The Practice and Principle of City Planning in Contemporary China

Abstract

AbstractThe goal of governments is to maintain a competitive environment, allowing prices to allocate resources and for the reduction of transaction costs. Governments aim to facilitate market operation and thus increase the rent value of various resources. City planning is a function of governments in the rapid process of urbanization; they take responsibility for land use and aim at increasing land rent. Western countries attempt to reduce negative externalities mainly by means of development controls, with the aim of maximizing the land rent. While city development in China is chiefly a product of master planning, the government leases land to the market and internalizes externalities in the form of contracts, making regulatory plans unnecessary. These differences between planning in China and foreign countries are determined by differences in the land property rights systems, stages of city development, and tax systems.