Dwelling in Shenzhen:
Development of Living Environment from 1979 to 2018
Xiaoqing Kong
Master of Architecture Design
A thesis submitted for the degree of Doctor of Philosophy at
The University of Queensland in 2020
School of Historical and Philosophical Inquiry
Abstract
Shenzhen, one of the fastest growing cities in the world, is the benchmark of China’s
new generation of cities. As the pioneer of the economic reform, Shenzhen has
developed from a small border town to an international metropolis. Shenzhen
government solved the housing demand of the huge population, thereby transforming
Shenzhen from an immigrant city to a settled city.
By studying Shenzhen’s housing development in the past 40 years, this thesis argues
that housing development is a process of competition and cooperation among three
groups, namely, the government, the developer, and the buyers, constantly competing
for their respective interests and goals. This competing and cooperating process is
dynamic and needs constant adjustment and balancing of the interests of the three
groups.
Moreover, this thesis examines the means and results of the three groups in the
tripartite competition and cooperation, and delineates that the government is the
dominant player responsible for preserving the competitive balance of this tripartite
game, a role vital for housing development and urban growth in China. In the new
round of competition between cities for talent and capital, only when the government
correctly and effectively uses its power to make the three groups interacting benignly
and achieving a certain degree of benefit respectively can the dynamic balance be
maintained, thereby furthering development of Chinese cities.
Declaration by author
This thesis is composed of my original work, and contains no material previously
published or written by another person except where due reference has been made in
the text. I have clearly stated the contribution by others to jointly-authored works that I
have included in my thesis.
I have clearly stated the contribution of others to my thesis as a whole, including
statistical assistance, survey design, data analysis, significant technical procedures,
professional editorial advice, financial support and any other original research work
used or reported in my thesis. The content of my thesis is the result of work I have
carried out since the commencement of my higher degree by research candidature
and does not include a substantial part of work that has been submitted to qualify for
the award of any other degree or diploma in any university or other tertiary institution.
I have clearly stated which parts of my thesis, if any, have been submitted to qualify
for another award.
I acknowledge that an electronic copy of my thesis must be lodged with the University
Library and, subject to the policy and procedures of The University of Queensland, the
thesis be made available for research and study in accordance with the Copyright Act
1968 unless a period of embargo has been approved by the Dean of the Graduate
School.
I acknowledge that copyright of all material contained in my thesis resides with the
copyright holder(s) of that material. Where appropriate I have obtained copyright
permission from the copyright holder to reproduce material in this thesis and have
sought permission from co-authors for any jointly authored works included in the thesis.
Publications included in this thesis
No publications included.
Submitted manuscripts included in this thesis
No manuscripts submitted for publication.
Other publications during candidature
Kong Xiaoqing, “Formation of China Merchants Port’s ‘Shekou Model’,” National
Maritime Research, no.19 (2017): 38-54.
Kong Xiaoqing, “Book Review: Creating a Paradise for Consumption, Department
Stores and Modern Urban Culture in Shanghai by Lien, Ling-ling,” Journal of history
and Anthropology, vol.16, no.2 (2018): 165-168.
Contributions by others to the thesis
No contributions by others.
Statement of parts of the thesis submitted to qualify for the award of another
degree
No works submitted towards another degree have been included in this thesis.
Research involving human or animal subjects
This thesis includes interviews and questionnaires. The Human Research Ethics
Approval was granted by University of Queensland Humanities and Social Sciences,
Low & Negligible Risk Ethics Sub-Committee on 31 January 2018. The approval
number is 2018000087.
Acknowledgements
First of all, I would like to thank my principal advisor, Professor Chi-Kong Lai, for his
erudition and wisdom, for his model of being a decent and objective scholar, for his
kindness and patience in guiding me, a layman of historical research, in the study of
history and everyday life.
I also would like to thank Professor Andrew Bonnell, as my associate advisor, for his
support and encouragement. He is always ready to offer direct and valuable advice
which enriches and perfects my thesis.
Besides, I would express my gratefulness to Ms Ouyang Dipin, Xiao Li and Zheng Bing
for their kind help and support when I studied in the Australian National Library.
Gratefulness also to Mr. Xiao Bin and all other staffs of The China Merchants Archives,
for their patience and kindness.
Moreover, I would like to thank my friends in UQ, Yang Yanzhe, Kent Wan, Zhang Mu,
Wong Wingfai, and Wang Chenchen, for their help and suggestion during my PhD
candidature.
I would also offer my gratefulness to those friends and relatives for their
recommendation of interviewees, and to all the anonymous respondents for sharing
their stories. I could never finish my thesis without your kind help.
Special thanks to two of my best friends, Debbie He and Queenie Chen. Our daily
“tripartite meetings” across the Pacific Ocean always make me relax and offer me
inspiration and confidence.
Finally, What I need to thank most is my families, who always support and encourage
my pursuit and dream, always give me warmth and comfort, always make me strong
and fearless.
Financial support
This research was supported by
Australia Asia Study Grant by The Australian National Library
Research Higher Degree Study Grant by the School of Historical and Philosophical
Inquiry
Keywords
Shenzhen, housing development, driving force, government, developer, consumer
Australian and New Zealand Standard Research Classifications (ANZSRC)
ANZSRC code: 210302, Asian History, 100%
Fields of Research (FoR) Classification
FoR code: 2103 Historical Studies, 100%
Table of Contents
List of Figures & Tables …………………………………………………………………i
List of Abbreviations used in this thesis …………………………………………….v
Chapter 1 Introduction
Shenzhen in the Megacity Perspective ……………………………………………….1
Housing Research in Multi-perspectives …………………………………………….12
Sources and Methods ………………………………………………………………….17
Research Framework and Thesis Outline …………………………………………...18
Chapter 2 The Role of Government
Introduction ………………………………………………………………………….…..22
Land Supply ………………………………………………………………………….….23
Housing Policies …………………………………………………………………….…..31
Urban Master Planning and Management ……………………………………….…..46
Conclusion ………………………………………………………………………….……63
Chapter 3 The Role of Developers
Introduction ………………………………………………………………………….…..64
The Rise, Prosperity and Current Situation of the Real Estate Industry in
Shenzhen …………………………………………………………………………….….67
Wang Shi and Vanke …………………………………………………………….……..76
Vanke’s Strategy for Government Policies …………………………........................84
Vanke’s Products, Marketing, and Property Service ………………………….……100
Conclusion ……………………………………………………………………….……..119
Chapter 4 Housing Choice: Evolution of Housing Conditions and Transportation
Introduction …………………………………………………………………….……….120
Housing and Community …………………………………………………….………..123
Transportation Development …………………………………………………………153
Chapter 5 Housing Choice: Children’s Education and Age Care
Introduction ……………………………………………………………………….…….167
Anxiety of Children’s Education ……………………………………………………...168
Age Care ………………………………………………………………………………..197
Chapter 6 Conclusion: Affordable and livable city ……………………………….211
Bibliography ……………………………………………………………………………..222
Appendix
Appendix 01: Questionnaire ………………………………………………………….240
Appendix 02: Summary of interview finding: dormitory ……………………………245
Appendix 03: Summary of interview finding: rental housing ………………………249
Appendix 04: Summary of interview finding: small-profit housing ………………..253
Appendix 05: Summary of interview finding: commercial housing ……………..256
Appendix 06: Letter of The Human Research Ethics Approval …………………261
i
List of Figures & Tables
Diagram
Diagram 1.1: key development areas and Shenzhen district layout …………………9
Diagram 1.2: Shenzhen Spatial Direction and Structure in the1980s, 1990s, 2000s,
2010 …………………………………………………………………………………………9
Diagram 1.3: Housing System …………………………………………………………..20
Diagram 2.1: Location of the Luohu Commercial District …………………………….27
Diagram 2.2: double tracks-triple types-multi-prices ………………………………….34
Diagram 3.1: Vanke’s projects in Bantian area, Longgang District, Shenzhen …….91
Diagram 3.2: Vanke 17 Miles in Yantian District, Shenzhen ………………………….91
Diagram 4.1: space reshaping model …………………………………………………..144
Diagram 6.1: T-shaped strategic development structure in China and the area of
Guangdong-Hong Kong-Macao Great Bay ……………………………………………216
Diagram 6.2: the four Great Bay Areas of the world ………………………………….216
Diagram 6.3: Xiong’an New District in the Beijing-Tianjin-Hebei Urban
Agglomeration …………………………………………………………………………….221
Table
Table 2.1: number and area of land transactions of residential land (1987-2017) …..30
Table 2.2: population of Shenzhen (1979-2016) ………………………………………..36
Table 3.1: number of real estate developer (1990-2016) ……………………………...66
Table 3.2: gross domestic product and contribution of the real estate industry in
Shenzhen (1979-2016) ……………………………………………………………………71
Table 3.3: summary of residential housing in investment, floor area, the average
price………………………………………………………………………………………….73
Table 3.4: Vanke Financial data (1990~2017) ………………………………………….82
Table 3.5: the subdivision of the Golden Series ………………………………………108
Table 3.6: Vanke full lifecycle products …………………….…………………………..108
Table 4.1: questionnaire data for public transportation ………………………………155
Table 4.2: questionnaire data for facilities of public transportation …………………156
Table 4.3: statistic of public transportation of Shenzhen (1979-2017) ……………..156
Table 5.1: number of secondary schools, teachers and students in Shenzhen (1979-
2017) ………………………………………………………………………………………169
Table 5.2: number of primary schools, teachers and students in Shenzhen (1979-
2017) ……………………………………………………………………………………….170
Table 5.3: number of kindergartens, teachers and students in Shenzhen (1979-
ii
2017) ……………………………………………………………………………………….172
Table 5.4: enrollment scoring method of Futian District, Shenzhen (2018) ………..175 Table 5.5: key undergraduate admission rate of Shenzhen 2018 …………………..178 Table 5.6: average housing price of Futian District, Baihua zone and Yuanling Zone ……………………………………………………………………………………….180
Table 5.7: national data of National Census of 2000 and 2010 …………………….198
Table 5.8: Shenzhen data of National Census of 2000 and 2010 ………………….198
Table 5.9: fee standard of Guangzhou Rongyue Binjiangzhong ……………………203
Table 5.10: fee standard of policy beds of Futian Welfare Center …………....…….204
Table 5.11: fee standard of commercial beds of Futian Welfare Center ……………204
Table 5.12: basic statistics on social pension institutions in Shenzhen …………….205
Table 5.13: fee standard of self-care zone of Taikang Yue Garden ………………...209
Table 5.14: fee standard of nursing-care zone of Taikang Yue Garden ……………209
Figure
Figure 2.1: area of land transactions of residential (1987-2017) ……………………….31
Figure 2.2: average sales price of commercial housing in Shenzhen (2005-2017) …31
Figure 2.3: investment in fixed assets and investment in real estate development
(1990-1997) ………………………………………………………………………………...39
Figure 3.1: GDP and GDP by real estate industry (1979~2016) ……………………..72
Figure 3.2: the ratio of GDP by real estate industry (1979~2016) ……………………73
Figure 3.3: investment in residential housing (1990~2016) …………………………..74
Figure 3.4: floor area of residential buildings under construction (1992~2016) and the
newly started (1998~2016) ……………………………………………………………….75
Figure 3.5: floor area of residential buildings sold (1992~2016) ……………………..75
Figure 3.6: the average selling price of residential houses (1998~2016) ……………75
Figure 3.7: Vanke business income (1990~2017) ……………………………………...82
Figure 4.1: general information of interviewees ………………………………………..122
Figure 4.2: general information of respondents ………………………………………..122
Figure 4.3: hierarchy of housing needs …………………………………………………124
Figure 4.4: buying food and cooking in Shenzhen families ………………………….149
Figure 4.5: questionnaire data for commuting mode …………………………………155
Figure 5.1: comparison of average housing price of Futian District, Baihua zone and
Yuanling Zone ………………………………………………………………………….....181
Figure 5.2: the result of pension mode survey …………………………………………200
Photo
Photo 2.1: poor condition of buildings in urban village of Shenzhen …………………27
Photo 2.2: the first master planning of SSEZ (1980) …………………………………..48
Photo 2.3: master planning of SSEZ (1984) ……………………………………………49
Photo 2.4: Shenzhen Special Economic Zone Master Planning (1986-2000) ………49
Photo 2.5: Urban spatial structure, ‘clusters in belt shape’ of Planning 1986 ……….50
iii
Photo 2.6: G.M.S.M. Shekou Industrial Zone General Layout (1980) ……………….51
Photo 2.7: Land use plan for Shekou Industrial Park before 1985 ……………………52
Photo 2.8: diagram of Land use plan for Shekou Industrial Park before 1985 ………52
Photo 2.9: survey map of existing land use of Shekou Industrial Park (1985) ………52
Photo 2.10: Shenzhen City Master Planning (1996-2010) …………………………….56
Photo 2.11: Urban structure of Shenzhen City Master Planning (1996-2010) ………57
Photo 2.12: Control Map of Shenzhen Basic Ecological Line (2005) …………………60
Photo 2.13: Comprehensive Planning of Shenzhen City (2010-2020) ……………….61
Photo 3.1: Yuanling residential community, Futian District, Shenzhen ………………71
Photo 3.2: Vanke Wonderland, Longgang District, Shenzhen ………………………..92
Photo 3.3: Vanke the Fifth Garden, Longgang District, Shenzhen …………………...92
Photo 3.4: Model rooms of Vanke the Fifth Garden ……………………………………92
Photo 3.5: Vanke East Coast, Yantian District, Shenzhen …………………………….93
Photo 3.6: Existing layout of urban villages Shenzhen ………………………………..99
Photo 3.7: Scope of the comprehensive renovation of urban villages ………………100
Photo 3.8: Tianjing Garden, Luohu District, Shenzhen ………………………………103
Photo 3.9: Plan of Vanke Wonderland …………………………………………………104
Photo 3.10: Vanke Wonderland, Longgang District, Shenzhen ……………….…….104
Photo 3.11: Shenzhen Golden Home, Futian District, Shenzhen …………………...116
Photo 4.1: typical floor layout of outside-corridor dormitory ………………………….126
Photo 4.2: Tongxinling community, Futian District, Shenzhen ……………………….126
Photo 4.3: Sihai dormitory, Shekou Industry Park, Shenzhen ……………………….127
Photo 4.4: Shuiwan C zone dormitory, Shekou Industry Park, Shenzhen ………….128
Photo 4.5: Huaguoshan community, Shekou Industry Park, Shenzhen …………….130
Photo 4.6: weak prevention of gates and anti-theft nets ……………………………...130
Photo 4.7: Yijing Garden, Luohu District, Shenzhen ………………………………….132
Photo 4.8: “井”-shaped floor layout and other similar plans ………………………….134
Photo 4.9: duplex house in high-rise apartment ……………………………………….135
Photo 4.10: bay-window ………………………………………………………………….135
Photo 4.11: entering-garden ……………………………………………………………..135
Photo 4.12: images of Shekou Industrial Park …………………………………………139
Photo 4.13: using landscape as highlights of sales promotion ……………………….140
Photo 4.14: reshaping a bed space …………………………………………………….146
Photo 4.15: Shenzhen metro line map …………………………………………………160
Photo 4.16: overall plan of Shenzhen Rail Transit Network Planning ………………161
Photo 5.1: Baihua Zone and Yuanling Zone in Futian District ………………………177
Photo 5.2: communities around Baitian Department of Shenzhen Experimental Group ………………………………………………………………………………………181 Photo 5.3: advertisement of Sinolink Garden …………………………………………187
Photo 5.4: advertisement of Great Azure Coast ………………………………………189
Photo 5.5: advertisement of Taoyuanju ………………………………………………..192
Photo 5.6: Rongyue-Binjiangzhong, Guangzhou ……………………………………..203
iv
Photo 5.7: Futian Welfare Center ……………………………………………………….203
Photo 5.8: Taikang Community national layout ………………………………………..208
Photo 5.9: Taikang Yue Garden, Gaungzhou ………………………………………….208
v
List of Abbreviations used in this thesis
1. The CCP, The Chinese Communist Party (中国共产党)
2. The NPC, The National People’s Congress (全国人民代表大会)
3. The SEZ, The Special Economic Zone (经济特区)
4. The SSEZ, The Shenzhen Special Economic Zone (深圳经济特区)
5. The SMPC, The Shenzhen Municipal Party Committee (深圳市委)
6. The SMPG, The Shenzhen Municipal People’s Government (深圳市政府)
7. The GBA, The Guangdong-Hong Kong-Macao Great Bay Area (粤港澳大湾区)
8. The SPLRC, Shenzhen Planning and Land & Resources Commission (深圳规划
国土资源委员会)
9. The CAUPD, China Academy of Urban Planning & Design (中国规划设计研究院)
10. The UPBSZ, Urban Planning Board of Shenzhen (深圳市城市规划委员会)
11. The SSEZREC, Shenzhen Special Economic Zone Real Estate Company (深圳
经济特区房地产公司)
12. The SASAC, State-owned Assets Supervision and Administration Commission
(国有资产监督管理委员会)
13. The SSEZDC, Shenzhen Special Economic Zone Development Company (深圳
特区发展公司)
14. CCRC, Continuing Care Retirement Community (持续照护退休社区)
15. The SES, Shenzhen Experimental School (深圳实验学校)
1
Chapter 1: Introduction
1.1 Shenzhen in the Megacity1 Perspective
Cities originated from “meeting places to which people periodically return”.2 Since the
industrial revolution, cities have represented the development of economy,
concentration of resources, and improvement of life quality, attracting people to look
for better opportunities, such as jobs, living condition, education, and medical care.
China is one of the countries where the earliest city appeared and once developed the
largest and most prosperous city in the world.3 However, when the People’s Republic
of China was established in Oct 1949, the urbanization rate was only 10.64%.4 Urban
development was restricted and increased by only 7% in the following 30 years. Max
Weber suggested that Chinese cities were a product of rational administration, and
their prosperity did not primarily depend upon the citizen’s enterprising spirit in
economic and political ventures. 5 William Rowe has proved Hankou was an
exception.6 The empirical data of China's urbanization after the economic reform also
challenged Weber’s views. In the past four decades, the economy in China developed
explosively with strong demands on labor resources. Millions of migrant workers
flocked to the cities for more opportunities and better living conditions. The urban
development thus has entered a fast track. Urbanization rate in China increased from
17.92% to 58.52% between 1978 and 2017.7
The author witnessed China’s rapid urbanization as an ordinary resident in different
cities, and as an urban planner who worked on urban planning projects in many cities
of China. As a trained urban planner, the author’s understanding and study of the city
began with the attention to urban space, which is one of the two mainstreams of urban
studies. Urban planners and architects emphasized the interpretation of spatial
structure and scale, seeking spatial solutions to respond to the problems that arose in
different urban development periods and developed a self-contained theory system in
1 According to the Oxford Dictionary, a megacity is a very large city, typically one with a population of over ten million people. In the standard of urban scale division of China, taking the permanent residents of urban areas as the statistical caliber, cities are divided into five categories. A small city is with a population of below 500,000 people. A medium city is with over 500,000 and below one million people. A large city is with over one million and below five million people. A super-large city is with over five million and below ten million people. A megacity is with over 10 million people. See “State Council Notice on Adjusting the Standard of Urban Size Division [2014] 51” (Issued on November 20, 2014). http://www.gov.cn/zhengce/content/2014-11/20/content_9225.htm (access on 26/9/2019). According to Wikipedia, as of 2017, The largest megacities are the metropolitan areas of Tokyo, Shanghai, and Jakarta, each having over 30 million inhabitants. Shenzhen was ranked the eleventh. 2 Lewis Mumford, The City in History: Its Origins, Its Transformations and Its Prospects. (Harmondsworth: Penguin Books, 1961), 18. 3 Fu Chonglan, Bai Chenxi, Cao Wenming. The Urban History of China (Beijing: Social Sciences Academic Press, 2009), 1. 4 China Statistical Yearbook2018 from National Bureau of Statistics of the People’s Republic of China, http://www.stats.gov.cn/tjsj/ndsj/2018/indexch.htm (accessed on 7July 2019). 5 Max Weber. Hans H. Gerth trans and ed. The Religion of China: Confucianism and Taoism. (Glencoe, Illinois: The Free Press, 1951), 16. 6 William Rowe. Hankow: Commerce and Society in a Chinese City, 1796-1889. (California: Stanford University Press, 1984). 7 China Statistical Yearbook2018 from National Bureau of Statistics of the People’s Republic of China, http://www.stats.gov.cn/tjsj/ndsj/2018/indexch.htm (accessed on 7July 2019).
2
different planning levels. Ebenezer Howard’s8 concept of the “Garden City” set up the
framework of modern town planning, defined the size of the city and population, and
regulated the spatial layout to deal with the relation between people and environment,9
which is still meaningful today.
Another mainstream of urban research, which is usually conducted by historians,
sociologists, anthropologists, and economists, focuses on factors of political, economic,
social, and demographic growth. Sociologists pioneered the study of the city. The
Chicago School, the first urban study school, flourished for 20 years from 1915 to 1935.
Robert Park put forward the first urban research paradigm “human ecology”,
suggesting that urban analysis included three dimensions of biotic, spatial, and
cultural.10 Ernest Burgess created the urban space concentric model to explain the
organic, dynamic, and developed urban expansion theory.11 The Chicago School had
put people and space together, deepening the concept of community. However, they
considered space based on human biological, assuming cultural unity, ignoring the
most important factor, human differences. The New Urban School,12 rising in the
1960s, criticized the cultural unity assumed by the Chicago School. They emphasized
the importance of human beings in the city and started to pay special attention to
ordinary people.
With the development of the Internet, and the advent of the global era, urban research
has also developed the urban theory of globalization. How did globalization impact on
the city? There were predictions that information technology would make space
insignificant, so that the city would lose its importance. However, Saskia Sassen
suggests that telecommunications and globalization have been changing the
relationship between cities and re-shaping the physical form of the activities that take
place in urban space.13 She further points out that the role of central cities is more
prominent, and a global urban system is built, in which cities are directly connected
8 Ebenezer Howard is regarded as the foundational figure in modern urban planning. In the 1946 edition of Howard’s book Garden Cities of To-morrow, Lewis Mumford wrote the introductory essay “The Garden City Idea and Modern Planning” to praise the fact that “Howard attacked the whole problem of the city’s development, not merely its physical growth but the interrelationship of urban function within the community and the integration of urban and rural patterns, for the vitalizing of urban life on one hand and the intellectual and social improvement of rural life on the other hand.” In 1998, Peter Hall and Colin Ward wrote a book, Social Cities: The Legacy of Ebenezer Howard, to commemorate the 100th anniversary of Howard’s Garden Cities of To-morrow, pointing out that Howard’s concept of Garden City and Sociable City can still provide guidance and a reference for sustainable urban development in the 21th century. 9 Ebennzer Howward, Garden Cities of To-morrow. (Massachusetts: The M.I.T Press, 1965). 10 Robert E. Park, “Human Ecology”, American Journal of Sociology, Vol.42, No.1 (1936), 1-15. 11 Ernest W. Burgess, “The Growth of the City”, Publications of the American Sociological Society, Vol. XVIII (1925), 85-97. 12 A seminar on “the Industrial Cities in 19th Century” was held at the Yale University in 1963. The participants agreed that the current life of urban dwellers was experiencing some explosive changes, which should be investigated and understood urgently. The proceedings, American City in 19th Century: New Urban History Proceedings, was marked as the birth of the New Urban School. The School had a breakthrough in the expansion of the research scope and methods. They applied sociological theory to the historical research and analysis, used measurement analysis methods in data analysis, paid special attention to the social experiences of ordinary residents who were neglected in the previous studies, and examined the relationship between urbanization and social and population structure. 13 Saskia Sassen, “Impact of the New Technologies and Globalization on Cities”, Arie Graafland and Deborash Hauptmann edited, Cities in transition. (Rotterdam: 010 Publisher, 2001)
3
with the world in economic activities.14 Since the 21st century, the rapid emergence of
the megacity has confirmed this point. There are fifteen megacities which developed
in China in the past two decades. Kleer and Nawrot point out that Chinese megacities
have two unique features. The first is that the emergence of such urban giants was a
“top-down process”, which means it is “under the strict control of the state leadership
and the power wielded by the Communist Party”. The second is “the influx of people
to major agglomerations is a controlled process” through the Hukou system.15
Although many scholars had carried out urban research during the period of the
Republic of China, after the establishment of PRC, great changes had been taken
place in higher education sector and research institutes. In 1952, the adjustment of
colleges and departments of higher education was conducted. Shanghai Tongji
University established the first urban planning major in China, but for a long time,
planning major was attached to the Department of Architectural Design, focusing
mainly on the study of space. At the same time, the Department of Sociology was
abolished, and it was not reopened until 1980. Therefore, in more than two decades,
the urban study conducted by Chinese scholars was relatively weak, and lack of the
perspective of social science. The early urban Chinese studies were conducted by
western scholars in mid-1960s.
Skinner proposed the concept of "regional analysis",16 which broke with the traditional
method of administrative zoning and also challenged the Weberian notion that believed
Chinese cities had flourished or declined due to their political and military values to the
ruling regime, therefore the rise and fall of cities had no relations with their economic
activities and actions of their residents. He applied his theory in the concrete study of
Chinese cities in “Urban Development in Imperial China”.17 He also put forward the
problems in urban ecology, sojourning and urban associations, and municipal
governance, which he thought scholars often ignored.18 These issues still need to be
considered in today’s urban studies. After Skinner, many scholars studied Chinese
cities from many other aspects of politics, economy, culture and everyday life. Victor F
S Sit explores urban history of China in a time frame of almost 6,000 years.19 Gilbert
Rozman compares the urbanization of two large scale societies in premodern period,
Ch’ing China and Tokugawa Japan. 20 Remaking the Chinese City examines the
14 Saskia Sassen. Globalization and its discontents. (New York: The New Press, 1998). 15 Jerzy Kleer and Katarzyna Anna Nawrot, ed. The rise of megacities: challenges, opportunities and unique characteristics. (World Scientific Europe: https://www-worldscientific-com.ezproxy.library.uq.edu.au/worldscibooks/10.1142/q0125, 2018). 24. 16 In accordance with the economic regions developed along the river system, Skinner divided China into nine regions. Details see George William Skinner. “Marketing and social structure in rural China”, Parts I, II, and III. The Journal of Asian Studies, Vol.24, No.1 (1964): 3–43; Vol.24, No.2 (1965): 195–228; Vol.24, No.3 (1965): 363-399. 17 George William Skinner. “Urban Development in Imperial China”. The City in Late Imperial China. Edited by George William Skinner. (Stanford, CA: Stanford University Press, 1977), 3-31. 18 George William Skinner. “Urban Social Structure in Ch’ing China”. The City in Late Imperial China, 521-553. 19 Victor F S Sit. Chinese City and Urbanism: Evolution and Development. (Singapore: World Scientific Publishing Company Pt. Ltd., 2010). 20 Gilbert Rozman. Urban Networks in Ch'ing China and Tokugawa Japan. (Princeton: Princeton University Press, 1973).
