Planning and developing a high-speed railway new town under state entrepreneurialism in China

ABSTRACT

The development of high-speed railway (HSR) new towns in China represents a new phase of suburbanization and has had a significant impact on urban expansion, but not all of its mechanisms and drivers have been studied. This article aims to understand the booming development of HSR new towns in China through the theoretical lens of state entrepreneurialism. It dissects the entrepreneurial behaviors of the local state in a medium-sized city, which harnesses the HSR project strategically to develop a new town. Our findings reveal that local governments play out state entrepreneurialism in developing HSR new towns. They compete with other cities for HSR projects. They are motivated by land revenue generation, career advancement for officials, and maintaining state power. Furthermore, this article contributes to the understanding of interactions among multi-level governments. Local states in China can also exert influence on the policymaking and resource allocation of the national government.

KEYWORDS:

• HSR station areas
• new towns
• state entrepreneurialism
• China

Introduction

Since the economic reform began in 1978, the urban transformation of China has been characterized by the development of new towns and rapid urban expansion (Hsing, 2010; Shen & Wu, 2013; Wu, 2018). This large-scale urban transformation can be divided into three rounds: development zones starting in the 1980s, university towns since the late 1990s, and eco-cities in the 2000s (Chien, 2013b; Li et al., 2014; Xue et al., 2013). Wu (2020a) points out that suburbanization in China has recently entered a new phase, with China attempting to transform from developing these single-function industrial parks to developing mixed-use new towns. These new towns are usually state-initiated new developments on the urban periphery or in rural areas far from cities (Shen & Wu, 2017). New towns are often planned to create mixed urban functions, develop massive real estate, and construct new infrastructures (Shen & Wu, 2012). Local governments intend to create distinctive urban landscapes, attract new investment, economic activities and population, and enhance city competitiveness through the development of new towns (Li, 2015; Wu & Phelps, 2011; Xu & Yeh, 2005).

Along with the development of high-speed railways (HSR) in China since 2008, mixed-use HSR new towns have emerged as a vital urban development strategy. China’s HSR network is developing rapidly and will connect around 210 cities with a population of more than 500,000 in 2030. In 2019, 139 cities in China have each already planned and constructed at least one HSR new town (Chen et al., 2019a). Unlike development zones, university towns, and eco-cities, which are concentrated in eastern China with rapid economic development, HSR new towns are scattered throughout the country and represent the only opportunity to develop new towns for many central and western cities. These HSR new towns are usually located in suburban or rural areas, around 10 kilometers away from city centers (Chen & Wei, 2013; Dai, 2015). They are usually large-scale and planned according to the estimated needs for the next 20 years. Some of the HSR new towns are even larger than half of the existing urban areas of cities. HSR new towns are expected to boost the local economy, upgrade industrial structures, enhance service levels and improve the urban competitiveness by local governments (Dai, 2015; Ureña et al., 2009; Yin et al., 2015). The construction of HSR new towns also aims to produce a considerable amount of revenue from land-leasing for the local land finance system, so a significant number of real-estate projects are planned in HSR new towns (Tang et al., 2011). They have had a profound impact on urban expansion and land-use structure, especially in central and western China (cf. Long et al., 2018; Wu et al., 2022).

However, the development of HSR new towns has faced many challenges and sometimes fallen short of expectations, especially in small and medium-sized cities, which has led to severe criticism from scholars and the public. First, the far-out-of-town location of most HSR stations has adverse effects not only on accessibility but also on the economic activities of the station area (Chen et al., 2019a; Yin et al., 2015). Second, the scale of the HSR new towns tends to be far in excess of what is required for the current usage (Chen & Wei, 2013). Third, HSR new towns often lack supporting infrastructures for creating urban vitality and attracting residents, for example, schools and recreation centers (Chen et al., 2019b). In fact, many planning areas are still vacant, and the land is wasted (Lu, 2012). Because of low utilization, the media has reported these unsuccessful HSR new towns as “ghost towns.” Many HSR station development projects can be seen as another strategy for sprawled urbanization (Dai & de Vries, 2018). Furthermore, the development of HSR and new towns has unavoidably led to rising levels of public expenditure (Chen et al., 2021) and growing concerns about debt levels among local governments, which have exploded since 2009 (Pan et al., 2017).

New towns in China are planned and developed in the context of entrepreneurial governance, land-based urbanization, and spatial commodification (He & Wu, 2009; Zhang & Wu, 2022), aimed to “foster and encourage local development and employment growth” (Harvey, 1989, p. 3). Urban governance in China, in particular new town development analyzed according to the theory of urban entrepreneurialism, has received ample academic attention (Chien, 2013b; He & Wu, 2009; Wu, 2003). Research on Chinese new districts (Qian, 2011; Xue et al., 2013), university towns (Li et al., 2014; Sum, 2018), and eco-cities (Caprotti, 2014; Chien, 2013a; de Jong et al., 2016; Xie et al., 2020) has consistently shown that the state apparatus, especially the local state, plays a principal role in the decision-making of urban development megaprojects and captures land values, though market tools are used pervasively. This phenomenon that “the state acts through the market” is defined as “state entrepreneurialism” (Wu, 2018, 2020b). So far, however, there has been little analysis of HSR new towns from an entrepreneurial governance perspective.

