Economic Growth and the Expansion of Urban Land in China

Abstract

This paper aims to demonstrate the relationship between economic growth and the urban core area in order to help urban planners reach a better understanding of the pressures that are leading to changes in land use. Using a unique panel dataset with measures of China’s land use, it is shown that, during the late 1980s and 1990s, China’s urban land area rose significantly. Descriptive statistics and multivariate analysis are then used to identify the determinants of urban land use change. In addition to using more standard regression approaches such as ordinary least squares, the analysis is augmented with spatial statistical analysis. The analysis demonstrates the overwhelming importance of economic growth in the determination of urban land use. Overall, it is found that urban land expands by 3 per cent when the economy, measured by gross domestic product, grows by 10 per cent. It is also shown that the expansion of the urban core is associated with changes in China’s economic structure. If urban planners have access to forecasts of economic growth, using these results they should be able to have a better basis for planning the expansion of the built-up area in the urban core.