4
modernist transformations of China's cities in early decades of the twentieth century.21
The collection of China Urban stresses rural life and socialism have great impact on
contemporary culture in Chinese cities. It focuses particularly on issues of gender,
market, and spatial practices.22 China’s Urban Life explores the social and cultural
elements, such as clothing, food, housing, entertainment, festivals, cultural relics,
streets, architecture, etc., of some major cities in the Ming and Qing Dynasties, such
as Shanghai, Beijing, Suzhou, Wuchang, Chongqing, etc., and provides a richer and
diversified understanding of the Ming and Qing culture.23 Based on the city guidebooks
of several major cities in modern China, Beijing, Shanghai, Beidaihe, Qingdao and
Tianjin, Finding Urbanity reviews the changes in urban space, images, and culture in
modern China.24 John Wilson Lewis compiled a selection of papers covering a wide
range of topics of political, economic, social, and legal issues, providing a deeper
understanding of cities in the late Imperial and Republican China.25
Some scholars take one city as example to conduct Chinese urban studies. William
Rowe carried forward Skinner’s theory, pointing out that Hankou became a commodity
distribution center because of commercial development. Hankou promoted the
development of its surrounding areas, and its business guild organization not only
safeguarded the interests of the industry but also shared the responsibility of local
social utilities, becoming a kind of autonomous organization. 26 Wang Di takes
teahouse as a starting point to discuss the transformation of urban space and daily life
in Chengdu in 100 years of the 20th century.27 David Strand researches ordinary
residents in Beijing, such as rickshaw pullers, policemen, trade unionists, workers, and
restaurant owners, to explore how they gathered their political experiences to deal with
the changes in a turbulent era in the early twentieth-century.28 Madeleine Yue Dong
Focuses on the everyday life of residents of Republican Beijing and examine the state
and its relation to everyday life, and how “old Beijing” culture was reserved.29 Kristin
Stapleton examines the history of urban planning and administration of Chengdu.30
Soren Clausen and Stig Thogersen study urban development history of Harbin under
21 Joseph W. Esherick, ed. Remaking the Chinese City: Modernity and National Identity 1900-1950. (Honolulu: University of Hawaii Press, 2001). 22 Nancy N. Chen, Constance D. Clark, Suzanne Z. Gottschang, Lyn Jeffery, ed. China Urban: Ethnographies of Contemporary Culture. (Dulhan: Duke University Press Books, 2001). 23 Xiaodi Li, ed. China’s Urban Life. (Beijing: Peking University Press. 2013). 24 Wu, Renshu, ed. Finding Urbanity: Guidebooks and the Study of Modern Chinese Cities (Taiwan: Republic of China History and Culture Society, 2019). 25 John Wilson Lewis, edited with an introduction. The City in Communist China. Stanford, CA: Stanford University Press, 1971. 26 William Rowe. Hankow: Commerce and Society in a Chinese City, 1796-1889. (California: Stanford University Press, 1984). 27 Di Wang. The Teahouse: Small Business, Everyday Culture, and Public Politics in Chengdu, 1900-1950. (Stanford, CA: Stanford University Press, 2008); Di Wang. The Teahouse under Socialism: The Decline and Renewal of Public Life in Chengdu, 1950–2000. (Ithaca: Cornell University Press, 2018). 28 David Strand. Rickshaw Beijing: City People and Politics in 1920s. (Berkley: University of California Press, 1989). 29 Madeleine Yue Dong. Republican Beijing: The City and Its Histories. (Berkley: University of California Press, 1989). 30 Kristin Stapleton. Civilizing Chengdu: Chinese Urban Reform, 1895-1937. (Cambridge: Harvard University Asia Center, 2000).
5
different rulers in the past 100 years.31 Tsin conducted a research of social and political
culture of Guangzhou in the early 20th century.32 Taking Tianjin as an example, Ruth
Rogaski reveals how hygiene crucially affected the formation of Chinese modernity.33
Modern Shanghai, as the economic center of the Far East, is a city that many scholars
pay close attention to. From the perspective of economic history, Niv Horesh explains
how Shanghai became a world-famous megacity today.34 Yingjin Zhang compiled a
collection which took the cinema as the starting point to study urban culture in
shanghai.35 With an approach of everyday life, Wen-Hsin Yeh studies the social and
cultural history of Shanghai, covering its entire modern period from the Opium War to
the founding of the PRC in 1949.36
Chinese scholars began research on the urban history of China in the mid-1980s.
Modernization research into four cities, Shanghai, Tianjin, Chongqing, and Wuhan, has
been listed as a national subject in the Seven-Five Plan. There came out fruitful works
about modern urban history.37 Meanwhile, many scholars started to research modern
urban history in other cities, such as Beijing, Suzhou, Jinan, etc.38 Some scholars
studied urban development in a longer historical period or a broader geographical
scope. He Yimin expounded the origin, development and evolution of Chinese cities in
thousands of years and summarized their features of urban style, economy, society,
urban planning and construction in different times.39 He also reveals the important role
of medium-sized cities in the urban system of Western China.40 Wei Yingtao studied
the national-wide modern urbanization, pointing out that unlike the industrialization of
western countries, China’s modern urbanization was the process of commercialization
31 Soren Clausen, Stig Thogersen. The Making of a Chinese City: History and Historiography in Harbin. (Armonk: M.E. Sharpe, 1995). 32 Michael Tsin. Nation, Governance, and Modernity in China: Canton, 1900-1927. (Stanford: Stanford University Press, 2000). 33 Ruth Rogaski. Hygienic Modernity: Meanings of Health and Disease in Treaty-Port China. (Berkley: University of California Press, 2004). 34 Niv Horesh. Shanghai, Past and Present: A Concise Socio-Economic History, 1842-2012. (Brighton: Sussex Academic Press, 2014). 35 Yingjin Zhang, ed. Cinema and Urban Culture in Shanghai, 1922-1943. (Stanford: Stanford University Press, 1999). 36 Wen-Hsin Yeh. Shanghai Splendor: A Cultural History, 1843-1949. (Berkley: University of California Press, 2007). 37 These four cities have published their modern urban history and some special studies, with a wide range of content including society, politics, economy, business, culture and management. For example, Zhongli Zhang, ed. Modern Shanghai Urban Study (1840-1949), (Shanghai: Shanghai People’s Publishing House, 1990); Yingtao Wei, ed. Modern Urban History of Chongqing. (Chengdu: Sichuan University Press, 1991); Shuwei Luo, ed. Modern Urban History of Tianjin. (Beijing: China Social Sciences Press, 1993); Mingxiu Pi, ed. Modern Urban History of Wuhan. (Beijing: China Social Sciences Press, 1993); Shanmin Peng. Public Health and Urban Civilization in Shanghai 1898-1949. (Shanghai: Shanghai People’s Publishing House, 2007). 38 For example, Zemin Su. Urban Planning History of Nanjing. (Beijing: China Construction Industry Press, 2008); Weiping Wang. A Study on the History of Jiangnan City in Ming and Qing Dynasties: Focusing in Suzhou. (Beijing: People’s Publishing House, 1999); Yu Li. The Start of Changsha’s Modernization. (Changsha: Hunan Education Press, 2000.); David D. Buck. Urban Change in China: Politics and Development in Tsinan, Shantung,1890-1949. (Beijing: Peking University Press, 2010.); Benshu Xie and Jiang Li, ed. Modern Urban History of Kunming. (Kunming: Yunnan University Press, 1997). 39 Yimin He. Chinese Urban History. (Wuhan: Wuhan University Press, 2012). 40 Yimin He. Medium Sized Cities and Regional Development in Western China in the 20th Century (Chendu: Bashu Publishing House, 2005).
6
and urban transformation.41
Since the economic reform, China’s cities have developed rapidly. In the past forty
years, China has gone through the equivalent of a century of western urban
development. Urban planning cannot keep up with urban development, and urban
studies cannot follow the pace of development. There is no precedent for the study of
contemporary Chinese cities. The most common topics in current urban research are
China’s urbanization and problems, the household registration system and population,
urban new immigrants.42 These studies mainly emphasize an economic and policy
perspective, when less attention is paid to cultural integration, civic awareness, and
urban life.
The author chooses Shenzhen as the research city, where she worked and lived for
more than 13 years, because it is the fastest-growing city in the world43 and the
benchmark of China’s new generation of cities. Shenzhen has developed from a small
border town to a megacity, with remarkable achievement in various aspects of society,
economy, and culture. With the establishment of the Guangdong-Hong Kong-Macao
Great Bay Area (GBA), Shenzhen was appointed as the demonstration pilot zone for
socialism with Chinese characteristics44 and continued to occupy a strategic position
in China's new round of developmental vision. In the transitional period, it is necessary
to figure out how the city was shaped and how it can be better developed in the future.
At the same time, Shenzhen's experience and lessons can be used for reference by
other cities in China which are still undergoing rapid urbanization.
Studies of Shenzhen often refer to its relations with Hong Kong. The establishment of
the Shenzhen Special Economic Zone (SSEZ) in 1979 has benefited from the
geopolitical relations with Hong Kong. Shenzhen’s early development relied on Hong
Kong’s capital investment, advanced technology, and management experience. The
city’s early urban planning and management also consulted the Hong Kong model.
Shenzhen University conducted a social survey in 2007, researching the similarities
and differences between Shenzhen and Hong Kong in traffic management, medical
security, education, public utilities, human resources, securities market, and other
aspects.45 Professor Ho PuiYin detailed the urban planning and development of Hong
41 Yingtao Wei, ed. A Comprehensive Study of Different Types of Cities in Modern China. (Chengdu: Sichuan University Press, 1998). 42 For example, Aimin Chen, Gordon G. Liu and Kevin H. Zhang, edited. Urban Transformation in China. (England: Ashgate, 2004); John R. Logan, edited. The New Chinese City: Globalization and Market Reform. (Great Britain: Blackwell, 2002); T. G. Mcgee, George C.S. Lin, Andrew M. Marton, Mark Y. L. Wang and Jiaping Wu. China’s Urban Space: Development Under Market Socialism. (London and New York: Routledge Taylor & Francis Group, 2011). 43 Ezra F. Vogel, Foreword, Learning from Shenzhen: China’s Post-Mao Experiment from Special Zone to Model City, edited by Mary Ann O’Donnell, Winnie Wong, Jonathan Bach. (Chicago: The University of Chicago Press, 2017), vii. 44 The Central Committee of the CCP and the State Council issued the Guideline to Support Shenzhen in Building a Demonstration Pilot Zone for Socialism with Chinese Characteristics. Details see http://www.gov.cn/xinwen/2019-08/18/content_5422183.htm (access on 7/10/2019). 45 Tanyu Jiang. Comparative Study of Shenzhen and Hong Kong. (Beijing: People’s Publishing House, 2007).
7
Kong from 1841 to 2000, 46 which described the maintenance of the ecological
environment, the provision of public housing, the establishment of public transport, and
urban management experience, were the most valuable lessons for Shenzhen.
Some research on Shenzhen concentrated on macro-political and economic policies
and decision-making events in the economic reform. 47 When Shenzhen lost its
advantages as the SSEZ, Shenzhen’s industrial development and urban
transformation and upgrading became a research focus, such as new urbanization
research, cultural industry, and high-tech industry research.48 These studies provide
valuable sources of the developmental direction of Shenzhen and its districts. In the
area of urban development, due to the rapid development and some administrative
measures, Shenzhen has become a city without peasants,49 accordingly, a city with
the largest amounts of urban villages. For the city’s future, Shenzhen must rely on the
transformation of urban villages. Thus, the study of urban villages is becoming a hot
topic.50
When designers and scholars recognized the complexity of cities, urban research
gradually trended to multidisciplinary integration. Many researchers started to consider
social, economic, cultural, ecological, and other comprehensive factors in their urban
research and projects. Learning from Shenzhen examines migrant labor, urban
villages, sex workers, the Second Line,51 citizens’ identities, transportation, creative
46 Ho Pui Yin. History of Hong Kong’s Urban Planning 1841-2015. (Hong Kong: Chung Hwa Book Co. (H.K.) Ltd, 2016). 47 For example, Tanyu Jiang. History of Shenzhen’s Reform and Opening. (Beijing: People’s Publishing House, 2010); Ying Fu. A Brief History of Significant Reform and Innovation in Shenzhen. (Beijing: Social Science Academic Press, 2017). 48 For example, Shenzhen Municipal Academy of Social Sciences & Shenzhen Guangming New District Administrative Committee, ed. Shenzhen’s Practice in New Urbanization. (Beijing: China Social Sciences Press, 2016); Wuya Zhong. Research on the Selection of Leading Industries in Shenzhen. (Beijing: China Social Sciences Press, 2016); Xiaoru Zhang, Fayu Huang. International City and Shenzhen Strategy. (Shenzhen: Haitian Press, 2014); Weili Wang. From the Edge to the Center: Research in Shenzhen Cultural Industry. (Beijing: People’s Publishing House, 2007); Comprehensive Development Institute. Quality of Urbanization Transferring and Upgrading. (Beijing: China Economic Publishing House, 2015). 49 In 2004, the Shenzhen local government nationalized all the rural collective land and turned 270,000 peasants to urban household population, making Shenzhen a city without rural areas and farmers. 50 Urban village is a special form in the process of rapid urbanization. Although all or most of the cultivated land is expropriated, the farmers are still living in the original villages, which become urban residential areas. In order to obtain land and space for development, Shenzhen carried out unified land conversion twice, in 1992 and 2003, respectively. It became the only city without rural areas and farmers in China, but farmers’ own houses were preserved. Most of the village buildings were built to illegal height, which did not conform to fire safety standards and were of poor construction quality. Most of the houses in urban villages are rented to the new workers and low-income people, which, to some extent, solves the housing problem of low-income people in Shenzhen. At present, there are more than 1000 villages in Shenzhen, which accommodate more than 7 million people, and occupy about 320 square kilometers of urban land. The Southern Metropolis Daily sent reporters to track the in-depth coverage of various issues and events in Shenzhen urban villages, and published a book There are no Urban Villages in the Future. (Beijing: China Democracy and Law Press, 2011). David Wang uses Shenzhen as an example to study urban villages problems in China. Da Wei David Wang. Urban Villages in the new China: Case of Shenzhen. (New York: Palgrave Macmillan, 2016). Peilin Li studies the system, operation, social network, social stratification and daily life of urban villages by interviewing the residents of 22 villages in Guangzhou. Peilin Li. The End of the Village: The Story of Yangcheng Village (Beijing: The Commercial Press. 2004). 51 Shenzhen’s Second Line was a special zone management line constructed in 1982 to separate the SEC and non-SEC. It was a total of 84.6 kilometers long with 2.8 meters high wire mesh and patrolled roads along the whole line. In May 2010, SEC got the approval from the State Council to expand the territory of SEC to the whole Shenzhen city, then the Second Line existed only in name. It was officially
8
city, and public health.52 Juan Du starts with Shenzhen’s farmers and fishmen, and
their ordinary lives, to uncover Shenzhen’s secrets regarding its rapid urbanization and
economic development.53 These topics are more about social issues, which inspire
the author to look at the city from different perspectives.
In the author’s practices of urban planning, with in-depth communication with local
governments and developers, as well as conversation with ordinary people to
understand their demands in the site investigation of projects, the author felt that she
needed to adjust her idea of the city which has been based on physical spaces. The
thesis is to integrate theories of design and sociology and combine theory and the
author’s practices to conduct urban research of Shenzhen. Drawing on Henri Lefebvre
and David Harvey’s theories in space, the author re-thought the development process
of Shenzhen and its driving force.
The development of Shenzhen started with establishing processing zones with
government’s preferential policies to attract foreign direct investment. The earliest
construction was the Shekou (蛇口) Industrial Park with the area of 214 hectares54 and
the Luohu (罗湖) Commercial Center with the area of 280 hectares,55 then extended
to Bagualing (八卦岭) Industrial Park56 and Shangbu (上步) Industrial Park57 which
supported the Luohu Management Zone and Shangbu Management Zone (now Futian
(福田) District), and the High-tech Park near the Shenzhen University. To meet the
developmental needs of the shipping industry, the eastern Yantian (盐田) Harbor and
the Western Harbor (composing of Shekou Harbor, Chiwan (赤湾 ) Harbor and
Dachanwan (大铲湾) Harbor) were developed. With the city center moving westward
to form the Futian CBD District, the Special Economic Zone (SEZ) inside the Second
Line with the area of 327.5 square kilometers was developed (see diagram 1.1).
Because of the rapid expansion and serious insufficiency of developmental space,
Shenzhen implemented the urbanization in the whole city in 2003,58 which expanded
the urban territory to about 2000 square kilometers. Baoan (宝安 ) District and
Longgang (龙岗) District, which were outside the Second Line, became the new
developmental focus. Shenzhen finally developed to form the urban pattern with multi-
revoked in January 2016. 52 Mary Ann O’Donnell, Winnie Wong, Jonathan Bach, ed. Learning from Shenzhen: China’s Post-Mao Experiment from Special Zone to Model City. (Chicago: The University of Chicago Press, 2017). 53 Juan Du. The Shenzhen Experiment: The Story of China’s Instant City. (Cambridge: Harvard University Press, 2020). 54 Area data from Shenzhen Special Economic Zone Yearbook (1985),101. 55 Area data from Statutory plans for #01-01&02, Luohu District, Shenzhen. 56 Bagualing Industrial Zone is one of the earliest Industrial Zone constructed from 1982 in Shenzhen. It covers 116 hectares of land surrounded by Nigang West Road, Shaogang West Road, Hongling North Road and Shangbu North Road in Futian District. 57 Shangbu Industrial Zone is one of the earliest Industrial Zone constructed from 1982 in Shenzhen. It was originally an electronics industrial area and developed into a pivotal electronic component trading market in China in the late 1980s. In the 1990s, with the industrial restructuring, it developed into a comprehensive urban business zone, with an area of around 145 hectares, dominated by commerce, office and some residential area. The name was changed to HuaQiangBei, being familiar to the public. 58 On 23 October 2003, the Shenzhen Municipal Government issued the Notice on Accelerating the Urbanization of the Baoan District and Longgang District (No.192, Shenzhen Municipality [2003]). All the collective land was converted into state-owned land and all the peasants into urban household registration.
9
centers (see diagram 1.2). The urban spatial expansion of Shenzhen was a process
dominated by industrial development, as well as a process of capital accumulation and
expansion, reflecting the needs of economic development. Based on Henri Lefebvre
and David Harvey’s theories of space, capitalism has achieved in growth and
expansion globally “by occupying space, by producing a space.” 59 The issue of
overaccumulation (surpluses of labor and capital) can be fixed by temporal
displacement through investment in long-term capital projects or social expenditures,
or spatial displacements through opening up new markets elsewhere. 60 The
establishment of SSEZ coincided with “the turn to the neoliberal solution in Britain and
the United States.”61 Thus, Shenzhen became an attractive place for capital.
Diagram 1.1: key development areas and Shenzhen district layout
Source: diagram drew according to the Shenzhen map (2018).
Diagram 1.2: Shenzhen spatial direction and structure in the1980s, 1990s, 2000s,
2010s
59 Henri Lefebvre. The Survival of Capitalism: Reproduction of the Relations of Production. Trans. Frank Bryant. (New York: St. Martin’s Press, 1976), 21. 60 David Harvey. The New Imperialism. (Oxford: Oxford University Press, 2003),109. 61 David Harvey. A Brief History of Neoliberalism. (Oxford: Oxford University Press, 2005),120.
11
Source: diagram drew according to the Shenzhen yearbooks (1985-2018) and Shenzhen maps.
Shenzhen has developed by utilizing foreign capital and conducting processing
exports. The government’s finances have increased rapidly, and the local capital has
been cultivated. Capitalists always aim at maximizing profits. To seek new spaces to
gain more advantages, they “tend to be drawn or impelled to move to those locations
where costs are lower or profit rates higher.”62 Therefore, the spatial expansion of
capital inevitably “produces uneven geographical development, then the geographical
landscape of capitalist production, exchange, distribution, and consumption is never in
equilibrium.”63 Although Shenzhen has constructed the Second Line to separate the
SEZ from the non-SEZ, the capital still flowed continuously to the lower-cost areas
outside the Second Line, which exceeded the Shenzhen government’s plan. At the
same time, the government lacked adequate administrative resources to manage this
kind of unexpected expansion which led to the contrast between the rapid and orderly
development of the SEZ within the Second Line and the disorderly construction of the
Longgang District and Baoan District outside the Line.
Harvey argues that government plays a key role in urban development, but he is more
likely concerned about the problems in capitalist countries. He believes that
government represents the interests of capitalists, and “dominant classes and
hegemonic class alliances can form within the region and lend a specific character to
political as well as to economic activity.”64 However, the “developmental state” applied
in East Asia is quite different from the “regulatory state” represented by the US. “In
states that were late to industrialize, the state itself led the industrialization drive, that
is, it took on developmental functions. These two different orientations toward private
economic activities, the regulatory orientation, and the developmental orientation,
produced two different kinds of business-government relationships.”65 As indicated by
Chalmers Johnson, one of the remarkable features of the developmental state is that
62 David Harvey. The New Imperialism. (Oxford: Oxford University Press, 2003), 94. 63 Ibid., 96. 64 Ibid., 103. 65 Chalmers Johnson. MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925-1975. (Stanford: Stanford University Press,1982),19.
12
the government gives direction to industrial policy. The Chinese model is a kind of
developmental state, but self-proclaimed as a model with socialist characteristics,
which is different from the Japanese Model. Japan focused on a primary and nationally
supported goal for its economy, instead of governing economic activity through
particular procedures, 66 while China’s government emphasized both. Ideally, a
developmental state is a government with sufficient organization and power to achieve
its development goals and able to resist the demands from capital for their short-term
interests. However, in the early stage of development, the Shenzhen Municipal
People’s Government (SMPG) had to rely on foreign capital for urban development
because of its weak fiscal resources. Therefore, to attract foreign capital, the
government was always committed to creating a good investment environment and
introducing policies and measures conducive to investment.
Another perspective on developmental state theory is the work by William Kirby. He
points out that in the period of Chiang Kai-shek’s Nanking government, the National
Resources Council was founded to work out the Three-Year Plan in 1936, which sought
to promote a “controlled economy” during war-time. 67 It meant all things were
according to plan and all industry were state-owned. Kirby names it as “state socialism”,
and, better, “state capitalism”.68 Although most projects of the Plan were undone due
to over-reliance on German funds and the onset of the Sino-Japanese War in 1937,
the Three-Year Plan was a dramatic achievement, which was the seeds of
developmental state in China. Kirby also claims that China is the engineering state,
which is a society led by engineers, focusing on the development of infrastructure as
a platform for the country’s economic growth and social well-being.69 In the early stage
of Shenzhen’s development, the urban impression was that the whole city was like a
big construction site with dust everywhere. Because at that moment, the Shenzhen
government had to focus on the infrastructure construction to build the urban physical
spaces and environment to attract investment on the one hand, and to develop the
local economy and accumulate capital on the other hand. With a certain achievement
of capital accumulation and the improvement of urban governance, the government’s
policies and measures have been changed to restrict and balance the expansion of
capital (including foreign and local capital) and the well-being of the city and its citizens.
While continuing the construction of infrastructure and real estate, the Shenzhen
government has already begun to upgrade and transform industries led by high-tech
and innovative industries in order to gain the development advantages in the post-SEZ
era.
The gradual economic reform which was adopted by China needs a strong central
state 70 to control the reforming process and direction. However, the relationship
66 Ibid., 20. 67 William Kirby. Germany and Republican China. (Stanford: Stanford University Press, 1984), 209. 68 Ibid. 69 Regina Abrami, William Kirby, Warren McFarlan. Can China Lead? Reaching the Limits of Power and Growth. (New York: Harvard Business Review Press, 2014), 56. 70 See Leong H. Liew. “Gradualism in China’s economic Reform and the Role for a Strong Central State”. Journal of Economic Issues, Vol 29. No. 3 (1995), 883-895.
13
between government and capital is not so simple. In the past decades, capital has
penetrated all aspects of urban development, and the competition between
government and capital is becoming more and more intense and complex. Many local
governments fell into the embarrassing and contradictory situation of being co-opted
by capital, such as land finance, at the same time, they still attempted to restrict and
balance capital expansion.
1.2 Housing Research in Multi-perspectives
There are many topics about urban development. An independent subject but closely
related to other systems can be the starting point for research. Housing is “a major
component of a nation’s infrastructure”.71 The residential building is the most massive
and common type of construction in a city. Also, it is closest to the livelihood, linking
with other urban functions, such as transportation, education, consumption, etc. Thus,
Housing is one of the indicators reflecting the level of urban development and people’s
living standards. Shenzhen was built by people from all over the country. Its population
increased from around 300,000 to nearly 20 million. Shenzhen is transforming from an
immigrant city to a settled city. Solving the housing problem of a large population and
providing corresponding public facilities and services have always been problems
faced by the Shenzhen government.
In the context of globalization, urban competitiveness greatly depends on the city’s
creativity. Peter Hall believes that the formation of creativity depends on a certain group
of people in a certain period. Only the city can provide the opportunity to these people
with different cultural backgrounds to gather in the city, interacting with each other to
form a specific atmosphere of innovation and continuing to create new ideas. 72
Charles Landry points out that cities have the most important resources—their
inhabitants. He suggests that people’s needs, motivations, and creativities are
replacing the location, natural resources, and market accessibility as resources for
urban development. 73 Therefore, the competition of talents is the core of urban
competitiveness. The affordability and quality of housing and living environment are
key factors in the competition for human talents.
Although Shenzhen has succeeded in economic transformation, the unaffordable
housing price has made Shenzhen less attractive to talented people. Therefore, it is
high time to study Shenzhen housing development to understand how today’s
residential environment was formed and to investigate how Shenzhen can be shaped
better, attracting and retaining talents and realizing the transformation and upgrading
of the city in the new developmental period.
Homes are the core ingredient of neighborhoods, villages, and towns. Together with
71 Andrew Golland and Ron Blake, ed. Housing Development: Theory, Process and Practice. (London and New York: Routledge, 2004), 4. 72 Peter Hall, Cities in Civilization: culture, Innovation, and Urban Order. (London: Phoenix Giant, 1999). 73 Charles Landry and Franco Bianchini. The Creative City. (London: Demos, 1995).
14
community facilities and local roads, houses make up the “residential landscape”.74
Thus, housing research often comes with a community or neighborhood. The concept
of community was first put forward by Ferdinand Tonnies, who believed community
consisted of people sharing the same values and was characterized by identity,
emotionalism, and traditionalism. 75 After that, there emerged many definitions of
community, mostly around a certain place and people and a certain number of social
relations.
1.2.1 Theory of Neighborhood and Community
The combination of community theory and planning practice led to the implementation
of community construction in real spaces. Clarence Perry created the theory of the
“Neighborhood Unit” 76 in 1929, which was the theoretical model of residential
planning in the 20th century. Although the theory of the Neighborhood Unit is still
relevant in today’s community planning, designers need to apply it flexibly according
to the specific conditions of the project. Mumford suggested that people’s community
awareness could be strengthened through effective spatial planning and design. Public
open spaces would encourage people’s daily contacts and be conducive to the
formation of residents’ regional sentiment, sense of belonging, and community
awareness.77 Nowadays, many developers create community image by building a
community landscape environment and cultural atmosphere to attract buyers. In order
to revitalize the declining urban center in the UK’s cities, David Rudlin and Nicholas
Falk proposed “Sustainable Urban Neighborhood”, 78 which was eco-friendly,
sustainable, convenient, efficient and energetic. Although it was based on the revival
of the British city center, for the community to achieve environmental and social
sustainability, this theory is an important and valuable reference.
