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Infrastructure and Urban Development

Evidence from Chinese Cities

Yan Song

May 2013, English

This paper by Yan Song discusses the links between infrastructure provision and urban expansion, the relationship between levels of infrastructure and land prices, and the mechanisms used to finance infrastructure. Data and case studies from developed and developing cities in China provide empirical evidence about the extent to which the provision of infrastructure affects urban development and shapes development patterns.

China was chosen as the case study for this paper because it provides sufficient dynamics and variation to enable the investigation of these research questions. In three decades of market-oriented reforms, China has been one of the world’s fastest growing economies, with per capita real incomes more than quadrupling since 1978. During this period, China has made substantial investments in infrastructure and has improved access to services such as safe water, sanitation, electric power, telecommunications, and transportation (J. Zhang 2011). Today, China is set to accelerate the construction of urban public infrastructure by investing as much as 7 trillion yuan (US$1.03 trillion) during its 12th Five-Year Plan from 2011 to 2015.

The scale of infrastructure investment and the extent to which infrastructure has transformed the urban landscape in China might seem remarkable. However, problems persist in the form of insufficient provision of infrastructure, discrepancies in the level of infrastructure across regions, deficiencies in cost recovery, inadequate sources of financing, and the lack of incorporation of sustainable principles in shaping urban growth. This paper describes these challenges in infrastructure provision in China and explores the causes of some of the existing problems.

This paper was presented at the Lincoln Institute’s annual Land Policy Conference in 2012 and is Chapter 2 of the book Infrastructure and Land Policies.