To enrich our understanding of state entrepreneurialism, research should pay more attention to cities under different historical and geographical conditions (Lin et al., 2022). HSR new town development represents a new phase of suburbanization in China, but its mechanisms and drivers have not been exhaustively studied, or its underlying problems in urban development fully revealed. In addition, empirical studies of entrepreneurial governance in Chinese cities have focused on mega-cities in eastern China such as Beijing, Shanghai, Guangzhou, and Shenzhen, while discussion of cities in central and western China is lacking (Luan & Li, 2022).

Furthermore, most of the literature exploring entrepreneurial governance in Chinese cities focuses on the relationship between the state, market and society (Guo et al., 2018; He & Wu, 2005; Li & Chiu, 2018). The new phase of suburbanization aims at industrial upgrading and economic restructuring and involves complex coordination between different levels of government (Zhang & Wu, 2022). However, the literature has paid less attention to interactions and negotiations across various tiers of government, which are important in identifying the mechanisms underlying the development of entrepreneurial cities (Chan & Li, 2017). HSR new towns offer a valuable reference, as they are shaped by both central and local governments (Yang & Han, 2020).

This paper aims to investigate how state entrepreneurialism plays out in the decision-making and planning of HSR new towns. It is important to explore the nature of entrepreneurial behavior among Chinese local governments during urban transformation and new town development (Chien, 2013a). This paper sheds light on the motivations and initiatives of local government in the planning process of HSR new towns. Furthermore, this paper also explores how local governments interact with provincial and national government organizations during the decision-making process regarding HSR new towns.

In addition, the empirical case of this research is an HSR new town located in a medium-sized city in central China. From 2018 to 2019, data has been collected in the context of a research project on the decision-making process of this HSR station area, for which Delft University of Technology cooperated with the local government and in which the authors participated. Because of the contract, we refer to this city under the pseudonym of Yongcheng in this article, which means “ordinary city” in Chinese. This research is based on interviews and workshops conducted with senior officials of the Chinese Railways, railway planners, Yongcheng local officials from different bureaus, and urban planners (see Appendix A for details). The analysis is also based on materials and documents collected during our fieldwork. The unique access to this decision-making process and the data collected allow a detailed understanding of such processes from an urban entrepreneurial viewpoint, which we consider to be illustrative for many other HSR new town developments in other medium-sized cities in China.

Probing HSR new town under state entrepreneurialism

The concept of urban entrepreneurialism has been widely used by scholars to describe the situation that cities are being run in a business-like manner since the rise of neoliberalism in the 1970s (Brenner & Theodore, 2002; Harvey, 1989; Jessop, 2013). It implies that the role of states has shifted from managerial government, traditionally a welfare provider for its citizens, to speculative governance, which means the government acting as an entrepreneur to promote urban growth and city marketing (Hall & Hubbard, 1998). To ensure the survival of countries and cities in a competitive global environment, the entrepreneurial city functions as a state strategic project that focuses on economic development and investment with the speculative construction of a specific place (Brenner & Theodore, 2002; Harvey, 1989; Jessop & Sum, 2000; Ward, 2003). Typical strategies of urban entrepreneurialism include the following: the construction of science and technology new towns to attract skilled labor, the promotion of cultural activities and facilities to attract consumption and investment, the upgrading of social and physical infrastructure to strengthen their position in global economic flows, and competition for national infrastructures to enhance the city's position in the region (Jessop & Sum, 2000). The growth of entrepreneurial cities is connected to the broader neoliberal transition of a country, as part of the global capitalist accumulation system that has undergone a profound transformation (Harvey, 1989).

Most leading scholars in the field hold the position that in the Chinese context, the state plays a central role in neoliberal policy-making (He & Wu, 2009; Wu, 2018; Yeh et al., 2015). They found that a unique characteristic of the governance regime in China is the ubiquity of state intervention, not only at the central but also at the local level (He & Wu, 2009; Zhang & Wu, 2008). Some therefore argue that neoliberalism is not the appropriate lens through which China's growth model should be seen, because neoliberal policies are combined with state authoritarianism (Ong, 2007). Neoliberalism is about releasing state constraints on the market, but marketization and commodification in China provide instruments that in fact strengthen the position of the state rather than weaken it.

Along with the decentralization of economic decision-making power in China since 1978, local states have shifted from being passive regulators in the planned economy to active agents in encouraging local businesses, building local infrastructure, promoting urban development, and attracting foreign investment (He et al., 2016; Oi, 1995; Wu & Zhang, 2007; Xu & Yeh, 2005). Chinese local governments act as “market actors” that mobilize special economic and political resources to meet their own interests in cooperation with other actors (Zhu, 2004). The gradualism of China’s market reform and asymmetric decentralization, such as the state’s regulation of the market and state-owned land property, leads to relatively constraining governance innovations (Wu, 2003, 2016). To understand the changes in governance with Chinese characteristics and respond to scholarly criticism that neoliberal urban entrepreneurialism is not applicable to China, Wu (2018, 2020) has added a new narrative, “state entrepreneurialism.” It is defined as follows: The state creates a market-like environment and uses market instruments to achieve its strategic goals. The state gives its officials, usually at the local level, the ability and power to catalyze economic growth in order to advance their political careers. The state is transformed into an entrepreneurial market agency and acts through the market (Wu, 2016, 2018, 2020b). The core of state entrepreneurialism is “spatial fix”, which means the state capacity to organize the complex mega-project of expanding new spaces for capital accumulation (Wu, 2017). Therefore, state entrepreneurialism often drives the development of suburbs and new towns in China. In Table 1, we show the differences between urban entrepreneurialism and state entrepreneurialism, based on a comparison of the development of new towns in North America and China as developed by Wu and Phelps (2011) and Wu (2017).

