China's Post-2010 Incremental State-led Financialisation in the Urban Built Environment: A Case Study of Nanjing's Indemnificatory Housing Financing and Construction

Due to China’s post-global financial crisis ‘stimulus package’ and loose credit policy, local government debts associated with urban infrastructure expanded and housing price surged rapidly in large cities between 2008... [ view full abstract ]

Due to China’s post-global financial crisis ‘stimulus package’ and loose credit policy, local government debts associated with urban infrastructure expanded and housing price surged rapidly in large cities between 2008 and 2010. In 2010, China launched its ambitious indemnificatory housing scheme (baozhangxing zhufang) aiming to offer 36 million non-market-rate housing units nationwide to tackle housing affordability and escalated housing rights related social conflicts. Meanwhile, state-owned local financing platforms (LFPs) for indemnificatory housing were established across the country to operate the construction and financing processes. Through triangulating the secondary data related to Nanjing’s local LFP at the municipal level for indemnificatory housing – Nanjing Anju Group (NAG) and major participating developers, we obtained comprehensive data about the housing scheme undertaken by Nanjing municipal government. Then we paid 7 site visits and approached 14 key stakeholders to gain more in-depth information about indemnificatory housing system in Nanjing. We identify: 1) The Chinese local state is increasingly playing an active role in fostering the integration between indemnificatory housing building and financial institutions by employing direct financing vehicles to reduce the project cost and local government debt pressure. 2) Through technocratic and technofiscal design, indemnificatory housing in Nanjing is securitised as a standardised financial product to meet the requirements of investors, while the developers have their own entrepreneurial incentives by treating indemnificatory housing as a financial asset. 3) To house displacees from the areas with large land rent appreciation potential, the indemnificatory housing project in Nanjing has been availed to reactivate urban redevelopment opportunities and overall land value appreciation of the entire city, albeit the enlarged spatial inequalities and deprivations. This research offers a nuanced angle to scrutinise the incremental entrepreneurial motive of the local state in a non-Western context in encouraging financialisation of housing and urban infrastructure provision after the global financial crisis.