**4. Examination of Dependency on Land-Leasing Revenue**

In this section, the dependency on land-leasing revenue of four selected cities is examined. According to data from 2008 to 2018, land revenue has clearly played an increasingly important role in each city's fiscal revenue structure (Figures 3 and 4). For instance, the ratio of land revenue to total revenue in Guangzhou rose from 0.26 in 2008 to 0.49 in 2018, meaning that the growth rate of Guangzhou's land-leasing revenue significantly surpassed the growth rate of tax revenue. Thus, Guangzhou has become increasingly dependent on land-leasing revenue. With almost half of its fiscal revenue from land leasing, Guangzhou has become a city with medium to high dependency on land-leasing revenues. Urban development in Guangzhou is not only a means to enhance its competitiveness but also a way of accumulating capital because of the economic revenues generated during the development process.

Shenzhen's fiscal revenue structure is quite different than that of Guangzhou. As illustrated in Figure 3, the ratio of Shenzhen's land-leasing revenue to its total fiscal revenue never exceeded 0.3 between 2008 and 2018, which represents a low level of dependency on land-leasing revenue of Shenzhen's local government. In general, Shenzhen has far less reliance on the economic contribution of land development. This can be partially explained in terms of land scarcity, which is an important concern in Shenzhen: Its population density is three times higher than Guangzhou. Because Guangzhou has medium dependency on land-leasing revenue, its overall approach to urban development might be assumed to be a combination of both quality and quantity growth criteria (according to the analytical framework presented above). Meanwhile, Shenzhen's relatively low dependency on land-leasing revenue is likely to result in an emphasis on the quality of growth (more than quantity) in its urban development strategies.

propositions.

than quantity) in its urban development strategies.

between 2008 and 2018, which represents a low level of dependency on land-leasing revenue of Shenzhen's local government. In general, Shenzhen has far less reliance on the economic contribution of land development. This can be partially explained in terms of land scarcity, which is an important concern in Shenzhen: Its population density is three times higher than Guangzhou. Because Guangzhou has medium dependency on land-leasing revenue, its overall approach to urban development might be assumed to be a combination of both quality and quantity growth criteria (according to the analytical framework presented above). Meanwhile, Shenzhen's relatively low

**Figure 3.** Land revenue versus tax revenue in Guangzhou (left) and Shenzhen (right) from 2008 to 2018. Sources: Statistic Year Books and Budgetary Reports of Guangzhou [53] and Shenzhen [54]. **Figure 3.** Land revenue versus tax revenue in Guangzhou (left) and Shenzhen (right) from 2008 to 2018. Sources: Statistic Year Books and Budgetary Reports of Guangzhou [53] and Shenzhen [54].

Foshan and Zhuhai, as lower-tier cities than Guangzhou and Shenzhen, have a higher dependency on land-leasing revenue in general. Foshan's land-leasing revenue was 42–52% of its total revenue between 2010 to 2016. In 2017, 60% of Foshan's fiscal revenue was from land-leasing (Figure 4). As such, Foshan is very dependent on the revenue through land development. The city's reliance on urban growth can be further observed in its strategies to develop new town projects. Zhuhai also witnessed significant increases of land-leasing revenue despite its smaller size. Apart from some missing data (the annual budgetary report of Zhuhai in 2013 is missing on its government website; Zhuhai began to release its budgetary report from 2011 so that land revenue data before that are missing), it can be seen that Zhuhai's land-leasing revenue surpassed its tax revenue in recent years. In 2014, 64% of total fiscal revenue was derived from land-leasing (Figure 4). The latest data for Foshan and Zhuhai show that both cities have more than 60% of their fiscal revenue was from land-leasing, which can be described as high dependency on land revenue according to the conceptual framework (Figure 1). According to the analytical framework presented above, both cities are likely to emphasise the quantity (rather than the quality) of growth in their urban development plans and practices. In the following section, the new town development plans and practices in each of the cities are examined to see whether their urban development strategies match the above Foshan and Zhuhai, as lower-tier cities than Guangzhou and Shenzhen, have a higher dependency on land-leasing revenue in general. Foshan's land-leasing revenue was 42–52% of its total revenue between 2010 to 2016. In 2017, 60% of Foshan's fiscal revenue was from land-leasing (Figure 4). As such, Foshan is very dependent on the revenue through land development. The city's reliance on urban growth can be further observed in its strategies to develop new town projects. Zhuhai also witnessed significant increases of land-leasing revenue despite its smaller size. Apart from some missing data (the annual budgetary report of Zhuhai in 2013 is missing on its government website; Zhuhai began to release its budgetary report from 2011 so that land revenue data before that are missing), it can be seen that Zhuhai's land-leasing revenue surpassed its tax revenue in recent years. In 2014, 64% of total fiscal revenue was derived from land-leasing (Figure 4). The latest data for Foshan and Zhuhai show that both cities have more than 60% of their fiscal revenue was from land-leasing, which can be described as high dependency on land revenue according to the conceptual framework (Figure 1). According to the analytical framework presented above, both cities are likely to emphasise the quantity (rather than the quality) of growth in their urban development plans and practices. In the following section, the new town development plans and practices in each of the cities are examined to see whether their urban development strategies match the above propositions.

