Funding China's Urban Infrastructure: Revenue Structure and Financing Approaches

By Zhao, Zhirong Jerry; Cao, Chengxin | Public Finance and Management, July 1, 2011 | Go to article overview

Funding China's Urban Infrastructure: Revenue Structure and Financing Approaches


Zhao, Zhirong Jerry, Cao, Chengxin, Public Finance and Management


ABSTRACT

Urban infrastructure has become increasingly important in China with its rapid urbani-zation and economic development. However, many questions remain unanswered about how different levels of governments in China gather financial resources to fund its urban infra-structure development, and whether the system is sufficient or sustainable. This article ex-amines financial resources for China's urban infrastructure investment in recent decades. First, the article traces the history of China's urban infrastructure investment since 1949. Second, using data mainly from the China Urban Construction Yearbook (2000-2008), it examines revenue structure and financial approaches for China's urban infrastructure finance, its recent trends and patterns, and disparities across provinces. Finally, the article evaluates unique characteristics of the China-style urban infrastructure investment, and dis-cusses some issues regarding the use of quasi-governmental authorities and land transfer fees.

1. INTRODUCTION

With rapid urbanization and economic development, high quality urban infrastructure has become increasingly important in China. Not only does it affect the welfare of the citizens but it also influences the progress of the so-ciety as a whole. Much literature has proved the positive relationship between urban infrastructure and economic growth (Wu, 2008; Chen et al., 2007). In recent decades, anecdotal observations and media studies have both shown rapid development of urban infrastructure, especially in the coastal regions. Some scholars, however, find that the provision of urban infrastructure in-vestment in China is insufficient compared to the high growth rate of the economy and population (Lin, 2001). In addition, Wu (2008) posits that sig-nificant regional disparity occurs in urban infrastructure investment, which obstructs the economic development in infrastructure-insufficient regions. Many questions remain unanswered about how China gathers financial re- sources to fund its urban infrastructure development, how the Chinese gov-ernment allocates the resources among different areas or different units of governments, and whether the system is sufficient or sustainable. This article examines revenue sources and financial approaches of China's urban infra-structure investment in recent decades. First, it traces the history of China's urban infrastructure investment since 1949. Second, using data mainly from the China Urban Construction Yearbook (Department of Finance, Ministry of Housing and Urban-Rural Development of China, 2000-2008), it examines financial sources for China's urban infrastructure finance and related trends and patterns. Finally, it evaluates specific characteristics of the China-style urban infrastructure investment, and discusses some issues regarding the use of quasi-governmental authority and public land finance.

In a broad concept, infrastructure is defined to provide -basic services to industry and household" (Lee & Martini, 1996). Generally, infrastructure in-vestment includes: -energy (power generation and supply); transport (toll roads, light rail systems, bridges, and tunnels); water (sewerage, waste water treatment, and water supply); telecommunications (telephones); social infra-structure (hospitals, prisons, courts, museums, schools, and government ac-commodation)" (Grimsey & Lewis, 2002, p.108). A narrower definition of urban infrastructure, used by the Ministry of Housing and Urban-Rural De-velopment of China, includes public utilities (water supply and drainage, resi-dential gas and heating supply, and public transportation), municipal works (roads, bridges, tunnels, docks, and sewerage), parks, sanitation and waste management, and flood control in urbanized areas (Wu, 1999). This is also the working definition of urban infrastructure used in the China Urban Construc-tion Yearbook (Department of Finance, Ministry of Housing and Urban-Rural Development of China, 2000-2008), which serves as the major data source for analysis in this article. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Funding China's Urban Infrastructure: Revenue Structure and Financing Approaches
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.