Dr. Yunqing Xu 徐蕴清博士Managing Directorlynnxu1013@googlemail.comBirmingham, 17 April 2013Sustainability Challengesfor Chines...
Page ! 2Agendan  The importance and complexity of sustainabledevelopment in global and Chinese citiesn  Three pillars fo...
Page ! 3Sustainable development is increasingly a problemof urban sustainabilityCentre for economicgrowth but alsofinancia...
Page ! 4How we view China: its world rolesWorld’s secondlargest economysince 2011World’s largestenergy consumersince 2010W...
Page ! 5China’s urbanisation: profound influence to the world“Urbanisation of China and the high-techdevelopment of the U....
Page ! 6Chinese cities: key to potentials and challenges“Urbanisation is a complex and big project that willtrigger profou...
Page ! 7The march of urban immigrants that are never seen52.60%17.9%65.0%80.0%0%10%20%30%40%50%60%70%80%78 79 80 81 82 83 ...
Page ! 8Chinese cities: extremely diverse, unbalanced and sophisticated
Page ! 9Property-led urban development: a prevalenturban growth modeGovernment sale ofland use rightGenerate local landrev...
Page ! 10Property-led strategy: a driving urban forcein the UK during the 1980sn  Tackle severe urban declinesn  Urban r...
Page ! 11Pillar one: from project-level to city-scaleThe role and scale of real estate sector in China2012 Average (2000-2...
Page ! 12Over-reliance on land financeSource: NBSC 2001-2012, MLR 2001-201216.6%28.4%38%71.7%48.8%33.5%50.7%41.9%39.0%53.9...
Page ! 13Rapid urban sprawl that intensifies land shortageSource: CNKI statistics 1991, Google Earth Map 20117215143310556...
Page ! 14Local fiscal instabilitySource: China Merchants Securities 2008With most of the local debts in 2011-2012 being re...
Page ! 15Pillar two: dominant role of governmentn  US1$ trillion to expand from 78,000km to120,000km by 2020n  Build 13,...
Page ! 16Government priority: housing privatisationand commercialisationSource: Statistics Canada 2006; Whitehead and Scan...
Page ! 17Housing price inflation: embarrassment of macro controlsSource: NBSC 1998-20101.40%0.00%1.10%4.80%7.60%5.50%7.60%...
Page ! 18Fierce local competition: the case of Beijing-TianjinShift it into ‘THE’ Economic Centre of Northern China
Page ! 19Fierce local competition: the case of Shanghai - SuzhouRemote location of Pudong International Airport
Page ! 20Is this in Suzhou or London?
Page ! 21Third pillar: weak power of private sectorn  Good ‘guanxi’ with government: critical to business successn  Prof...
Page ! 22Expansion of high-end developmentSource: NBSC 2009, REICO 200977%64%50%16%22%13%19%28%9%0%10%20%30%40%50%60%70%80...
Page ! 23Low housing affordability and intense social divideSource: INSEE Official Statistics 2009; 2009; BFS 2010; J.P. M...
Page ! 2415.1%17.6%35.2%6.0%13.5%0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0%UK 2006 Sweden 2006 Netherland 2004 Germany 20...
Page ! 25Headline path in striving for sustainable development9th & 10th FYPChina Agenda 21Hu-WenAdministrationXi-LiAdmini...
Page ! 26Urban sustainability strategies: a new fever in Chinese citiesn  Recycling (Circular) Economyn  Green Urban Gro...
Page ! 27Motivation of local governmentsLocal benefitsof Eco-citiesCentralSupport‘Eco-City’TitleCityPromotionPolicy suppor...
Page ! 28n  Build from scratch at grand scale (e.g.70km2 Dongtan, 30km2Tianjin, Beijing100km2)n  Rely on real estate dev...
Page ! 29Conclusions: opportunities through more understandingn  Tremendous opportunities: city-level and grand-scaleprop...
Page ! 30Zerstart Consulting: our strengths and focusn  Urbanisation and sustainabledevelopment of citiesn  Urban sustai...
Thank  You  Dr. Yunqing Xu 徐蕴清博⼠士lynnxu1013@googlemail.com
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Sustainability of Chinese cities: how does the urban growth model matter?

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It discusses the challenges of urban sustainable development in China through a deeper understanding of the prevalent property-led urban development pattern and the dynamic impacts of the real estate's sector on urban economic, environmental and social landscape in China. It also indicates the prospects of eco city campaign, which remains being largely affected/shaped by the property industry.

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Sustainability of Chinese cities: how does the urban growth model matter?

