A natural consequence of the general deficiency of rural property rights and rising market demand at the urban-rural interface also stimulates an informal market for rural lands as Chinese farmers attempt to gain access to land rent residuals. Lacking land tenure, farmers have little incentive to invest in their property’s long term productivity, are unable to use their land as collateral to gain credit, and can’t consolidate land for larger-scale farming that takes advantage of economies of scale. The restrictions on rural hukou basically work to restrict the liquidity and fungibility of land assets – and in doing so greatly decreases the potential value of land. For farmers then, it is by far more profitable to circumvent restrictions in a variety of ways in order to sell or lease their collective lands for non-agricultural uses. 6 Note that this is not as risky as it sounds. Due to a combination of China’s extraordinary size and inchoate system of laws, the country has out of necessity developed a form of legal pluralism that, implicitly condones a certain amount of flexibility and experimentation. 6a In fact certain methods are sometimes abetted by local governments in order to absorb surplus rural labour in local industries. Back to figure 1 , informal urbanism will raise the value of land rent residuals and give shape to meniscus AC1B in the land bid curve. As such development is legally ambiguous at best and given rural peasant’s generally limited access to credit, the built outcome thus manifests landscapes of crowded, low-density, ramshackle structures of low-rent housing and industry markets. Thus even as the supporting conditions of urban transportation and infrastructure are developed region AC1B cannot align to the urban land cost, elevating at best to curve AC2B. Ultimately these regions end up as the incongruous informal villages, the corollary spatial pattern to expanding urbanisation in China. If one wanted to construct a remarkably inefficient system of development, that built in inequality and managed to circumscribe bottom- up development by the caprice and profligacy of top-down authority, China’s dual-institutional structure would be a pretty good start. This is without even getting into the immeasurable cost to human dignity in a country where no legitimate conduit for protest exists. Such structural failings at the rural-urban envelope are coincident to the set of civil institutions that underlie them.
wong + vasanthakumar
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6, 6a Lanchih Po, pp 1604, 1612
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