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Learning from China: The positive role of planning

04 December 2015 Author:

October’s state visit by Chinese president Xi Jinping was intended to cement the UK’s new strategic relationship with the world's most populous country. The trip was hailed by British and Chinese officials as the start of a “golden era” of relations which the UK Government hopes will make China Britain’s second biggest trade partner within 10 years. Xi himself noted that “The UK has stated that it will be the western country that is most open to China.”

Amid the numerous trade and investment deals, there’s much that the two countries can learn from each other – including in relation to planning.

This week we published our latest SPIRe report on Planning China’s Future: How planners contribute to growth and development. The report, by Professor Fulong Wu, Dr Fangzhu Wang and Zheng Wang from the UCL Bartlett School of Planning, considers the quite different understanding of the value of planning in China compared to what we sometimes experience in the UK.

Kicking off the event, Professor Wu outlined how he finds it “difficult to explain to his colleagues in China that in the UK planning can be considered as an obstacle to growth”. While one common misconception of planning in Britain and some other liberal economies is that planning is only focused on regulating and inhibiting development, in China there is a fundamentally different attitude to planning. From central government to municipal government, there is political support and firm confidence in planning and planners as a leading force in fostering economic growth. Building on previous RTPI work on the value of planning, the RTPI-UCL report presents strong evidence that planning can support growth by stimulating, shaping and regulating markets for development.

Planning is a key aspect of fostering economic growth in China

As is well-known, in recent decades China has experienced economic growth and urbanisation on a scale unmatched in human history. Since its economic reforms began in 1979, China’s GDP has skyrocketed from 202.46 billion US$ in 1980 to 6,988.4 billion US$ in 2011. While this astonishing growth is often associated with cheap labour and international demand for Chinese goods among other factors, what is clear from the report is that urban planning has been a key driver behind China’s economic growth through a proactive approach to development.

In China,  local political leaders initiate new land developments and produce strategic urban development plans in order to foster local growth. Municipal governments have taken on the role of an ‘urban entrepreneur’ and aim to attract investments through direct state actions that provide a range of incentives including infrastructure, cheap land, and fiscal incentives to the creation and promotion of visions for development. Chinese private developers rely on the government and its planners to spearhead large-scale development, since the involvement of the government significantly reduces risks.

The Chinese land market and the tax-sharing system also provide the necessary conditions and financial incentives for local governments to pursue land development and urban expansions, so it makes financial sense for municipal leaders to enact growth strategies. In addition, planning has played a critical role in innovation development in Shanghai through the establishment of the Zhangjiang High Tech Park (see picture below), involving many actors such as the national state, the local state, overseas returnees and the skilled labour force, investors to work together to expand innovation.

 Figure 7. P3310519

The incubator of Zhangjiang High-tech Park. Photo by Fulong Wu

The value of planning in managing urbanisation and reducing the costs of an unregulated market

According to the Chinese government’s national statistics bureau, the urban population at the end of 2014 stood at 749 million people (that’s about 86 Londons). This represents 55 per cent of the population, a rise from 26 per cent in 1990. Fierce competition between cities has resulted in over-expansion, with considerable environmental consequences, surplus production in certain industries and lopsided development across entire regions. The National Urban System Plan and interregional and regional strategic plans (for example, the Pearl River Delta Cluster Coordination Plan) aim to better coordinate development. The report cites the Kunshan Master Plan as an example of how the excesses of urbanisation can be contained in a city that more than doubled in size as it underwent rapid industrialisation.

As well as being entrepreneurial, the Chinese state has introduced strong regulatory mechanisms that coordinate developments and reduce the potential cost of excessive urban expansions. Constraints and regulations are in place to coordinate the development of the market – such as limiting urban sprawl and uncontrolled industrial expansion into ecologically fragile areas. In that sense, the impact of planning in China is wide reaching and cannot simply be understood as higher GDP growth; in China planning has become a key mechanism for shaping the market according to the needs of society.

Learning from China

All of this is not to say of course that the Chinese planning represents a perfect model. China is a vast, rapidly urbanising country which faces different challenges than those found in Western European contexts. Nonetheless, these findings from China do provide a more positive interpretation of planning and help to counter the perception that planning is a passive obstacle to economic growth. This suggests that extreme liberalisation of the planning system should be avoided, as this would weaken the ability of planners to shape the development market. Instead of solely relying on private initiatives and waiting for the development proposals from private developers, planning should be given the financial and political support to lead new development, as planners can contribute significantly to growth but also to better regulated development.

This may be particularly relevant to another of the UK Government’s major initiatives, that of city-regional devolution. In China, the system provides the necessary conditions and financial incentives for local government to pursue land development and urban expansions, by allowing local government to retain more of the benefits from development. Again, the context may differ greatly, but there’s much that echoes ongoing debates here.

While the UK was at the forefront of developing professional planning, such work also reminds us that there’s much we can learn from other countries. In the same vein, do also have a look at another RTPI SPIRe paper published last week which looked at positive planning in France, Germany and the Netherlands

You can listen to podcasts of the launch event held at UCL.