the residents of Neighbourhood No.57 the internal friction between state organisations means that they struggle to hold the real decision makers accountable and instead can only complain to the powerless township government: They kick the responsibility like a ball, back and forth ... whilst we here do not even know who to talk to anymore. Local residents are fully aware that the township government's role is mostly liaising. The township government has no rights and cannot make any decisions. (Resident B in Neighbourhood No.57, August 2016) Despite this, residents are forced to rely on the township government as officially the LDMC and the SODCs have no obligations to respond to their requests and have always avoided them: We went there with a group of people and they locked the door ... if you directly talk to the development corporation [responsible for Neighbourhood No.57], they will not care about you. Now we go to the township government and the government will directly liaise with them and give them pressure. This way is better, only the government can control them! (Resident D in Neighbourhood No.57, August 2016)

Conclusion
The relocation of millions of residents and forced evictions have been highlighted by many studies as major social problems of China's mega developments (Hsing 2010;Shin 2012;Zhang 2004Zhang , 2017. However, through the case of Neighbourhood No.57, we find that the biggest social problem in Lingang is in-situ marginalisation whereby residents, who have not been relocated, suffer from declining public services and environmental quality due to nearby industrial activities. Although relatively under-researched in China, in-situ marginalisation is not limited to Lingang and other studies have also reported similar problems (He et al. 2009;Shih 2017;Tian et al. 2017). The contribution of this study is twofold. Firstly, through the case of Lingang we provided an in-depth analysis of in-situ marginalisation and its underlying causes, which so far have remained an under-researched social problem. The Lingang project was conceived to realise the strategic visions of serving the Yangshan deep-water port as a harbour city and the industrial base for Shanghai to upgrade its industrial sector. The project was funded through land financing and early phases of the project involved large-scale residential relocation, although resistance was relatively low due to a fairly generous compensation package. Lingang's governance is dominated by the LDMC, which took over the planning and budgetary power from the district and township governments, and two major SODCs, which deliver specificp r o j e c t sa n da r et h em a i nfinancial benefactor of the project. Problems of in-situ marginalisation started to emerge upon completion of the basic infrastructure of the industrial zone, and the land acquisition policy switched from large-scale land acquisition to only relocating residents when there is demand for specific projects. Having sold its 9.4 km 2 of farmland during the early phases of Lingang's development, Neighbourhood No.57 was only left with its core residential area of 80 hectares, which mattered little to the development of the industrial zone. Despite years of continued complaints and petition to the township government, Neighbourhood No.57 is yet to be relocated. Lingang's township governments blame the absence of any strategy for the wellbeing of local residents on the lack of involvement of the township and district governments during the initial planning of Lingang. Furthermore, the centralisation of planning power and financial benefits to the LDMC and the SODCs have effectively taken away the ability of the townships to provide any substantial help to Neighbourhood No.57 residents. The unequal distribution of development and economic powers have also reduced the willingness of the district government to involve itself in Lingang and help the township solve Lingang's social problems. The internal tensions created by Lingang's institutional arrangement is by no means unique as other Chinese mega projects also have similar problems (Jiang et al. 2016b;Wu and Phelps 2011).
The second contribution of this study is towards the conceptualisation of state entrepreneurialism and the distinctive social problems that emerge under this governance paradigm. Table 1 compares the social outcomes and causes of mega projects developed under neoliberalism and state entrepreneurialism. Unlike neoliberal mega projects which focus on profiting from land revalorisation and an improved tax basis (Swyngedouw et al. 2002), state entrepreneurialism stresses the prioritisation of strategic objectives for Chinese mega projects such as alignment with central government policies (Wu 2018(Wu :1385. Whilst land revalorisation still plays a crucial role in China, especially for strategically important mega projects, land financing is more a means to an end than the objective itself. For neoliberal mega projects, displacement and gentrification are major problems and are caused by a public-private growth coalition that is driven by a shared pursuit of land profit (Fainstein 2008;Hiller 1998;Olds 1998;Watt 2013). Yet in China, the fate of residents is not merely determined Devolvement of social responsibilities to low-tier governments; refined compensation schemes for "relevant" residents by market logic but even more by how relevant they are to the state's strategic objectives whereby those who are not of importance receive very little attention and compensation. The way the state responds towards public contestation against mega projects also differs between neoliberal and Chinese mega projects. For neoliberal projects, to pacify public resistance the state adopts fuzzy concepts aimed at pleasing everyone and introduces lengthy, elaborate but ultimately superficial planning participation procedures (Lehrer and Laidley 2008;Swyngedouw 2009;Tarazona Vento 2017). Under state entrepreneurialism, the state foregrounds large public resistance, through generous compensation packages but only to those residents who are relevant to state, yet makes very little effort to relocate residents once they have been relocated Kan 2019). The state also devolves its social responsibilities to powerless lower-tier governments to deal with contestations from residents that are irrelevant to the state's objectives. Under China's urban governance model, though somewhat counterintuitive, relocation may not always be the worst outcome compared with residents suffering from in-situ marginalisation.