Table 1. Key differences between urban entrepreneurialism and state entrepreneurialism in new town development (Sources: authors’ summary based on Wu, 2017; Wu & Phelps, 2011).

	Developing new town under urban entrepreneurialism	Developing new town under state entrepreneurialism
Form of generation	Spontaneous clustering of office buildings to generate an employment subcenter	Comprehensive planning by local state, with mixed residential, industrial, office and commercial land uses
Investment actor	City as an independent actor or a firm in the market, public-private partnerships	Local states as market agents, establishing Urban Investment and Development Corporations (UIDCs) and using these as financial vehicles
Decision-maker	Urban elites and key leaders in a more localized development corporation	State officials
Goals	Mainly economic benefits	Strategic objectives including economic interests

Entrepreneurial behavior of states leading to extensive new town development and rapid urbanization in China are explained by two main strands of literature, land revenue generation and GDP-ism (Wu, 2018; Zhang & Wu, 2022). Literature on land revenue generation has focused on how local governments adopt land development to enhance the economic competitiveness of cities under fiscal reform incentives (Tao et al., 2010; Ye & Wu, 2014). To reduce fiscal pressure, the national government launched a tax reform in 1994 to establish a tax-sharing system and realign the revenue distribution between the national government and subnational governments (Zhang, 1999). This reform has given autonomy and motivation to subnational governments to improve economic growth and urban development while turning them into tax collectors for the central government (Zhu, 2004). The unbalanced fiscal revenues and expenditures have led to growing fiscal deficits. Thus, the local governments have to depend on land marketing and speculative development to raise funds for urban construction and public affairs (Lin, 2014). Furthermore, the land and housing reform has further changed the role of local governments and provided an operational space for speculation (Zhu, 2004). The national government enacted the Land Administration Law and the Urban Planning Act, which have transformed state-owned land and housing products into tradable products and recognized the legitimacy of local governments to retain the most income generated from land development (de Jong, 2019; Xu & Yeh, 2005; Yeh & Wu, 1996). Local governments have direct control over revenues derived from land conveyance when they acquire land from peasants, plan urban development projects, and then lease the land to commercial and industrial developers (Li et al., 2014; Lin, 2007; Liu et al., 2008; Xue et al., 2013). Land has become the most valuable resource for local governments (Lin, 2014). The commodification of urban land has generated over 30% of total local budgetary revenue and almost 40% of urban construction funds (Lin & Zhang, 2017). As a result, local governments can provide funding for mega projects to enhance the competitiveness of their city. Since local governments can mobilize both capital and land resources more easily than before, they have adopted pro-growth strategies that harness megaprojects to spur the local economy and improve city image (Shen & Wu, 2020; Xu & Yeh, 2005).

The literature on GDP-ism reveals that local officials, who are appointed cadres, are most concerned about GDP growth and their political career advancement in the context of political decentralization and upward accountability reform (Chien, 2010; Eaton & Kostka, 2013; Li & Zhou, 2005). Local cadres are assessed based on economic performance, alongside environmental and social achievements during their terms in office (de Jong, 2019; Gao, 2015). These development targets are most easily achieved through mega-projects (Ren, 2008; Wu & Zhang, 2007). To demonstrate their governance competency and increase the chances at promotion, they place great importance on physical mega-projects to visualize their achievements, for example, public transport projects, city squares and new development areas (Wu et al., 2006; Zhu, 2004). Local officials pay more attention to gaining political favor and prestige through mega-projects than the functionality of these projects (Chien & Woodworth, 2018). For instance, the political evaluation acted as a strong incentive for the local government of Suzhou to participate in the development zone fever (Yang & Wang, 2008).

Wu (2018) has argued that both GDP-ism and land revenue maximization focus too narrowly on specificity and ignore the need for local governments to align themselves with national government policies and achieve strategic goals to maintain state power. Most literature exploring entrepreneurial cities has focused on advanced economies and has paid less attention to complex interactions and negotiations between different levels of state (Chan & Li, 2017). Because of its authoritarian tradition and top-down administrative system, the Chinese national government can intervene in resource allocation through macro-spatial policies to maintain its power (Chien, 2010; Duckett, 2006). Local states can intentionally maintain discretion through informal practices exempted from central control and state-sanctioned informality (Chien, 2013a; Shin, 2009; Wu, 2003; Zhang & Wu, 2008). Previous studies say little about the interaction of various governments across multiple levels and how they maintain their power and serve their interests.

Entrepreneurial governance results in rampant intercity competition (Xu & Yeh, 2005). Competition does not only occur between local governments at every administrative level but also between different national government departments (de Jong et al., 2016; Hsing, 2010; Qian, 2013). Local governments have adopted mega-projects as one of the important strategies for urban growth in Chinese cities for the last 30 years (Jiang et al., 2016). The goals of these mega-projects are promoting urban renovation and expansion, upgrading industrial structures, refiguring city image, and enhancing the competitiveness of cities to attract investment (Jiang et al., 2016; Qian, 2011). The intercity competition leads local governments to imitate and compete with their neighboring cities in establishing megaprojects and enlarging urban areas for attracting investments and promoting economic growth (He et al., 2016). Local governments are keen to build central business districts, compete for national-level development zones, and construct large-scale but almost empty new towns (Gaubatz, 2005; Li, 2015).