  1. 1. Dr. Yunqing Xu 徐蕴清博士Managing Directorlynnxu1013@googlemail.comBirmingham, 17 April 2013Sustainability Challengesfor Chinese CitiesZerstart Consulting
  2. 2. Page ! 2Agendan  The importance and complexity of sustainabledevelopment in global and Chinese citiesn  Three pillars for understanding China’s urbangrowth patternn  China’s urban sustainability strategies, newdevelopment and opportunities
  3. 3. Page ! 3Sustainable development is increasingly a problemof urban sustainabilityCentre for economicgrowth but alsofinancial crisis andeconomic risks underaccelerated globalisationEconomic rolesUse 80% of world’sEnergy, emit 70% ofworld’s CO2, sufferfrom recourse scarcityand ecological decayEnvironmental impactsCities are now home to overhalf of the world’s population32% of the world’spopulation live inslums under urbansprawl and divideSocial-spatial divides
  4. 4. Page ! 4How we view China: its world rolesWorld’s secondlargest economysince 2011World’s largestenergy consumersince 2010World’s largestwaste generatorsince 2004World’s largestemitter of CO2since 2007202720202016
  5. 5. Page ! 5China’s urbanisation: profound influence to the world“Urbanisation of China and the high-techdevelopment of the U.S. would be the two importantkeys which would profoundly influence the humandevelopment in the 21st century.”Nobel economic prize winnerJoseph E. Stiglitz
  6. 6. Page ! 6Chinese cities: key to potentials and challenges“Urbanisation is a complex and big project that willtrigger profound changes in economy and society.”- China’s Premier Li Keqiang
  7. 7. Page ! 7The march of urban immigrants that are never seen52.60%17.9%65.0%80.0%0%10%20%30%40%50%60%70%80%78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 30 50Over 300 million urban immigrants by 2025Another 300 million by 2050Emergence of 10 mega cities with over 10 million by 2025
  8. 8. Page ! 8Chinese cities: extremely diverse, unbalanced and sophisticated
  9. 9. Page ! 9Property-led urban development: a prevalenturban growth modeGovernment sale ofland use rightGenerate local landrevenuePromote land andproperty developmentReinvest ininfrastructureconstructionLure localinvestmentCity image-buildingImprovehousingconditionsBoost localeconomicgrowth
  10. 10. Page ! 10Property-led strategy: a driving urban forcein the UK during the 1980sn  Tackle severe urban declinesn  Urban regeneration led by and relieson property developmentn  Revitalise old city centresn  Rebuild local image and confidencen  Create jobsn  Attract inward investmentsn  Boost economic growth§  Government support§  Private participation§  Economic priority§  Short-term perspective
  11. 11. Page ! 11Pillar one: from project-level to city-scaleThe role and scale of real estate sector in China2012 Average (2000-2012)Annual GDP growth rate 7.8% 9.9%Ratio of fixed asset investment in GDP 72.1% 50.5%Ratio of property development in GDP 13.8% 8.9%Annual completion of property (million m2) 994.25 --Chinese cities are becoming theworld’s largest building sitesA city-level movement: we will never be second?
  12. 12. Page ! 12Over-reliance on land financeSource: NBSC 2001-2012, MLR 2001-201216.6%28.4%38%71.7%48.8%33.5%50.7%41.9%39.0%53.9%55.0%31%0.0500.01000.01500.02000.02500.03000.03500.001 02 03 04 05 06 07 08 09 10 11 12RMB billion0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%land sale income ratio of land sale income to local fiscal revenue
  13. 13. Page ! 13Rapid urban sprawl that intensifies land shortageSource: CNKI statistics 1991, Google Earth Map 2011721514331055644 603 587 5634653543714133618239725402004006008001000120014001600ShanghaiBeijingShenzhenGuangzhouTianjinDongguanSuzhouXi’ankm21991 2011
  14. 14. Page ! 14Local fiscal instabilitySource: China Merchants Securities 2008With most of the local debts in 2011-2012 being refinanced, the year 2013onwards will see the greatest debt risks in Chinese local governments. 
  15. 15. Page ! 15Pillar two: dominant role of governmentn  US1$ trillion to expand from 78,000km to120,000km by 2020n  Build 13,000km high-speed rail by 2020
  16. 16. Page ! 16Government priority: housing privatisationand commercialisationSource: Statistics Canada 2006; Whitehead and Scanlon 2007; NBSC 2008; BFS 2010; Statistics Sweden 2010; Census Bureau of US 2011; DCLG 201168.4%63.0%43.0%57.2%54.0%34.6%83.0%66.4% 66.2%0%10%20%30%40%50%60%70%80%90%China Canada France Germany Netherland Sweden Switzerland UK USInternational comparison of home ownership rate 
  17. 17. Page ! 17Housing price inflation: embarrassment of macro controlsSource: NBSC 1998-20101.40%0.00%1.10%4.80%7.60%5.50%7.60%6.50%1.50%9.70%2.20%9.99%3.70%-2%0%2%4%6%8%10%12%98 99 00 01 02 03 04 05 06 07 08 09 10The growth rate of property prices 
  18. 18. Page ! 18Fierce local competition: the case of Beijing-TianjinShift it into ‘THE’ Economic Centre of Northern China
  19. 19. Page ! 19Fierce local competition: the case of Shanghai - SuzhouRemote location of Pudong International Airport
  20. 20. Page ! 20Is this in Suzhou or London?
