Contested rent-based urban governance: Land rent dissipation and redistribution under scalar politics in China

Abstract

Despite the recent resurgence of land rent theory in political economy, its application to China's urban governance, characterised by a land-based development model, remains underexplored. This study introduces the concept of land rent capture, which highlights the rentier nature of the local state, to examine territorial contestation among China's multi-level local governments and its broader implications. The theoretical framework we propose links rent-based urban governance – the strategic use of land rent to finance urban development – with scalar politics, positing that competition over land rent has become a crucial dimension of intergovernmental struggles at the local level. Using a mixed-methods approach that includes in-depth interviews, archival research, and statistical analysis, our case study of Zhongshan investigates the operation and distribution of land rent and its historical interplay with inner-city power dynamics during the post-reform era. The findings reveal that implicit land rent distribution prompted rent-seeking by discretionary lower-level governments, resulting in a developmental crisis and rent dissipation. In response, a scalar restructuring process was initiated to redistribute land rent among government tiers for more efficient rent operation, although these efforts are impaired by entrenched rent dissipation and the real estate downturn. Theoretically, this study contributes to understanding the role of land rent in shaping scalar relationships within China's cities. Practically, it highlights scalar restructuring as an interim strategy for cities with low-rent land markets but critiques the long-term viability of rent-based governance due to the inevitable dissipation of land rents.