This competition between cities leads to many problems, including a substantial loss of cultivated land, excessive investment, and overspending of local governments (Ho & Lin, 2004; Wang et al., 2012). Even though the national government has published strict regulations to protect agricultural land, developers and state agencies have usually manipulated, contested and circumvented these regulations (He et al., 2016; Yang & Wang, 2008). Local governments have been strongly motivated to acquire land from farmers and develop new towns and areas (Hsing, 2010; Song et al., 2021). To protect rural land and restrict land acquisition, the national government requires all developable land to be traded transparently through bidding, auction, or listing processes, and allocates land development quotas to local governments (Lin, 2014). Moreover, local governments are prohibited from running into public debt, obtaining loans, granting loan guarantees and directly participating in the land market (Carsten & Feng, 2004). As a response, local governments have established Urban Investment and Development Corporations (UIDCs) to expropriate and transfer land and act as local financing platforms to borrow funds from the capital market (Li & Chiu, 2018). Local states are protected by the “soft budget constraint syndrome”, which means that loss-making investments never lead to the bankruptcy of the city or the dismissal of key officials (Xu & Yeh, 2005, p. 284). Therefore, local governments have often made risky investments and overspent on megaprojects which led to mounting local debts and a heightened risk of financial instability (Pan et al., 2017). The central government has recently released land-use policies, which urge local governments to develop mega-projects more strategically and mitigate debt risks (Wu, 2020b).

Based on a thorough study of the literature, we summarize our analytical framework on the mechanisms underlying HSR new town development in China, which can be examined in Figure 1. The development of HSR is an important national-level strategy, as well as an opportunity for local governments to implement entrepreneurial strategies. However, there are few up-to-date discussions on local state actions and on how the power between central and local government is redistributed within the Chinese institutional context. This paper attempts to investigate the behavior of local states in implementing the entrepreneurial strategy through the development of HSR new towns. The motivations and impetus of local governments in the specific context of HSR new town development are explored empirically for the first time here. Furthermore, interactions and negotiations between national and local governments are also exemplified in the case we describe below.

Figure 1. Analytical framework for probing HSR new town under state entrepreneurialism (Source: the authors).

Planning process of Yongcheng HSR station area

Yongcheng is located in a province along the Yangtze River. Its administrative area is 12, 404 km², of which the main urban area is 273 km². The total population was 2,897,500 in 2019, of which 780,000 lived in the main urban area. The urbanization rate has increased sharply from 45.5% in 2010–60% in 2019, which has caused social, environmental and economic problems between urban and rural areas. Yongcheng plays an important role in the grain production and chemical industry in China. Its Gross Domestic Product (GDP) reached 203.4 billion CNY in 2019. The secondary industry still dominates the economic structure, while the local government attempts to develop the service industry. The area, population and GDP of Yongcheng are all more or less average among all Chinese prefecture-level cities, so its development conditions and transformation problems are representative of a very large population.

The national industrialization strategy The Third Front Movement between the 1960s and 1970s transformed Yongcheng from a county providing services for agriculture into a base for heavy industry. A conventional railway station was constructed in Yongcheng in 1970, which improved its transport advantage and brought many national industries. As a result, Yongcheng became a prefecture-level municipality in 1983. After economic reform, project assistance and financial investment from the national government have been reduced, but the new national policies for regional and industrial development still influence its urban and economic development (Guo, 2020).

Yongcheng is currently influenced by the “Belt and Road Initiative”, “Yangtze River Economic Belt Development” and “Mid-Yangtze River Urban Agglomeration”. The “Belt and Road Initiative”proposed constructing the Huhehaote-Nanning HSR. The “Yangtze River Economic Belt Development” was put forward by the State Council in 2014, which proposed to construct Yanjiang HSR to connect Chengdu-Chongqing Economic Zone, the Mid-Yangtze River Urban Agglomeration and the Yangtze River Delta Region. These two railway lines would intersect in Yongcheng. Furthermore, the State Council approved the Development Plan for the Mid-Yangtze River Urban Agglomeration in 2015, which positioned Yongcheng as a regional transport hub in the urban agglomeration. The following parts elaborate on how the local government plays out state entrepreneurialism in connecting to the HSR network, selecting a profitable location and planning the HSR new town.

Stage 1 competing for connecting to HSR network

Mega-infrastructure projects are adopted as a pro-growth strategy by local governments in China to build the city competitiveness (Jiang et al., 2016). Therefore, local governments have tended to compete for connections to HSR networks, and local leadership failing in this competition is perceived as incompetent. When the State Council proposed constructing the Yanjiang HSR line in 2014, only major node cities were confirmed, including Shanghai, Nanjing, Hefei, Wuhan and Chengdu. The specific location of the railway line and other nodes were not decided. Yongcheng and one of its neighboring cities, City Z, are similar in many aspects such as geography, resources and culture. Local governments of both cities competed to respond to the national strategy “Yangtze River Economic Belt Development” and take the chance to develop their cities.

