The state in the financialization of urban development using Chengtou in China

Keywords: financialization, China, urban governance, urban development
Session Type: Virtual Paper Abstract
Day: Sunday
Session Start / End Time: 2/27/2022 02:00 PM (Eastern Time (US & Canada)) - 2/27/2022 03:20 PM (Eastern Time (US & Canada))
Room: Virtual 6

Abstract

The financialization of urban development has been associated with the critical role of the state, which is not unitary but manifests in various actors and agencies. Previous studies have emphasized the dominance of the Chinese state in urban development while local financial operations through chengtou have been less explored. This paper is located in the literature of urban governance in China and the broad discussion of state-finance relationship. It investigates the role of different state actors in the development of chengtou as financial intermediaries. First, we show that financialization is not merely a state-led process, but that the state also restricted financialization at different stages. Second, albeit with stringent central regulations, local states have striven to support chengtou, which demonstrates intrastate divergence. Third, we illustrate the performance of local states across regions to show that the state regulations to control financial risks further differentiates the patterns of local financing. This paper presents a dynamic interaction among different state actors and the financial market, which demonstrate both the dominance of the central state in guiding financialization and the compromises of the state in dealing with financial risks.