*Sustainability* **2020**, *12*, x FOR PEER REVIEW 9 of 20

**Figure 4.** Land revenue versus tax revenue in Foshan (left) and Zhuhai (right) from 2008 to 2018. Sources: Statistic Year Books and Budgetary Reports of Foshan [55] and Zhuhai [56]. Note: The government-managed funds data of Foshan in 2008, 2009, and 2018 are missing, and the Foshan government change statistical calibre in 2016; the government-managed funds data of Zhuhai in 2008, 2009, 2010, and 2013 are missing. **Figure 4.** Land revenue versus tax revenue in Foshan (left) and Zhuhai (right) from 2008 to 2018. Sources: Statistic Year Books and Budgetary Reports of Foshan [55] and Zhuhai [56]. Note: The government-managed funds data of Foshan in 2008, 2009, and 2018 are missing, and the Foshan government change statistical calibre in 2016; the government-managed funds data of Zhuhai in 2008, 2009, 2010, and 2013 are missing.

### **5. Examination of New Town Development Strategies 5. Examination of New Town Development Strategies**

In this section, new town development in each city is compared. The history of the urban development process is analysed to understand the role and significance of new town in the urban development process. The town projects are placed in the context of the urban development narrative to illustrate how local entrepreneurial governance affects new town development in practice. In this section, new town development in each city is compared. The history of the urban development process is analysed to understand the role and significance of new town in the urban development process. The town projects are placed in the context of the urban development narrative to illustrate how local entrepreneurial governance affects new town development in practice.

### *5.1. Guangzhou 5.1. Guangzhou*

Guangzhou, the capital city of Guangdong province, is the political and economic centre of the PRD region. It played a key role in China's development as its historical southern gateway [57] but now faces similar challenges as many other hub cities, and is becoming overshadowed by the rapid growth of nearby Shenzhen. Nevertheless, Guangzhou has strong decision-making powers and economic resources for urban development, and the idea of developing large urban projects and Guangzhou, the capital city of Guangdong province, is the political and economic centre of the PRD region. It played a key role in China's development as its historical southern gateway [57] but now faces similar challenges as many other hub cities, and is becoming overshadowed by the rapid growth of nearby Shenzhen. Nevertheless, Guangzhou has strong decision-making powers and economic resources for urban development, and the idea of developing large urban projects and deploying pro-growth strategies for enhancing its competitiveness can be easily justified.

deploying pro-growth strategies for enhancing its competitiveness can be easily justified. In the process of urban development, new towns have played an increasingly important role in Guangzhou. The concept of new town appeared in the early 2000s when the city government initiated its university town and Zhujiang new town project (Figure 5 and Table 2). At that time, the concept of university town had just became popular, and the university town in Guangzhou was essentially an experimental project on the urban fringe [58]. Zhujiang new town was regarded as the core of the new city central axis of Guangzhou. The municipal government was quite cautious about this new town project and had several rounds of plans and revisions for almost a decade. The 2010 Asian Olympic Games was the event that pushed the development process of Zhujiang new town and finally implemented the project. Zhujiang new town soon became the most prestigious and successful urban project in Guangzhou. With several landmarks constructed, including the Guangzhou Opera House designed by the famous architect Zaha Hadid, Zhujiang new town demonstrates Guangzhou's In the process of urban development, new towns have played an increasingly important role in Guangzhou. The concept of new town appeared in the early 2000s when the city government initiated its university town and Zhujiang new town project (Figure 5 and Table 2). At that time, the concept of university town had just became popular, and the university town in Guangzhou was essentially an experimental project on the urban fringe [58]. Zhujiang new town was regarded as the core of the new city central axis of Guangzhou. The municipal government was quite cautious about this new town project and had several rounds of plans and revisions for almost a decade. The 2010 Asian Olympic Games was the event that pushed the development process of Zhujiang new town and finally implemented the project. Zhujiang new town soon became the most prestigious and successful urban project in Guangzhou. With several landmarks constructed, including the Guangzhou Opera House designed by the famous architect Zaha Hadid, Zhujiang new town demonstrates Guangzhou's

latest urban achievement as the so-called 'city living room'. On the other hand, hosting the Asian Games also brought huge amount of debt to the local government due to lavish spending on projects [59].

