Relational regulation and Chinese real estate investment in London: moving beyond the territorial trap

Abstract

National governments, urban authorities and supra-national bodies increasingly see the provision of new housing as a core priority. There has been a strong emphasis on reforming the regulatory environments that exist within geographical territories and making them more welcoming to inward investment. However, such outlooks we claim often fall into a territorial trap and give too much prominence to the regulations and policy environments found in recipient destinations. The paper argues instead for a more recursive focus on the ways in which decisions taken in 'source' and 'host' locations need to be understood as part of a mutually constitutive system of governance. Using the example of Chinese residential investment into London, it argues that investment trends, processes and outcomes reflect a recursive combination of regulatory and political changes in both the city and within China, with the latter becoming increasingly influential. As we show, the Chinese Communist Party has been exerting greater control over the activities of Chinese real estate enterprises and what products are 'permitted' for investment and how this should be done. The paper reflects on the implications for recent academic and policy writings on urban territorial competition.

State capitalism, capitalist statism: Sovereign wealth funds and the geopolitics of London’s real estate market

“…This mutual constitution is not only one of state and market, but relational systems of regulation across and within different states. States at different scales and locales de facto govern outcomes in othersas Raco et al (2020) show in the case of Chinese capital controls and London real estate, for instance (see Hall, 2017). Such relational forms of regulation are particularly notable in the 'strategic coupling ' Haberly (2011) of market-oriented governments seeking to attract capital and capital-exporting state-led/influenced investment bodies such as SWFs.…”

“…Within this frame, we have counterposed ‘capitalist statist’ to ‘state capitalist’ forms as interpenetrating and mutually constitutive within a wider ‘uneven and combined state capitalism’, in contrast to the free market/state capitalist binary prevalent in much of the extant literature on state capitalism. This binary rests on a methodological nationalism in which the nation-state is taken as the given unit of analysis (Dixon, 2011; Pradella, 2014), reinforcing the ‘territorial trap’ of taking sovereign territory to be a fixed, discrete container of society (Agnew, 1994; Raco et al, 2020). In this section, we draw on Büdenbender and Golubchikov, 2017 interpretation of the ‘geopolitics of real estate’ to interpret the relational configurations of capital flows, state projects and strategic couplings in the built environment.…”

“…This has been bound up with a shift to urban entrepreneurialism which has at points taken on the form of urban diplomacy (Phelps and Miao, 2020) in which cities actively court foreign investors and governments (see Massey, 2007) while being an important basis of national foreign policy such as in the city regional infrastructure agglomerations making up China’s One Belt One Road initiative (Chen, 2020). The combination of glocalising state restructuring, urban entrepreneurialism and geopolitical considerations has produced fragmentary ‘hybrid contractual landscapes’ (Taşan-Kok et al, 2020) whereby urban governance is relationally constituted across projections of political and economic power both geographically and between state, market and civil society actors (Raco, 2013; Raco et al, 2020; Swyngedouw, 2016).…”

Practising comparative urbanism: Methods and consequences

“…For example, employing this strategy shaped how I juxtaposed the way developers are depicted in the media with how real estate professionals understand the term “the developer.” Comparing the developers across Johannesburg and London, specifically a white English developer and two Chinese developers, made me question the role of “China in Africa” discourses (see also Reboredo & Brill, 2019). I took that problematic to London to think about the narratives around “China in England” and, in doing so, the lesson from Johannesburg challenged me to think more comprehensively about the geo‐politics of real estate development and how this impacted the way Chinese actors are understood in London (see Brill & Raco, 2020; Raco et al, 2021).…”

Real estate and regional studies

“…More broadly in the regional studies community, real estate features frequently as a topic of exploration in sister journals to Regional Studies. For example, recent research has explored a range of issues, including inter alia: the links between real estate investment, urban density and capital flows (Pain et al, 2020); regulation, governance and inward investment in real estate (Raco et al, 2020); and land reform (Percoco, 2019).…”