Modern China’s community concept originated from Tonnies’s idea and was introduced
by Fei Xiaotong79, but did not make much progress before China’s economic reform.
Only after the commercialization of housing, has the research of community and living
environment gained great attention. Professor Chen Bingzhao and Wu Zhiqiang from
Tongji University presided over the research on the Sustainable Development Model
and Evaluation System of Human Settlements in China in 1999 and published a series
74 Andrew Golland and Ron Blake, ed. Housing Development: Theory, Process and Practice. (London and New York: Routledge, 2004), 5. 75 Ferdinand Tonnies, translated and edited by Charles P. Loomis. Community and Society. (Mineola, N.Y.: Dover Publications, 2002). 76 Clarence Perry was an American planner, sociologist. He was an early promoter of neighborhood community and recreation centers. He became a strong advocate of the Neighborhood unit when he worked in the New York City planning department. In the case of car traffic becoming popular, he suggested that research on the residential area should begin with the family life and its surroundings—the neighborhood, so as to create a comfortable, safe, well-equipped, friendly living environment. Details see Clarence Perry, “The Neighborhood Unit, a Scheme of Arrangement for the Family-life Community”, Regional Plan of N.Y. Regional Survey of N.Y. and Its Environs, Vol7 (1929). 77 Lewis Mumford. The Urban Prospect. (London: Secker & Warburg, 1956). 78 David Rudlin & Nicholas Falk. Building the 21st Century Home: The Sustainable Urban Neighborhood. (Oxford: Architectural Press, 1999). 79 Fei Xiaotong (1910-2005) received his PHD from School of Economics and Political Science, the University of London in 1938, and was selected as the academician of the School in 1982. He was one of the founders of Chinese sociology and anthropology.
15
of articles.80 Yu Qi mainly discussed the construction and morphological changes of
the Shanghai residential area during the transition period from the aspects of design
and spaces.81
1.2.2 Housing Development in China and Shenzhen
China's modern real estate industry originated in the concession areas, which once
flourished in Shanghai, Tianjin, Guangzhou, Xiamen, Hankou, Nanjing and other major
open ports and political power centers. Referring to the Western real estate model and
combining with local conditions, it formed a series of related industries, such as land
transactions, housing development, sale and lease, finance, design, etc.82 At that time,
the houses were designed according to the local conditions and people's needs,
forming different characteristics in different cities, such as western-style houses,
alleyway houses in Shanghai, courtyard houses in Beijing, etc. After 1949, the real
estate industry stopped abruptly as the housing welfare distribution system began to
be implemented. Houses became standardized products, and people lived in the same
houses in different cities. After the economic reform, the commodification of land and
housing have been rediscovered. Chinese people have regained the right to choose
housing. The design of housing was constantly innovating based on people's living
needs. A team of experts from the School of Architecture of Tsinghua University and
Graduate School of Design of Harvard University have analyzed the development in
the types of residential buildings over 160 years in China from 1840 to 2000 by
studying political, economic, social, technological, cultural and other changes.83 It is
currently the most complete residential research with sufficient data covering a long
period in China, which is of great reference value for my project.
Housing has a clear geographical feature, linked closely to climate, living habits, and
the level of economic development. Shenzhen, located in the south of China, is a
typical immigration city with unique population structure and background; thus, it has
its own characteristics in community and housing construction. From the perspective
of the relations between residential product and market, Mao Wei and Wang Xiaomo
discuss the evolution of housing in the market and make a comparative study on the
housing types and the development process of Shenzhen housing construction.84 This
book focuses on the interpretation of housing design and technology in Shenzhen,
providing my research many sources on housing projects in Shenzhen.
The China Merchants Real Estate, born and developed in Shekou, explored and
summarized its concept of comprehensive community development in the
80 The subject lasted for four years, conducting empirical research of living environment in the eastern developed areas (Shanghai) and central and western regions (Henan, Yunnan and Sichuan province). 81 Qi Yu. Production and Morphogenetic evolution of Urban Residential Space in Shanghai during the Transitional Period. (Nanjing: Southeast University Press, 2011). 82 Jin Zhao. History of Urban Real Estate Industry in China (1840-1949) (Tianjin: Nankai University Press, 1994). 83 Junhua Lv, Peter G. Rowe and Jie Zhang, edited. Modern Urban Housing in China 1840-2000. (Beijing: Tsinghua University Press, 2002). 84 Wei Mao and Xiaomo Wang. Revolution of Living. (Beijing: Haichao Press, 2000).
16
development of Shekou Industry Park, which is similar to the theory of New Urbanism
in the United States. China Merchants’ comprehensive community is a multi-functional
development, focusing on human nature and comfort, with the features of cultural
symbiosis, scale economies, and social coordination.85 However, such a community
model was unique in the early stage of Shenzhen. Although the China Merchants
copied this model to other cities in China and countries along the One Belt One Road,86
this model could only be developed in a relatively large scale and independent area.
1.2.3 Multi-disciplinary Approach on Community and Housing Research
Many scholars have realized that people’s daily residence is affected by social,
economic, and cultural factors. Therefore, a multi-disciplinary approach to community
and housing research has been carried out. Lawrence studies what made a house a
home in a smaller dimension. He suggests the design, the meaning, and the use of
home interiors are intimately related to a range of cultural, sociodemographic, and
psychological dimensions.87 Wang Ying and Yang Guiqing start from the sociological
view to study the problems of community stratification and segregation, changes in
family needs, neighborhood relationship reconstruction, and aging issues in the
Shanghai community during this period.88 These analyses focus on how community
and people’s lives are affected by economic development and changes in policy
systems, etc., without considering, in turn, how human residential activities and habits
influence the community and, further on, real estate developers and related
government policies, which is an area that this thesis is about to investigate.
The author agrees with Ron Blake and Andrew Golland’s suggestion that housing
development is a multi-faceted process in which vertically all aspects of everyday life
have some input.89 When Lu Hanchao studied everyday life of early 20th century
Shanghai, he incorporated much material about housing and residence. He described
the different types of dwelling in Shanghai at that time, including western-style houses,
alleyway houses, and shanties.90 Then he focused on how shantytowns and alleyway
houses were formed, how the spaces and neighborhoods were laid out, how they
changed over time, and how they affected people's daily life. Through the study of the
daily life of “little people”, Lu discovered the persistence of the tradition out of the
modernity and westernization of Shanghai. Meanwhile, he pointed out pragmatism was
the dominant way of ordinary people’s thinking, which incorporated “whatever was
appealing and available to make life better”.91 Everydayness is usually associated with
85 Zheng Hu, Shaobin Lin and Xinzhi Lu. The China Merchants and the China’s Real Estate Industry. (Beijing: Zhonghua Book Company, 2010). 86 Jian Zhong. Dream Workshop of Reform and Opening-up: 40 Years of Development and Construction of China Merchants Shekou Industrial Park 1978-2018. (Beijing: Science Press, 2018). 513-517. 87 Roderick J. Lawrence. What Makes a House a Home? Environment and Behavior, Vol. 19 No. 2, March 1987. 154-155. 88 Ying Wang and Guiqing Yang. Urban Community Construction in the Period of Social Transformation. (Beijing: China Architecture & Building Press, 2009). 89 Andrew Golland and Ron Blake, ed. Housing Development: Theory, Process and Practice. (London and New York: Routledge, 2004), 4. 90 Hanchao Lu. Beyond the Neon Lights: Everyday Shanghai in the Early Twentieth Century. (Berkley Los Angeles London: University of California Press, 1999), 110. 91 Ibid., 295, 296.
17
pragmatism. Everyday Modernity in China sees “everyday as a productive seam from
which to address issues of modernity and identity, particularly in a non-Western
context”. 92 Among the volume, Hanchao Lu’s essay discusses ordinary people’s
culture by focusing on how Shanghai residents in the late Qing dynasty responded to
new technologies related to their basic necessities of daily life.93 Inspired by the
approach of everyday life, the author has found a way to study residential development
and other urban facilities from the everyday life of ordinary people.
1.2.4 Perspectives of Everyday Life
This thesis draws on theories of everyday life to understand people’s daily life related
to dwelling. By understanding people's demands and behaviors in daily life, it is to
investigate how people can realize their respective interests to some extent by
choosing, transforming and using residential space, community public space and
facilities. It is exactly as Ben Highmore argues, that “everyday life in modernity is a
dynamic process: making the unfamiliar familiar; getting accustomed to the disruption
of custom; struggling to incorporate the new; adjusting to different ways of living. In
attempting to make everyday vivid, phantasmagoric representation is replaced by
practical, poetic and critical operations”.94 Especially for the long-term use of housing,
people need to constantly adjust their behavior and transform home spaces to find a
comfortable balance based on new circumstances, such as changes in family
members' structure, and purchase of new appliances and furniture.
Michel de Certeau conducted more detailed observation and study of daily life in
residential space and the neighborhood. He proposed that society was composed of
some certain practices, thus, to understand the impact from ordinary people in the
construction of social reality and social development, an understanding of the practice
of everyday life of ordinary people in the society was of paramount importance. The
spatial practice was the core theme of Certeau’s theory in the practice of everyday life.
In a neighborhood, people’s access and use of public space, the way of communication,
the home layout and cooking habits, reveal their consumption and behavioral tactics.
Through these practices, in the spaces provided by the ruling elites, ordinary people
have added their own goals and aspirations under the delicate balance of maintaining
all of the interests, so that the spaces containing the symbols and institutions become
suitable for the individual practice and can benefit the individual interests as well.
This research aims to set Certeau’s theory of everyday life into Shenzhen's urban
historical and spatial context to test the spatial composition and daily use of
Shenzhen's housing and community. With the development of Shenzhen city, not only
the population was increasing, but also the population structure was changing.
92 Madeleine Yue Dong and Joshua Goldstein, ed. Everyday Modernity in China. (Seattle: University of Washington Press, 2006). 93 Hanchao Lu. “Out of Ordinary: Implications of Material Culture and Daily Life in China”, Everyday Modernity in China, edited by Madeleine Yue Dong and Joshua Goldstein, ed. (Seattle: University of Washington Press, 2006), 22-51. 94 Ben Highmore. Everyday Life and Cultural Theory: An Introduction. (London and New York: Routledge, 2002), 2,16.
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Therefore, people demanded different housing and living facilities in different stages.
This research focuses on four main factors which relate to ordinary people’s everyday
life and affect their housing choice, that is house and community, transportation,
children’s education, and age care. It explores how ordinary people’s everyday life and
decisions affect the decision-making of developers in housing development and
influence the government in the urban function layout, traffic management, school
locations, and so on.
1.3 Sources and Methods
As this is a contemporary historical study, the sources of data are different from those
of modern or ancient studies, which mainly focus on archives. This thesis only used
part of the archives of the China Merchants. Most of the government policies and
statistics were collected from government websites and Yearbook publications. There
is no doubt that the Internet as a means of information searching and collecting has
proliferated since the 1990s. With the popularity of the Internet and the implementation
of the paperless office, most government departments and enterprises have built up
their own official websites where news and relevant information are published.
Some people questioned the accuracy of the Chinese government's data, so the
author compared and confirmed it through data from other agencies. Taking house
prices as an example, the official prices were compared with the data of several major
real estate intermediaries. For the average house prices of the city, the government
data was used, while for the prices in specific areas, the author preferred to use data
of real estate intermediaries, because, in a small range, the intermediary data was
more real-time and accurate. For the population data, the statistical data only counted
the population with household registration and residence registration. Some of the
floating population in Shenzhen were unwilling to register for residence, so the
population in the statistical data was not the total resident population in Shenzhen. The
concept of managing population was put forward in Shenzhen Master Planning 2006.
According to a government official the author interviewed, it was very difficult to
calculate the managing population. They tried different methods and thought it was
relatively accurate to use water consumption to estimate the resident population.
Because this was only an estimate, the data would not be published on the official
website, but only appeared in some leaders' speeches. In view of these uncertainties,
this thesis used the population data from the statistical yearbook. As long as the
statistical caliber was the same every year, the trend of population change was
relatively accurate.
Mapping and Visual material are essential for this research. Mapping sources,
including urban planning layout and building design drawings, city maps and GIS maps,
can clearly express the city’s functional layout, road and traffic organization, and open
space system, etc. For specific projects, design drawings can help to understand the
design concept, floor plan layout, relation between buildings and environment, and so
on. Visual materials include photos, pictures, advertising, housing brochures which can
19
be collected by myself, provided by interviewees, posted in newspapers and internet,
and collected from sales offices of real estate companies. Visual materials directly
record buildings, spaces, and people's living conditions.
To understand people’s everyday life and the condition of houses and communities,
oral interview and field research were conducted in Shenzhen. People have fresh
memories about their lives and the development and transformation of Shenzhen city
in the past four decades. Shenzhen’s residential buildings and urban spaces of each
period are still being used. Through the interviews and field research, people’s
everyday life can be restored to a certain extent.
1.4 Research Framework and Thesis Outline
Shenzhen is an emerging city in China’s economic reform with uncommonly rapid
development. Its urban research is lagging behind its development. Multi-disciplinary
housing study in China is relatively weak, while the attention to ordinary people’s
housing and everyday life is relatively insufficient. It is necessary to study Shenzhen's
housing development from different perspectives and frameworks, and further to
provide experience and lessons for the development of other cities in China.
In this research, the author suggests that housing development is a process of
competition and cooperation among the government, the developer, and the buyer.
This thesis puts three groups in the housing system together in a framework to conduct
the research systematically in multiple perspectives by combining the theory of
planning and social science. It aims to fill the gap and provide a new direction for
housing research in China’s contemporary cities.
In the commercial housing system (see diagram 1.3), the government stations on the
upper level, controlling the land supply and financial resources, formulating housing
policies to encourage or restrict the construction and purchase, doing urban planning
and infrastructure construction. The developer stations between the government and
the buyer. Developers need to obtain land use rights from the government and work
out a developmental plan to get government approval. They also need to pursue
financial support from banks. By doing projects successfully, developers contribute to
increasing local employment, tax revenue, and adding values in the region. Thus, they
get the discourse power to influence the urban development. As to the home buyer,
developers study their needs and lifestyle and build up quality housing and community,
to create well-designed living environment and lifestyle for the future dwellers, not only
to meet, but also to design and affect dwellers’ aspirations. Standing at the lower level,
the buyers express their opinions by using the right of choice. They usually consider
the price, location, traffic conditions, service facilities, community quality, also concern
about the floor plan layout, orientation, and views. Although the choice of the buyer is
within the range provided by the government and the developer, their choice can still
make the developer adjust the development strategy and improve the design and
construction quality and also affect the government to adjust the urban planning and
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the layout of public facilities. After moving and settling down in the new home, buyers
can affect the formation of the living environment and community-style through their
practice of everyday life, and further to affect the appearance of the urban region.
In the affordable housing system, it is the government’s responsibility to provide
affordable housing. Because of insufficient funds, the government develops attractive
policies and measures to invite developers’ investment in building affordable housing.
And the government works out the standards and procedures for the application of
affordable housing so as to ensure the coverage and principle of fairness.
Diagram 1.3 Commercial housing system
Based on this housing system model, this thesis is going to examine the housing
development in Shenzhen from 1979 to 2018 and accomplish the following four
objectives. First of all, it will explore how the government controlled urban housing
development. The second is to explore how developers responded to government
policies and satisfied buyers’ requirements in housing. Then, to demonstrate how
ordinary people chose their housing and affected housing development in their
everyday life. And finally, it is to figure out how the government, the developer, and the
buyer formed a joint effort to promote urban development.
The city is a complex system, and the housing problem is a long-term problem in each
region. The housing development is a systematic project, involving multiple interests
and many urban subsystems. Therefore, it is difficult to be solved singly. The purpose
of this thesis is not to propose a solution, but to sort out what / why has been done in
a more comprehensive way from different perspectives, and identify the key factors
which should be the main foci in the future housing development.
Apart from the introduction and the conclusion, the main body of this thesis is divided
into four chapters, which is based on the three main competitors in the housing
development in China.
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Chapter two is on the role of government. Shenzhen became a city from a border
county because of the national policy of economic reforms; thus, the role of
government was very important in the development of Shenzhen. The government
constantly explored urban construction and management in the system that never
appeared in Chinese history. This chapter focuses on three aspects of the
government’s role in housing development, including land supply, housing policies, and
urban planning. It also explores the different roles of the central government and the
local government.
The real estate industry emerged in the commercialization of housing and became a
pillar industry in China. Real estate companies also emerged as the times required
and achieved remarkable development. Chapter three is on the role of developers.
Taking Vanke as an example, it examines how real estate developers responded to the
government’s variety of real estate control policies and promoted the housing
development in Shenzhen. It also explores how developers satisfied people’s ever-
changing requirements for housing and community environment, changed people’s
knowledge and demands on housing, and unnoticeably affected people’s everyday
lives. It further discusses how real estate companies become resource integrators to
form a joint effort to promote urban development in China.
Chapters four and five are on the main factors affecting Shenzhen people’s everyday
life, which further affect people’s choice of housing. Shenzhen is an immigrant city with
a special demographic structure and population background. Shenzhen people had
very different housing choices in different stages. Through interviews and
questionnaires, people’s standards of housing choice, the way people used community
space and facilities, and their interaction with developers and the government are
explored in these two chapters. Chapter four focuses on the evolution of housing and
community and transportation. The quality of houses and communities and the
convenience of transportation have always been important criteria for people to choose
housing. Chapter five is on education and pensions, which are growing concerns of
people in their housing choices.
The final chapter draws conclusions based on all the findings of this thesis. Besides
the summaries of what/why happened in Shenzhen’s housing development, it points
out the way in which the competition and cooperation of the government, developer
and buyer is the driving force of Shenzhen’s housing development, and exercises a
profound impact on urban development. It also attempts to figure out the main factor
in the competition and cooperation and provides suggestions for building an affordable
and livable city.
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Chapter two: The Role of Government
2.1 Introduction
At the opening meeting of the 19th National People’s Congress (NPC) of the Chinese
Communist Party (CCP) on October 18, 2017, Xi Jinping (习近平 ), the General
Secretary of CCP, stated his position on housing as follows: “A house is for living, not
for speculation”95 (房子只住不炒), which kicked off the new round of China’s housing
system reform. After this, local governments launched corresponding housing reform
measures in combination with their actual conditions.96 This process from the decision
of the central government to the rapid follow-up and implementation by local
governments demonstrates the route of introduction and implementation of China’s
policies.
Although China is a developmental state and the central state has strong forces on
urbanization and the development of cities in the economic reform, local governments
still have opportunities to work out their own regulations. Moreover, Urban governance
was affected by various external factors in different stages. Under the overall control
of the central government, the struggle between local governments and capital and
people accelerated or slowed down the process of urban development, making cities
present different characteristics.
In terms of the urban housing development, the government stations on a dominant
position, controlling the quantity and progress of land supply, formulating regulation
and policies of housing reform, controlling financial resources, encouraging/restricting
construction and purchase, planning the residential layout and specifying the
developmental condition for each block through the urban master planning and
detailed planning, and being responsible for the construction of infrastructure and
public service facilities. Regarding the affordable housing, it is the government’s
responsibility to provide affordable housing. However, because of insufficient funding,
the provision of affordable housing is far behind the demand. Thus, the government
95 This is the direction of the development of property market defined clearly in the Central Economic Work Meeting in December 2016. http://finance.people.com.cn/n1/2016/1216/c1004-28956355.html (access on 4/9/2018) At the opening meeting of the 19th NPC of the CCP in October 2017, Xi Jinping affirmed and emphasized this positioning, and pointed out “we should improve people’s livelihood, strengthen and innovate social governance, strengthen the construction of social security system. A multi-level social security system will be built, covering the whole people, coordinating urban and rural areas, having clear rights and responsibilities, and ensuring moderate and sustainable development. We should adhere to the orientation that a house is for living, not for speculation and accelerate the establishment of a housing system, so that people can have a certain house to live.” http://cpc.people.com.cn/19th/GB/414745/414754/ (access on 4/9/2018) 96 For example, in the work report of Beijing Municipal Government issued on 24 January 2018, it was put forward that the working focus in 2018 is to restrict housing price and improve the security housing system, including renting, sharing property rights, leasing collective land for housing, encouraging industrial park to build worker’s dormitories. http://cn.chinagate.cn/reports/2018-03/02/content_50637906.htm (access on 10/9/2018) Shanghai has issued a series of major housing reform policy adjustments in 2017. In 2018, Shanghai further strengthened the real estate market regulation and increase the construction and supply of affordable housing (including rental housing). Shanghai plans to invest 7 billion yuan in the construction of affordable housing and start construction of 42,000 sets. In the first half of the year, there has started construction of 15,000 affordable houses. http://m.sh.bendibao.com/mip/195407.html (access on 10/9/2018)
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needs to develop some attractive policies and measures to invite developers’
investment and social capital. Moreover, the government works out the aplication
standards and procedures to ensure the coverage and principle of fairness.
The housing development of Shenzhen has gone through different stages in the
economic reform. Shekou Industrial Park launched the first housing commercialization
scheme in 1984, and in 1988, SMPG promulgated the “Housing Reform Plan of SSEZ”
and officially began the first reform of the housing system. In 2018, SMPG started the
second housing reform by focusing more on the affordable housing for talents and low-
income population. This chapter focuses on the role of the government in the
developmental path of Shenzhen in the past 40 years. It consists of three main parts,
namely, land supply, housing policy, and urban planning, to review how the government
guides the urban housing development, influencing the business strategy of the
developer and affecting the everyday life of Shenzhen people. At the same time, the
government constantly adjusts the strategy and policies upon being influenced by
external factors. It is to clarify the role of government and the government-business
relations and to reveal under the socialist market economy system, how a strong
socialist government carries out urban development by making use of the needs of
capital expansion while restricting and balancing this expansion.
2.2 Land Supply
Back to the beginning of reform and opening up, the opportunity for the establishment
and development of SSEZ lay first in its geographic relationship with Hong Kong, which
attracted capital with sufficient land supply, low land prices and the low cost of the labor
force. Hong Kong, a river away from Shenzhen, has become a financial and trade
center in the Far East at that moment after the great development in the 1960s and
1970s. The price of land in the city was as high as 15,000 HK dollars per square foot,
and it reached 500 HK dollars in the suburbs. Lack of labor and high wages were also
big issues.97 The Hong Kong’s capital surplus was in need of outlets for development.
The China Merchants eventually chose Shekou to develop its industrial park just
because “it could not afford 5,000 square meters of land in Hong Kong even if it sold
out all the property of the Hong Kong China Merchants.”98 Therefore, the low price of
land and abundant and inexpensive labor in SSEZ were in line with the demands of
market development, especially for Hong Kong’s capital. Because of its geographic
and kinship relationships with the mainland, unlike those who hold the wait-and-see
attitude in Europe, America, Japan, and other developed countries, Hong Kong
capitalists were the most sensitive and responsive to the establishment of SSEZ. On
November 1, 1978, Yuan Geng99 (袁庚), the new head of Hong Kong China Merchants,
97 See Shixiu Zhu, ed. History of the China Merchants (modern part). (Beijing: People’s Communications Press, 1995),180. 98 Qiao Tu. Yuan Geng Biography: The Reform Scene 1978-1984. (Beijing: Writers Publishing House, 2008),14. 99 Yuan Geng (23/04/1917-31/01/2016). He was the leader of the East River Column in the second Sino-Japanese War. He began to lead the Hong Kong China Merchants in 1978 and set up the Shekou Industrial Park. Under his leadership, the Shekou Port and the Chiwan Port were built. Later, he founded the China Merchants Bank and the Ping An Insurance Group. He was the key figure in creating the
24
made his first appearance at the Fulihua Hotel in Hong Kong, which attracted the
attention of all circles in Hong Kong. More than 200 guests were celebrities, including
Huo Yingdong (霍英东), Bao Yugang (包玉刚) and Dong Haoyun (董浩云). The major
newspapers in Hong Kong reported the event in the next day.100
The government’s power to control the urban development, first of all, lies in the land
supply which determines spatial direction, project location, and development cost.
According to the Land Management Art of China, land in China includes urban land
owned by the state and rural land owned by collectives. The land for urban
development is all state-owned land. Governments at all levels formulate the plan for
land supply in accordance with land planning, urban planning, and the superior supply
plan. Each city formulates its long-term land use plan and annual plan, and launches
land for construction accordingly. Before the economic reform, the land in China was
distributed through government allocation (政府划拨), which meant land users gained
the right of land use from the local government. It was free of charge, but without an
explicit tenure of use. The land use free of charge can only reflect its characteristics
as a resource. Although the central government had control over land use, the local
government actually obtained the power to fully control the industrial process and
investment scale of the construction according to the local circumstances. In particular,
as the test of economic reform, SSEZ gained greater power to investigate new modes.
2.2.1 compensated-use of land and land auction
In 1980, the early stage of SSEZ, the first development project, Luohu Commercial
District (see diagram 2.1) had to do filling by bulldozing two small hills because of its
low-lying terrain. It also needed to conduct basic construction such as water supply,
power supply, road and land leveling (三通一平). The project only gained funding of 30
million yuan from state loan. Thus, Luo Jinxing (骆锦星), the deputy commander of the
project, put forward a scheme of land leasing when facing financial difficulties. With the
support from Wu Nansheng101 (吴南生), the Secretary of Shenzhen Municipal Party
Committee (SMPC), the land leasing was put into practice after re-designating the land
as compensated-use. As suggested by Harvey, capital tended to find new places with
lower cost for reproduction, thus, the news that Shenzhen’s land could be rented was
a great attraction for Hong Kong businesspeople with keen instincts. Hong Kong
Dexing (德兴) was the first company to negotiate and sign a leasing contract with
Shenzhen. It obtained a piece of land of 5,000 square meters in a core location of
Luohu District and constructed Dexing Building. In only one year, Luohu District
second period of growth of the China Merchants and one of the most important pioneers of China’s reform and opening up. He was awarded the Gold Bauhinia Star by the Hong Kong SAR in 2003. 100 Tu Qiao. Yuan Geng Biography: The Reform Scene 1978-1984. (Beijing: Writers Publishing House, 2008), 24-28. 101 Wu Nansheng (8/1922~10/4/2018) was appointed Secretary of Guangdong Provincial Committee in March 1978, Chairman of Guangdong Special Economic Zone Management committee from May 1980 to July 1983. He organized three SEZs (Shenzhen, Zhuhai, Shantou) in Guangdong Province, won the development autonomy for the SEZs, and insisted on introducing market economy, which was the main reason for the success of the SEZs. He was in charge of Shenzhen as the Secretary of the SMPC for a short period, from June 1980 to February 1983. He worked very hard to develop the Luohu Commercial Center and clear many obstacles for the development of SSEZ.
25
collected 213.6 million HK dollars by leasing land of 4.54 hectares.102 It was the first
time in the PRC that land presented its capital value. Compensated-use of land is a
common thing now, but it was a shocking move at that time. Many reformers criticized
it as a traitorous action.103 Although acquiesced to by the central government, the
SMPG suffered tremendous political risks and pressure of public opinion.