Citizens of both cities exerted pressure on the provincial government and local states competed for a connection to the Yanjiang HSR because they believed it would encourage economic and urban development (Interviewee 7). Thousands of people gathered in the commercial centers to appeal for the Yanjiang HSR to pass through City Z in March 2015. Citizens of City Z argued that the population of City Z was twice that of Yongcheng, so the HSR should pass through the city. In response, thousands of Yongcheng citizens rallied to appeal for the connection of Yongcheng to the national HSR network. They claimed that 11 other prefecture-level cities in the province, including City Z, already enjoyed connections to the HSR network, but Yongcheng was the only prefecture-level city without an HSR station (Interviewee 9). The existing conventional railway station in Yongcheng was seen as largely insufficient.

Local government officials, especially mayors, are spurred to plan mega-projects for career advancement and political favors (Xu & Yeh, 2005). Local officials of Yongcheng and City Z both negotiated with the provincial government to make pleas for being connected to the Yanjiang HSR. The former mayor endeavored to construct the HSR station in Yongcheng. He stated that the lack of access to HSR had become a constraint on Yongcheng’s development and having an HSR station was the strong desire of local people at the two sessions of the Provincial People’s Congress in January 2015. As a result, Yongcheng won the competition (Interviewee 3). China Railway (CR)¹ and the provincial government decided to construct the Wuhan-Yongcheng-Yichang HSR as a part of Yanjiang HSR, the Xiangyang-Yongcheng HSR as a part of Huhehaote-Nanning HSR during the “13th Five-Year Plan (2016-2020)” period.

Stage 2 aiming for the HSR new town

Due to decentralization and marketization, the funding of HSR lines and HSR stations was provided by CR, provincial governments and local governments in China. They established a joint venture company for a specific HSR line and contributed to the capital base with certain percentages (Interviewee 7). The land for railway lines, facilities and stations was allocated by the national government directly. The areas surrounding the station were controlled by the local government. The local government was responsible for land acquisition, compensation and development. Therefore, the CR, provincial governments and local governments had to reach an agreement on a location for the HSR station (Wang et al., 2021).

After CR and the provincial government confirmed that two HSR lines would connect to Yongcheng, they entrusted the China Railway Fourth Survey and Design Group (CRFSD) to formally select a location of Yongcheng HSR station in June 2015. The Yongcheng Urban Planning Bureau (YUPB) represented the Yongcheng municipal government to assist CRFSD with finding a location as well as a suitable place for the HSR new town. The local government regarded the HSR new town as a golden opportunity to develop the local economy and service industry, attract investment, enhance competitiveness, and the improve spatial structure and city image (Interviewee 1). According to the urban development master plan, CRFSD and YUPB proposed three location alternatives to the west of the city in September 2015, namely Zhoujiapo, Guishan, Tandian (see Figure 2).

Figure 2. Alternative locations of Yongcheng HSR station (Source: the authors).

Zhoujiapo is located on the northwest urban edge of Yongcheng. It was close to the Administrative New District of Yongcheng and 12km away from the city center. Zhoujiaopo connected to the existing urban infrastructure of the Administrative New District through the transport network and drainage system. The HSR station area could be 8km². The Yongcheng local government thought the area was too small for the HSR new town (Interviewee 9).

Guishan is located southwest of Yongcheng, far from the main urban area and 20km away from the city center. The station area could be extended to 18km², most of which was agricultural land. Compared to Zhoujiapo, the cost for the Xiangyang-Yongcheng line passing through Guishan increased by 120 million CNY. In addition, all urban infrastructures needed to be newly built. Guishan as a location was aligned with the direction of the spatial expansion proposed in the urban master plan and suitable for developing an HSR new town. Together with the Ecology and Technology New Town on its east and the Aviation New Town on its west, the local government believed that Yongcheng’s urban transformation could immensely benefit from this triple new town development.

Tandian is located on the periphery of the Ecology and Technology New Town and 15km away from the city center. It is connected to the existing transport network and can share urban infrastructures with the Ecology and Technology New Towns. In contrast to other locations, the investment of the Yanjiang line passing through Tandian could be decreased by 1.5 billion CNY, but it would be difficult to connect it with the Xiangyang-Yongcheng line. Furthermore, the HSR would pass through the city and ravage existing urban form. Many parts of the newly built Ecology and Technology New Town needed to be demolished, and the factories had to be relocated. Yongcheng local government disagreed with the HSR passing through the main urban area because it had already been disturbed by the conventional railways.

Comparing the conditions of these alternatives for the HSR new town development, the Yongcheng local government decided to construct the HSR station in Guishan in December 2016. The provincial government approved that location and the construction of the HSR lines in December 2017 and reported this to the National Development and Reform Commission (NDRC) and the Ministry of Land and Resources.²

Stage 3 national interventions and local government’s endeavors

However, the plan was rejected by the national government. To curb the uncontrolled development, the NDRC and the Ministry of Natural Resources, the Ministry of Housing and Urban-Rural Development and CR published the Opinions on Improving the Rational Development and Construction of the Areas Surrounding HSR Stations (in the following referred to as “Guideline of HSR Station Areas”) in April 2018. This policy rules that local governments should select an appropriate HSR station location as close as possible to the central city or the built-up areas, plan their station and new town on a human scale, use land intensively, establish a “correct view” of political achievements, avoid haphazard urban expansion, and manage the risk of local government debt.