13 Nansha New District Central

latest urban achievement as the so-called 'city living room'. On the other hand, hosting the Asian Games also brought huge amount of debt to the local government due to lavish spending on landmark developments (e.g., Guangzhou Tower and Haixinsha Island where the Asian Games opening ceremony took place), sport stadiums, public transport facilities, and urban beautification projects [59]. *Sustainability* **2020**, *12*, x FOR PEER REVIEW 10 of 20 opening ceremony took place), sport stadiums, public transport facilities, and urban beautification

**Figure 5.** New town projects in Guangzhou. **Figure 5.** New town projects in Guangzhou.


**Table 2.** Information of new towns in Guangzhou. **Table 2.** Information of new towns in Guangzhou.

government 14 Guangzhou Education City District government Knowledge city 10.79 km2 2014 15 Sino-Singapore Knowledge City Municipal Knowledge city 5.86 km2 2011 16 Conghua New City District government - 39 km2 2013 However, the increased debts did not slow down the development of new towns, instead accelerating the process. Guangzhou's local government initiated and announced nine new town projects in 2013 alone (No. 2, 3, 5, 7, 8, 9, 10, 11, 12 in Table 2). Every new town in this set of projects had a 'world-class' vision and multifarious urban progressive concepts such as


had a 'world-class' vision and multifarious urban progressive concepts such as eco-city, financial-

However, the increased debts did not slow down the development of new towns, instead accelerating the process. Guangzhou's local government initiated and announced nine new town eco-city, financial-city, smart-city, knowledge city, healthcare city, and airport city. All these new towns carried the ambition of transforming Guangzhou's urban and industrial environment over the long term. However, the fiscal data in the same year (Figure 3) indicate a drastic increase of land-leasing revenue, more than double compared to one year before. It is highly likely that the sudden increase of land-leasing revenue was due to the release of nine new town projects and their subsequent land transaction from land market. Taking the example of Guangzhou international financial city (No. 3), after its detailed plan completed by the end of 2012, Guangzhou local government leased out four parcels of land of the 'boosting area' of the financial city in February 2013, gaining 13 billion CNY revenue, which was equivalent to one-third of the total land-leasing revenue of the year before [60]. In Chinese media, these land transactions were called the 'king of land deals' (*diwang*). Soon after, criticisms emerged accusing the Guangzhou local government for using new town projects as a means to 'sell land' (i.e., adopting a 'land-driven economy'). These new town projects continued to act as local government financing vehicles (LGFVs), attracting property investments and generating capital through the land market [32].

Many new town projects were hastily planned under entrepreneurial principles, resulting in problematic implementation. First, there were duplications of urban concepts. Tianhe smart valley (No. 4) and Tianhe smart city (No. 5) not only followed very similar development concepts, they were also in close proximity to each other. There are three other knowledge cities (No. 9, 14, 15), two second-CBD projects (No. 6, 10), and two eco-cities (No. 2, 7). Some of them adapted these concepts based on local conditions, like the former university town turning into international innovative city (No. 9), but some of them had nothing to do with their labels, such as Huadi ecological city (No. 7). This also relates to a second problem: Their planning lacked empirical justification. For example, Tianhe smart valley used to be branded as Olympic new town for a city-level sport stadium located there. But this place turned into 'Guangzhou eastern ecological and liveable district' later, and then it transformed again into a 'smart valley' for technological and innovative industries. It is hard not to question the scientific basis underlying these several plan versions. This reflects the negative effects of seeing entrepreneurial considerations outweigh urban transition targets in new town projects.

Two main observations can be made in light of the above analysis of new town practices in Guangzhou. First, the size of new town projects varies greatly depending on the function and location of the new town. Most new towns are located within or near the urban central area (Figure 5), and their starting areas are planned in details. Suburban expansion is not the major objective of new town projects in Guangzhou; they are more focused on small-area urban renovation and upgrading. However, Guangzhou is still highly dependent on land-leasing revenue, which is closely linked with new town projects. The sudden release of many new town projects and the subsequent increase of land-leasing revenue immediately follow each other. However, because of high property and land prices, Guangzhou can generate a large amount of land revenue by small-area development in the urban centre, rather than large area suburban growth. Second, the urban pro-growth approach in Guangzhou is driven more by land-driven income than spatial growth. Pro-growth approaches have resulted in several planning problems in new town practices, including redundant functions, duplication of activities, and weak linkage to urban master plans.
