Dreaming the wrong dream: An exploratory case study of a policy change toward sustainable urban development in a medium-sized Chinese city

ABSTRACT

Sustainable urban transformation has become a mantra for Chinese cities. While most studies focus on sustainable urbanization in megacities, the far larger number of medium-sized cities is understudied, although the latter face more severe urban problems. This article develops a framework for examining policy change in sustainable urban development initiated at the central level and reactions, tensions, and implementation issues emerging at the local level. It focuses on an in-depth case study of the challenges in realizing a transition from quantity-oriented pro-growth policies to sustainable quality-oriented ones in a medium-sized Chinese city. We find that there is evidence of changes in long-term values and goals toward sustainability at the levels of both central and local government, but also great inconsistency between goals on paper and policy implementation in practice. Sustainability in urban development is much harder to realize as local officials see urban development as a major means to maintain local economic growth, which can be separated from other issues in ecological preservation. The article concludes with a roadmap for future studies focusing on medium-sized cities, especially indicating how narratives on sustainable urban development hide from view financial and environmental risks generated by the actual implementation of the dominant aggressive urban pro-growth model.

KEYWORDS:

• Policy paradigm
• medium-sized cities
• sustainable urban transition
• urban growth
• infrastructure development

Introduction

Dushan, a humble county town in the west of China, reached the national media headlines in 2015 for its astonishing 40 billion RMB of municipal debt, which was around 40 times its annual revenue. As it was not able to even pay back the interest on these debts, Dushan’s local government was declared bankrupt. One of the main reasons for this municipality’s financial downfall was its unrealistic investment in rapid urban growth, including new commercial districts, an industrial park, a university town, and a tourist resort (Pengpai News, 2019). Soon after the revelation of this massive debt, the head of the municipality was arrested for creating the local debt crisis (as well as for corruption). Thereafter, all of these lavish projects were halted and have since remained unfinished. Beyond the issues of corruption and misconduct of city officials, the story of Dushan highlights a widespread urban phenomenon in China today: excessive eagerness to pursue urban growth and development strategies, often resulting in high financial risks with the potential for economically disastrous consequences.

If a county-level town like Dushan can be this aggressive in its urban development, what about the situation in prefecture-level cities which are more representative of common “urbanities” in China? According to the national “destocking” policy proposed in 2016,¹ the third and fourth-tier cities² had produced more than 80% of the existing excessive real estate inventory which needs to be reduced (Financial News, 2018). However, recent reports and studies have shown that there is still an increase in real estate inventory in those cities, even in those with a shrinking population (Chen et al., 2020; Li et al., 2021; People.cn, 2021). The study of Long and Gao (2019) has further revealed that 180 cities with shrinking populations are all planning for urban growth regardless of their population decline and mounting risk of overdevelopment. Most of them are common medium-sized prefecture-level cities³ across the nation. All of these suggest a systematic risk of overdevelopment deeply embedded in the mechanism of urban growth and development in Chinese cities that cannot be solved by a unified economic destocking policy. It seems that “development and growth” have become a dominant paradigm for urban visions and plans, even in cities with limited economic and social resources. In the academic literature, this type of pro-growth urban governance has been explained in terms of urban entrepreneurialism and urban growth coalitions (Guo et al., 2018; He & Wu, 2005; Wu, 2015, 2018). In the Chinese context, there is a common understanding that the local “land-driven economy,” also known as “land finance (tudi caizheng),” referring to local governments generating revenue from land development, is the major driver behind the pursuit of urban growth (Liu, 2013). Although such urban pro-growth mechanisms abound across cities of all sizes in China, the risk of overdevelopment is distinctly higher in medium-sized cities since these cities are often overlooked, and the public only notices them when they find themselves in severe financial problems.

Trying to address the risk of urban overdevelopment systematically, the Chinese central government has issued a series of policy statements emphasizing the importance of sustainability, efficiency and urban quality. However, it remains to be seen whether these policy changes will be sufficient to affect the land finance model currently used in many of China’s cities. Among the new policies adopted by the central government, “eco-civilization” and “new-type urbanization” are two major concepts emphasize for future urban development. The highly publicized national strategy on “eco-civilization” seeks to promote ecological and environmental values and foster “a new pattern of modernization where humans live in harmony with nature” (Central Committee [CPC] & State Council, 2015). Meanwhile, the “new-type urbanization” concept stresses a more sustainable, people-centered and environmentally friendly pathway for future urban development and redevelopment (Chen et al., 2016; Li & de Jong, 2017). These major national-level policy changes on urban development have led some scholars such as Liu and Qin (2016) to herald the beginnings of “a systematic set of low-carbon policies” in China in which “low-carbon” is a central feature of future development. On the other hand, other scholars such as De Jong (2019) have argued that there is still a clear gap between national-level new narratives and the urban development in practice, and that such gaps can be systematic and deeply imbedded in China’s institutional mechanisms. These debates reveal a fundamental question related to policy change: whether the promotion of sustainability in urban development reflects a genuine, consistent and systematic policy change, or merely a window-dressing narrative for reasons of political correctness.