As a result, the planning of the HSR and its station stagnated. In order to facilitate its construction and protect local interests, both the provincial government and Yongcheng local government actively cooperated with the central government through formal and informal institutions. The Ministry-Province Cooperation (Bu-sheng hezuo) is a form of agreement between different ministries of the central government and specific provinces on a certain aspect of development, such as education, agriculture and transport. The Ministry of Transport (MoT) and the provincial government signed the “Cooperation Agreement on Accelerating Transport Development in the Province 2018-2020” in June 2018, in which the MoT promised to coordinate with other stakeholders and expedite the HSR construction in the province. Furthermore, the new mayor of Yongcheng submitted a proposal to the First Session of the 13th National People’s Congress in March 2018 on Accelerating the Construction of the Wuhan to Chongqing section of the Yanjiang HSR. Besides these formal institutions, there were also informal channels built on personal relationships (Guanxi), such as “going to Beijing to visit the ministries” (Paobu jinjing) (Yang & Han, 2020). Local officials met the head of a ministry personally to propose development plans and ask for support from the central government. In March 2019, the new mayor of Yongcheng visited the General Manager of CR in Beijing and expressed the desire that CR could consider the interests of Yongcheng when planning the HSR line and station location.

CRFSD began to plan a new location for the Yongcheng HSR station in January 2019. CRFSD persuaded the Yongcheng local government that HSR could not become the main driver for a new town, especially in small and medium-sized cities (Interviewee 5). As a result, the Yongcheng local government decided to locate the HSR station at Zhoujiapo, and the central government finally approved it in 2020. The costs incurred by the HSR passing through Zhoujiapo instead of Tandian were defrayed by the Yongcheng municipal government. It provided 3.2 billion CNY for the capital base of Yanjiang HSR.

Stage 4 planning station area from new town to new district

The Yongcheng local government had already planned the HSR new town at the Guishan location in 2017. After the announcement of the Guideline of HSR Station Areas and the change of HSR station location, it made a new district plan on Zhoujiapo in 2020. The new national policy had restricted local government’s entrepreneurial endeavors, and the planning aims had been shifted from real estate development to compact development, station areas had been reduced from new towns to new districts, and the cost of supporting urban infrastructures had been substantially cut. In response, the local government followed but then enlarged the size of station building. Yongcheng UIDCs (Chengtou) acted as the financial platform to fund these place-specific spatial projects.

New towns in China are produced by planning centrality and initiated with strategic consideration, including not only economic incentives, but also other social and political pursuits such as alignment with national policies, industrial transformation and enhancement of technology and education (Wu, 2018; Xie et al., 2020). The planning goals of Guishan HSR New Town were to promote Yongcheng’s industrial transformation, become an area for knowledge-based high-tech industries, and decongest the population in the main urban area. 65% of the new town area was planned to construct high-rise buildings for commercial and residential use and accommodate a population of 65,000. However, the population of Yongcheng was in fact shrinking because of pollution, with especially young people moving out (Interviewee 11). In compliance with the Guideline of HSR Station Areas, the plan of Zhoujiapo HSR New District adopted the compact development concept for transit-oriented development (TOD). It aimed to develop the healthcare and tourism industries on site. The change in goals heralded the conviction that local government not only intended to develop the economy and urban area but also to pursue ecological civilization as proposed in national policies.

The HSR station area in Guishan location could be extended to 18km², and the planning area was around 10km². However, 88% of this area was agricultural and forestry land, and 50% was permanent basic farmland, strictly protected by national policy. Converting the land use from cultivated to construction land would take many years and could only be approved piece by piece (Interviewee 13). Moreover, some developers had obtained development rights for land in the Administrative New District many years ago but had not even started the construction yet because of the depressed economic environment (Interviewee 11). The same situation would play out again in Guishan. If the HSR New Town in Guishan was approved, farmland would be wasted, and farmers would lose their income. Meanwhile, the station area would develop at a slow pace and might become a ghost town. In contrast, the HSR station area in Zhoujiapo was 8km², contained only 3.5km² of construction land, and the remaining areas were water bodies, green areas and roads. This area contained only 5% permanent basic farmland. Due to its location, the local government planned to integrate the area with the Administrative New District and improve land-use efficiency.

In contrast to Zhoujiapo, the investment in urban infrastructures of Guishan would increase by six billion CNY because it was far from the built-up area, while electric networks, water systems and road infrastructures would still need to be built. Furthermore, the local government proposed constructing a monorail to connect the Guishan HSR New Town with the main city, which would cost another 400 million CNY. However, it would lead to a lack of subsidy for bus, taxi and road maintenance because local financial resources were limited (Interviewee 10). The Zhoujiapo HSR new district plan abandoned the monorail proposal and focused on bike and pedestrian-friendly design. It was in line with the Guideline of HSR Station Areas, which required the local government to prevent the risk of local debt arising from HSR station area development and improve the livability of the station area.

Yongcheng’s ambitious HSR plan was thus scaled back after the abovementioned national interventions. However, the local government still found a loophole: the size of the station building. The CR usually provided funding for 6,000m², and the cost of the excess area was covered by the local government (Interviewee 7). The CR often did not oppose large station because it would manage the station building and gain profits from retail within these stations. The local government regarded the station as a symbol of modernity, governance competency and urban prosperity, and as a promise of investment and land value increase (Interviewee 12). The size of Yongcheng HSR station was compared with the HSR station in City Z, which had also preferred to construct a large station to demonstrate its economic development. The building area for the station in Guishan had been planned at 12,000m², the same size as the station in City Z. In the Zhoujiapo plan, the station building area is now enlarged to 50,000m². Yongcheng ranked seventh in GDP and tenth in population among the eleven cities in the province, but the HSR station size would be top five.