In its early stage, Shenzhen gathered its developmental funds through compensated-
use of land. Although implementing the compensated-use, the right of land use was
still allocated by the government, and the land fee was relatively low. The power of
land management was highly concentrated into the hands of a few government officials.
It was not hard to imagine that to gain access to land, developers had to establish
some relationships (关系) with officials, which often involved bribery and corruption.
Developers who had no relationship to get land inevitably felt unfairly treated, while
even the companies who had obtained the land felt insecure, because the land had no
clear tenure of use and the government had the right to take back the land at any time.
Thus, they dared not put massive investment into the land quickly. Capital’s strong
demand for a rapid expansion called for a more equitable and reasonable method of
land leasing in line with the law of market economy. On December 1, 1987, the first
land auction in China was held in Shenzhen Hall, in which 44 enterprises took part.
The SSEZ Real Estate Company finally offered 5.25 million yuan to acquire the land
with an area of 8,588.25 square meters and a 50-year tenure104. The auction finally
brought to light the potential capital value of land in a market economy and directly led
to the nationwide promotion of the principle that “the right of land use can be
transferred by the law.”105 This auction was also the starting point of land reform in
SSEZ. Since then, government allocation has been gradually replaced in the transfer
of the right of land use by bidding, auction, and listing. Land transfer, coupling with the
demand for capital expansion, has promoted the rapid development of Shenzhen in
the next thirty years.
2.2.2 Unified Land Conversion
Before establishing SSEZ, Bao’an County was mainly an agricultural county, where
the majority of its area was collective land. To obtain land and space for development,
Shenzhen carried out unified land conversion twice. The first time was when SMPG
promulgated the “Temporary Provisions on Rural Urbanization in SSEZ” on June 18,
1992. The villagers were transformed into citizens while the rural collective land was
transformed into state-owned land. By doing so, the SSEZ enjoyed a tremendous
development in the following ten years. Although there was the Second Line to
separate the inside and outside SEZ, it could not stop the rapid development in the
outside SEZ as capital tended to flow to lower cost areas. It was precisely that the
102 See Writing Group of Propaganda Department of Shenzhen Municipal Committee. Riddle of Sphinx in Shenzhen. (Shenzhen: Haitian Press, 1991),39-43. 103 Chen Hong. Civil Observation of Major Decisions and Events in Shenzhen 1979-2000. (Wuhan: Changjiang Literature & Art Publishing House, 2006), 64. 104 Ibid., 161-163. 105 ‘Constitution Amendment of People’s Republic of China 1998’. Clause2.
26
existence of Second Line caused differences in the administrative management, land
policy, public resources input, etc. between inside and outside areas, resulting in the
dual development and the gap growing. Various reasons and requirements, such as
the lack of development space inside the SEZ, the disorderly development outside the
Second Line, and the need to integrate the land and spaces, have led to the
urbanization of the whole Shenzhen city. On October 30, 2003, the SMPG issued the
“Notice on Accelerating the Urbanization Process of Bao’an District and Longgang
District” (SMPG [2003] No.192). The collective land in the whole Shenzhen city was
converted into state-owned land, and 270,000 peasants were all converted into
residents with urban household registration. Shenzhen became the only city without
rural areas and farmers in China.
Since the late 1990s, many cities in China have been criticized for expropriating rural
land for development, critics arguing that the government forcibly deprived peasants
of land at low prices and transferred the benefits to a small number of beneficiaries
(foreign investors or developers).106 This unified land conversion in Shenzhen was the
first and the only time in the country and this practice was different from that of a single
project. Although the land ownership had been fully converted to state-owned, the
premise was to ensure the original land rights and interests of villagers and village
committees, that was, 100 square meters of residential land per household, 100 square
meters of land for public buildings per villager, and 200 square meters of land for public
facilities per household.107 Moreover, the unified conversion in Shenzhen was unlike
the situation in many other cities where peasants lost the land for their lives and could
not survive after running out of the compensation. Although the peasants in Shenzhen
were peasants in their status, they have long been divorced from agricultural
production and turned to work in the industry or service sector. Most of them built
houses on their homestead to become rent-collectors and have been living a
prosperous life. The conversion did not change their lives greatly but provided them
with social security as urban residents such as pension, medical care, education and
so on. The unified conversion did not cause social unrest, but it led to many illegal land
occupations and construction in disregard of policies and regulations. In a short period,
a large number of buildings were built, which did not conform to fire safety standards
and were of poor construction quality. Because of the small interval between buildings,
these houses were called ‘handshake building’ and ‘kissing building’. (see photo 2.1)
However, the government did not take strong measures to prohibit and demolish these
villagers’ unauthorized construction, instead, it acquiesced to the existence of these
illegal buildings afterward. It was assumed that the government was worried about
creating a mass incident and adopted a peaceful approach. Meanwhile, villagers bet
on the government not punishing collective offenders and chose to take risks for the
great benefits. The unified conversion effectively curbed the spread of disorderly
106 David Harvey. A Brief History of Neoliberalism. (Oxford: Oxford University Press, 2005),146. 107 The first right of land use goes to the villagers directly, and the latter two rights of land use belong to the village committees. For details, see “Interim Measures for Planning and Land Management of Bao’an and Longgang District of Shenzhen City” (SMPG [1993] No.283) and “Urbanization Land Management Measures of Bao’an and Longgang District of Shenzhen City” (SMPG [2004] No.102).
27
construction conducted by villagers and village committees and provided a guarantee
for the overall development of the city, which showed the foresight, courage and
strength of the SMPG. However, the government was defeated in the competition with
villagers in illegal construction, which accelerated the formation of urban villages and
expanded their scales as well. Government’s compromise not only increased
difficulties in urban renewal at this stage but also made citizens learn how to resist the
government.
Diagram 2.1: Location of the Luohu Commercial District
Source: diagram drew based on the Shenzhen map (1982)
Photo 2.1: poor condition of buildings in urban village of Shenzhen
28
Source: Photo 1-3 are photos of Xiangdong Wei (向东围), Futian District, provided by Xiaohai, an official
of Nanyuan subdistrict office. Photos were taken when they carried out a surprise inspection on the urban
village, 10/4/2017. Photo 4-5 are photos of Wangtang (旺塘), Longgang District. Photos were taken by
the author in field research, 2/1/2018.
2.2.3 Land Finance
Land as a key resource provided space for urban development, while land as a capital
source enabled the government to obtain developmental funds. In fact, the rapid
urbanization of many cities in China was dependent on land for gathering
developmental capital. This was known as “land finance”, which has always been
criticized but still intensified. Many blamed the land finance on the financial system
reform that was implemented in 1994, arguing that the tax-distribution system has
strengthened central finance and weakened local finance. The system put the income
of land and real estate, which only accounted for a very low proportion of fiscal revenue
at that time, into the local government income and it was even not included in the
budget. Since July 1, 2002, when the “Regulations on Grant the Right to Use State-
owned Land by Biding, Auction and Listing” were implemented, land and housing
prices were pushed up rapidly, which opened up an important financial resource for
local governments. Land grant fees have gradually become a pillar of the local fiscal
revenue, which, in some cities, even exceeded 50% of the fiscal revenue. However,
Zhu Rongji (朱镕基), a former Premier of the State Council, firmly denied that the tax-
distribution system was the source of land finance at a symposium with teachers and
students of Tsinghua University in 2011. He used the central and local fiscal data of
2010 to argue that attacking the tax-distribution system to hollow out the local finances
was ignorant. The national revenue was 83.3 trillion yuan in 2010, in which the local
direct revenue took 40.0 trillion, and the tax refund to the local level from central
government was 33.0 trillion. He believed that local finance was not short of money
29
and the origin of land finance lay in the housing reform policy.108
No matter what the source of land finance was, that many local governments have
been kidnapped by the land finance was a matter of fact. Land prices in auctions were
getting higher and higher, which were transferred to the housing prices that were paid
by buyers eventually. High housing prices have caused resentment in citizens of some
cities, leading to the flight of some enterprises and talents, which further affected urban
development. The central government has decided to change this situation. Since the
18th CCP National Congress, land reform policies have been issued frequently. One of
the core countermeasures was to make rural non-agricultural land enter the market
directly through market-oriented means instead of land expropriation by the local
government. However, these reforms will seriously affect local finance and damage the
interests of some groups. Although under the leadership of the strong central
government, there were always opportunities for local governments to exercise their
influences. Therefore, the competition between the central state, the local state and
interest groups was extremely fierce and the reform was difficult to promote.
Although the proportion of land finance in Shenzhen was relatively low when
comparing to other cities, the development of Shenzhen was, to some extent, an
achievement in the land reform. However, after 40 years’ rapid development, the
problem of insufficient space highlighted the fact that the land issue has become the
bottleneck of Shenzhen’s further development. In February 2012, the Ministry of Land
and Resources109 and the Guangdong Provincial Government jointly approved the
“Overall Plan of Land Management System Reform in Shenzhen (2012-2020)”, which
marked the start of Shenzhen’s second land reform. Shenzhen has entered the stage
of stock land development110 from the incremental land development, with urban
renewal and land consolidation 111 as the two major land development modes.
However, the development of urban renewal projects was more difficult with a longer
period and greater investment. Although there were ups and downs, generally, 1999-
2012 was the period with large numbers and area of land transactions. The supply of
residential land decreased year by year accordingly since 2012. (see table 2.1 and
figure 2.1) Thus, residential land launched for auction was competed for keenly by
developers, resulting in much higher land prices. The cost of time and fund from
developers was ultimately reflected in the high housing price in Shenzhen. The figure
2.2 shows that the average selling price of commercial housing in 2017 was 54,584
yuan, which was 7.6 times that of 7,149 yuan in 2005. It is noteworthy that these prices
108 See the video of Zhu Rongji’s Tsinghua speech (2011). http://business.sohu.com/20110526/n308583800.shtml (access on 12/9/2019). 109 The Ministry of Land and Resources was revoked in the institutional reform of the State Council in 2018 and merged into the Ministry of Natural Resources. 110 Stock land development refers to the clearance, integration and secondary development of unused land and land with insufficient, unreasonable and low output within the existing urban land use. 111 Land consolidation refers to the consolidation of scattered land, the land clearance and the pre-development of land through means of withdrawal rights of land use, housing acquisition and demolition, land acquisition, treatment of historical problem of land, and reclamation land. Land consolidation is dominated by the government and mainly provides land for industrial upgrading and large-scale public services facilities. Shenzhen Land Consolidation Bureau was established in 2012.
30
were the average prices of the city. In some areas of Futian District and Nanshan
District, such as Overseas Chinese Town, Xiangmi Lake, Houhai, Shekou and school
district around key schools, the housing prices have exceeded 100,000 yuan per
square meter. When Shenzhen was trapped in a dilemma of insufficient development
space, high housing prices and the outflow of enterprises and talents, the Guangdong-
Hong Kong-Macao Greater Bay Area112 (GBA) was proposed and planned in 2017,
which provided Shenzhen an opportunity to break through the bottleneck and mitigate
the situation.
Table 2.1: numbers of land transactions of residential land (1987-2017)
year
numbers of land
transactions for residential
land
area of land
transactions for
residential land (m2)
2017 2 57300.0
2016 4 239700.0
2015 4 132970.7
2014 1 46646.8
2013 3 132671.2
2012 7 414979.9
2011 11 1283640.1
2010 7 605442.8
2009 9 565363.2
2008 9 958228.7
2007 15 452456.7
2006 20 996007.0
2005 14 709683.9
2004 31 1784606.2
2003 34 2147753.7
2002 26 940069.8
2001 20 1245134.0
2000 11 422921.9
1999 4 323512.1
1998 2 45818.4
1996 2 26981.2
1993 2 37999.0
1992 5 46034.0
1991 12 86038.0
112 The Guangdong-Hong Kong-Macao Greater Bay Area is an urban agglomeration including 11 cities, Hong Kong, Macao, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Zhaoqing, Jiangmen, Huizhou. Its area is 56000 square kilometers with population of 67.74 million in 2016. The GDP of 2017 was nearly US$1.4 trillion. The cities in the GBA conduct in-depth cooperation in economic, cultural and technological fields. Details see Overview of Guangdong-Hong Kong-Macao Bay Area, Research Group of Hong Kong Legislative Council Secretariat, file#FS03/17-18. http://www.legco.gov.hk/research-publications/chinese/1718fs03-overview-of-guangdong-hong-kong-macao-bay-area-20180223-c.pdf (access on 12/9/2018)
31
1990 4 104395.0
1989 2 14778.0
1988 6 51924.0
1987 2 54943.0
Source: https://d.qianzhan.com/ (access on 16/9/2018)
Figure 2.1: area of land transactions of residential land (m2) (1987-2017)
Notes: line chart based on the number of table 2.1.
Figure 2.2: average sales price of commercial housing in Shenzhen (2005-2017)
(yuan/m2)
Source: bar chart based on the data https://d.qianzhan.com/ (access on 16/9/2018)
2.3 Housing Policies
Throughout the economic reform in Shenzhen, apart from the land supply for housing
construction, the government has intervened directly in the housing industry by
0.0
500000.0
1000000.0
1500000.0
2000000.0
2500000.0
1987 1989 1991 1993 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
area of land transactions for residential land
7149 9111
140901288915586
2016818913187732178823559
33006
5442554584
0
10000
20000
30000
40000
50000
60000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
average sales price of commercial housing
32
promulgating housing policies and regulations, through which the government has
established the commodity nature of housing and pushed it to market operation.
Meanwhile, the government threw away the financial burden of housing distribution
and gained numerous fiscal revenues through the provision of land and real estate
taxes. Since the commodity nature of housing was released, the housing development
became a new attraction of a large amount of capital investment and later became a
pillar industry, which gave birth to such giant real estate enterprises as Vanke Group,
The China Merchants Real Estate, and Wanda Group. Because of the
commercialization of housing, housing quality and living environment have been
greatly improved, meanwhile, buying houses has become an important means of
private consumption and investment, which together had a profound impact on the
everyday life of contemporary Chinese.
2.3.1 Welfare Housing System and Housing Problem in Early Shenzhen
Before 1978, China’s cities implemented the national housing system of “unified
construction, distribution and maintenance”, that was, the government and units (单
位)113 were responsible for raising funds and construction, and workers got welfare
houses by allocation for dwelling indefinitely with a very low rent, meanwhile, units
were responsible for the housing management and maintenance. As a result, the state
and the units bear a great financial burden. In addition, the lack of funds made housing
construction very slow and the maintenance very weak, which resulted in people’s per
capita living space becoming smaller and the housing quality lower.114 Because of the
low rent, getting a flat was not related to one’s income, but to the unit one served, the
position, and social relations. Leading cadres could be first assigned a house, normally
good and big. Those who could build a relationship with the cadres who were in charge
of the housing allocation could also be in the first place assigned a flat. Therefore,
people had to exploit some connections to get a good job in a good unit. The housing
distribution welfare system was extremely easy to breed corruption and unfairness,
which led to great resentment among ordinary people and became a factor in social
instability. Moreover, the binding of houses and units led to people’s reluctance to
change their jobs easily, and reduced the mobility of talent. Many people worked in the
same job in the same unit, while living in the same house in their whole lives, which
depressed the initiative and creativity of work and life. As a result, the whole city was
dull, depressed and losing its vitality.
The housing problem in Shenzhen’s early stage was more prominent than in other
cities. When Shenzhen city was founded in 1979, the population was 314,100,
113 Units (dan wei) refer to the institutions in which people work. According to the index of the National Bureau of Statistics, units mean economic entities that can own assets, incur liabilities, engage in economic activities and trade with other entities in their own names. Units are divided into three categories, government units, public service units and enterprise units. Enterprise units need to obtain legal person qualification through industrial and commercial registration. 114 In the 1970s, urban residential areas were 27-35 square meters per household and 3.5-4 square meters per capita. Kitchens and toilets were shared by several families. The National Housing Census (1985) showed that more than a quarter of the urban residents were in poor housing condition and 1.2 million families without houses. Details see Lv, Junhua, Rowe, Peter G. and Zhang, Jie, ed. Modern Urban Housing in China 1840-2000. (Beijing: Tsinghua University Press, 2002),174.
33
including less than 30,000 urban household registration and about 2,000 temporary
residents. The per capita living area was 2.7 square meters, with very poor quality and
conditions. The government, setting up a city with such a weak foundation, brought in
a large number of people and had to face the major problem of solving their housing
demands inevitably. From 1979 to 1987, although Shenzhen built residential buildings
at an annual growth rate of 40%, the housing problem has not been alleviated. The
number of households without a house even reached 22,000.115 The welfare housing
allocation system could not at all satisfy the demand of a rapidly increasing population,
thus, the housing reform was imminent.
2.3.2 The First Housing Reform
The China Merchants Shekou Industry Park, which was self-financing and self-risk-
bearing, was the first institution to attempt the housing reform. The funds to develop
the Industrial Park were raised from the loans of banks in Hong Kong, including for
building a large number of employees’ family housing and dormitory. Yuan Geng once
calculated that “building a flat of 80 square meters costs about 20,000 yuan, excluding
the construction fee of community and public facilities, the monthly interest of which is
more than 200 yuan. If we adopt the previous low rent policy, 8-10 yuan per month, it
is not enough even just for the maintenance of the buildings, not to mention to repay
the loan with interest. For this reason, the housing rent in our Industrial Park has
increased to 80-120 cents per square meter.”116 Although the housing rent in Shekou
Industrial Park was the highest in China at that time, it obviously could not repay the
loan including interest. Therefore, the Industrial Park enacted the “Interim Measures
for the Management of Employees’ Housing in Shekou Industrial Park,” advocating the
housing purchase at a preferential price (quasi-cost) and encouraging the employees
to own their private property, which was the first time that public housing was sold to
employees in Shenzhen. However, this reform did not receive a positive response from
Shekou employees at the beginning, as many people have calculated that renting was
still a better deal. In order to carry out the reform, the Industrial Park required cadres
to take the lead in buying houses, meanwhile, to encourage the purchase, the
Industrial Park offered a discount of 25-30% off on the price of quasi-cost and provided
home loans as well (the banks had not yet started the mortgage business at that time).
Following the bold attempt of Shekou Industrial Park, SSEZ promulgated the “Cadres
and Staffs Housing Commercialization Trial Measures in Administrative Institutions” in
1985. It could be found easily just from the title that this was a trial implementation in
a specific scope. What was truly epoch-making was the “Housing System Reform Plan
of SSEZ” read out by Vice Mayor Li Chuanfang in Shenzhen Hall on June 10, 1988,
which started the first housing reform in Shenzhen. This reform mainly established the
commerciality and sociality of housing, that was, gradually abolishing the housing
115 See Shenzhen Municipal People 's Government Housing System Reform Office & Shenzhen Land and Resources and Real Estate Administration, ed. A complete Record of Housing System Reform in Shenzhen 1988-2005. (Guangzhou: Guangdong Economic Publish House, 2005),4. 116 Yuan Geng’s speech at the work conference of the SEZ on 25/12/1985. China Merchants Group Office and Research Association of China Merchants History, ed & print. Yuan Geng’s Anthology (2012),167.
34
allocation system, pushing housing to the market and realizing the housing
commercialization eventually. The starting point was to raise rents and put housing
subsidy into wages to encourage individuals to buy existing public housing. The
government and units obtained funds through the sale of public housing to speed up
the housing construction and improve people’s living condition. On the other hand,
buyers got housing from the market. Thus, housing was directly linked to personal
income, cutting off the ties between individuals and units, so that housing could
gradually realize socialization.
Although this plan was to promote housing to the market, in practice, because these
existing public houses were only sold to the employees of the unit, only some of the
residents could buy a house. Many residents whose units had no houses to sell were
not capable of buying commercial housing at market prices. The government had the
responsibility to address the residential needs of these people to maintain social equity
and stability. Referring to the experiences of Singapore and Hong Kong 117 , the
Shenzhen government launched the “Outline of housing Development in SSEZ” on
July 27, 1989, putting forward the housing supply model of “double tracks - triple types
- multi-prices” (双轨三类多价制) (see diagram 2.2). This diagram shows that the
government and developers were responsible for building houses. The government
provided commercial welfare housing to government employees and low-profit
commercial housing to low-income workers. Most of the workers had to rely on the
commercial market housing built by developers. Meanwhile, a variety of housing prices
coexisted in the system.118 This model was a specific embodiment of the dual-track
price system which was implemented in 1985. The dual-track price system had been
criticized for benefiting individual interest groups and become a “hotbed of economic
disorder and corruption”.119 Obviously, the biggest beneficiaries of this model were
government employees. But in any case, the dual-track price system was an
“intermediate system between a centrally planned and a market system” in China’s
gradual reform. 120 Likewise, this model was an intermediate policy between the
welfare housing distribution and housing commercialization. Housing reform,
combining with the land reform, opened the prelude of Shenzhen’s commercial
housing construction, which gave birth to real estate companies with housing
development as their main business. Vanke Group, the leading real estate developer
nowadays, acquired two parcels of land by auction in Luohu District in 1988 and has
since entered the real estate industry (for more Vanke’s details, see chapter 3).
Diagram 2.2: double tracks-triple types-multi-prices
117 Details of Hong Kong’s housing system in different stages refer to Pui Yin Ho. History of Hong Kong’s Urban Planning 1841-2015. (Hong Kong: Chung Hwa Book Co. (H.K.) Ltd, 2016), 184-185, 217-219, 302-305. 118 See Aipin Chen, ed. Seeking for Progress: Housing System Reform and Practice in Shenzhen. (Beijing: China Social Sciences Press, 2017), 38-39. 119 Clause 25, “Decision on Further Establishing Order, Readjustment and Deepen Reform”. People’s Daily, (17/01/1990), 1. 120 Leong H. Liew. “Gradualism in China’s economic Reform and the Role for a Strong Central State”. Journal of Economic Issues, Vol 29. No. 3 (1995), 883-895.
35
Source: Aipin Chen, ed. Seeking for Progress: Housing System Reform and Practice in Shenzhen. (Beijing:
China Social Sciences Press, 2017), 38.
After the introduction of the housing reform, many workers whose units had houses to
sell bought the existing public housing, so that the government and units gained funds
for new development. However, with the increase of urban population, the number of
households without housing was still rising, the cost burden on units was still great,
and the living conditions were uneven and unfair. The reason lay in the fact that the
housing reform program stipulated that “married couples over 23 years old provided
that one side of the couple is a registered resident of Shenzhen have the right to buy
or rent a quasi-cost commercial housing”.121 Housing reform was directly linked to
household registration. Those who were not registered residents of Shenzhen were
not qualified to get a quasi-cost house.
Shenzhen’s workers consisted of three groups. The first one was government
employees, accounting for about 20%, who were provided with commercial welfare
housing by the government. The second group was enterprise employees, accounting
for about 70%. According to the reform, employees were granted housing subsidies
and they should obtain housing through two ways, low-profit commercial housing and
commercial market housing. But in practice, housing subsidies for employees were
inadequate for them to get access to any commercial housing, so that companies had
to buy housing and rent to their staffs. However, the low-profit housing was insufficient,
and the price of commercial housing had been rising, which burdened enterprises
heavily. The third one was workers not belonging to any units, about 10%, mainly small
vendors and temporary laborers. Their low wages meant that they could not afford to
buy commercial housing, and normally they were not registered residents to buy low-
121 See “The Sale and Lease of Quasi-cost Commercial Housing”, the fifth chapter of “Housing System Reform Plan of Shenzhen Special Economic Zone”. Shenzhen Municipal People 's Government Housing System Reform Office & Shenzhen Land and Resources and Real Estate Administration, ed. A complete Record of Housing System Reform in Shenzhen 1988-2005. (Guangzhou: Guangdong Economic Publish House, 2005),303-304.
36
profit commercial housing. Most of them had to stay in temporary houses or rent
peasants’ housing, which was in poor living condition. 122 Moreover, before the
promulgation of the “Provisional Regulations on Socialized Housing in SSEZ”123 in
1992, low-profit housing was sold only to enterprises, not directly to individuals. It was
evident that the housing reform was only aimed at residents with urban registration
and with formal units and jobs. However, Shenzhen is an immigrant city where the
temporary population was the main body. From 1988, the proportion of the population
who were non-registered population reached nearly 50%, and from 1992, this ratio has
almost remained above 70% (see table 2.2). Therefore, in such an immigrant city, the
housing problem had not been solved at all. In addition, the real estate sector in
Shenzhen had begun to prosper, but according to statistics, two-thirds of the
commercial housing was bought by enterprises.124 In other words, the prosperity of
the commercial housing market at that time was not due to the individual consumption
demand, which was not the true meaning of the real estate market.
Although it could not satisfy the housing demands of the major population and there
were various problems mentioned above, this housing reform policy was still a
milestone, which had a far-reaching impact on the housing development in Shenzhen
and even the housing reform of the whole country. Its greatest merit, first of all, was to
establish that housing was a commodity that could be bought, sold, transferred, leased
and mortgaged, and to make people accept the concept that buying the property was
a form of household consumption. Secondly, through the sale of existing public housing,
housing funds were raised to develop new residences, which put the construction of
low-profit housing into a reasonable and healthy developmental track. “According to
the incomplete statistics of Shenzhen Land Resources and Property Administration
Bureau, from 1988 to 2004, the Shenzhen government raised more than 25 billion
yuan from the sale of public housing to build new affordable houses of 17.15 million
square meters.”125 Thirdly, the commercialization of housing provided a new source
for sensitive capital expansion to promote the real estate industry. Finally, Shenzhen
had pioneered the exploration of residential finance and accumulated experience for
deepening the housing reform in 1998.
Table 2.2: population of Shenzhen (10,000person) (1979-2016)
year year-end
permanent
population
registered
population
non-
registered
population
ratio of non-
registered
population
1979 31.41 31.26 0.15 0.5
122 See Dong Richen, “The Countermeasures to Solve the Housing Problem in Shenzhen” Special Zone Economy No.9 (1992):30. 123 Housing socialization refers to the individuals’ direct application to the Housing Bureau for purchasing small-profit housing, thereby cutting off the links between employees and enterprises in housing, not only reducing the pressure on enterprises, but also conductive to the flow of talents. 124 Enterprises bought commercial houses in the market and allocated to their employees for buy or rent. See Dong Richen, “Review the Past Seven Years of Housing Reform in Shenzhen”, originally published in The Shenzhen Housing Bureau, ed. Shenzhen Residence. (Beijing: Xinhua Publishing House, 1995). Quoted in A complete Record of Housing System Reform in Shenzhen 1988-2005. (2005),112. 125 A complete Record of Housing System Reform in Shenzhen 1988-2005. (2005),482-483.