Most of the current literature concerning sustainable urban development policies in China focuses on the “material” aspects of changes, such as laws, regulations and resource distribution. To date, little attention has been paid to the “ideational” level of changes, such as the values, beliefs and principles contained in policy, and whether a paradigmatic change has taken place. This is a limit in our current understanding of how new ideas influence policy change and the challenges that these new policies face during the implementation process. This article aims first to contribute to an understanding of policy changes in sustainable urban development at the central level. Second, it explores the tensions and struggles generated within the local state in its policymaking and implementation processes, which have been dominated by a model characterized as “urban growth machine” for decades. In other words, as an exploratory study, this article aims (1) to gain an in-depth understanding of the tensions emerging between central and local states regarding newly adopted sustainable urban development policies at the national level and still dominant local urban pro-growth practices; and (2) to develop a research framework for future study on medium-sized cities to examine the extent to which local governments have changed their development strategies from a pro-growth to a sustainable pattern, so that the analysis of policy dilemmas faced during urban sustainable transitions can be replicated and tested more systematically.

There are a number of reasons why we selected and focus on medium-sized cities in particular. First, medium-sized cities have produced the majority of the excessive real estate inventory, which is still increasing regardless of a national destocking policy (Chen et al., 2020; Financial News, 2018). Second, medium-sized cities are still pro-growth in urban development despite their shrinking or stagnant populations (Long & Gao, 2019). Therefore, medium-sized cities are at much higher risk of urban overdevelopment compared to the large metropolis which are suffering with soaring housing price during rapid urban growth rather than the risk of overdevelopment. However, how the local governments of medium-sized cities deal with such risks and how they react to urban sustainable policies from the central government is understudied.

This article is divided into two main parts. The first part explores the policy changes regarding urban sustainability at the central level and describes it as a shift in policy paradigm. The second part examines the specific policymaking and implementation issues at the local state level with an in-depth exploratory case study of a medium-sized city. Specifically, Section 2 introduces the concept policy paradigm and explores the generated policy change at the central level. Section 3 outlines the methods in building an exploratory case study that both provides in-depth understanding of local development dilemmas and can be tested more in-depth among other medium-sized cities. Section 4 analyses policy change at the ideational and material level, focusing on local policies in our city under study. Section 5 discusses the influence of ideational change on shifts in policy paradigms and examines the degree of consistency between ideational and material changes in urban development policies. Section 6 concludes with a clear roadmap for future research focusing on development risks and challenges of medium-sized cities in China during their sustainable urban transition.

Conceptual framework

Ideas, policy paradigm, and policy change

This article draws on the notion of public policy paradigms, which have been widely used by public policy scholars. The origins of the conceptual framework can be found in the work of Hall (1993) who built his ideas on the “scientific paradigm” developed by Kuhn (1962). According to Hall (1993), a policy paradigm is “a framework of ideas and standards that specifies not only the goals of policy and kind of instruments that can be used to attain them, but also the very nature of the problems they are meant to be addressing” (Hall, 1993, p. 279). This framework of ideas and standards constitute the “world view” of politicians, bureaucrats, and policy experts, their beliefs, values, attitudes in perceiving public policy problems and possible solutions (Howlett & Ramesh, 2003). One major contribution of Hall is using policy paradigm shift to explain significant public policy change. Hall suggests that paradigm shift is a result of “the accumulation of anomalies, experimentation with new forms of policy, and policy failures that precipitate a shift in the locus of authority over policy and initiate a wider contest between competing paradigms” (Hall, 1993, p. 280).

Although the theory on policy paradigms has become a “classic,” it faces a number of criticisms. First, the concept of policy paradigm has been criticized as elusive and undertheorized. More particularly, identifying what precisely leads to and results from a paradigm shift is not clear (Berman, 2013; Campbell, 2004; Carson et al., 2009). Hall’s initial definition of policy paradigm suggests an automatic connection between third-order change with policy paradigm shift, which is later criticized as oversimplified (Campbell, 2002; Daugbjerg, 1997; Greener, 2001). Second, on the level of methodology, the causal mechanisms connecting policy paradigm with policy consequence is not sufficiently clear (Blyth, 1997). “Revealed ideas” is a frequently used approach in the application of policy paradigms in which ideas are inferred from policy outcome rather than directly studied from policy actors (Daigneault, 2014). The advantage of this approach is its simplicity as public policies are easier to compare and measure, but it is also risky as a given public policy can be compatible with various policy paradigms. The approach cannot be used to study the influence of ideas on public policy; studying how policy paradigm shifts affect public policy change when the paradigm shift is inferred from those very policy changes is in fact circular reasoning (Daigneault, 2014).

In response to the above challenges in studying policy paradigms, Daigneault (2015) proposed a new framework for policy paradigms in an attempt to make the concept theoretically clearer and practically more operational. Four core components of policy paradigm are defined as: (1) the nature of reality, social justice, and the appropriate role of the state; (2) the problem that requires public intervention; (3) policy ends and objectives that should be pursued; and (4) appropriate policy “means” to achieve those ends. Other than in Hall’s third-order change, Daigneault (2015) suggests that a policy paradigm can be identified when there are “significant changes” in all four dimensions of the concept. There are two requirements in the shift identification: the ideas that compose a policy paradigm (i) must be internally coherent and (ii) must be widely shared by a significant number of actors in a given policy community (Daigneault, 2015).

