Assetization: The Chinese Path to Housing Financialization

Abstract

Acknowledgement: We would like to acknowledge the joint funding support on the project entitled "The financialization of urban development and associated financial risks in China" from UK Economic and Social Research Council (ESRC) (ES/P003435/1) and Natural Science Foundation of China (NSFC) (NSF71661137004). We also thank research assistance from Yi Feng.

The state acts through the market: ‘State entrepreneurialism’ beyond varieties of urban entrepreneurialism

“…Based on land development, housing is ‘assetized’. Millions of homebuyers, though they are not necessarily property speculators, are motivated by value appreciation alongside pursuing a better quality of housing (Wu et al, 2020).…”

Scripting Indian and Chinese urban spatial transformation: Adding new narratives to gentrification and suburbanisation research

“…The new phase of urban redevelopment focuses on ‘old villages, old urban areas, and old factories’ (also known as three types of old areas, or sanjiu ) (Wu, 2018). Shanty town renewal uses new financial tools (He, 2019), along with the broad process of housing financialisation (Wu et al., 2020).…”

“…The history of urban redevelopment in China reveals several features: first, the state is heavily involved in the process of redevelopment; second, there are various motivations including dilapidated housing upgrading, profit-making through real estate speculation, promoting post-industrial economies and global cities (Wu, 2016), and creating investment opportunities to sustain economic growth (He, 2019; Wu et al., 2020). Third, displacement has driven peripheral residential development and led to social tensions.…”

“…Urban demolition is subject to complex local politics in India, showing dispossession through extra-economic measures (Doshi, 2015; Ghertner, 2014). In China, demolition is incentivised by specific fiscal arrangements where municipal finance relies on land development as a revenue source (He and Wu, 2009; Wu et al., 2020). In both countries, the removal of low-quality informal areas or ‘slums’ has been used to justify urban demolition and redevelopment.…”

The financialization of real estate in megacities and its variegated trajectories in East Asia

“…While land-based finance and abundant bank credit to stateowned enterprises have operated a rather balanced spatial distribution of capital for urban development across the national territory, they have led to skyrocketing prices in the biggest cities, and have entailed an overproduction of housing that is unparalleled in history. Because investment in real estate, especially in housing, has been a quasi-exclusive saving channel in the past decades (both through platforms or by direct acquisition of housing units) (Wu et al 2020), Chinese households and firms have come to hold some 50 million unoccupied homes, or approximately 22% of the total housing stock. 8 One can only be glad that China's speculative mechanism supported by small investors' distorted apprehension of risk (Aveline-Dubach, 2020b) is poorly interconnected with global financial channels.…”