37
1980 33.29 32.09 1.20 3.6
1981 36.69 33.39 3.30 9.0
1982 44.95 35.45 9.5 21.1
1983 59.52 40.52 19.00 31.9
1984 74.13 43.52 30.61 41.3
1985 88.15 47.86 40.29 45.7
1986 93.56 51.45 42.11 45.0
1987 105.44 55.60 49.84 47.3
1988 120.14 60.14 60.00 49.9
1989 141.60 64.82 76.78 54.2
1990 167.78 68.65 99.13 59.1
1991 226.76 73.22 153.54 67.7
1992 268.02 80.22 187.80 70.1
1993 335.97 87.69 248.28 73.9
1994 412.71 93.97 318.74 77.2
1995 449.15 99.16 349.99 77.9
1996 482.89 103.38 379.51 78.6
1997 527.75 109.46 418.29 79.3
1998 580.33 114.60 465.73 80.3
1999 632.56 119.85 512.71 81.1
2000 701.24 124.92 576.32 82.2
2001 724.57 132.04 592.53 81.8
2002 746.62 139.45 607.17 81.3
2003 778.27 150.93 627.34 80.6
2004 800.80 165.13 635.67 79.4
2005 827.75 181.93 645.82 78.0
2006 871.10 196.83 674.27 77.4
2007 912.37 212.38 699.99 76.7
2008 954.28 228.07 726.21 76.1
2009 995.01 241.45 753.56 75.7
2010 1037.20 251.03 786.17 75.8
2011 1046.74 267.90 778.85 74.4
2012 1054.74 287.62 767.13 72.7
2013 1062.89 310.47 752.42 70.8
2014 1077.89 332.21 745.68 69.2
2015 1137.87 354.99 782.88 68.8
2016 1190.84 384.52 806.32 67.7
Source: Shenzhen Statistics Bureau, NBS Survey Office in Shenzhen, ed. Shenzhen Statistical Yearbook
2017 (Beijing: China Statistics Press, 2017),57.
2.3.3 Macro-economic Control from 1993 to 1998
Although commercial housing was primarily sold to enterprises at the outset, the
housing reform did boost the prosperity of the real estate industry. Especially since
38
Deng Xiaoping’s (邓小平) southern tour126 in early 1992, China’s real estate industry
ushered in its first unprecedented prosperity. On November 4 of the same year, the
State Council issued the “Notice on Several Questions Concerning the Development
of Real Estate Industry,” clearly pointing out that “Real estate industry is a new industry
in China and an important part of the tertiary industry. With the compensated-use of
land and the promotion of housing commercialization, it will become one of the pillar
industries of the national economy”.127 The Notice further stimulated the real estate
market. A rapid expansion of the real estate industry occurred in most cities, with a
substantial increase in investments, land leasing, and development volume.
Speculative businesspeople suddenly found that the real estate industry could, like
magic, multiply their assets. As long as they found a way to access land and loans,
they could become rich right away. Thus, they immediately set up a real estate
company and used all ties to obtain land, loans and building materials. At that time, the
hottest place was Hainan SEZ. A large amount of money and people rushed to Hainan
wildly, and there were thousands of signs of real estate companies on Hainan’s streets.
Other coastal SEZs also had similarly sudden and sharp development, and Shenzhen
was not an exception. The investment in fixed assets in Shenzhen increased sharply
from 9.123 billion yuan in 1991 to 17.823 billion in 1992 in a growing rate of 95.3%,
reaching 24.779 billion in a rate of 39% in 1993, among which the real estate
investment increased from 2.556 billion yuan in 1991 to 13.046 billion in 1994 by
annual growth rates of 180%, 43.7% and 27%, respectively (see figure 2.3).
The central government was alerted to this severe financial situation as over-
investment had led to the Consumer Price Index (CPI) reaching 114.7% in 1993 and
124.1% in 1994128 . Zhu Rongji, the Vice Premier of the State Council, delivered a
speech entitled “Preventing Inflation should start from the very beginning”129 on April
1, 1993, which signaled that the central government would take measures to control
inflation. On June 24, the Central Committee issued the “Opinions on the Current
Economic Situation and on Strengthening Macro-control” (Central Committee [1993]
No.6) (known as ‘State 16’), which adopted 16 measures to start macro-control
formally with the focus on rectifying financial order and controlling inflation as the
primary task. On July 2, 1993, Zhu was appointed as the governor of the People’s
Bank of China to implement the ‘State 16’ better. At the National Conference of
Financial Work on July 7, 1993, he ordered the governor of each bank to call in 50%
of the illegal loans and put forward recovery plans for the remaining 50% before August
126 Deng Xiaoping’s southern tour means Deng Xiaoping’s visit to Wuchang, Shenzhen, Zhuhai and Shanghai from 18th January to 21st February 1992, during which he delivered a series of important talks, collectively referred to as ‘Southern Talks’. The Talks focused on the doubts and vacillations that many people had about the reform at that time, and reaffirmed the necessity and importance of deepening the reform and accelerating the development. The Southern Tour played a key role in promoting China’s economic reform and social stability in the 1990s. 127 See the “Notice on Several Questions Concerning the Development of Real Estate Industry” (State[1992] No.61). http://www.gov.cn/zhengce/content/2010-12/19/content_4913.htm (access on 16/9/2018). 128 CPI data from Qian Zhan Data Base https://d.qianzhan.com/ (access on 25/9/2018). 129 Rongji Zhu. Zhu Rongji Speeches Vol1. (Beijing: People’s Publishing House, 2011), 277.
39
15 of that year.130 The ‘State 16’ has effectively curbed the development of the real
estate industry by strictly controlling the entry of bank loans into the real estate
development, levying a high regulation tax on investments, strictly examining new
projects and other economic measures to control investment in construction. Due to
the lag effect of inflation, although the overall economic development had slowed down,
the national retail index still rose by 27% in 1994. Zhu pointed out that excessive
growth in fixed assets investment and large-scale infrastructure were the fundamental
causes of the inflation, so the central government continued to implement strict
measures on controlling land grants, no longer approving high-end real estate
projects.131
Although unlike the crash in Hainan Province, the growth in the real estate industry in
Shenzhen slowed down during the macro-control. In 1995, the investment dropped to
the level under that in 1994. (see figure 2.3) This macro-control produced the desired
effect, and its wide-ranging impact lasted for a long period. From 1993 to the first half
of 1998, China’s real estate development experienced a slowdown to a downturn with
both sales volume and prices falling. However, the situation in Shenzhen was slightly
different from that in the whole country. As can be seen from the chart, it slightly fell
behind in 1995 then began to rise in 1996. Because the real estate development in
Shenzhen was ahead of other cities, there was a slowdown in price rises due to the
automatic adjustment of the market itself in the half year before the national control
policy came out, while the adjustment in other cities lagged behind the national policy
for more than half a year. Therefore, Shenzhen’s adjustment ended before other cities.
In addition, in the second half of 1994, the rate of individual house purchasing in
Shenzhen exceeded 60%, and the individual purchasing power exceeded that of
enterprises, which marked the maturity of the real estate market in Shenzhen.
Furthermore, the Shenzhen government issued the “Several Provisions on Promoting
the Real Estate Market in Shenzhen” in 1995, which put forward 11 measures to help
the real estate market in Shenzhen to quickly re-enter the path of accelerated
development from the downturn.132 The stable response of Shenzhen to the state’s
regulation was due to the housing reform since 1988. The Shenzhen government
instilled the concept of the housing commerciallization into its residents through the
housing reform and cultivated the commercial housing market.
Figure 2.3: investment in fixed assets and investment in real estate development (ten
thousand yuan) (1990-1997)
130 See Zhu Rongji’s speech “Ground Rules on Financial Work” in the National Conference on Financial Work hold on 5th-7th July 1993. Rongji Zhu. Zhu Rongji Speeches Vol1. (Beijing: People’s Publishing House, 2011),307-316. 131 See Zhu Rongji’s concluding speech at the central economic work conference in 1994. Rongji Zhu. Zhu Rongji Speeches Vol2. (Beijing: People’s Publishing House, 2011),65-79. 132 See Shi Wang, Chuan Miu, Road and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006),142-144.
40
Notes: line chart based on Shenzhen Statistical Yearbook 2015 (Beijing: China Statistics Press, 2015),171.
The sudden popularity of Hainan, Beihai and other coastal places was the inevitable
result of the uneven geographic development because the government policies had
encouraged the demands of capital reproduction. When the market adjustment ability
was poor, the situation was gradually out of control. In such cases, the government
intervened and adjusted through issuing new policies. This was a typical market
economy with Chinese characteristics, that was, an incomplete market economy under
state intervention when the state controlled the process and direction of economic
development through strong administrative forces. At the same time, even if a nation-
wide macro-control prevailed, local cities still had a certain operating space. The
central government issued a programmatic document, then the local government
detailed implementation rules according to their specific circumstances, which not only
had the rationale of dealing with the actual local situation but also created the
competing space between the local government and the central government. In order
to maintain local finance, local governments tended to introduce some compromise
regulation, which was why the land finance has snowballed and the housing prices
have become higher under more regulating.
2.3.4 Cessation of the Welfare Housing System
Since the regulation in 1993, developers without land reserves were unable to obtain
lands, while those having land found it difficult to gain loans and approval for
construction. Therefore, many developers had to choose to sell their lands at a much
lower price. By the outbreak of the Asian financial crisis in 1997, China’s import and
export and foreign investment were affected, resulting in negative growth. In order to
maintain the economic growth, the central government formulated policies to stimulate
domestic demand. At the critical juncture when the struggling companies were about
to surrender, the government introduced new policies on finance and housing reform.
On May 9, 1998, the Bank of China promulgated the “Regulations on the Management
of Personal Home Loans”, which were enacted to support urban residents in
623380912324
1782322
24778752819413 2758243
3275270
3930657
112000 255600
7149001027700
13046001030368
1248251 1366545
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
1990 1991 1992 1993 1994 1995 1996 1997
investment in fixed assets (ten thousand yuan)
investment in real estate (ten thousand yuan)
41
purchasing their ordinary housing. Residents who were eligible for loans could obtain
loans for up to 20 years and up to 70% of housing purchases. Then on July 3, the State
Council issued the “Notice on Further Deepening the Reform of Urban Housing System
and Accelerating Housing Construction” (State [1998] No.23), which contained 20
clauses. Among them, what had an earthquake effect was “stopping the distribution of
housing”, 133 which completely ended the welfare housing system that had been
implemented for 50 years since the founding of the PRC. This clause terminated the
welfare housing distribution for government employees and also terminated
companies’ buying houses for leasing or distribution to their staff. Although the Notice
proposed to stop the welfare distribution from the second half of 1998, it also agreed
that the local government could determine the specific implementation time and steps
in accordance with the actual local situation. During the period from the issue of the
Central Notices to the implementation of specific measures in various localities,
companies and residents in cities throughout China felt the earthshaking power of this
notification. All government departments and companies that had enough funds were
rushing out to buy housing for their employees who still did not own a house. Effective
demand broke out in the short term, and real estate development exploded. The over-
supply of housing in the past five years was sold out quickly. Those developers who
had land reserves tried every means to get the projects started. When the building just
started piling, the presale houses were sold out already. As the residents wanted to
catch the “last bus” (末班车)134 for welfare housing, their daily lives were stirred up.
According to the housing distribution system, houses were generally allocated to
married employees. Thus, many lovers got married immediately, and some singles
wanted to find someone to marry through a blind date, which triggered a marriage
boom. There was regulation in some cities that unmarried employees over the age of
30 could also enjoy the welfare housing. Thus, some couples who had already been
allocated a flat were willing to divorce just to get one more house. It was not hard to
imagine that such a marriage or divorce for the sake of a house would certainly cause
some contradictions and problems, which might further lead to social problems.
Shenzhen’s response to the Central Notice 1998 was not so massive as that of other
cities, because housing reform in Shenzhen started earlier than others. Shenzhen’s
housing reform plan in 1988 had proposed the abolition of housing allocation, and a
gradual implementation year by year. The personal house purchase rate was much
higher than that in other cities. In response to the Central Notices and to meet the
needs of deepening housing reform and accelerating the housing construction in
Shenzhen during this period, the Shenzhen government promulgated “Several
Provisions on Housing System Reform of Shenzhen Municipal Agencies and
Institutions” on October 20, 1999, which were implemented from January 1, 2000. This
regulation was mainly to transfer the housing prices from quasi-cost housing to low-
profit commercial housing, as well as to solve the constraints on property rights. After
133 See Clause 2 in the ‘Notice on Further Deepening the Reform of Urban Housing System and Accelerating Housing Construction’ (State [1998] No.23). http://www.bjjs.gov.cn/bjjs/fwgl/zfgg/zfgg/350118/index.shtml (access on 12/9/2018) 134 The ‘last bus’ (mo ban che) metaphor meaning the last chance.
42
being granted full property rights, affordable housing became tradable in the real estate
market, which accelerated housing commercialization and socialization. However, this
regulation still stipulated that only couples who both had Shenzhen’s household
registration were eligible to buy an affordable house, which only solved the housing
problem of a small proportion of residents who worked in formal units and with
Shenzhen household registration. Because of insufficient housing security, a large
number of residents without Shenzhen registration rented peasants’ houses. The
abundant rental income gave birth to a group of villagers who were criticized by the
public for living a life of idleness and luxury on rent. At the same time, these villagers
were willing to take the illegal risk to build higher and bigger housing, accelerating the
formation of urban villages and aggravating hidden dangers and poor hygienic
conditions.
2.3.5 Development of Affordable Housing in Shenzhen
A close reading of the State Notice 1998 would find another important clause, that was
“to establish and improve the housing supply system based on affordable housing and
to implement different housing supply policies for different income families. The lowest-
income families rent low-rent housing provided by government or units; the low to
middle-income families purchase affordable housing; those high-income families
purchase and lease commercial housing at market prices”.135 However, it did not draw
any attention of local governments. The Notice 1998 only brought real estate industry
back to life, once again into the track of high-speed development, while the
establishment of the social security housing system was almost ignored.
Although Shenzhen launched the first batch of low-profit houses for sale to households
without housing in December 1990, there were only 45,501 low-profit houses built from
1988 to 2002,136 and still, only those holding household registration were eligible to
apply for the houses. Thus, the demand of most people was not met at all. On June 6,
2003, the SMPG promulgated the “Implementation Plan for the Reform of Housing
Distribution Monetization in Shenzhen Municipal Agencies and Institutions” (SMPG
[2003] No.104), announcing the complete cessation of the construction and distribution
of low-profit housing in government agencies and institutions and gradually
“establishing and improving a social housing security system focusing on low income
families”, 137 whose annual family income was less than 60,000 yuan. 138 The
Shenzhen government had been trying to build a virtuous circle of the social security
housing system, but the speed of housing construction would never keep pace with
the growth of the urban population. Morover, a large number of temporary residents
were not included in the registration system, escaping from effective management.
135 See Clause 7 in the ‘Notice on Further Deepening the Reform of Urban Housing System and Accelerating Housing Construction’ (State [1998] No.23). http://www.bjjs.gov.cn/bjjs/fwgl/zfgg/zfgg/350118/index.shtml (access on 12/9/2018) 136 A complete Record of Housing System Reform in Shenzhen 1988-2005. (2005),416. 137 Clause 8 of the the “Implementation Plan for the Reform of Housing Distribution Monetization in Shenzhen Municipal Agencies and Institutions” (SMPG [2003] No.104). A complete Record of Housing System Reform in Shenzhen 1988-2005. (2005),565. 138 Ibid.,536.
43
Thus, their housing problems were inevitably unable to be taken into account.
Most Chinese people believe houses are the root of life, and without their own houses
it is difficult to make them have a sense of belonging, which makes the movement of
population full of opportunism and randomness. The labor force, just like capital, tends
to flow to those places where the benefits are the greatest. People take personal
income, living conditions and employment opportunities as the criteria for evaluating
the benefits. Housing is an important factor in living standards and family life. If the
housing problem cannot be solved, the human resource structure of Shenzhen, which
is the foundation for urban development, will be affected in the long-term.
2.3.6 Alternative Regulation and Relaxation in Policies
In the development of commercial housing, upon the cessation of the welfare housing
system and various supports from the banks, the real estate industry increased by
leaps and bounds. Moreover, the price restriction on commercial housing was
abolished in 1998, which meant that developers could set prices for their housing
products, henceforth, housing prices were different because of location, developer’s
brand, building and environmental quality, etc., but rising all the way. Two important
events followed in 2001, that was the successful bid for the Beijing Olympic Games on
July 13 and China’s entry into WTO on December 11, which were very encouraging to
economic development. Since July 2002, the prices of land and housing rose sharply
because of the implementation of the “Regulation on Granting the Right to Use State-
owned Land by Bidding, Auction and Listing.” Given the overheating of real estate and
the rapid rise of housing prices, the People’s Bank of China issued the “Notice on
Further Strengthening the Management of Real Estate Credit Business” in June 2003
to restrain the overheating of real estate by adjusting the personal housing loan policy
of commercial banks. However, in August, the Central Committee pointed out that the
real estate industry has become a pillar industry of the national economy. To promote
the sustained and healthy development of the market, it is necessary to gradually
realize the purchase or rental of ordinary commercial housing by most families by
adjusting the housing supply structure, meanwhile, to increase credit support for
eligible real estate companies.139 There was an obvious contradiction between these
two notices issued two months apart, reflecting the government’s ambivalence of
worrying about potential social problems caused by overheating of real estate and
excessive housing prices on one hand, and hoping the real estate industry driving
economic growth continually on the other hand. Land finance began to kidnap
government finance at that time. It was this ambivalence that led the development of
real estate to a repeated process of overheating, adjustment, unbind, overheating
again and re-adjustment. Each adjustment had different priorities, such as tightening
land supply and credit in 2004, adjusting supply and demand in 2005, and adjusting
the housing structure in 2006. Despite the outbreak of the global financial crisis in 2008,
139 See Clause 1,3,14 in the “Notice on Promoting the Sustainable and Healthy Development of the Real Estate Market” (State [2003] No.18). http://www.gov.cn/zhengce/content/2008-03/28/content_4797.htm (access on 12/9/2018).
44
the Beijing Olympics, followed by monetary easing and 4 trillion from central
government, allowed the property market to continue rising after a slight slowdown,
then came the year of 2010, known as a policy year. Confronted with the runaway
housing prices, the central government and various ministries and commissions issued
14 important regulatory measures 140 and adjusted the interest rates of financial
institutions nine times141 in 2010. However, regardless of how the central and local
governments regulated and controlled, real estate in first-tier cities like Shenzhen has
been in a flourishing trend with housing price rising all the way. In 2016, after Suzhou
took the lead in introducing restrictions on purchases, many big cities also introduced
their measures. Shenzhen issued strict restrictions on purchases and loans142 on
October 4, 2016, and restrictions on prices of commercial housing and apartments143
on January 19, 2017 to further control housing prices. The effect of the restrictions on
purchase, loans and prices really controlled the housing prices to a certain extent, and
the turnover volume also fell.
However, the more regulation, the more people felt the scarcity of land and housing.
Especially in Shenzhen, a city with insufficient space, both the construction land and
the annual salable volume were decreasing year by year. In fact, these measures were
140 These policies and measures mainly included controlling land supply, real estate development and home loans. For example, the “Notice of the Ministry of Land and Resources on Improving the Application and Implementation of Urban Construction Land” on January 21, 2010 stipulated that in the residential land use, the proportion for affordable housing and small and medium-size commercial housing could not be less than 70%; the “Notice on Strengthening the Supply and Supervision of Real Estate Land Use” on March 10, 2010 stipulated that developers pay at least 20% for the auction margin, upon the successful bidding, pay 50% of the land price in one month and the balance within one year; the “Notice on Further Strengthening the Regulation and Control of Land Use and Construction of Real Estate” on September 27, 2010 stipulated that if the annual construction tasks of affordable housing and small and medium-size commercial housing were not fulfilled, urban land could not be supplied to projects of large and high-grade housing; the development of low-density and large-scale housing projects must be strictly restricted; the floor area ratio (FAR) of residential land must be more than 1.0; real estate companies could not lay the land aside for more than one year after obtaining the right of land use. The main provisions on control of purchase included the “Notice on Promoting the Stable and Healthy Development of the Real Estate Market” on January 10, 2010 stipulated that the down payment of the second home loan could not be less than 40%; the “Notice on Firmly Curbing the Rapid Rise of Housing Prices on Some Cities” on April 17, 2010 stipulated that the down payment for the first house with area above 90 square meters could not be less than 30%, for the second house 50%, and the mortgage for the third/and above home was suspended; the “Regulations on Further Regulating the Administration of Housing Purchase for Overseas Institutions and Individuals” on November 15, 2010 stipulated that overseas individuals could only buy one house for their own use, and overseas institutions could only by non-residential property for their offices in the cities where they were registered. 141 In 2010, The People’s Bank of China raised the RMB reserve requirement ratio of deposit financial institutions six times, from 15.5% to 18.5%, and raised the benchmark one-year deposit and loan interest rate three times, 0.25% each. 142 On October 4, 2016, the Shenzhen Planning and Land Resources Commission and other departments jointly issued “Several Measures to Further Promote the Stable and Healthy Development of the Real Estate Market in Shenzhen”. As for the Shenzhen registered households (including some of the family members are registered residents), the policy of restricting the purchase of the second house, that is the down payment for the first house is 30% and 70% for the second one, and the adult single (registered resident and including divorced single) can only buy one house, and the time span of holding social insurance which is the purchase qualification for the non-registered households has changed from 3 years to 5 years, and the second house also requires 70% down payment. http://www.szpl.gov.cn/xxgk/gggs/201610/t20161004_450020.html (access on 13/9/2018) 143 On January 19, 2017, the Shenzhen Planning and Land Resources Commission promulgated the “Rules for the Management of Pre-paid Prices of Commercial Housing and Commercial Department”, stipulating that the prices of commercial housing and commercial department could not be higher than that of similar products in the surrounding area, and could not use decoration to raise the price in a disguised form. http://www.szpl.gov.cn/xxgk/gggs/201701/t20170119_450035.html (access on 13/9/2018).
45
like squeezing demand into a bag, and once the rope was loosened, it was not difficult
to imagine how the rebound effect would be, just like the previous adjustments often
followed by retaliatory increases. In the face of these restrictions, developers and
buyers had a variety of strategies to deal with and circumvent the policies to achieve
the best results for themselves, which is discussed in the following chapters. Rigid
demand cannot be reduced by various control measures. Only when the supply is
sufficient, people do not have to worry about lack of housing or high housing prices.
Just like rice in a supermarket, when there is plenty of it, people buy it on demand.
When there is a shortage expectation, people panic and scramble for it. Supermarkets
may take the opportunity to raise the price, even some people may hoard to sell for a
higher price. Therefore, the main focus of dealing with high housing prices should be
on the supply side, that is, to provide adequate and affordable housing. When the vast
majority of the population can afford to buy or rent a house, the houses are no longer
snapped up because of scarcity and housing prices will not keep rising. The stability
and balance of the market also can make the flow of capital more rational to avoid
overheating in real estate development. Lessons, such as excessive housing prices,
talent and businesses escaping, have made the Shenzhen government realize the
importance of affordable housing. On June 5, 2018, Shenzhen Housing and
Construction Committee released the “Opinions on Deepening the Housing System
Reform and Accelerating the Establishment of Multi-sources Supply and Security
System through Rent and Purchase”.144 (details see chapter 3). This document was
considered to mark the beginning of the second housing reform in Shenzhen.
2.3.7 Summary
To sum up, housing development in Shenzhen has gone through every stage of
traditional welfare housing distribution and housing reform of commercialization and
socialization. The real estate industry in Shenzhen has experienced ups and downs
due to the endless national and local policies, but the overall development is flourishing
with housing prices increasing all the way. Comparatively, the development of
affordable housing is rather slow. In this process, the government played a leading role.
Through various policies, the government controlled and adjusted the real estate
development process, product structure, sales price, financing and loans, etc., which
could be effective promptly in a certain period. But in the long run, the close relationship
between government finance and real estate industry, the self-adjusting function of
market economy, the various countermeasures created by developers based on their
nature of profit-seeking, and the choices and ways of buyers, all worked together on
housing development in Shenzhen, diluting the effectiveness of government’s
mandatory policies. Meanwhile, the government had to adjust constantly to balance
the interests of developers, the needs of residents, and social benefits. Although the
high housing prices in Shenzhen have caused many complaints from the public,
objectively speaking, if the housing reform did not push the housing to the market, the
housing conditions and living environment of Shenzhen would not have been improved
144 See http://www.szjs.gov.cn/csml/bgs/xxgk/tzgg_1/201806/t20180605_12082438.htm?winzoom=1 (access on 5/10/2018).
46
at all; the urban development would be difficult; much capital and talent would not have
been attracted; not to mention joining the ranks of the first-tier cities. The government’s
policies were inevitably imperfect, even wrong in some aspects, but in the specific
circumstances at that time, the merits always overweighed the demerits. The decision
of the government to concentrate on the affordable housing development in the second
housing reform was justified. Guaranteeing social security is the most fundamental
task of the government, and it is also the most effective and lasting method for the
government to regulate the real estate market.
2.4 Urban Master Planning and Management
Urban planning is an important means to express the strong will of the government in
urban construction and development. Urban master planning is responsible for solving
urban economic and social development goals, determining the city’s positioning, scale
and construction standards, arranging the scales and spatial layout of various types of
urban land-use, specifying important projects, laying out urban circulation and
transportation system, formulating planning indicators, implementation steps and
measures. 145 Urban master planning is led by the municipal government and
conducted by a state-owned urban planning institute to ensure that the planning can
reflect the government’s strategy and satisfy the interests of urban development. As a
SEZ, Shenzhen’s master planning must be examined and approved by Guangdong
Provincial People’s Government and submitted to the State Council for approval before
it becomes a statutory document.146 Shenzhen has organized the compilation or
revision of master planning and overall developmental strategies many times in the
past 40 years. However, only the master planning of the years 1986, 1996 and 2006
have become statutory documents. The “Shenzhen Master Planning 2016-2035”
which is under compilation at present will be the fourth edition of the statutory master
planning. By reviewing urban master planning and its compilation background, we can
understand the social and economic development strategy and spatial developmental
direction at different stages, and how the government solved the contradiction between
economic development and the needs of people’s livelihood and balanced economic
and social benefits. In keeping with the three editions of statutory planning, Shenzhen
master planning can be unscrambled in three stages.
2.4.1 Stage one
Shenzhen city always proudly calls itself a city built according to urban planning. Since
the establishment of the SSEZ in 1980, the SMPG rapidly carried out the compilation
of urban planning. In May 1980, Shenzhen Municipal Construction & Planning
Commission was set up with Zhang Xunfu (张勋甫), the Secretary of SMPC, as the
director, and Jia Hua (贾华 ), the mayor, as the deputy director. Specialists and
145 See clause 21-32 of “Methods for Compiling Urban Planning”, Ministry of Construction of the People’s Republic of China, No146, (2005). http://www.shgtj.gov.cn/zcfg/ghzd/200812/t20081224_168590.html (access on 13/9/2018). 146 The “Notice to Designate the Approval of Shenzhen Urban Master Planning by the State Council”, State [1995] No.86 (1995). http://www.gov.cn/zhengce/content/2010-11/15/content_5927.htm (access on 13/9/2018).