This article employs a research framework that examines policy change both in terms of ideational and material aspects. On the ideational level, we identify the current dominant and alternative policy paradigms in urban development based on literature review and policy document exploration. The overall status of the policy paradigm for urban development is established. On the material level, we select a typical medium-sized Chinese city for in-depth policy study. By examining the local policy goals, instruments, and policy implementation, we measure the influence of policy paradigm and idea change on local policy practice. We thus draw a linkage between ideational change and policy change to understand the policy for sustainable urban transition in China.

Employing the theoretical framework described above, urban development policies are analyzed according to the four dimensions of policy—values, problems, goals, and instruments—considering both ideational and material aspects. Temporal changes in each dimension are examined to determine whether a policy paradigm shift has taken place.

Identification and examination of a policy paradigm for urban development in China

Existing academic literature has identified the pro-growth paradigm as the dominant one in China since 1978. Ngok (2008) characterized it as a market economy-based, development-oriented paradigm that dramatically shifted from the socialist paradigm of the Maoist era. Wu (2018) used the neo-liberal model to explain the paradigmatic reform with changes of decentralization of government power, marketization of state-owned businesses, and industrialization for the global market. The type of urban governance promoting growth and expansion was identified as urban entrepreneurial governance in which local governments promote urban growth with property-led development in pursuit of political and economic objectives (He & Wu, 2005; Jiang et al., 2017; Song et al., 2020; Wu, 2018; Wu & Phelps, 2011). The policy value can be identified as “quantity growth,” and the policy problem is that the low level of urbanization restrains modernization and economic development. With the goal to promote urban growth as the highest priority, several major policy and institutional instruments support this pro-growth paradigm (Table 1). First, China’s tax-sharing system reform in 1994 regulated that local municipalities should transfer up to 75% of local taxes to the central government (Peng, 2014). In return, local governments are allowed to engage independently in urban development and keep all revenue they incur from leasing land to developers for themselves. Land development has since become a tool to boost local government coffers. Second, GDP-ism in the Cadre Appointment System encourages local leaders to use urban development as a tool to reach high “political performance levels” in their competition for promotions (Li & Zhou, 2005). Third, the local government financial vehicle (LGFV) is a major local instrument for financing urban and infrastructure development (Li, 2016). LGFVs are fully state-owned enterprises established by local governments, and act as vehicles for local governments’ entrepreneurial behaviors including land acquisition, compensation, leasing, investment and finance. LGFVs greatly increase the ability to leverage massive urban projects of local governments, as well as the risks of local debt crisis.

Table 1. Identification and examination of policy paradigm of urban development in China.

	Pro-growth urban development	Sustainable urban development
Values, principles and the nature of reality	Quantity growth	Quality growth
Policy problems that require public intervention	Low levels of urbanization and modernization restrain economic development	Growing social conflicts, financial risks and environmental deterioration during rapid urbanization
Policy ends and goals	Achieving high GDP growth through urban expansion and modernization	Achieving high quality built environment and promoting social equality
Policy means and instruments	‘Land finance model’: Tax-sharing reform and decentralization of power in land development GDP-ism in cadre appointment Establishment of local government financing vehicles (LGFV)	Incremental change in the ‘land finance model’ but no significant overall change: replace LGFVs with local governmental loans and bonds

The clarion call for changing the quantity-oriented growth model into a quality-oriented one has grown increasingly strong in recent years (Central Committee [CPC] & State Council, 2015; Chen et al., 2019; De Jong, 2019; Liu & Qin, 2016; Ngok, 2008), but whether this call for a strong emphasis on sustainability is strong enough to justify calling it a policy paradigm shift remains debatable. Some academic sources state that a shift toward environmental and human-centered development has taken place in China based on national-level policy changes (Liu & Qin, 2016; Ngok, 2008). Others argue that urban sustainability has so far actually little more than a branding tool, while noting that realizing a shift in policy paradigm in urban development can take years or even decades (De Jong, 2019; Zhu, 2013). Evidence suggests that changes in policy instruments have been limited, and that any transition in policy paradigm has also been limited. For example, the central government put a halt on LGFVs raising money for local governments in the revision of the Budget Law in 2015 (Li, 2016). But in return, local governments were allowed to issue bonds and loans to replace LGFVs in financing development projects. This has only curbed the land finance model only to a limited extent. Additionally, there is very little change in the tax-sharing and cadre appointment systems. Property tax has been discussed for a long time, and even partly tested in some cities as a replacement for land-leasing revenues for local governments. To date, however, this has not resulted in significant change partly because the land finance model is deeply imbedded within China’s political and administrative institutions; it may require years or even decades to reform it. As such, there is little evidence of a national policy paradigm shift occurring to date.

We must consequently draw a preliminary conclusion that although there are loud voices suggesting policy transformation, signals of thorough institutional and instrumental change from pro-growth to sustainable development policies remain weak. There is not yet enough evidence to justify claims of a policy paradigm shift. As central government is very cautious regarding changes to institutions and instruments, it may take a long time for significant policy change to take place. In the meantime, there exist various inconsistencies in policy goals and instruments where pro-growth development is hidden in the official narrative but remains strong in practice. The nature and implications of these inconsistencies at the local level are considered in more detail in Section 4.