  21. 21. Page ! 21Third pillar: weak power of private sectorn  Good ‘guanxi’ with government: critical to business successn  Professional organisations: under government surveillancen  Exceptional: property developers enjoy much greater influencePresident of Beijing Huayuan Group“I am a businessman, sothat I should notconsider the poor.”“Making profit is thepriority of propertydevelopers.”
  22. 22. Page ! 22Expansion of high-end developmentSource: NBSC 2009, REICO 200977%64%50%16%22%13%19%28%9%0%10%20%30%40%50%60%70%80%1980-1989 1990-1999 2000-2005<90 m2 90-120 m2 >120 m2Proportion of housing units by size 
  23. 23. Page ! 23Low housing affordability and intense social divideSource: INSEE Official Statistics 2009; 2009; BFS 2010; J.P. Morgan 2010; SCB 2010; 2010; Census Bureau of US 2011;DCLG 2011; SBD 2011; Hypoport Group 2011; Statistics Netherlands 20117.187.046.705.844.963.962.820 1 2 3 4 5 6 7 8SwedenFranceChinaGermanyUKNetherlandUSInternational comparison of housing price to earnings ratio
  24. 24. Page ! 2415.1%17.6%35.2%6.0%13.5%0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0%UK 2006 Sweden 2006 Netherland 2004 Germany 2006 France 2007Proportion of affordable housing in total housing stockSocial housing shortage: social inequality and instabilityEconomic decent housing (EDH) construction 2000 2005 2010EDH investment to total investment in housing 14.0% 4.6% 3.0%EDH new starts in total housing new starts 21.8% 6.4% 4.0%EDH construction in total housing construction 20.2% 6.3% 4.2%EDH completion in total housing completion 26.1% 7.4% 5.0%
  25. 25. Page ! 25Headline path in striving for sustainable development9th & 10th FYPChina Agenda 21Hu-WenAdministrationXi-LiAdministration1994 1996 2006 2013China’s increasing commitment towards sustainable development§  The  first  developing  country  to  establish  a  na6onal  agenda  21  §   Severe  local  resistance  with  economic  priority  §   Main  targets  of  reduc6on  of  energy  intensity  were  not  met  §     Watershed  §     Op6mise  the  mode  and  structure  of  growth  §   Harmonious  society  §   Energy  target  by  2010  was  not  met  §   Change  of  growth  mode  §   New  type  of  urbanisa6on  §   Redirect  incen6ves  of  local  officials  
  26. 26. Page ! 26Urban sustainability strategies: a new fever in Chinese citiesn  Recycling (Circular) Economyn  Green Urban Growthn  Eco-cities or Low-carbon cities a tangible solution tointernational pressure and national conditionsn  National task of ‘saving energy and cutting emission’n  Measurable indicators of local officials’ performanceAmong the current over 600 cities in China, morethan 90% of them are planning to build eco-cities,and 50 municipal governments have already madeformal proposal to the central government.