Discussion

Based on the analytical framework in Figure 1, this section probes the motivations, behaviors, and effects of the local state to develop HSR new towns. Our findings reveal that the Yongcheng local government exhibits typical entrepreneurial governance behavior during the planning of its HSR station area. It is regarded as a symbol of modernity, prestige, and the future, and local governments believe it can attract investment and talent while also serving as a financial tool to leverage land value. The local government uses HSR projects to improve its competitiveness and city image amidst its territorial competition with rivals around it. Yongcheng and its neighbor, City Z, compete to get connected to the broader HSR network, build an impressive station, and project a large station area for the near future. The competition for HSR stations between local governments in China evokes irrational location choices and highly inefficient uses of land and financial resources (Interviewee 1).

The strong motivation behind these entrepreneurial strategies of local governments is an attempt to capture the increased value of the land around HSR stations and to fill the gap between public expenditure and public revenue. Because of the budgetary system, profit from land development is a vital and almost the only source of local finance (Jiang et al., 2016). As we have shown in the Yongcheng case, the local government strove for the largest area of the HSR new town during the location choice process. Furthermore, the desire for political career advancement of state officials is an additional incentive. The Yongcheng case demonstrates how local officials, particularly mayors, use HSR projects as a governance initiative to highlight their leadership abilities and promote their careers. The former mayor’s actions were recognized by his superiors, and he was promoted in 2017 but convicted of corruption in 2020.

Beside land revenue maximization and GDP-ism, strategies of local governments should be aligned with central government policies. Land-speculation-oriented development in China causes loss of cultivated land and constitutes a threat to food production; it also creates social conflict, unemployment among farmers, and inefficient land use. From 2013 on, the central government has published new policies to intensify the control of the party-state over urban development and change the aims from chasing short-term revenues to achieving sustainable development and industrial upgrading (Li, 2015; Wu, 2018). To protect cultivated land and strengthen land management, the national government has published a new land policy that requires local governments to sustainably manage the amount of cultivated land (Shi & Tang, 2020). The Guideline of HSR Station Areas has also curbed the excessive land use for HSR new town and the real estate development, which encourages the local government to change from incremental planning to inventory planning. In line with these policies, the Yongcheng local government changed the location of the station from the area containing 50% permanent basic agricultural land to the area containing only 5% and reduced the station area from 18km² to 8km². Moreover, the Guideline of HSR Station Areas does not allow debt-burdened local governments to develop more HSR new towns. The Yongcheng local government had to abandon the plan to build an HSR new town and an expensive monorail, and chose an area nearer the existing urban area, allowing for a more “compact design.”

Furthermore, we observe that HSR projects entail massive financial costs and exacerbate the financial crisis plaguing local governments. It is noteworthy that high costs and debts are not just the consequence of HSR construction but also of supplementary projects, such as related urban transport facilities and various infrastructures inside the new town. Despite the various policies introduced by the central government to restrict haphazard development, local states have a strong fiscal motivation to circumvent these national statutory restrictions (He et al., 2016). In the 1994 tax reform, the central government recentralized the power of tax revenue collection (Li & Chiu, 2018). Local governments were asked to fend for themselves in terms of providing a fiscal foundation for urban development. Ordinary cities like Yongcheng operate within extremely tight fiscal constraints and have to rely on off-budget finance such as land conveyance fees to develop their infrastructure (Xue et al., 2013). The current situation is that the regulatory control chain from the national government onto local governments is still weak (Xu & Yeh, 2005), the availability of land revenues will be exhausted soon, and massive local debts from loans taken by UIDCs need to be repaid by local governments. We therefore claim that a new tax reform plan is needed to gradually increase the proportion of local fiscal revenue to total local revenue.

Conclusion

In this paper, we adopted state entrepreneurialism as the theoretical lens to investigate the planning process of the HSR new district in Yongcheng, aiming to understand the motivations and actions of local states in planning processes regarding HSR new towns in China and to show how the national government intervenes in the entrepreneurial governance of local governments. Building on the extensive literature about the structural drivers of state entrepreneurialism in China, we found that land revenue generation, political achievements, and maintaining state power are the main internal causes for local governments to pursue large-scale HSR new towns. We also revealed potential problems in HSR new town development, such as loss of cultivated land and the risk of high local debts. Furthermore, this study sheds new light on the complex interactions between various tiers of government and adds new insights into state entrepreneurialism to understand the behaviors of local governments. In addition, another contribution of this paper to state entrepreneurialism is that it scrutinizes the experience of medium-sized cities in central China, which has been overlooked in previous research.