Research methods

Based on the above theoretical considerations, an exploratory case study is introduced. In order to gain an in-depth understanding of the potential tensions and dilemmas that local states of medium-sized cities are facing during the overarching policy change of urban sustainability, one medium-sized municipality is selected to conduct extensive primary research. The qualitative methods used to collect data are interviews and focus groups which provide meaningful insights from various actors involved in the policymaking and implementation processes of local urban development. This section sets out the analytical framework, data collection methods, and basic information on the case.

The analytical framework consists of two parts: ideational analysis and material evidence. The analysis on the ideational level aims to explore and examine the consistency of overall policy goals and policy instruments between central and local government. In simple terms, the ideational dimension can be understood as identifying “what governments say they want to do” in their policy statements. Analysis of this dimension involves examining the underlying values, principles, stated problems and solutions that decision makers claim to address. This information is gathered through interviews with governmental actors as well as from policy documents including local urban masterplans and transport plans. Their content is then compared with the content of central-level policies. Second, the analysis draws on empirical (material) evidence of urban development policies at the local level. Analysis of the material dimension can be understood as “what governments actually do in the practice of implementing their policy.” Comparing what governments claim on paper and what they do in action provides a way of examining the consistency of policy ideas as well as the alignment of policy paradigms between central and local government.

As an exploratory case study, a typical medium-sized city located in central China was selected on which we drew for extensive first-hand fieldwork. The research team was invited by the local government to conduct a research project on its sustainable urban transition, and we were given the opportunity to visit and stay in the city for a few months and conduct interviews. In order to preserve the anonymity of the interviewees, we do not refer to the real name of the city but instead refer to it as Yongcheng, which means “mediocre city” in Chinese. Between November 2018 and January 2019, the research team stayed in Yongcheng and conducted interviews with public officials from dozens of government departments (including planning bureau, planning and design institute, land and resource bureau, new district government, land investment corporation, bus company, and traffic police department—see Appendix⁴) and to inspect many official policy documents, including various kinds of planning documents (such as urban master plans, transportation plans, and district plans). At the end of the fieldwork, a 3-day seminar was hosted in Yongcheng for the research team to present its initial findings to selected public officials and international invited experts from various fields including urban planning, governance, and transport. While in Yongcheng the research team also took part in a focus group on sustainable urban transition in which in-depth discussions about some of the initial research findings took place.

Yongcheng is a city that few people know outside its province. Its GDP per capita (around 70,000 RMB in 2019) is close to China’s overall average of 71,000 RMB. The urbanization rate (percentage of urban population to total population) in Yongcheng’s administrative territory (including three surrounding counties) in 2019 was 60%, similarly close to the national level of 61%. As such, Yongcheng can be regarded as an “average” Chinese medium-sized city. Yongcheng’s urban population in its central urban area has grown from 643,100 in 2009 to 715,000 in 2019, while its overall administrative population merely increased from 2,850,300 to 2,897,500. In general Yongcheng does not have a shrinking population, but its population growth is far behind the estimates in its master plan. Since the 1970s, Yongcheng’s economy has centered around heavy industry after a group of state-owned factories were transferred to the city. However, by the start of the 21st century, Yongcheng was no longer satisfied with its image as an industrial medium-sized city: it had bold ambitions for urban development that sought a transformation from a polluted industrial city to a sustainable, innovative and livable one. Since 2000, two new urban districts, a new industrial district and a new administrative district have been developed.

Empirical evidence: Urban and transport development

Ideational analysis

This section focuses on the ideational level, more specifically the consistency of the general development goals and the policy problems as perceived by the central and local governments. We examine through interviews and two key local development documents (urban master plan and comprehensive transport plan) if the local government claims to be moving in the same direction as the central government has proposed.

According to the Yongcheng urban master plan, the overall goal is to pursue “industrial upgrading, innovation and transition, achieving sustainable, livable and low-carbon urban development.” Yongcheng aims for building “a regional central city, provincial petrochemical and innovative industrial base, cultural and livable city with great natural resources.” Additionally, the urban master plan states that the major development problem of Yongcheng is low resource efficiency during its rapid urban expansion. Yongcheng should put more efforts on sustainable development and resource conservation, while at the same time its urban structure and road infrastructure system should be optimized. We observe that the overall goals of Yongcheng master plan stresses the value of sustainability and quality growth which and is therefore consistent with the alternative paradigm of sustainable urban development, as well as the central-level requirement to realize an eco-civilization and new-type urbanization.

Moreover, Yongcheng’s comprehensive transport plan also claims to have sustainable development at its core and explicitly aims to give public transport a central role in the future development of its transport system. The plan’s overall development goal is to increase urban competitiveness and to achieve urban sustainable development, while the key development principles are efficiency and conservation of land resources, protection of the natural environment and creating an urban traditional cultural area during infrastructure development. The key problem found in the current transport system is unbalance in the road network which severely lacks in secondary roads and branch roads. So, the key objectives are to optimize road network and prioritize public transport, in order to achieve 30% public transport travel in 2030.