47
designers from all over the country (including Hong Kong) were called together to form
a planning and design team to compile the master planning. In June of the same year,
under the presiding of the newly appointed Secretary, Wu Nansheng, the first master
planning of SSEZ (see photo 2.2) was worked out. In this planning, Shenzhen was
designated as a medium-sized city with industry as the main kind of development. The
population was planned to reach 500,000 with a city area of 50 square kilometers by
1990. Bagualing Industrial Zone, Shangbu Industrial Zone, Qingshuihe Storage Zone
and several living areas were delineated as well.147 This planning proved to be an
important guiding document for the start-up of Shenzhen urban development, in which
all the planned industrial zones and residential areas were implemented by steps.148
Shenzhen was upgraded to a sub-provincial city in August 1981, thus, SMPC decided
to draw up a new developmental outline to match it. “More than one hundred experts
from the country were gathered to formulate the “Outline of Shenzhen’s Social and
Economic Development”. After repeated studies and revisions, hundreds of experts
and scholars from mainland big cities and Hong Kong were invited to review and make
comments. 149 The Outline was submitted to Guangdong Province and the State
Council for examination and approval in December 1982. As the basis of urban
development, this Outline was still based on the development of modern industry and
with a planned population of one million by 2000. For the first time, it proposed the
spatial layout of “clusters in a belt shape”150(带状组团结构), which divided the SSEZ
into three districts, the East, the Middle and the West, with total 18 functional clusters.
In 1983, Liang Xiang151 (梁湘) paid a visit to Singapore with his team, which had a far-
reaching impact on the overall planning of Shenzhen. As a world-famous garden city,
Singapore’s beautiful landscape and environment impressed the visiting team, which
made the Shenzhen officers realize the importance of shaping the urban landscape
147 Ling Huang, “Study on the Overall Planning and Development Strategy of Shenzhen (part one)”, Party History Research Office of Guangdong Provincial Party Committee, Red Wide Angle, Vol3 (2016): 35-36. 148 Shenzhen Industrial Development Corporation was established in September 1982 to develop Shangbu Industrial Zone and Bagualing Industrial Zone. By the first half of 1984, more than 1.3 million square meters of land had ben developed in only one year and nine months. See Wu, Songying. The Hardships and Splendor of Shenzhen (Guangzhou: Guangdong People’s Publishing House, 2015),87. 149 Liang Xiang, “The Establishment and Development of Shenzhen Special Economic Zone” (speech at Shenzhen Economic Development Seminar on 4th June 1984). Shenzhen Special Economic Zone Yearbook (1985). (Shenzhen: Shenzhen Yearbook Press, 1985), 56. 150 Shenzhen’s spatial structure, “clusters in belt shape” is a combination of multi-core cluster planning structure and belt city theory. The multi-core cluster structure was prevalent in European and American cities in the 1960s-1970s. the urban layout was relatively decentralized and consisted of several relatively independent and interdependent groups, which were connected by main traffic lines. A belt city is usually limited by physiographic conditions and forms the urban structure with the main circulation lines in a belt shape land-use. Main urban functions are arranged along coast, river or mountain and are linked by rails or roads. The idea of a systematic belt city was first proposed by a Spanish engineer Arturo Soria Y Mata in 1882. He believed that the rail transport system was the most economical, convenient and rapid. The city should be built along the rail or road to link towns and form a city network. 151 Liang Xiang (6/11/1919~13/12/1998) was the third Secretary of the SMPC, serving from March 1981 to May 1986, when was the most difficult and fastest period of economic reform and urban construction in Shenzhen. He organized the first statutory urban master plan. He took the lead in carrying out major reform measures such as public bidding system, price reform, wage reform, labor contract system, etc. He attached importance to the development of education and science and technology. Eight major cultural buildings were arranged and Shenzhen University was built in his serving period. He also organized the planning of Shenzhen Science and Technology Industrial Park and laid out the high-tech industry in Shenzhen.
48
and environmental protection for the city’s image. After the visit, some adjustments,
such as widening road greening and enlarging greenbelts between clusters, were
made in Shenzhen master planning (see photo 2.3).
By the end of 1984, the Shenzhen Municipal Planning Bureau and the China Academy
of Urban Planning & Design (CAUPD) began to work on a new round of master
planning. “Shenzhen Special Economic Zone Master Planning (1986-2000)” (see
photo 2.4) was achieved by the end of 1985, which was the first statutory master plan
of Shenzhen with a milestone significance. The urban spatial structure (see photo 2.5)
and transportation network within SSEZ were formed in this edition, while major
transportation facilities, such as Huangtian (黄田) airport (now named Bao’an airport),
Yantian Port, and important projects, such as the CBD area and eight major cultural
buildings, like museum, library, theatre and stadium, were identified and reserved land-
use. Upon the State Council’s approval of the 1986 plan, the Shenzhen Consulting
Center of CAUPD was commissioned immediately to study and formulate the
“Shenzhen Urban Developmental Strategy”, which was completed in 1990. In this
Strategy, the goal of developing Shenzhen into an international metropolis was put
forward for the first time and the population forecast for the year 2000 was adjusted to
3 million.
In the first ten years from 1980 to 1990, the Shenzhen master plan was adjusted most
frequently. Even so, the planning still lagged behind the rapid pace of development
and construction. The planning, design and construction of a project were always
carried out simultaneously (known as ‘san bian project’ 三边工程) in the early stage of
Shenzhen. The cause of this characteristic of synchronization was catering to capital
requirements at a special period. Relevant clues could be found in the planning
process and achieved documents in the first ten years. China’s economic reform
coincided with the neo-liberal turn led by the Thatcher regime in Britain and the Reagan
regime in the United States. After nearly one hundred years of industrialization of
Western countries, capitalists needed to find a way out for capital reproduction when
their capital accumulation reached a certain level. China’s low-cost land and cheap
labors were what capital pursued exactly. In the early stage of Shenzhen’s
development, the State did not provide funds, but only supporting policies. “The
economic development of SSEZ relied mainly on the utilization of foreign capital, and
products were mainly for export.”152 Therefore, this was a period in which the city was
eager for capital and was inevitably open to meet the demand of capitalists. Wu
Nansheng decided to develop Luohu District first, even at the cost of removing two
hills to fill the low-lying areas just because Luohu connected the Shenzhen-Hong Kong
entry port, in order to give foreign investors a good impression.
Photo 2.2: the first master planning of SSEZ (1980)
152 Liang Xiang, “The Establishment and Development of Shenzhen Special Economic Zone” (speech at Shenzhen Economic Development Seminar on June 4, 1984). Shenzhen Special Economic Zone Yearbook (1985). (Hong Kong: Economic Information & Agency, 1985), 53.
49
Source: exhibit at Shenzhen Museum. Photo taken from field research in the Museum, 3/12/2017.
Photo 2.3: master planning of SSEZ (1984)
Source: Shenzhen Special Economic Zone Yearbook 1985. (1985),10.
Photo 2.4: Shenzhen Special Economic Zone Master Planning (1986-2000)
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Source: Shenzhen Special Economic Zone Yearbook 1986. (1986), 8.
Photo 2.5: Urban spatial structure, “clusters in a belt shape” of Planning 1986
Source: speech delivered by Chen Yixin, deputy chief planner of Shenzhen Planning and Land Resources
Commission, at the 7th Annual meeting of the 3rd Women Planners Committee of the China Planning
Association. http://www.sohu.com/a/213324760_611316 (access on 19/9/2018).
In the 1980 planning (photo 2.2), there appeared some unconventional contents. There
were only four types of land-use: industry and warehouse; residence; tourism; and
farmland, mountain and forest. The residence areas were arranged around industrial
areas, which seemed like the subsidiary construction of industry. It could be inferred
that the planning was based entirely on the needs of industrial development and its
main purpose was to determine the locations of several industrial zones for immediate
construction. There were similar phenomena in the planning and construction of the
relatively independent area, Shekou Industry Park. The common feature of the 1980
and 1981 planning of Shekou Industry Park (see photo 2.6, 2.7, 2.8) was that there
were only three types of land-use: port, industry and residence (including villas and
staff dormitories). In reviewing these early plans from today’s perspective, many
shortcomings could be found undoubtedly. But when evaluated against the
background of the time, they were respectively in line with the needs of SSEZ in its
infancy and the original idea of establishing Shekou Industry Park by the Hong Kong
China Merchants. Comparing the 1981 planning of Shekou and the 1985 survey map
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(see photo 2.9), it could be found that the actual construction went beyond the scope
of the planning, and many public buildings such as stores, hotels and tourist facilities
were added, which indicated that the actual development speed of Shekou was much
faster than the original planning expectation. Yuan Geng admitted that when they
started to develop Shekou, they had no more plans but to open a shipbreaking steel
mill, a paint factory, and a container factory to meet the needs of Hong Kong China
Merchants. Unexpectedly, the situation changed in the past three years, and their
original ideas fell far behind the constant developing, which forced them to keep
moving forward.153 The incessant progress was to try meeting the demand of capital
expansion. Indeed, to attract and retain capital, they made the greatest commitment to
capitalists in project construction. Taking the construction of Shekou oil terminal as an
example, the Industry Park wanted to sign the oil depot contract with the Float Glass
Factory. In the internal meeting, the general manager of the Industry Park demanded
a military order that the project must be finished on time, and pointed out in particular
that it must be put into operation before May 30, 1987. Otherwise it might result in a
daily fine of 25,000 USD, and seriously damage the reputation of the Industry Park.154
To fulfill this promise, they worked day and night to complete the project and made the
factory owner very satisfied. The capital was kept in the Industry Park, and later the
factory developed into one of the most successful factories.
Photo 2.6: G.M.S.M. Shekou Industrial Zone General Layout (1980)
Source: Tu Qiao. Yuan Geng Biography: The Reform Scene 1978-1984 (Beijing: Writers Publishing
153 Quoted from Yuan Geng’s speech at the forum of responsible comrades of ports at 21st August 1982, China Merchants Group Office and Research Association of China Merchants History, ed & print. Yuan Geng’s Anthology (2012),58. 154 “Summary of the special meeting on ensuring the completion and operation of the oil depot and oil terminal of the First Bay” (13/09/1986), General manager office of Shekou Industrial Park, ed. Compilation of Documentation for the China Merchants Shekou Industrial Park Vol6 (1988),129.
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House, 2008).
Photo 2.7: Land use plan for Shekou Industrial Park before 1985
Source: China Merchants Archives, file No. A15.
Photo 2.8: diagram of Land use plan for Shekou Industrial Park before 1985
Note: diagram drew according to photo 2.7 for better understanding
Photo 2.9: survey map of existing land use of Shekou Industrial Park (1985)
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Source: China Merchants Archives, file No. A161.
The Master Planning of Shenzhen, which was found in the Shenzhen Yearbook 1985
(photo 2.3), showed considerable changes. New types of land-use were added, such
as administrative and commercial areas, university and scientific research institutions,
and public green spaces. It was presumed that this planning was the revised version
after Liang Xiang’s visit to Singapore. At that moment, the influx of capital, in addition
to requiring production spaces, also brought about the needs of living quality and urban
environment by foreign investors. This planning reflected the great efforts made by the
local government to create a better urban environment to attract more people and
capital. When coming to the 1986 statutory version, the master planning had shown
the integrity of a city. But if looking at the proportion of land-use, residential land-use
only occupied 18.2%, which was below the standard.155 It could be inferred that the
attention of both capital and the government were in industrial production, and did not
consider the housing development seriously due to the welfare housing policy at that
time. Before the commercialization of housing, the housing industry did not gain any
attention from capital.
The reasons for planning and adjustment were closely related to the leaders of the
municipal government, especially the Secretary of SMPC. The SEZ was a new thing
155 According to the Clause 4.3.1, “Classification of Urban Land and the Standard of Planning & Construction Land” (GBJ137-90), the proportion of residential land is 20-32%.
54
for which there were no precedents in the history of China. As leaders in early
Shenzhen, Wu Nansheng (吴南生) (term 1980.6-1981.3), Liang Xiang (梁湘) (term
1981.3-1986.5) and Li Hao (李灏) (term 1986.5-1993.4) had no experiences in urban
construction and economic development. They relied on their courage and judgment.
The timeframe for conducting or adjusting the planning was very short in each time,
which could prove objectively that these plans did not carry out in-depth research and
future prediction, and also showed that capital was very eager to enter the new market.
There was not much time left for leaders to think over, and they had to only try in
practice to seize the fleeting opportunity to introduce capital. They constantly invited
experts to guide and compile planning, personally participating in research and
listening carefully to experts’ opinions. “The integration of executive leadership and
professionals was the golden key to solving problems.”156 At the same time, they also
learned valuable experiences about urban development through visiting cities. In the
face of new situations that often arose because of the rapid urban development and
the constant changes in the positioning of SSEZ from the central government, they
had to make an immediate adjustment to the planning. Thus, a leap-forward forecast
of population scale from half million to 1 million to 3 million emerged undoubtedly. All
these cases indicated that Shenzhen leaders were good at learning and listening to
suggestions, daring to challenge and change, but also showing the style of dictatorship.
In the early stage of Shenzhen, there was no lack of cases in which top leaders’ word
was the final decision or direct order. Even nowadays, the words of leaders at higher
rank are still as serious as an imperial edict to the lower ranks, which is a common
phenomenon in Chinese officialdom. Therefore, top leaders’ ability and
accomplishments are key factors in government decisions.
People’s needs also had an important impact on planning. If people did not put forward
requirements of living conditions, urban planning and construction would be more
responsive to capital expansion, but ignoring housing issues. In the early stage of
Shenzhen, there were obvious stage characteristics that people did not ask for better
living conditions and the urban environment.
Wu Songying, the previous vice minister of Shenzhen Propaganda Department and
director of Shenzhen Special Zone Daily, arrived in Shenzhen in July 1981 and
stayed temporarily in Xinyuan Hostel (nowadays the Shenzhen Guest House). He
described the place upon his arrival and the dormitory later as following:
“It was as big as a classroom, standing a dozen bunk beds….I went to the other side
of this bungalow and took a shower in the public bathroom.” 157 “The dormitory
buildings for government cadres were built in Tongxinling which was a desolate place
a dozen years ago. We walked on a hilly path and passed an embankment between
two small ponds, then arrived at the office building…Service interruption of water and
156 Ganshi Zhou, “Historical experience of Shenzhen Planning”. Urban Studies Vol.17 No.4 (2010): 6. 157 Songying Wu. The Hardships and Splendor of Shenzhen (Guangzhou: Guangdong People’s Publishing House, 2015), 43.
55
power was a common occurrence…The only market of the city, Nantang Market, was
more than one hour distant by bike.”158
The description by Wu reflected the situation of the period from 1979 to 1983. The
early living environment in Shenzhen was consistent with the development stage of
the national housing, reflecting the level of the national economy and urban
development. That the extremely frugal principle of construction was implemented
nation-wide from 1949 to 1979 before the economic reform, coupled with the
stagnation in development in the ten years of the Cultural Revolution, led to an
extremely low level, 3.5-4.0 square meters per capita, in the average living area of the
country. There were countless families without housing, and the common living
experience was "crowded room, personal privacy not guaranteed, lack of storage
space, inconvenience, lack of a sense of security and stability”.159
In addition to the poor living conditions prevalent throughout the country, there were
special reasons why early Shenzhen people did not ask for better living quality. Unlike
the natural development of a city, Shenzhen became a city from a small border town
in one day because of political policy. Thus, its population growth was not led by the
natural birth/death or the normal population flow, but was gathered together in a very
short period under the power of the state. Most of the people who were transferred
under the organizational command from all over the country came with doubt and
reluctance, and would have preferred to come alone rather than bring the whole family,
without any intention to settle down in Shenzhen. Another kind of people was recruited
by factories, mostly from small towns or rural areas, young and low-educated, mainly
hoping to make some money in Shenzhen and go back to their hometown later.
Therefore, the early population structure of Shenzhen was characterized as quite
uneven with a big portion of single (including married but came alone without family),
young and industrial population. The housing requirement of this population structure
was relatively a basic type. The most basic residential functions, i.e. a place to eat,
sleep and wash, could satisfy them temporarily. It explained why there only industrial
zones and living areas were arranged in the first edition of Shenzhen master planning.
This not only reflected the only goal of the government at that time was the
development of industry to meet the needs of capital, but also reflected the status of
Shenzhen people, simply working, eating and sleeping.
With economic development and much more contact with the outside world, Shenzhen
people obtained more fresh ideas and understanding of living quality brought by foreign
investors, overseas Chinese, newspaper and broadcasting. As people’s life being
relatively stable, they began to pursue a better quality of living environment, which was
reflected in the 1986 planning adding land-use and construction plans of public service
158 Ibid.,53. 159 It is a summary of the environmental psychology sampling survey of new built employee dormitories in nine cities of Shenyang, Shanghai, Fuzhou, Wuhan and so on in 1980, excerpted from Lü Junhua, Peter G. Rowe, Zhang Jie, ed. Modern Urban Housing in China 1840-2000, (Beijing: Tsinghua University Press, 2002), 210.
56
facilities, cultural buildings, education, urban parks. Increasing public facilities not only
created a better investment environment but also greatly improved the living quality of
Shenzhen people. The improvement of ordinary people’s cognition and living demand
promoted the adjustment of urban planning and construction. It is an important aspect
of sustainable urban development that a city attracts and retains talent by making
changes.
2.4.2 Stage Two
By entering into the 1990s, SSEZ began to take shape after a decade of rapid
development. Apart from the industrial zones, Luohu commercial center was formed
with China’s tallest building, the International Trade Center Building, at its center, and
a series of major facilities were under construction, such as Luohu Entry Port, Shekou
Port, Huangtian Airport, Beihuan Road, Binhe Road, Shenzhen Stadium, etc.. The
continuously inproving economic indicators and the completion or start-up of various
projects were pushing Shenzhen into a new stage. The year 1992 was an important
year for China’s economic reform, with Deng Xiaoping’s second tour to the south in
January giving a strong impetus to deepen China’s reform. In particular, the Tour
solidified SSEZ’s position as being the pioneer of reform.
In the first unified land conversion on June 18, 1992, the villagers within the SSEZ
were transformed into citizens while the rural collective land was transformed into
state-owned land. In the same year, the State Council approved Shenzhen to revoke
Bao’an county and establish Bao’an district and Longgang district. Significant changes
in the size of state-owned land, population and administrative structure promoted
Shenzhen to redesign its development strategy and urban planning. In June 1993, the
SMPC officially launched the Shenzhen City Master Planning (1996-2010) (see photo
2.10), which was completed in December 1996. The State Council approved it in 2000
after several rounds of expert demonstration and examination.
The first feature of the 1996 planning was that the planning area extended to the whole
city, i.e., from 375 square kilometers inside the Second Line to about 2000 square
kilometers outside the Line. In the planning, the city would expand outward through
three development axes (see photo 2.11), respectively linking Guangzhou, Dongguan
and Huizhou, and developing clusters along the main traffic routes, thus, to form a
“cluster-network” urban structure. This reflected the inadequacy of space inside SEZ
and the eagerness of capital seeking new reproductive space. When the government
was still making economic development its priority, it was necessary to expand the
planning territory to support the needs of capital expansion fully. The planning also
considered, for the first time, the relationship with the urban system of the Pearl River
Delta and the coordinated development with Hong Kong after the 1997 handover. The
intention was obviously to start weaving a network for freer capital flows in the southern
region.
Photo 2.10: Shenzhen City Master Planning (1996-2010)
57
Source: http://www.szpl.gov.cn/ywzy/ghzs/plan/plan.htm (access on 17/9/2018)
Photo 2.11: Urban structure of Shenzhen City Master Planning (1996-2010)
Source: http://www.szpl.gov.cn/ywzy/ghzs/plan/plan.htm (access on 17/9/2018)
Another important feature of the 1996 planning was that it aimed to build “a beautiful
city full of vitality” and “make people live happily”. Housing development was listed as
one of the six development goals: “to determine population distribution and habitation
pattern; to provide adequate housing land; to meet the needs of citizens for adequate
housing choices; and to be equipped with public safety, education, healthcare, cultural
and recreational facilities, physical fitness and communication facilities to meet the
needs of future life”.160 Through 20 years of rapid development, both the government
160 Quoted from “Urban Functions and Development Goals”, Shenzhen City Master Planning (1996-2010). http://www.szpl.gov.cn/ywzy/ghzs/ztgh/zhineng.htm (access on 13/9/2018).
58
and individuals have accumulated certain wealth. Many people decided to settle down
in Shenzhen, with their families who had been left in their home town moving to
Shenzhen. With the gradual increase in the number of seniors and children, the
population structure in Shenzhen changed, while people’s requirements for housing
quality and good environment were raised. The commercialization of housing gave
people the right to express their wishes by choosing housing and community suitable
for their economic conditions and family needs. From the government perspective, the
goal was no longer the simple pursuit of capital accumulation as in the early stage but
started to consider the sustainable development of the city, and one of the important
and tough tasks was to make the city affordable and livable for the large population.
With the thorough termination of the housing allocation system, the real estate industry
has gradually become a new pillar industry, attracting the sensitive capital rushing in
rapidly. Therefore, the elevating of housing development to an important position in the
overall planning was in line with not only people’s pursuit of quality of life but also the
needs of capital reproduction.
In the process of compiling the 1996 planning, some different practices were adopted.
A public exhibition was organized to solicit public opinions before the planning was
submitted for approval. This pioneered public participation in Shenzhen urban planning
practice. It showed that the government paid more and more attention to public opinion,
at least seemingly, and gave citizens the opportunity to express their thoughts. At the
end of 1997, Shenzhen built the first planning exhibition hall in China, which
specialized in exhibitions of master planning, important detailed planning and design,
such as the CBD detailed planning, and exhibitions and publicity of some planning
projects irregularly. Shenzhen citizens showed unprecedented enthusiasm for
participating in the planning and management of the city, which inspired their love for
the city and a sense of ownership. It indicated that the government was concerned not
only about people’s livelihood, but also the voice of ordinary people. It can be
speculated that the voice of the public will play an increasingly important role in urban
development.
Regarding planning implementation and urban management, to restrain the
phenomenon that the indicators of land parcel were revised by developers to gain more
benefit through various channels in the past, in 1998, the Shenzhen Urban Planning
Ordinance was formulated relying on the legislative power of Shenzhen. Referring to
the planning management measures of Hong Kong, the “statutory plan” was
introduced, that was, detailed and clear developmental indicators for each parcel was
worked out and given the status of statutory documents. At the same time, the Urban
Planning Board of Shenzhen (UPBSZ) was set up, responsible for drawing up statutory
plans and making decisions in major projects. The UPBSZ consisted of 29 members,
of whom no more than 14 were government officers and others were professionals and
social figures.161 It was a statutory body with ultimate decision-making power in urban
161 See http://www.szpl.gov.cn/szupb/jgzn_6708/201105/t20110506_457325.html (access on 6/10/2018).
59
planning, making it difficult for developers or even government agencies themselves
to revise the parcel plans. These management institutions and measures were
effective means for the government to curb the excessive pursuit of profits by capital.
Instead of being fully responsive to capital requirements in the previous stage, the
government started to make changes. Urban planning has become more effective in
controlling urban development.
Although strengthening supervision in the planning practices, in fact, the result of the
implementation of the 1996 master planning turned out to be not so satisfactory. When
planning to expand outside the Second Line to form the cluster-network pattern, frankly
speaking, it was a bit idealistic after all. In the first two decades of the economic reform,
most of the limited government funds and public resources were invested in the SEZ.
The planning implementation relied on the support of the land system by conducting
unified land conversion. Therefore, the development of the SEZ was orderly. At the
same time, the lower cost outside the Second Line attracted some of the capital which
was eager to seek the highest profit. However, due to the weak administrative
resources, the inadequate provision of public services, and the equivocal land system
mingling state-owned land with collective land, the development outside the SEZ was
disorderly in the way of spreading out and self-governance, which resulted in the
planning management and control existing in names only. Because of the vast
differences between inside and outside the SEZ, although reasonable overall planning
was compiled, it was difficult to put it into spatial practice successfully.
2.4.3 Stage Three
Shenzhen entered the Twenty-first Century with difficult strides in terms of both internal
and external challenges. The negative factors brought about by the rapid development
of more than 20 years have gradually emerged, beginning to confront the difficulties in
land, energy, population and ecology. The gap between the rich and the poor was
widening to create increasing social inequality and contradictions. The vice mayor
Wang Ju162, one of the pathbreakers in Shenzhen people’s minds, was ‘shuanggui’163
(双规) at the beginning of the new century for taking bribes and abusing his power,
which greatly undermined public confidence in the government. Outside the city, first
of all, Shanghai Pudong began its reform and opening up from the 1990s, rapidly
becoming a new economic star of the whole China. The competition in the financial
sector between Shenzhen and Shanghai reached unprecedented intensity throughout
the 1990s. In September 2000, although the Shenzhen Stock Exchange kept its main
board from merging with Shanghai, it was stipulated that it could no longer issue new
162 Wang Ju, born in March 1942, led 20,000 engineering soldiers south to Shenzhen in 1981 to support Shenzhen’s urban construction. He was a highly respected and heroic leader of the regiment. He served as deputy secretary-general of Shenzhen Municipal Government, director of the Shenzhen Land and Resources Bureau, director of Shenzhen Planning and Construction Bureau, Secretary of Longgang District Committee successively, and then the vice mayor since 1995. He has been in charge of the departments of land, planning and construction for many years. Because of corruption, bribery and the use of power for seeking a huge amount of illegitimate interests for his children, relatives and friends, he was ‘shuanggui’ in 2000 and sentenced to 20 years in prison in 2001. 163 ‘shuanggui’ is a disciplinary measure outside the regular legal system under which party members are detained and interrogated.
60
shares. Sensitive capital flowed out of Shenzhen immediately and quietly. Some news
came out that the most influential enterprises of Shenzhen, such as the China
Merchants, Ping’an Insurance, Huawei, and ZTE, were planning to move to Shanghai.
Secondly, the nearby urban agglomeration of the Pearl River Delta was also rising to
become a strong competitor of Shenzhen. And the third one was Hong Kong, just on
the other side of Shenzhen river, whose government started to compile “Hong Kong
2030: Vision and Strategy”164 to be ready for the second taking off in the new century.
The future of Shenzhen’s development has become a topic for hot debate and
speculation among both the government and people.
Under such a situation, the SMPC put forward a major strategy of developing
Shenzhen into an international city, and for the first time, proposed three pillar
industries of high-tech industry base, modern logistics hub, and regional financial
center.165 Subsequently, the Committee organized the formulation of the second urban
development strategy. Through 2003-2005, Shenzhen Planning Bureau and CAUPD
compiled “Shenzhen Urban Development Strategy of 2030” (known as Shenzhen
2030). In the same year, “Shenzhen Basic Ecological Line Management Regulations”
were promulgated and their scope was delimited (see photo 2.12). According to this
development strategy, Shenzhen launched a new master planning in 2006. The
Comprehensive Planning of Shenzhen City (2010-2020) (see photo 2.13) was
completed in more than two years and was approved by the State Council in August
2010.
Photo 2.12: Control Map of Shenzhen Basic Ecological Line (2005)
164 Pui Yin Ho. History of Hong Kong’s Urban Planning 1841-2015. (Hong Kong: Chung Hwa Book Co. (H.K.) Ltd, 2016), 325-7. 165 See “Work points of 2003 of the Shenzhen Municipal Committee and the Shenzhen Municipal Government” Shenzhen[2003] No.4, 19th February 2003. http://www.sz.gov.cn/zfgb/2003/gb323/200810/t20081019_96121.htm (access on 13/9/2018).