This study contributes to the literature on Chinese urban transformation, which is still dominated by state interventions in a broader context of marketization and decentralization (He & Wu, 2009; Li & Chiu, 2018; Wu, 2015). We find that, similar to policies regarding development zones, university towns, and eco-towns, the development of HSR new towns is driven by state entrepreneurialism, consistent with the characteristics in Table 1. Rather than being an urban area spontaneously formed by market choice, the HSR new town is comprehensively planned, with a mix of residential, industrial, commercial, and office land uses. The decision to build the HSR new town is made by state officials, and the plan is not designed to make a profit for state officials but to strengthen the local economy and increase the tax base. As the case shows, the local government plans the HSR new town to achieve many strategic aims to maintain state power, such as adjusting the spatial structure of the city, guiding the direction of urban growth, improving the service industry, and enhancing urban competitiveness within the region. To achieve these goals, local governments prefer to select a large area far from the city to ensure enough space for capital accumulation. Planning for growth is used as a strategy by local governments to legitimize state persistence, which is contrary to neoliberalism (Wu, 2017). Furthermore, the planning of HSR and its new town is jointly dominated by the national government, the provincial government, and the local government. Neither the joint venture company for HSR construction nor the UIDCs for HSR station area development are real market actors, but they act as market instruments for the state (cf. Li & Chiu, 2018; Wu, 2019; Wang et al., 2022). The UIDCs organize the development of HSR new town, which is actually an “investment branch” of the state.

Moreover, this study contributes to the under-discussed area of the complex coordination and interaction between different levels of state in Chinese entrepreneurial governance, especially bargaining between the national and local governments. We find that the redistribution of power takes place primarily within the state system, and that the role of the local state is important in many ways. Negotiations within the Chinese state system are often more difficult than those between the state and the market sector or social groups (Chan & Li, 2017). Wu (2020) argued that the central government maintains its power by giving preferential policies to local governments, exerting hierarchical control through policies, appointing local leaders and granting exemptions, while local governments can maintain discretion through state-sanctioned informality. This perspective explains the interaction between multiple levels of the state in China from a top-down perspective. However, we add a new perspective based on the entrepreneurial behavior of local governments. Local governments are not only subject to the incentives and pressures from the national government, such as GDP-ism, but local governments can also exert influence on the national government, such as by providing more funds for the projects and visiting leaders in Beijing. Furthermore, local governments do not only align themselves with the policies of the national government, but they can also influence the formulation of policies through a number of formal and informal channels. Local governments can bargain with the national government and have influence on the allocation of resources, such as by cooperating with the MoT. The case shows that some local governments even use potentially dangerous methods due to a lack of political resources, for example, by tolerating or even encouraging mass gatherings and petitions. This adds a new dimension to the theory of state entrepreneurialism in terms of the complex interactions between multi-level governments and provides a complement to the understanding of local states’ entrepreneurial behaviors. This finding shows the development of the relationship between the national government and local governments in China, which determines the future entrepreneurial strategies of cities (Lin et al., 2022).

Although we acknowledge that the implications derived from this case may not necessarily be applicable to planning practices in all Chinese HSR new towns because of regional variations, we believe this study does enrich the existing literature on entrepreneurial governance of Chinese suburbanization and new towns. It provides new insights into new town development in China by connecting state entrepreneurialism with infrastructure planning. Based on an exploration of local government entrepreneurial actions for pro-growth in China, this article also examines the political nature of these actions, that is, their alignment with national strategies to maintain state power. We recommend further research both to verify and expand on the findings here and to help demonstrate more in-depth how state entrepreneurism influences HSR new town development.

Acknowledgement

The authors would like to thank all the interviewees for providing invaluable information. We would also like to thank the two anonymous referees and editors for their insightful comments.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by China Scholarship Council: [Grant Number 201708620179] and the Delft University of Technology.

Notes

1 The Ministry of Railways was dismantled at the 1st Plenary Session of 12th National People’s Congress (14 March 2013). Its administrative duty has been transferred to the National Railway Authority, resorting under the Ministry of Transport (MoT), while the enterprise function has been assigned to the China Railway (CR).

2 The Ministry of Land and Resources was dissolved in March 2018 and its functions are replaces by Ministry of Natural Resources.

Appendix A.

Interviewee list.

Table

Interviewee No.	Position	Organization
1	Researcher of Comprehensive Transport Institute	National Development and Reform Commission
2	Director of Railway Yard Department	China Railway
3	Chief Engineer	China Railway Fourth Survey and Design Group
4	Director of Railway Yard Department	China Railway Fourth Survey and Design Group
5	Director of Transport and Economic Department	China Railway Fourth Survey and Design Group
6	Director of Architecture Department	China Railway Fourth Survey and Design Group
7	Director of Railway Office	Yongcheng Development and Reform Commission
8	Manager of Passenger Management Branch	Yongcheng Transport Bureau
9	Director	Yongcheng Urban Planning Bureau
10	Director	Yongcheng Housing Construction Committee Construction and Management Center
11	Deputy director of Administrative new district	Yongcheng Local Government Administrative New District Branch
12	Director of Infrastructure Construction	Yongcheng Local Government Administrative New District Branch
13	Director	Yongcheng Land Resource Bureau
14	Vice Head	Yongcheng Planning and Design Institute
15	Officer	Yongcheng Planning and Design Institute
16	Officer in Technical Section	Yongcheng Planning and Design Institute
17	Vice Head	Yongcheng Land Investment and Development Company
18	Director	Yongcheng Bus Company
19	Officer	Yongcheng Traffic Police
Meeting	Officer	Meeting with Urban Planning Bureau
Workshop	Experts from Mainland China, Hong Kong and the Netherlands	Experts Workshop