On the other hand, despite a heavy emphasis on the value of sustainability and quality growth in Yongcheng’s official urban and transport development goals, pursuit of massive urban growth appears still prominent in interviews and in other pages within abovementioned documents. For example, the urban master plan states that the main problem of Yongcheng’s downtown area is that it is “falling behind economic and industrial development, and the urban central area should have more development space.” The urban structure of Yongcheng should be made more compatible with regional transport infrastructure development. According to the local officials, the “adjustment in urban structure” very much refers to new town or new district development that expands the built area. Pro-growth goals are hidden within the policy documents, in which the sustainable agenda is emphasized. However, the local officials clearly state that what Yongcheng actually and urgently needs is more development in a larger urban space.

Material analysis: Road infrastructure policies

When comparing two selected sustainable and pro-growth road infrastructure development policies, we can clearly pinpoint implementation gaps. Pro-growth policies are a top priority in which substantial financial and political resources are invested, which are not allocated sustainable urban development policies.

A prominent example is the “Traffic Microcirculation Optimization Plan for the Old Town Area of Yongcheng,” also known as the “Microcirculation Plan.” This plan is a local policy formulated in response to the national guidance on urban development to optimize road networks and develop public transport (State Council, 2016).

On the ideational level, this plan perceives the key policy problem as “traffic congestion caused by an existing unbalanced road network with a severe shortage of secondary and tertiary roads.” It upholds the value of quality growth as its policy goal and aims to optimize and improve the existing road infrastructure system for the built urban area (Table 2). In other words, more branch roads are to be built to relieve pressure from the main roads and to support a more efficient and accessible bus system. The plan has three main strategies: (1) constructing new roads, (2) opening up existing roads from closed communities, and (3) renovating and reconstructing existing problematic roads. So, the microcirculation plan is not in pursuit of massive new infrastructure development but to make better use of existing road infrastructure and to improve public transport.

Table 2. Differences between ideational and material aspects in road infrastructure policies.

	What they say they will do (idea on paper)	What they actually do (practical action)
Policy values and principles	Sustainable, compact, quality growth	Urban and infrastructure quantity growth
Policy problems	Traffic congestion, unbalanced road network structures	Crowded downtown area, lack of urban space restrains economic development
Policy objectives and goals	Improve existing road network, achieve public transit-orientation	Expand urban space, with car-oriented infrastructure development
Policy means of implementation	Lack of valid instruments	LGFV as financial instrument

Unfortunately, the plan never really reached the implementation stage for lack of deployed valid policy (financial) instruments, a common situation for many sustainable urban development policies. Compared to common transport infrastructure plans, the microcirculation plan requires less funds (326 million RMB in total including slow traffic and bus systems) as it mainly focuses on constructing small roads and the improvement of existing roads. Local officials from the planning bureau explained that the microcirculation plan lacks financial support from local government leaders, so it misses a government budgets to be implemented. Currently, the plan has a tiny number of road projects under construction under another policy called “Shantytown Renovation Policy (Penghu qu gaizao),” which is a national policy issued in 2015 to reconstruct and renovate old town areas in Chinese cities, especially medium-sized cities. This policy is funded by a special financial instrument from the central government (XinhuaNet, 2019) and does not need any local budgetary contribution. The fact that it has become the de facto carrier of the microcirculation plan suggests that the local government shows little interest in sustainability and is reluctant to put in local resources, even though it could directly have improved Yongcheng’s downtown area.

Instead of investing in the microcirculation plan, Yongcheng’s local government allocated most of its resources to a large-scale pro-growth infrastructure development program: the “Three Rings Eight Arterials and Six Tunnels (TREAST).” TREAST aims to build a whole new transport structure of three concentric ring roads: the inner ring is 19.22 km long covering the old town area of about 20 km²; the middle ring is 34.07 km long encircling the current city’s built-area of 73 km²; and the outer ring is 76.80 km long enclosing about 380 km² territory (Hubei News, 2017). There is an obvious contradiction between the TREAST and the microcirculation plan: if there is already a shortage of secondary and tertiary roads in Yongcheng, then building more primary roads only aggravates the imbalance in the road network. TREAST is not an infrastructure program for the current built environment, but rather facilitates future urban expansion.

On the ideational level, TREAST considers the key policy problem as “lack of urban space resulting in a crowded and congested downtown area which constrains further economic development.” It upholds the value of quantity growth and aims to facilitate the massive future urban growth (Table 2). According to one interviewee of the planning bureau, TREAST will “reconstruct Yongcheng’s urban structure and its urban space will grow from 70 km² to 380 km², achieving a five-fold growth of space for the future development.”

Although TREAST is more than ten times costlier than the microcirculation plan, its implementation runs much more smoothly, because it financially well endowed. For example, the outer-ring project costs 3.3 billion RMB and was completed and put into use in 2017 only after 4 years of construction. Zhanghe Avenue, one of the eight arterials, cost more than 700 million RMB and was completed in 2015 as the most important arterial project connecting to a Yongcheng new town area. The financial instrument used in the implementation of TREAST is LGFV, which is the Yongcheng Transport Construction Investment Group (TCIG) specifically for funding transport infrastructure. Although the central government has officially limited the use of LGFVs in financing local land development projects, they are still the main instrument under use.