  27. 27. Page ! 27Motivation of local governmentsLocal benefitsof Eco-citiesCentralSupport‘Eco-City’TitleCityPromotionPolicy support tofoster economicrestructuringOfficial designationthat opens moreopportunitiesAttract domesticand internationalexperiments,technologies andinnovation
  28. 28. Page ! 28n  Build from scratch at grand scale (e.g.70km2 Dongtan, 30km2Tianjin, Beijing100km2)n  Rely on real estate developmentn  Foreign designers and consultancy(e.g. Arup, Atkins)n  Expensive to build partly due tountested technologiesn  No standard conceptsn  Varied local strategiesn  Difficult to monitor and evaluaten  Wait for more experiments and localinnovationsFeatures & challenges of eco-city projects in China
  29. 29. Page ! 29Conclusions: opportunities through more understandingn  Tremendous opportunities: city-level and grand-scaleproperty-led urban growth and sustainability strategies urban rapidurbanisation, keen to international experience and experimentsn  Coalition with government: the predominant power of thegovernment in pursuing urban results and intense competitionamong Chinese citiesn  Role of foreign companies: contribute to bold andinnovative ideas, concepts, standards and technology that open upnew local development opportunities
  30. 30. Page ! 30Zerstart Consulting: our strengths and focusn  Urbanisation and sustainabledevelopment of citiesn  Urban sustainability indexn  Eco-city development andevaluationn  Institutional rearrangements ongrowth model changen  Land and housing marketn  Property investment in the UKand ChinaAnnual days of good air qualityWater pollution and shortageGreen space per capitaWaste collection and recycling measuresPollution levelPollutionBuilt density (site/city)Floor area ratio/plot ratio (FAR)Building densityArable land protectionIdle land disposalRecycling of landLand useProportion of new buildings that meet energy standardsEnergy efficiency of buildingsEnergy useEnvironmental SustainabilityGeneral transport facilities by modeGeneral transportMass transit projects by modePublic mass transitInfrastructure qualityRental and price of commercial propertyPrice earning ratio for housingProperty investabilityReal estate investmentVacancy rate of housingVacancy rate of officeVacancy rate of retailEfficiency of property useReal estate useHousing sizeProperty locationHousing maintenanceQuality of propertyProperty completions & purchasesQuantity of propertyScale of government land saleRevenue of government land saleProperty development capacityReal estatedevelopmentGDP growth & per capita GDPFDI & inward investment growthShare of property sector in GDPEconomic growthGeneral performanceMeasurement variablesIndicatorsThemesEconomic SustainabilityAnnual days of good air qualityWater pollution and shortageGreen space per capitaWaste collection and recycling measuresPollution levelPollutionBuilt density (site/city)Floor area ratio/plot ratio (FAR)Building densityArable land protectionIdle land disposalRecycling of landLand useProportion of new buildings that meet energy standardsEnergy efficiency of buildingsEnergy useEnvironmental SustainabilityGeneral transport facilities by modeGeneral transportMass transit projects by modePublic mass transitInfrastructure qualityRental and price of commercial propertyPrice earning ratio for housingProperty investabilityReal estate investmentVacancy rate of housingVacancy rate of officeVacancy rate of retailEfficiency of property useReal estate useHousing sizeProperty locationHousing maintenanceQuality of propertyProperty completions & purchasesQuantity of propertyScale of government land saleRevenue of government land saleProperty development capacityReal estatedevelopmentGDP growth & per capita GDPFDI & inward investment growthShare of property sector in GDPEconomic growthGeneral performanceMeasurement variablesIndicatorsThemesEconomic SustainabilityProfessional qualification and trainingSkills & trainingAvailability and validity of dataAvailability and quality of dataIndependence & professionalismProfessional bodiesRole & power of governmentGovernment administrationProperty marketadministrationTransparency of planning processImplementation of urban plansTransparency of urban planningCapacity of non-government organisationsRole of non-govern-mental sectorTransparency of governments in generalGovernment coordinationTransparency of governmentUrban governance &planningEnforceability at central & local levelsRule enforceabilityPolicy clarityPolicy continuityPolicy sufficiencyPolicy guidanceLegal clarityLegal continuityLegal sufficiencyLegal guidanceLegal & regulatoryframeworkInstitutional SustainabilityImpacts of property developments on historic buildingsDestruction to historic buildings &sitesCultural heritageLevel of compensation & relocationDemolition & relocationSocial cohesionNew starts & completionsQuality (size, location)Social housing provisionSocial housingUrbanisation ratePopulation growth & migrationPopulation changeSocial SustainabilityProfessional qualification and trainingSkills & trainingAvailability and validity of dataAvailability and quality of dataIndependence & professionalismProfessional bodiesRole & power of governmentGovernment administrationProperty marketadministrationTransparency of planning processImplementation of urban plansTransparency of urban planningCapacity of non-government organisationsRole of non-govern-mental sectorTransparency of governments in generalGovernment coordinationTransparency of governmentUrban governance &planningEnforceability at central & local levelsRule enforceabilityPolicy clarityPolicy continuityPolicy sufficiencyPolicy guidanceLegal clarityLegal continuityLegal sufficiencyLegal guidanceLegal & regulatoryframeworkInstitutional SustainabilityImpacts of property developments on historic buildingsDestruction to historic buildings &sitesCultural heritageLevel of compensation & relocationDemolition & relocationSocial cohesionNew starts & completionsQuality (size, location)Social housing provisionSocial housingUrbanisation ratePopulation growth & migrationPopulation changeSocial Sustainability
  31. 31. Thank  You  Dr. Yunqing Xu 徐蕴清博⼠士lynnxu1013@googlemail.com

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