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Source: Urban Planning Society of Shenzhen (UPSSZ)
http://www.upssz.net.cn/news/newsinfo.aspx?id=616 (access on 17/9/2018)
Photo 2.13: Comprehensive Planning of Shenzhen City (2010-2020)
Source: Urban Panning and Land & Resources Commission of Shenzhen
http://www.szpl.gov.cn/ywzy/ghzs/201710/t20171024_443924.html (access on 3/1/2017)
In this 2006 planning, Shenzhen was planned to develop into an “innovative,
62
comprehensive economic zone, a city of national economic center, an international city
jointly developed with Hong Kong.”166 Around the four goals: regional cooperation,
economic transformation, social harmony, ecological protection,167 the 2006 planning
had several distinct features. Firstly, regarding industrial structure, the four pillar
industries were defined, high and new technology, modern logistics, modern finance
and cultural industry,168 proposing a series of measures to consolidate and develop
these four pillar industries. Secondly, the control scale of the permanent resident
population in the planning period was 11 million,169 and for the first time, the concept
of urban management and service population was put forward, which included
permanent residents and temporary residents living in Shenzhen for more than half a
year.170 This management and service population was taken as the basis for arranging
public service facilities, transportation, and municipal facilities. This was a very suitable
concept for a city of immigrants. However, due to the difficulties in counting the
temporary population, the size of the management and service population was difficult
to predict, thus, not mentioned in the planning. The last, but the most important feature
was the land use pattern. The 2006 planning was the first non-expansive urban master
planning, that was, the total amount of renewing land use (190 square kilometers)
exceeded the newly added land use for construction (140 square kilometers). During
the planning period, the newly developing land was mainly obtained by regenerating
the existing land use.171 This practice of guiding the spatial transformation through
planning transformation was an innovation in China. In conjunction with a series of
urban renewal and transformation measures afterward, Shenzhen has undergone
many explorations in urban regeneration and put forward a “Shenzhen Model”, i.e.,
government guidance and market operation, to solve the problem of inherent shortage
of urban space172 to a certain extent.
In residential construction planning, the keyword was affordable housing. The price of
commercial housing in Shenzhen has been rising steadily, becoming an unaffordable
item of consumption for most ordinary citizens. The government has realized that
industry upgrading and economic transformation necessitated the continuous
introduction of new talent. Therefore, providing affordable housing, superior public
service facilities, and a friendly employment environment were significant in retaining
talent. The planning proposed to improve the social housing security system and
vigorously develop the construction of affordable housing with the goal to reach per
capita residential area of 33 square meters for the permanent population and a well-
off living quality.173 Shenzhen’s 2035 planning is under compilation. Relying on the
concept of the Guangdong-Hong Kong-Macao GBA, Shenzhen will develop more
166 See section11, Text of “Comprehensive Planning of Shenzhen City (2010-2020)”, http://www.szpl.gov.cn/ywzy/ghzs/201710/t20171024_443924.html (access on 3/1/2017) 167 Ibid., section14. 168 Ibid., section25. 169 Ibid., section19. 170 Ibid., section20. 171 Ibid., section18. 172 Shenzhen covers an area of nearly 2000 square kilometers, which is only one eighth of Beijing, one third of Shanghai and one fourth of Guangzhou. 173 Ibid., section107.
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closely with its surrounding cities and have the opportunity to realize spatial expansion.
It is believed that Shenzhen will enter a new stage of development after the new master
planning is issued.
2.5 Conclusion
It has been proved that Shenzhen’s industrial upgrading and economic transformation
have enjoyed great success. Shenzhen’s industrial structure has been optimized, and
its economic benefits have been continuously improved, which has regained national
and even worldwide attention for Shenzhen. This was the result of strong government
leadership conducting guidance for direction, policy support and moderate intervention
through urban master planning and related policy coordination.
In the urban development and housing construction, the Shenzhen government
controlled and guided all aspects of land supply, housing policies formulation and
master planning, thus, always controlled the general direction of urban development.
Although there have been various problems and even crises in the development
process, such as, in the early stage, because of the lack of funds and the needs of
development, it had to rely entirely on foreign investment. Thus, the government had
to cooperate with the needs of capital and the ecological environment inevitably
suffered a certain degree of damage; the establishment of the Second Line has
brought about a geographically uneven dual development inside and outside the SSEZ;
the unified land conversion has accelerated the formation of the urban villages; the
binding of government finance and land system continued to push up housing prices,
these were inevitable in the course of development. Whether success or failure, this
was the result of capital expansion and the result of the competition between capital
and government. Under the leadership of the central government, the Shenzhen
government has always found opportunities to adopt policies of regulatition and control,
constantly adjusting the developmental direction of the city’s industry and space, and
constantly improving the housing security system.
Shenzhen’s experience shows that China’s 40-year economic reform has been a great
success in meeting the needs of local people and global capital expansion. Because
of the characteristics of capital, it inevitably led to uneven spatial development. As a
developmental state, even if a certain degree of compromise was needed in a given
period, China’s government could formulate industrial policies to affect the direction of
capital flows, which was different from the way in which capital was completely free-
flowing in capitalist countries. Although the current marketization in China is already
relatively high, the government still has strong decision-making capabilities to control
capital expansion to achieve a certain balance. This is the market economy with
Chinese socialist characteristics.
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Chapter 3: The Role of Developers
3.1 Introduction
China’s cities have undergone tremendous changes since the economic reform,
among which, the change of housing pattern has led to the transformation of urban
living space and its impact on people’s lifestyle. The housing development is not only
the epitome of economic development and social transformation but also one of the
forces of urban spatial development. In chapter two, it was explained that a series of
government policies of land reform and housing reform had pushed housing from the
welfare system to the housing commercialization system, solved housing demand
through market means, and greatly improved the quality and environment of housing
and community. Housing commercialization gave birth to the real estate industry, which
soon became the pillar industry of the national economy. Real estate companies also
emerged as the times required, and have achieved considerable development.
Real estate is an industry with distinct regional characteristics. Each city presents
different developmental features because of differences in historical and cultural
backgrounds, geographical and natural conditions, economic development level, local
governance styles, etc. As the pilot of the economic reform, Shenzhen has been in a
leading position in housing reform and real estate development. In addition to the first
land auction in China mentioned above, there were many “national first” records in
Shenzhen. For example, in 1980, the first real estate company, Shenzhen Special
Economic Zone Real Estate Company (SSEZREC), was established and the first
commercial housing community in China, Donghu Iiyuan (东湖丽苑), was developed
by SSEZREC in cooperation with Hong Kong Miaoli Real Estate Group (妙丽集团).
SSEZREC provided land while Miaoli was responsible for the funds and sales, and the
profits were distributed in the proportion of Shenzhen 85% and Miaoli 15%. Even still
in the drawing stage, the housing was snapped up by Hong Kong, Macao and some
overseas Chinese, because the price of HK$2,730 per square meter was very low for
these buyers. Since China implemented the welfare housing system at that time, there
was no concept of property management services. In order to meet the needs of
residents in Donghu Liyuan, Shenzhen Property Management Company, the first
property management company in China, was established, which was a subsidiary
wholly owned by SSEZREC. 174 Shenzhen also introduced the first local property
management regulations in 1994, “the Regulations on Property Management in
Residential Area of SSEZ”, while the national unified “Property Management
Regulations” was promulgated ten years later in 2004. In 1988, Gui Qiangfang175, who
174 Luo Jinxing. “We Built the First Commercial Housing Community of China”. Oral History of 30 Years of Reform and Opening Up. http://www.gzlib.gov.cn/ztoralhistory/16354.jhtml (access on 15/2/2019) 175 Gui Qiangfang, born in 1957, graduated from university in 1984 and went to Shenzhen. He worked in the municipal government infrastructure office, land reform office, and Land Bureau successively. He founded the first real estate agency company in 1988, and also the magazine "China and Foreign Real Estate Guide". In 1989, he hosted a seminar on China’s property management and a real estate training course for senior cadres. In 1991, he edited the first issue of "Shenzhen Real Estate Yearbook". He is known as the godfather of China real estate intermediaries.
65
was working in the Shenzhen Housing Reform Group, discovered that intermediaries
played an important role in real estate development when he visited Hong Kong.
Therefore, he applied to set up China’s first real estate agency, International Real
Estate Consulting Co., Ltd, under the guidance of which, Vanke (万科), the leading real
estate company nowadays, started the housing development business through
attending the land auction in November 1988. The auction that Vanke participated in
was the second land auction in China, but it was the first time that private enterprise
obtained the qualification for real estate development through land auction.176 In 1991,
Vanke established the first owner committee of China in its first completed project,
Tianjing Garden (天景花园), building a platform for co-management of property owners
and a property management company.
In addition to the beginning, rapid development and great achievement in real estate
industry, as well as its high quality in design and property services, hundreds of
developers have sprung up in Shenzhen (see table 3.1), including some well-known
enterprises. For example, Vanke, the leading developer, specialized in building
ordinary housing and providing high-quality property services; The China Merchants
Real Estate 177 created the “community comprehensive development model” to
combine residential and industrial development; The Overseas Chinese Town Real
Estate178 was praised as the first brand of China’s tourism developer. Shenzhen
developers had obvious factional characteristics, which firstly could be divided into two
camps: state-owned developers and private ones. The state-owned companies were
subdivided into local and outside ones. Local developers referred to those which were
established by the SMPG for the construction and development of the SSEZ in its early
stage, such as the SSEZREC and Shenzhen Construction Investment Holding
Company which was founded after the transfer of the 20,000 engineering soldiers.179
176 See Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 65-66. 177 The Hong Kong Merchants Bureau, under the Ministry of Communication, began to develop the Shekou Industrial Park in 1979. The Shekou Industrial Park Real Estate Company was established in 1981, but it was not officially listed until 1983, mainly responsible for the planning and construction of the Industrial Park. As the business expanded to other districts of Shenzhen and other cities of the country, in 1997, the company renamed to Shenzhen China Merchants Real Estate Co., Ltd. thanks to the experiences in developing the Shekou Industrial Park, the China Merchants Real Estate is characterized by its advocacy of the ‘community comprehensive development model’ and ‘green real estate development concept’. See Zheng Hu, Shaobin Lin, Xinzhi Lu, ed. The China Merchants and China’s Real Estate Industry (Beijing: ZhongHua Book Company, 2010). 52,57,172,207. 178 Overseas Chinese Town Holdings Company (OCT) was established in November 1985. It is affiliated to the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council. It acquired a land of 4.8 square kilometers in Shahe area of Shenzhen for independent development. It built the earlies theme parks in China, the Chinese Folk Culture Village and the Window of the World. And replying on the theme parks, it built complex communities of high-end hotels, residences, offices, etc. See Shenzhen Real Estate Association, ed. Shenzhen Classical Properties. (Nanchang: Jiangxi People’s Publishing House, 2002), 83-86. 179 In 1982, China dismobilized 1 million troops and abolished railway and infrastructure engineer troops. Shenzhen was in the period of construction, so it accepted 20,000 engineering soldiers transferring to civilian work. These officers and soldiers established Shenzhen Construction Investment Holding Company, which undertook many government projects and became the main force in the early construction of the SSEZ. Later, it was reorganized into Shenzhen Construction (Group) Co., Ltd. with real estate development, construction and property management as its main business, and was merged by Evergrande Group in 2011. See Wu, Songying. The Hardships and Splendor of Shenzhen (Guangzhou: Guangdong People’s Publishing House, 2015), 06.
66
The outside developers were institutions accredited or established in Shenzhen by
various ministries and commissions to support the development of SEZ. For example,
the China Merchants Real Estate and OCT mentioned above, and Shenzhen Industrial
and Trade Center of China Aerospace Technology Import and Export Corporation
which developed the area around the Shanghai Hotel, belonging to the Ministry of
Aerospace Industry. 180 Directly under the central government, these companies
acquired a large amount of land to develop when they entered Shenzhen, separating
from the urban planning and construction management of SMPG. In the early stage,
Shenzhen appeared to be in a situation of “group separation”. Therefore, the start of
private real estate companies was extremely difficult. At the beginning, private
developers were represented by Vanke and Jintian (金田). Later, with the construction
of Futian CBD and the rise of Chaoshan businesspeople, there emerged Chaoshan
factional developers represented by Galaxy Group (星河集团), Kaisa Group (佳兆业集
团), and Excellence Group (卓越集团). Among the many developers, Vanke focused
mainly on residential product research and development, especially in housing for
ordinary people. Vanke’s growth was a mirror of Shenzhen’s housing development and
also reflected the transformation of Shenzhen people’s way of life.
Table 3.1 number of real estate developer (1990-2016)
year number year number year number
1990 80 1999 563 2008 550
1991 101 2000 578 2009 N/A
1992 138 2001 560 2010 668
1993 188 2002 564 2011 687
1994 337 2003 600 2012 732
1995 N/A 2004 600 2013 751
1996 398 2005 732 2014 821
1997 573 2006 650 2015 857
1998 581 2007 598 2016 856 Source: Editorial Board of Shenzhen Real Estate Yearbook, ed. Shenzhen Real Estate Yearbook 1991~2017 (Shenzhen: Shenzhen Press Group Publishing House, 1991~2017).
As indicated before, in the system of commercial housing, the developer stands
between the government and the buyer. Developers gain land and developmental
approval from the government. By doing projects successfully, developers contribute
to increase local employment, tax revenue and adding value in the region to influence
urban development. To the buyer, developers create designed living environment and
180 China Aerospace technology Import and Export Corporation, affiliated to the Ministry of Aerospace Industry, established an office in Shenzhen in 1980, and was upgraded to Shenzhen Industrial and Trade Center in April 1982. Shenzhen Aeronautical Building Industrial Co., Ltd. was established in 1985, and renamed to Shenzhen Nanguang in 1987. In 2007, Shenzhen Nanguang Group Co., Ltd. was changed to Shenzhen Zhonghang Real Estate Co., Ltd. Zhonghang has developed Shanghai hotel area and established Tianhong Mall, a local chain department store in Shenzhen. Details see the Growth Exhibition (1979~2019) of the AVIC INTL in its website https://www.avic-intl.cn/ (access on 15/2/2019).
67
way of life for the future dwellers. In the system of affordable housing, developers need
to decide if they are willing to invest in the small profit business to build a strong
relationship with the government and get some potential opportunities to collect profit
in other areas. This chapter is on the role of the developer. After a brief outline of the
development process of Shenzhen’s real estate industry, it takes Vanke as a case
study, as it is a developer growing in Shenzhen and focusing on residential
development, to examine how developers can respond to the government’s variety of
real estate control policies and promote the housing development in Shenzhen.
Meanwhile, it aims to investigate how they conduct the housing research and
development (R&D), improve construction quality, build community landscape and
space, communicate with customers, and provide good property services, to satisfy
people’s ever-changing requirements in housing and community, to promote people’s
knowledge and demands on housing, and to affect people’s everyday lives.
3.2 The Rise, Prosperity and Current Situation of the Real Estate Industry in
Shenzhen
Innovation was the driving force of economic growth and development of capitalist. It
included innovation in product, technology, market, resource allocation, and
organization. Creative destruction led to the business cycle of prosperity, recession,
depression, and recovery.181 In China's reform and opening-up, the commercialization
of housing has brought about new products, new markets and new enterprises, thus
forming a new industry. Schumpeter’s theories of innovation and business cycle can
be drawn on to explain the development process of China's real estate industry from
an emerging industry to a traditional one. However, the rise and fall of the industry was
not only influenced by the internal innovation of enterprises and entrepreneurs, but
also by other complex factors, such as government policies, people's living standards
and consumption levels.
The development of China’s real estate industry in 40 years can be divided into major
stages of approximately ten years each. The first decade, 1978~1988, was the
exploratory period of land reform and housing reform, and also the budding period of
the real estate industry. The real estate development entities were state-owned
enterprises, and most of the projects were according to government plan and budget.
Apart from foreign-related commercial housing, most of the housing was distributed in
the form of welfare. For example, Tongxinling (通心岭)182 community and Yuanling (园
岭) community (see photo 3.1) were the earliest multi-story residential buildings for
Shenzhen government personnel. The second decade began with the first land auction
181 Joseph A. Schumpeter, Redvers Opie trans. The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. (New Brunswick and London: Transaction Publishers, 1983). 182 Tongxinling community was the earliest government staff dormitory built in 1981. However, due to lack of construction experience, although the dormitory was built up, there was no accessible road, no connected water, power and even sewers, which made it impossible to stay in. This lesson made the early
builders understand that before conducting construction, they need to firstly finish ‘san tong yi ping’ (三通
一平), that was, roads, water and power connected and the site leveled off. Details see Bi Wang, Xiaopei
Mo, Shenzhen Museum, ed. The History of Shenzhen Special Economic Zone. (Beijing: People’s Publishing House, 1999), 36.
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in Shenzhen. From 1988 to 1998, it was a trial period in which the new land system
and the housing provident fund were all in the experimental stage. The development
in this stage was still dominated by state-owned companies, but China’s first
generation of private or joint-stock real estate companies were born. Wanda (万达)183,
the representative of the northern region, and Vanke, representing the southern region,
started their exploration of the real estate industry in 1988. Especially after Deng
Xiaoping’s southern tour in January 1992, the real estate investment suddenly became
a hotspot for businesspeople to compete for. There appeared the repeated process of
real estate overheating and government control and regulation (see chapter two).
During this stage, real estate companies were constantly exploring and accumulating
experiences, including development models and directions, internal management,
product quality, and relationship with both the government and the customs, etc. The
third decade began in 1998 when China abolished the welfare housing system and
ended in 2008 when the global financial crisis was triggered by the subprime mortgage
crisis in the United States. This period was known as the “golden decade” of China’s
real estate development. The cancellation of the welfare housing system completely
pushed housing into the market, creating the outbreak of personal housing
consumption. In 2004, the state fully implemented the land auction system, which not
only enabled private enterprises to gain the equal right to compete with state-owned
enterprises but also attracted capital to compete for the real estate market. The
bundling of capital and land led to the crazy hoarding of land by developers, which
pushed up the land price, and later, pushed up the housing price to an unprecedented
high level. It was not until the financial crisis that the real estate development turned to
the adjustment stage. After a brief adjustment in 2008, the Chinese government
relaxed real estate policies to stimulate domestic demand, and the real estate industry
entered another round of rapid growth. In the fourth decade, the government tried more
supervision and control policies. Urban development started to focus on the
construction of affordable housing and urban regeneration. With the scarcity of land
resources becoming more and more obvious, the competition between developers was
more intense, and they were all seeking new development directions. Some
developers, such as Greentown (绿城中国), R&F (富力集团), Wanda and Country
Garden (碧桂园) have carried out large-scale overseas expansion. For ordinary people,
this was the decade when the rich and the poor were further divided greatly, and
housing prices have been rising wildly.
Shenzhen has also experienced these stages. As one of the first cities to develop a
real estate industry, Shenzhen real estate development has made an impressive
183 Wanda Group, one of the most famous real estate developers of China, was founded in 1988 by Wang Jianlin who resigned his government position and started his business by taking over a government-owned and heavily indebted real estate company, Dalian Xigang Residential Development Company. He tried very hard to get a loan of RMB500,000 to kick off his first project. Wanda became a private owned company when Dalian Xigang Residential Development Company was shareholding restructured to Dalian Wanda Real Estate Company in 1992. In the following 23 years, Wanda experienced four important transformations and grew from a real estate developer to a transnational firm with its business covering real estate, hotel, department store, cultural and tourism, children’s theme park, cinema and movie, sports and entertainment…and so on. Details see Wangjianlin’s inverview by Fanluxian, Forbes' Shanghai bureau chief 07/02/2014.
69
achievement, and the city’s appearance has also undergone profound changes. The
overall performance can be illustrated by a series of data and charts (see table 3.2-
3.3, figure 3.1-3.6). Table 3.2 and figure 3.1 are about the GDP of Shenzhen over the
years and the proportion of real estate contribution. The data shows that Shenzhen’s
economy has been in a period of rapid growth since the reform. The GDP of 2016 was
nearly 10,000 times that of 1979, and the GDP contributed by the real estate industry
was nearly 38,000 times. From figure 3.2, it can be seen that although the contribution
rate of real estate to GDP rose and fell in a certain period of time, and even dropped
to the lowest 1.2% in 1989, its overall trend was rising, from 2.38% to about 9%, and
it maintained a certain stability since then. The 9% share does not seem to be
outstanding for a pillar industry, but this is only the share of the real estate industry
itself. It can affect dozens of industries in the upstream and downstream, thus, it has
an important impact on the economic development. Table 3.3 and figure 3.3-3.6 list the
investment, floor area of construction, sales, price and other data of Shenzhen
commercial housing from 1990 to 2016. Undoubtedly, real estate investment was on
the rise, maintaining relatively stable growth in several periods, and some adjustment
then leaping growth at certain nodes. In 1992-1998, the investment was within 10
billion, then after 1999-2000, it suddenly jumped to 20 billion in 2001, reaching a peak,
more than 30 billion, in 2006 and 2007. An adjustment started in 2008 and ended in
2010, then a new surge began. It took only five years to break through 100 billion in
2016. The annual under-construction area and the newly started construction area
were directly related to the investment amount; therefore, the development trend and
the turning point were similar, but the overall rate of increase was lower than the
investment amount. Moreover, it is worth noting that the data of 2016 showed that the
investment increased sharply, but the area under construction, especially the newly
started area in that year, decreased actually, which can explain, to some extent, why
the cost of real estate development, especially the upfront cost, increased substantially.
Developers always passed their cost onto consumers through housing prices, which
can be seen from the housing price data. Every turning point was accompanied by the
rise of housing prices to a new level, especially in 2015 and 2016 when there was an
increase of 40% and 60% respectively.
Although Shenzhen’s real estate industry was booming, the problems caused by high
housing prices have become increasingly prominent. Unaffordable housing prices
made the polarization between the rich and the poor more obvious, and the public’s
doubts about the government and developers were getting stronger. Shenzhen used
to be a city that many people yearned for, but now the high housing prices made people
discouraged. Many college graduates no longer chose Shenzhen because they
estimated they could not afford a house in their lifetime. It was better for them to go to
some second or third-tier cities with less pressure. The increase in housing prices also
pushed up the price of rent and other living expenses. Those people who used to work
in Shenzhen could not stay any longer and chose to return to their home town. Many
factories and construction teams found it difficult to recruit workers. As the cost of
expansion and human resources increased dramatically, many enterprises began to
70
move out of Shenzhen. Foxconn184, listed in the world’s top 500, set up a factory in
Shenzhen in 1988 and developed it into the headquarters of mainland China. As early
as 2008, it began to set up branches in cities with lower costs in land and workforce,
such as Nanning, Zhengzhou, and Langfang, and even to countries with much lower
costs, like Vietnam and India. Huawei185, which was founded and grew up in Shenzhen,
also moved some departments to Dongguan. Land finance and the excessive
development of real estate has crushed the growth space of other physical industries,
which was harmful to the overall economic development in the long run.
The Shenzhen government may have realized this problem as early as 2008, but it
only took partial measures to alleviate it. Because land income and real estate tax was
one of the main sources of fiscal revenue, and GDP was the indicator of government
officials, these problems have not been given enough attention and systematic
guidance until 2018. On June 5, 2018, the Shenzhen Housing and Construction
Committee released the “Opinions on Deepening the Housing System Reform and
Accelerating the Establishment of Multi-sources Supply and Security System through
Rent and Purchase” which was called the second housing reform in Shenzhen. It
aimed at “building a multi-level, differentiated and fully covered housing supply and
security system for different income levels of residents, professionals and other
designated groups.” These Opinions divided housing into three categories: commercial
market housing, policy-supported housing, and public rental housing, accounting for
40%, 40%, and 20% respectively. Policy-supported housing included talent housing
and affordable commercial housing. Talent housing accounted for 20%, rentable and
saleable, providing to qualified talent, with the floor area of each unit mostly less than
90m2 and the rental/sales price about 60% of the market price. Affordable commercial
housing accounted for 20%, rentable and saleable, providing to registered residents in
line with income restrictions, with the floor area of each unit mostly less than 70m2 and
the rental/sales price about 50% of the market price. Public rental housing was for
eligible low/middle-income households, employees in relevant industries providing
basic public services, advanced manufacturing workers, and other eligible groups. The
floor area of each unit was mostly 30-60m2, and the rental price was about 30% of the
market price. People living in extreme poverty and marginal families living on low-
income only paid 10% of the rent for public rental housing. This was the first time that
the Shenzhen housing security system included bus drivers, subway drivers, sanitation
workers and other practitioners who provided basic public services, and blue-collar
184 Foxconn Science and Technology Group is a high-tech enterprise specializing in the research and development of 3C products such as computers, communications, consumer electronics, etc. It is widely involved in the development and application of digital content, automotive components, access, cloud computing services and new energy and new materials. Foxconn was founded in Taipei in 1974 by Guo Taiming, and invested in Shenzhen in 1988. Foxconn grew rapidly with more than one million employees and the world's top customers. It is the world's largest electronics technology manufacturing service provider. For details see its website http://www.foxconn.com.cn/index.html (access on 16/2/2019). 185 Huawei is a leading global provider of information and communications technology (ICT) infrastructure and smart devices. It was founded by Ren Zhengfei in 1987 in Shenzhen. For details see its website https://www.huawei.com/en/ (access on 15/2/2019).
71
workers in advanced manufacturing industries. 186 This policy and the successive
restrictions on purchase and price were serious challenges to the development of the
real estate industry. How the developers coped with these policies and adjusted their
business strategies is discussed in the following part with Vanke as an example.
Photo 3.1: Yuanling residential community, Futian District, Shenzhen.
Source: taken from the field research in Futian District Shenzhen, 16/12/2017.
Table 3.2 Gross domestic product and contribution of the real estate industry in
Shenzhen (1979-2016) (10,000 yuan)
year GDP GDP by real
estate industry
*ratio of GDP by
real estate industry
1979 19,638 467 2.38%
1980 27,012 688 2.55%
1981 49,576 1,152 2.32%
1982 82,573 1,850 2.24%
1983 131,212 3,181 2.42%
1984 234,161 6,301 2.69%
1985 390,222 14,759 3.78%
1986 416,451 15,420 3.70%
1987 559,015 17,347 3.10%
1988 869,807 35,016 4.03%
1989 1,156,565 13,831 1.20%
1990 1,716,665 91,396 5.32%
1991 2,366,630 155,372 6.57%
1992 3,173,194 236,652 7.46%
186 “Opinions on Deepening the Housing System Reform and Accelerating the Establishment of Multi-sources Supply and Security System through Rent and Purchase”, see http://www.szjs.gov.cn/csml/bgs/xxgk/tzgg_1/201806/t20180605_12082438.htm?winzoom=1 (access on 5/10/2018).