A comparison of the microcirculation plan with TREAST shows a clear gap between the sustainable urban development goals on paper and the pro-growth development in action. Yongcheng’s local government invests massively in local transport infrastructure development using LGFV as a main policy instrument. Yongcheng’s dominant belief still appears to be: as long as the central government asks for economic development and urban modernization, urban growth and expansion continue to be the right way forward and ways around restrictions shall be found. Sustainable urban development policies with their concomitant values and goals have become the political correctness that the local government needs to display on paper to please the central government. But in practice, local government sticks to its old agenda of bigger, faster and more impressive infrastructure systems to promote dramatic urban expansion. Old means of showing political achievement are hard to die.

Material analysis: High-speed rail policies

Not only can the pro-growth tendency be found when comparing the implementation of pro-growth and sustainability-oriented policies, but also in the implementation of key transport and urban infrastructure projects like the high-speed railway station and the development of new town area surrounding it.

High-speed rail (HSR) development in China is closely related to urban development, especially new town development. Although HSR development is a part of a national-level infrastructure strategy planned, designed and implemented by the China Railways, local governments always see it as an important opportunity for urban expansion. During our interviews in Yongcheng, which was the last municipality in the province to be connected with the HSR network, local government officials saw this missing connection as a major policy problem and emphasized the importance of a HSR station for their local economic development and competitiveness of their city.

Theoretically speaking, to maximize the economic contribution a HSR station can generate, the station should be built in the city center to maximize the city’s regional accessibility. However, in practice it has become a tradition for local governments to build HSR new towns far out of town; Yongcheng is no exception. Yongcheng’s HSR New Town Plan in 2017 proposed the HSR station 13 km south-west of its current city border, nearly 20 km from its old city center. It was projected as 8 km² area offering homes to 55,000 to 65,000 residents in the future. The plan was approved and made public by the local government in mid-2017. Even at the ideational level, Yongcheng’s initial HSR new town plan strongly upheld the value of quantity growth, as its policy goal was to use the HSR station to initiate new town development rather than to efficiently connect the city to HSR network (Table 3).

Table 3. Differences between ideational and material aspects in HSR policies.

	What they say they will do (idea on paper)	What they actually do (practical action)
Policy values and principles	Sustainable, compact, quality development	Urban and infrastructure quantity growth
Policy problems	Disconnect from national and regional rail network which constrains urban and economic development	Disconnect from national and regional rail network which constrains urban and economic development
Policy objectives and goals	To better connect and integrate HSR with the city	To use national HSR project to initiate new urban expansion
Policy means of implementation	Transport and land use integration tools	New town development instrument: LGFV for land development

However, the central government put a stop on the widespread construction of HSR new towns when promoting sustainable development policies. In 2018, four ministries from the central government⁵ issued a guideline for the urban development around HSR stations. Basically, it urged local governments “not to pursue short-term political performance, to consider local conditions and capability, and prohibit impetuous urban expansion in the name of HSR station area development” (NDRC, 2018). This national-level guideline does uphold the value of quality growth as it encourages compact development and the integration of HSR with urban development and discourages using HSR for massive urban growth. Yongcheng is one of the cities directly criticized by the central government for deliberately locating HSR station farther away from city center in its pursuit of new town development. Its initial HSR new town plan had to be abandoned and new location nearer to the built area was to be found.

This case demonstrates both tensions between local and central governments and developmental dilemmas local governments face. From the perspective of local leaders, urban growth is automatically desirable and promotes their political careers. It drives them to use every opportunity to strive for more urban expansion. But the existing cases and experiences (especially HSR new towns on the Beijing-Shanghai HSR line) have already shown that the potential of HSR stations to attract residents for new development is always overestimated, especially for medium and small sized cities (Yu et al., 2012). Building HSR stations in remote areas not only increases risks of overdevelopment and financial debts to local governments but also decreases accessibility to and ridership of the HSR network, thus boosting the deficit the China Railway are already coping with. This is why the central government decided to ban on the further construction of HSR new towns.

The after-tale of Yongcheng’s HSR station is worthwhile telling too. The location chosen for the HSR station was shifted to the west of the city, indeed much closer to city center. But the ambitions of the local government had not faded yet. It enlarged the size of the station from 12,000 m² to 40,000 m², of the China Railways would build around 6000 m² (the size it thought was actually needed), and the rest of the enlargement program would be paid by Yongcheng itself. The latter stepped up its investment to 2.1 billion RMB in 2021 to make the enlargement possible. At the time of writing the detailed plan had not been published yet, but its preliminary scheme still insists on an astonishing 100,000 m² square in front of the station surrounded by potential “district development.”

Discussion

Empirical evidence from Yongcheng confirms the idea that there are changes in ideas as to sustainable urban development in terms of local policymaking and urban planning, but that these still largely remain a paper tiger, while the pro-growth paradigm still looms large but not remains hidden from official narratives. Our findings show a significant gap between policy ideas, values, goals, principles on the one hand and what is actually implemented on the other. In this section, we will further discuss the influence of idea changes on policy change, and the role of ideas in paradigm shifts.

Policy ideas and policy change

An analysis of ideational and material changes in Yongcheng shows that policy idea, values, and goals with regard to sustainable development are emphasized at both the central and local levels, but that the LGFV as policy instruments for pro-growth policies remains dominant (now facing restrictions in land development but not in infrastructure development), while the policy instruments for implementing urban sustainability are unclear. From Yongcheng’s perspective, there is no contradiction between emphasizing sustainability as a value and pursuing great urban growth as a practice at the same time. To them, sustainable ideas are long-term visions promoted by the central government, while pro-growth targets are a default mission they need to address to show local political and economic achievements. This creates an inconsistency between long-term and short-term policy goals. Furthermore, local leaders under the current administrative system would commit political suicide if they put all their resources in sustainable urban policies without showing immediately visible output while other cities build magnificent infrastructure and realize high urban growth as an indication of induced prosperity. For the central government, no matter how hard sustainability is emphasized as a value, the targets for urban sustainable development policies remain “soft and vague” compared to the clear targets of GDP growth each year. In other words, GDP growth is still the highest priority both for central and local governments, and infrastructure and urban development remain the main approach to boost this growth, especially in medium-sized cities that lack investment in other industries. This explains why Yongcheng decided to invest heavily on TREAST projects rather than on the microcirculation projects even though the local government is fully aware of its severe shortage of secondary and branch roads. Only introducing new policy ideas will not change much in actual policy practice if it can afford to become pure “political correctness” on paper.

Compared to the change of policy ideas and policy goals, the change of police instruments affects policy practice more visibly. For example, LGFV has been the major instrument for financing both infrastructure and urban development, especially in less developed cities with limited budgetary resources. When in 2015, the central government imposed restrictions on the use of LGFVs with the new budget law, this directly influenced the urban development process at the local level (Li, 2016). In Yongcheng, we interviewed the Land Investment and Development Company (LIDC), a subsidiary under Yongcheng’s major LGFV of Urban Construction Investment Holding Group (UCIHG). The officials stated that their numbers of land development projects decreased dramatically when the central government put restrictions on the use of LGFVs. The financial instrument for land development changed from LGFVs to special land bonds issued by local government which allowed for stricter supervision within the fiscal system. As a result, Yongcheng’s land development process significantly slowed down. However, although using LGFV is severely restricted, it remains the major instrument to finance infrastructure development. TREAST is primarily funded through the major LGFV of the Yongcheng Transport Construction Investment Group (TCIG), with few restrictions. Consequently, TREAST through LGFVs as infrastructure development itself theoretically encourages massive future urban development but future urban expansion through LGFVs as urban development is unlikely to be realized because that type of LGFV is no longer allowed. Restrictions on the use of LGFV as a financial instrument do have a direct influence on policy practice, but this influence is more instrumental than significant. Local governments can maintain their strong belief in the pro-growth paradigm.

What impedes a paradigm shift?

Our case study confirms the impression that a new narrative for sustainable urban development has emerged, but that it is not enough for a shift in policy paradigm. Building new roads and HSR stations takes place along the lines of pro-growth development. Although the latter is hidden on paper, in practice it remains dominant. So, the sustainable urban transition in China today can better described as a change in narrative than in a change of worldview. To force off a genuine policy paradigm shift, there first needs to be a genuine replacement of existing policy goals for urban development. For example, the central government should reconsider setting hard GDP growth targets every year, since China has already entered a slowing down period in which quality growth should outweigh quantity growth. Furthermore, quality growth target should replace quantity growth targets in the Cadre Evaluation and Appointment System so that local leaders would no longer compete for personal career promotion purely based on local infrastructure and urban growth achievements. However, replacing policy goals in this manner can be extremely difficult because maintaining economic growth is deeply ingrained as a source of legitimacy: the capability of constructing large-scale infrastructure and urbanization has also become a symbol of “institutional superiority” in China which often refers to the ability of “concentrating all powers to make great achievements.” This type of propaganda narrative is deeply embedded not only among decision-makers but also more broadly in society. The risk of overdevelopment may then be easily overlooked.

Conclusions

In recent years, urban sustainability has grown markedly in importance as the national “eco-civilization” policy gained high-level political endorsement. Although local officials have begun to pay more attention to the protection of the natural environment and industrial pollution control, little attention is paid to the nature and scale of urban development (and urban infrastructure) when considering sustainable transitions. Urban development of this type revolves more around local investment and economic growth, and the aspect of sustainability is comparatively “softer” than in other fields of ecological preservation. Its environmental effects only become visible after a long period of time and are complicated to pinpoint and caught up in arguments of “modernity.” All of this contributes to difficulties local states experience in their shift from short-term capital-centered pro-growth urban development toward a more human-centered quality-oriented model of development. The effects of applying the urban pro-growth paradigm in medium-sized cities are more serious because they have high ambitions to promote large-scale urban growth but lack the economic and population growth to support and facilitate their expansion plans. At the end of the day, using investment in urban and infrastructure development to boost GDP growth highly likely leads to overinvestment and oversupply.

As an exploratory study, this article does not seek to demonstrate whether a paradigm shift to sustainable urban development is successful at the central or local levels, but rather contributes to an understanding of what has changed in policy values, problems, goals, and instruments at the central level, and how the local state reacts to such changes given the institutional context it operates in. The findings show that even if there are significant policy changes at the central level (e.g., overarching sustainable urban development goals, restrictions on the use of policy instruments such as LGFVs, and direct interventions in local transport policies), the local state will still struggle to shift away from its urban pro-growth model. This does not necessarily imply that local officials do not care about urban sustainable development, but rather that it is extremely difficult to find alternative ways to maintain local economic growth without massive investment in urban and infrastructure development. They may be working tirelessly on the restoration of local ecological systems through controlling air and water pollution and greenhouse gas emissions, while at the same time having to maintain their financially risky and environmentally unfriendly modes of aggressively promoting urban growth. Their dependence on investment, especially state-led investment, is deeply embedded in China’s political and economic system, and constitutes the biggest financial risk in China’s economy. This goes well above and beyond the agency of the local state in policymaking and implementation processes.

This study also raises the awareness of a development dilemma medium-sized cities face and to proposes a roadmap for future research project on urban overdevelopment and sustainable development among medium-sized cities in China. A twofold examination framework is suggested for future studies on this topic. The first part of the framework starts with the assessment of risks in overdevelopment through examining cities’ historical population growth, future population projections, overall strategic planning, and the scale of their visible and invisible local governmental debt. The second part focuses on an analysis of the consistency of policymaking and implementation on urban development issues through the comparison of policy goals, values, and instruments on the ideational level and implementation processes on the material level. Such studies will not merely reveal implementation gaps of sustainability policies, which can more or less be found among all types and sizes of cities, but also lay bare hidden financial and environmental risks of applying the urban pro-growth model cloaked behind dreams of a sustainable future.

Acknowledgments

The first author was funded by the China Scholarship Council. The authors thank all the interviewees from various departments of the Yongcheng local government, and particularly appreciate the local officials and staff who organized and arranged fieldwork visits and stays in the city. We are also very grateful for the comments from the editor and two anonymous reviewers that have contributed to the improvement of this article.

Disclosure statement

No potential conflict of interest was reported by the authors.

Supplemental data

Supplemental data for this article can be accessed online at https://doi.org/10.1080/07352166.2022.2059377.

Additional information

Funding

This work was supported by the China Scholarship Council [CSC201607720037].

Notes on contributors

Yun Song

Yun Song is a post-doctoral researcher at the Erasmus Initiative “Dynamics of Inclusive Prosperity” at Erasmus University Rotterdam. He did his PhD on the governance of urban growth, land politics, finance and urban entrepreneurialism of Chinese cities at the Delft University of Technology. His work has also been published in Cities, Research in Transportation Economics, and Sustainability.

Martin de Jong

Martin de Jong is a professor and scientific director of the Erasmus Initiative “Dynamics of Inclusive Prosperity” at Erasmus University Rotterdam. He also has a part-time professor position at the School of International Relations and Public Affairs of Fudan University in Shanghai. He has a 25-year experience in research, education and entrepreneurship on public policy, decision-making, urban studies, infrastructure development and cross-cultural management. His work has also been published in Journal of Cleaner Production, Cities, Journal of Contemporary China, Environment and Planning A, International Journal of Urban and Regional Research, Transport Policy, and Policy & Society, among others.

Dominic Stead

Dominic Stead is a professor of land use and transport planning at Aalto University and also has a part-time position at Delft University of Technology. His research focuses on urban and regional governance and sustainability. He is a member of six editorial boards of international peer-reviewed journals: European Journal of Transport and Infrastructure Research, European Planning Studies, Journal of Planning Education and Research, Journal of Planning Literature, Planning Practice and Research and Urban Policy and Research.

Wei Yang

Wei Yang is a lecturer and post-doctoral researcher at the School of Humanities and Law at the Northeastern University in Shenyang, China. His research focuses on transport policy, public policy package, and digital governance. His work has been published in Research in Transportation Economics, Sustainability, and Energies.

Biyue Wang

Biyue Wang is a PhD candidate at the Faculty of Architecture and the Built Environment at Delft University of Technology. Her research focuses on urban and infrastructure development and high-speed rail development. Her work has been published in Planning Theory and Practice, Urban Policy and Research and Sustainability.

Notes

1. The destocking policy is a unified economic policy first introduced in the 2015 Central Economic Work Conference as one of the five key tasks for China’s supply-side structural reform. Its target is to reduce real estate inventory in the market.

2. The “tiers of cities” is not a well-defined concept but is often used in the media and government policy documents. The third and fourth-tier cities often refer to some lesser developed big cities and the general medium-sized cities.

3. Medium-sized cities refers to cities with the population of urban central district from 500,000 to 1,000,000 (State Council, 2014). There are currently 99 cities that can be classified as medium-sized cities in China.

4. The interviewed departments are mostly “development-related” as our topic revolves more around sustainable patterns in urbanization rather than being included in the general definition of ecological protection. Thus, several departments were left out from the list of interviews as either they provide little information apart from policy documents, or they play rather a minor role in the local decision-making phase on urban development. For example, the Environmental Protection Bureau and the Financial Bureau provided us with policy documents rather than interviews.

5. National Development and Reform Commission, Ministry of Natural Resources, Ministry of Housing and Urban-Rural Development, and State Railway Group.