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1993 4,531,445 328,708 7.25%
1994 6,346,711 472,171 7.44%
1995 8,424,833 673,506 7.99%
1996 10,484,421 842,883 8.04%
1997 12,974,208 955,661 7.37%
1998 15,347,272 1,062,525 6.92%
1999 18,040,176 1,193,283 6.61%
2000 21,874,515 1,585,464 7.25%
2001 24,824,874 1,818,950 7.33%
2002 29,695,184 2,348,995 7.91%
2003 35,857,235 3,184,157 8.88%
2004 42,821,428 4,110,367 9.60%
2005 49,509,078 4,449,012 8.99%
2006 58,135,624 5,202,636 8.95%
2007 68,015,706 6,130,153 9.01%
2008 77,867,920 4,900,481 6.29%
2009 82,902,842 6,772,994 8.17%
2010 97,733,062 7,493,301 7.67%
2011 115,158,598 8,579,914 7.45%
2012 129,714,672 10,888,097 8.39%
2013 145,726,689 12,032,709 8.26%
2014 160,018,207 13,238,647 8.27%
2015 175,028,634 15,644,076 8.94%
2016 194,926,012 17,775,690 9.12%
Source: Shenzhen Statistics Bureau, NBS Survey Office in Shenzhen, ed. Shenzhen Statistical Yearbook
2017 (Beijing: China Statistics Press, 2017),27-28.
*the ratio was calculated according to the numbers of GDP and GDP by the real estate industry.
Figure 3.1 GDP and GDP by real estate industry (1979~2016) (10,000 yuan)
73
Notes: bar chart based on the number of the table 3.2.
Figure 3.2 the ratio of GDP by real estate industry (1979~2016)
Notes: line chart based on the number of the table 3.2.
Table 3.3 summary of residential housing in investment, floor area, the average price
year
investment in
residential
housing (100
million)
floor area of
residential
buildings under
construction
(10,000m2)
floor area of
residential
buildings sold
(10,000m2)
average selling
price of
residential
houses
(yuan/m2)
floor area of
residential
buildings
newly started
(10,000m2)
1990 7.06
1991 15.34
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
GDP DP by real estate industry
2.38%
4.03%
1.20%
8.04%
6.61%
9.60%
6.29%
9.12%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
74
1992 45.04 601.10 96.00
1993 66.80 909.51 140.89
1994 87.41 868.86 183.28
1995 62.85 844.20 209.07
1996 78.64 940.61 261.13
1997 85.50 966.18 336.70
1998 99.89 1146.97 372.38 5191 333.27
1999 141.31 1355.62 492.51 5004 492.81
2000 178.68 1576.89 556.82 5275 487.48
2001 209.71 1790.49 593.72 5517 792.24
2002 270.92 2124.86 724.41 5641 747.50
2003 250.19 2072.89 811.90 5679 645.18
2004 255.84 2257.68 802.58 6419 766.91
2005 265.54 2152.58 901.13 6996 753.90
2006 325.05 2157.39 704.89 9190 609.46
2007 331.76 2177.78 500.35 13370 621.91
2008 314.98 2210.36 413.65 12823 471.80
2009 289.78 2087.47 717.40 14858 328.04
2010 304.89 2025.13 413.80 20297 355.17
2011 353.21 1965.63 469.43 19038 367.32
2012 474.40 2107.59 488.44 18848 561.89
2013 594.10 2608.29 527.16 21808 910.13
2014 730.28 2870.00 474.81 23955 549.50
2015 897.13 3156.99 747.83 33,406 777.32
2016 1044.54 3079.28 660.08 53,455 472.09
Source: Shenzhen Statistics Bureau, NBS Survey Office in Shenzhen, ed. Shenzhen Statistical Yearbook
2017 (Beijing: China Statistics Press, 2017),227,230,231,233,236.
Figure 3.3 investment in residential housing (1990~2016) (100 million)
Notes: bar chart based on the number of the table 3.3.
0.00
200.00
400.00
600.00
800.00
1000.00
1200.00
19
90
19
91
19
92
19
93
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95
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97
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20
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20
16
75
Figure 3.4 floor area of residential buildings under construction (1992~2016) and the
newly started (1998~2016) (10,000m2)
Notes: bar chart based on the number of the table 3.3.
Figure 3.5 floor area of residential buildings sold (1992~2016) (10,000m2)
Notes: bar chart based on the number of the table 3.3.
Figure 3.6 the average selling price of residential houses (1998~2016) (yuan/m2)
0.00
500.00
1000.00
1500.00
2000.00
2500.00
3000.00
3500.001
99
2
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16
floor area of residential buildings under construction
floor area of residential buildings newly started
0.00
100.00
200.00
300.00
400.00
500.00
600.00
700.00
800.00
900.00
1000.00
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
76
Notes: bar chart based on the number of the table 3.3.
3.3 Wang Shi and Vanke
Schumpeter believed that the initiative of innovation was entrepreneurship, including
the dream of building a kingdom, passion for victory, joy of creation and a strong mind,
while the success of innovation depended on the accomplishment of entrepreneurs,
including the ability to predict, organize and persuade.187 Therefore, the discussion on
the establishment and development of Vanke starts from the introduction of Wang Shi,
who is the founder of Vanke, and has been in charge of Vanke for 33 years from 1984
to 2017.
3.3.1 Beginning with Wang Shi
When speaking of Vanke, people might immediately think of Wang Shi, an
entrepreneur who has had a high profile nation-wide for decades. Wang was born in
1951. Before he finally set foot on the land of Shenzhen in May 1983 to explore what
had happened to the former poor and desolate place after the reform and opening
up,188 Wang had the experiences of being a soldier, a worker, a college student, and
a government officer. His character was tough and ambitious, unwilling to be mediocre.
He liked new things and was eager to learn, and was good at discovering and seizing
opportunities. His experience in serving as a soldier made him realize his independent
and unconstrained character, but also make him aware of the importance of discipline
and system. Studying in the college gave him a systematic knowledge base. Working
as a government official made him realize the importance of people’s wishes and the
opportunities for young people.
187 Joseph A. Schumpeter, Redvers Opie trans. The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. (New Brunswick and London: Transaction Publishers, 1983). 188 See Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 4-11.
0
10000
20000
30000
40000
50000
60000
77
On his arrival in Shenzhen, Wang joined the trade section of Shenzhen Special
Economic Zone Development Company (SSEZDC), formerly the SSEZ Administrative
Committee. Wang earned his first bucket of gold by trading corn. In 1984 he
established the Shenzhen Modern Science and Education Instrument Exhibition
Center, which was a subsidiary of the SSEZDC and engaged in import business of
mechanical and electrical products. Wang completed the accumulation of original
capital through trade. However, his conflict with the parent company was deeper and
deeper. In October 1986, the SMPG promulgated the “Interim Provisions on the
Shareholding Pilot of State-owned Enterprises in SSEZ,” encouraging large-scale
state-owned enterprises to carry out the joint-stock transformation. Inspired and
encouraged by the Provisions, Wang was determined to carry out the shareholding
reform of the subsidiary to get rid of the complicated administrative personnel
relationship with the state-owned parent company. With the support and help of SMPG
and through a difficult negotiation with the parent company, the shareholding
transformation was finally approved in November 1988. The company was also
renamed as Vanke Co., Ltd., with Wang being the chairman and general manager. He
started his business by trading, so he knew deeply about various ways of doing
business in the early stage of reform and opening up, such as building a relationship,
getting official approval, using policy and legal gaps and so on. Therefore, Wang set
standardization as the core principle from the beginning of the company share reform.
He bet that China would become more and more standardized after entering the
market economy. He wanted to make Vanke the most regulated enterprise in China.189
Wang led Vanke into real estate development in 1988, and Vanke became one of the
leading enterprises in China’s real estate industry. Wang resigned as general manager
in 1999 after Vanke entered a stable development stage, no longer participating in the
daily management of the company. He kept his leadership as chairman of the board
until 2017, when he officially resigned as chairman of Vanke.
Professor Peng Jianfeng of Renmin University of China once summed up the
characteristics of the first generation of entrepreneurs in China’s economic reform,
including outstanding, charming and unyielding personality, extraordinary learning
ability and market insight, high adversity EQ, innovative and risk-taking mindset, being
familiar with the political system and confident in dealing with complex relationships,
etc.190 This was a pertinent conclusion. The first generation of entrepreneurs, such as
Huawei’s Renzhengfei (任正非), Lenovo’s Liu Chuanzhi (柳传志), Haier’s Zhang
Ruimin (张瑞敏), and Wahaha’s Zong Qinghou (宗庆后), all have such characteristics.
They also have their own distinctive features, which exactly made their respective
enterprises different. Wang’s difference was that he abandoned holding shares from
the beginning of the shareholding reform, giving up being a boss, but becoming a
professional manager. At the age of 48 in 1999, he resigned as general manager in his
prime, leaving opportunity for young successors because he believed that an excellent
189 Ibid., 55. 190 For more information, see http://www.sohu.com/a/284909445_761946 (access on 17/2/2019).
78
enterprise was not sustained by individual ability or charm, but by norms and systems.
He firmly insisted on making the most regulated and transparent company and
proclaimed that he and Vanke never paid bribes. “Greatness is managing yourself, not
leading others”,191 which was a high evaluation of Wang.
However, the public always have different opinions on celebrities. On the Internet,
there were many doubts about Wang on the grounds that he started his business
relying on his father-in-law’s official circles; he did not really give up his equity; he was
carried up to Mount Everest, and so on. It is difficult to judge the authenticity of these
voices, but these are not the focus of this thesis. By looking at the achievements of
Vanke in these years, I believe that Wang’s unique personality, capability and business
management strategy were key factors to lay a solid foundation for Vanke’s
development. What Wang brought to Vanke were as following: choosing the real estate
industry; establishing a modern enterprise system; building a team; creating a brand.192
Wang Shi confirmed Schumpeter's argument that entrepreneurs played a key role in
the development of enterprises, but Wang himself believed that the long-term
development of Vanke lay in the team and system, not in the prestige or charm of
individuals.193
3.3.2 Vanke’s development
Development of Vanke began after the share reform. On November 21, 1988, SMPG
approved the shareholding reform plan, and the Shenzhen Branch of the People’s
Bank of China approved the issuance of Vanke stock, which was publicly released on
December 28, 1988. On March 8, 1989, the “Report on Equity Verification of Shenzhen
Vanke Enterprise Co., Ltd.”, issued by Shekou Zhonghua Certified Public Accountants
showed that, as of October 31, 1988, Vanke’s predecessor, the Modern Enterprise Co.,
Ltd. had net assets of 13,246,680.17 yuan. Together with 28 million raised by issuing
shares, the total capital of 41,246,680.17 yuan was the base for Vanke to restart. At
that time, Vanke had five wholly-owned subsidiaries, whose main business was import
& export trade and industrial and commercial investment, including three processing
plants and seven industrial investment projects (including a real estate investment).194
At this stage, Vanke was taking a development path of diversification and cross-
regional expansion. Its goal, proposed in 1991, was a “Zaibatsu” (comprehensive
commercial association) learned from Japan, which was a super-large company with
commerce and trade as the leading factors and taking into account various operations
such as finance, manufacturing, and transportation.
There was a general disdain for commerce in Chinese tradition, that was "exalting
agriculture and disparaging commerce" in the past, and " exalting industry and
191 Lun Feng. Barbaric Growth. (Beijing: CITIC Press, 2007), 356. 192 Shi Wang. My Change: 40 Years of Personal Modernization. (Beijing: Joint Publishing, 2019), 68. 193 Ibid. 67, 73. 194 Details see The Prospectus of Vanke Co., Ltd http://quotes.money.163.com/f10/ggmx_000002_176904_1.html (access on 18/2/2019).
79
disparaging commerce " after the founding of the PRC. Therefore, Wang believed that
the long-suppressed commerce should be the most promising field in the economic
reform. Vanke was involved in four major fields: trade, industry, real estate, and cultural
communication, refining into ten industries: import & export, retail, real estate,
investment (including securities), film & television, advertising, beverages, printing,
mechanical processing, and electrical engineering.195 Wang himself once said that
except for business in pornography, gambling, drugs, and arms, Vanke did all kinds of
profitable business at that time.196 The early stage of Vanke represented the business
model of most Shenzhen enterprises at the beginning of the economic reform. It was
an era of opportunism. The market economy was just starting, with demand and
opportunities everywhere, and attractive profits. As long as a certain amount of funds
was raised and certain contacts were built, almost every industry could earn money.
Most enterprises were developing in a diversified way, seizing every chance and doing
what was thought profitable. The result was that most people could not help
themselves with immediate interests and would not consider the long-term
development plans of their companies.
On November 18, 1988, Vanke obtained a residential land plot numbered H201-3 at a
high price of 20 million yuan through auction.197 A month later, it took another parcel
in the auction, and from then on Vanke had entered the real estate development field.
However, in view of the situation of “group separation” of early Shenzhen, private
developers were not easy to survive. Although Vanke developed two projects, Tianjing
Garden and Weideng Villa, and achieved sales success and market praise, “Vanke
had not been yet recognized as an authentic real estate company in Shenzhen”.198
Therefore, Vanke began to walk out of Shenzhen in 1991 and developed real estate
business in twelve cities along the eastern coast, including Shanghai (上海), Tianjin
(天津), Qingdao (青岛) and Xiamen (厦门). Vanke launched the Shanghai Vanke City
Garden in 1992, which was the first large-scale suburban community of Vanke,
integrating residence, commerce, education, entertainment, and leisure. The success
of Shanghai City Garden became the beginning of Vanke’s focus on the development
of housing and large-scale suburban communities.
After Deng Xiaoping’s southern tour in 1992, there was a situation of overheated
economic development and a serious real estate bubble, the central government
implemented macroeconomic regulations and made real estate development cool
down suddenly, causing a capital fracture in many companies. After several years of
business and geographical expansion, Vanke had 55 subsidiaries and joint companies
in 12 cities. Vanke was under tremendous pressure in terms of capital and human
195 See Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 71. 196 Lu Xinzhi. Vanke Battle (Chengdu: Southwest University of Finance and Economics Press, 2017), 74. 197 Clause 6.9 of The Prospectus of Vanke Co., Ltd. 198 Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 82.
80
resources. Fortunately, as the earliest listed real estate company, Vanke's A-shares199
were listed for two additional issues in 1991 and 1992. In 1991, its total equity
increased by 77,965,556 shares, with a par value of 1.00 yuan per share, then its paid-
up equity was equivalent to 77,965,556.20 yuan.200 With the additional issuance of
92,364,611 shares in 1992, its paid-up equity was equivalent to 92,364,611.40 yuan.201
In 1993, Vanke successfully issued B-shares, raising 450 million Hong Kong dollars.202
Funds raised on the stock market saved Vanke from its funding shortage. Although
Vanke survived the government’s macro-level intervention, it paid a high price and
learned many lessons, which made Wang and Vanke rethink and adjust the company’s
development strategy. Vanke began to shrink other businesses from 1993 and
established the dominant position of real estate development in the company. Vanke
believed that urban housing was a market with great potential, and decided to take the
mid-range and medium-to-high-end urban housing as the leading development
direction. In fact, the investment in urban housing projects had already accounted for
52.5% of the total investment in the Group’s real estate projects under construction.203
In the second half of 1995, Vanke decided to return to Shenzhen and adjusted the
strategy of blooming everywhere to focus on four major cities of Shenzhen, Shanghai,
Beijing, and Tianjin, of which Shenzhen was the key target. Vanke raised 382.54 million
yuan through the additional issuance of A-shares and B-shares in 1997, mainly
investing in real estate projects and land reserves in Shenzhen. 204 The sale of
Vanguard 205 in 2001 signalled that Vanke finally embarked on the road of
specialization in real estate development after a long eight-year adjustment.
According to Wang, Vanke’s first decade (1984-1993) solved the problem of survival
and attempted diversified development. The second decade (1994-2003) was to
rationalize the structure of the firm and carry out the specialization in the development
of urban housing. In the third decade, Vanke carried out the second specialization
development, that was refinement, being more professional and more excellent in
focusing on the housing sector. To improve product quality and achieve scale
development, Vanke proposed the industrialization of residential buildings, and put
forward the concept of “making a house like making a car”.206 Because of China’s
199 A-shares, or Renminbi common stock, are issued by domestic companies for subscription and trading in Renminbi by domestic institutions, organizations or individuals (from April 1, 2013, residents of Hong Kong, Macao and Taiwan were able to open A-share accounts). The official name of B-shares is Renminbi special stock. It is denominated in Renminbi, subscribed and traded in foreign currencies and traded on the stock exchanges in China (Shanghai and Shenzhen). The registered and listed places of B-share companies are both in mainland China. 200 See Vanke Co., Ltd. Vanke Annual Report 1991. 201 See Vanke Co., Ltd. Vanke Annual Report 1992. 202 See Vanke Co., Ltd. Vanke Annual Report 1993. 203 Ibid. 204 See Vanke Co., Ltd. Vanke Annual Report 1997. 205 Vanguard (万佳) was founded by Vanke in 1991 and was a traditional department store. In 1994,
Vanguard completed the shareholding reform and Vanke held 60% of the shares. It was transformed into a warehouse-style department store and quickly became the leading enterprise in Shenzhen’s retail
industry. In 2001, Vanke sold all 72% Vanguard shares to China Resources (Holding) Co., Ltd. (华润集
团), ending its retail business, and focused on the specialization development in real estate. 206 Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 257,258,272.
81
housing reform and the support from local governments for real estate development,
Vanke made a great leap forward in the specialization of the development of real estate,
achieving 10 billion business income in 2005. In the Vanke Ten-year Plan put forward
in 2004, it was planned to achieve 100 billion income in 2014. The target was reached
earlier in 2012, and it approached 200 billion by 2015 and nearly 250 billion by 2017.
(details see table 3.4 and figure 3.7). This was Vanke’s achievement in operation and
management, policy response, housing R&D and property management, which are
discussed separately in the following sections.
In 2014, when Vanke entered its fourth decade, it was deeply aware that “the world
around us was undergoing tremendous changes and the mobile internet was
subverting the rules of the entire business society”.207 To reflect on this development
in the new decade, Vanke selected 27 economies as examples in the world to conduct
a study on the 40-year history of the development of real estate value. In combination
with China’s current situation, Vanke believed that the outlook of China’s real estate
development was still relatively positive, but the era of the high-speed rise in housing
prices and the rapid expansion of the overall scale of the industry had come to an end.
Vanke needed to investigate new business models to maintain future growth. Based
on the above analysis, Vanke proposed that the direction of the next decade would be
“three good residences” + “city supporting service provider”. “Three good residences”
referred to good housing, good service, and good community. It was to update the
definition and standard of high-quality residential experience constantly, to safeguard
and expand the advantages of Vanke’s residential brand. The expression of “city
supporting service provider” was rather vague, which referred to the emerging real
estate business which was different from traditional business and conformed to the
trend of the mobile internet era, and the extended business which was related to
Vanke’s customer resources, housing technology, and credit advantages. 208 In
practice, Vanke’s new business included commercial real estate, logistics real estate,
ski resorts, education, long-term rental apartments, and retirement service.209 In July
2015, Vanke’s equity contest took place, which caused Vanke’s management to
encounter an unprecedented crisis. The contention for the capital market is beyond the
scope of this thesis, and is not discussed here. Eventually, Shenzhen Metro Group
became the largest shareholder of Vanke in 2017, and Wang no longer served as the
chairman of the board. Vanke’s 33-year Wang Shi era was over.
What would be the future direction of Vanke? In the Annual Report of 2017, it was
pointed out that Vanke's positioning of "city supporting service provider" in 2014 further
evolved into "urban and rural construction and life service providers", which was
refined into four roles: a creator for better way of life, a major player for entity economy,
a pilot of innovative exploration, and a builder of harmonious ecology. 210 The
positioning and wording, which were close to the government discourse, were no
207 See Vanke Co., Ltd. Vanke Annual Report 2014. 208 Ibid. 209 See Vanke Co., Ltd. Vanke Annual Report 2015. 210 See Vanke Co., Ltd. Vanke Annual Report 2017.
82
longer Wang Shi-style phraseology, suggesting that the Wang Shi era of Vanke was
gone forever.
Table 3.4 Vanke financial data (1990~2017)
year
business income net profit
income (100
million)
year-on-year
growth (%)
net profit
(100
million)
year-on-year
growth (%)
1990 2.18 0.18
1991 4.23 94.04 0.26 44.44
1992 6.61 56.26 0.66 153.85
1993 10.84 63.99 1.53 131.82
1994 12.28 13.28 1.73 13.01
1995 15.04 22.48 1.47 -14.95
1996 11.78 -21.68 1.5 1.5
1997 19.48 65.36 1.87 24.67
1998 22.69 16.48 2.02 8.02
1999 29.12 28.34 2.29 13.37
2000 38.73 33 3.01 31.44
2001 44.55 15.03 3.74 24.25
2002 45.74 2.67 3.83 2.41
2003 63.8 39.48 5.42 41.51
2004 76.67 20.17 8.78 61.99
2005 105.59 37.72 13.65 55.47
2006 178.48 69.7 21.55 70.17
2007 355.27 98.27 48.44 110.81
2008 409.92 15.38 40.33 -16.74
2009 488.81 19.25 53.3 32.15
2010 507.14 3.75 72.83 36.65
2011 717.83 41.54 96.25 32.15
2012 1031.16 43.65 125.51 30.4
2013 1354.19 31.33 151.19 20.46
2014 1463.88 8.1 157.45 4.15
2015 1955.49 33.58 181.19 15.08
2016 2404.77 22.98 210.23 16.02
2017 2428.97 1.01 280.52 33.44
Source: Vanke Annual Report (1990~2017).
Figure 3.7 Vanke business income (1990~2017)
83
Notes: bar chart based on the number of table2.4.
3.3.3 Vanke’s Management Philosophy and Corporate Culture
Although Wang left Vanke, Vanke’s company management system and corporate
culture established by Wang have taken root in Vanke. They have played an
indispensable role in the past and certainly have a profound impact on the present and
the future.
Wang believed that the modern enterprise system was a product of Western culture,
religion, and civilization. Before he set up Vanke, he thought if he managed a company,
he would do it according to the humanist concepts and ways of the West.211 Vanke
adopted the western management, and Wang believed that system and teamwork
were its fundamentals. To build a sustainable system, Wang created ‘Vanke Hua’ (万
科化), that included professionalization, standardization, and transparency.212
In the early stage of China’s reform and opening up, when everything was broken and
remained to be built, the business integrity environment was particularly weak. It was
not easy for Wang and Vanke to adhere to the ideas and values established at the
beginning of the company and achieve success. Wang wrote in Vanke’s 20-year
summary and the prospects for the next ten years: “Looking back on the 20-year
development course, Vanke was most proud of holding the bottom line of
professionalization while the industry was not yet mature. In the face of any temptation
of interests, Vanke had always adhered to its values and chose a simple, transparent,
standardized and modest model of the practice”.213 Simplicity, the most important,
meant the simple personal relationship. Wang did not arrange any his classmates,
211 Tsui, Anne S., Zhang Yingying, Chen Xiaoping, ed. Leadership of Chinese Private Enterprises, Insights and Interviews. (London: Palgrave Macmillan UK, 2017), 242,243. 212 Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 194. 213 See Vanke Co., Ltd. Vanke Annual Report 2004.
10.84105.59
507.14
1031.16
1463.88
1955.49
2428.97
0
500
1000
1500
2000
2500
3000
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
business income (100 million)
84
close friends and families to work in Vanke, and neither did Yu Liang.214 This was
precisely the most common phenomenon in Chinese enterprises that when a person
succeeded, there were always relatives and friends to seek help. Many people were
willing to use their acquaintances whom they believed they could trust and control,
which could easily undermine the environment of fairness and mutual trust within the
company. Simplicity also meant the simple way of working, that the only important thing
for an employee was to do the job well. Transparency meant nothing was hidden. An
enterprise without secrets was the one with the lowest institutional cost. Transparency
required norms, which meant honesty and trustworthiness that Wang believed were
the cornerstone of commercial society. Modesty referred to the pursuit of fair returns
rather than excessive profit. Vanke believed that the competition between companies
was not a sprint but a long-distance race. The fair return was the key to long-term
success.215
The core value of Vanke was summarized as to create a healthy and prosperous life,
which meant making customers proud by continuous providing of products and
services beyond customers’ expectations, keeping investors satisfied by delivering
returns exceeding investors’ expectations, and making employees proud through the
continuous provision of development opportunities and remuneration beyond
employees’ expectations. 216 This core value was expressed in four aspects:
customers were always our partners; employees were the assets of Vanke; a sunlit
system; sustained growth and leadership, which was printed on the back of every
employee’s card.217 Vanke's values were deeply recognized by Vanke employees and
praised by the outsiders. Its corresponding management methods were always
reflected in Vanke's response to government policies, product research, and customer
service.
3.4 Vanke’s Strategy for Government Policies
In the tripartite competing relationship of the government, developers, and buyers, the
government is in charge of a series of important factors such as land, bank funds,
housing policy, urban planning, development approval and so on. If the developer’s
strategy runs counter to the government’s policy, it is undoubtedly suicidal behavior.
But when it came to competing with the government, each developer had its own
approach. The first one was rent-seeking. Developers gained convenience in obtaining
land, project approval, and bank loans by satisfying several government officials,
214 Yu Liang, born in 1965, is the successor of Wang Shi. He graduated from Peking University in 1988, and joined Vanke in 1990. He was appointed as the General Manager in 2001, and is now the president and CEO of Vanke. 215 See Vanke Co., Ltd. Vanke Annual Report 2004; Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 288; Anne S. Tsui, Yingying Zhang, Xiaoping Chen, ed. Leadership of Chinese Private Enterprises, Insights and Interviews. (London: Palgrave Macmillan UK, 2017), 249,250. 216 Vanke Weekly ed. Vanke: Viewpoint on Corporation Management (Guangzhou: Huacheng Press, 2004), 313. 217 Anne S. Tsui , Yingying Zhang, Xiaoping Chen, ed. Leadership of Chinese Private Enterprises, Insights and Interviews. (London: Palgrave Macmillan UK, 2017), 250.
85
namely, obtained development resources by offering a bribe. The rent-seeking practice
was popular especially in the early stage of the economic reform and did not stop
despite repeated prohibition since then. Many corruption cases involved land and real
estate development. For example, Wang Ju’s corruption, mentioned in the previous
chapter, involved the project of Shenzhen Windsor Plaza, which caused the
government to lose more than 100 million in land fees, and also caused owners’
economic losses, who paid in advance. Another corruption case, Xu Zongheng218, a
former mayor of Shenzhen, was also involved in several land transaction, including the
No.9 of Mangrove Bay plot obtained by Shenzhen Liantai Real Estate Company, and
the regeneration project of Gangxia urban town. Although rent-seeking meant that was
easier to obtain land and funds and earned a high return as well, the risk of illegal
operation was extremely high. In recent years, with the strengthening of anti-corruption
efforts in China, the government’s investigation measures and the people’s supervision
have been strengthened, and the scope of rent-seeking has become smaller and
smaller.
The second approach was the practice of the state-owned real estate company. The
early development of Shenzhen benefited from the support of various ministries and
commissions. Companies like the China Merchants, OCT, and Zhonghang, acquired a
large amount of land at a very low price at one time. At the same time, of course, they
also assumed many functions of the government within their land boundary, building
and managing public facilities such as roads, schools, and hospitals. They enjoyed a
high degree of autonomy inside their domains. When they stepped out of their territory
and developed in other regions of Shenzhen or other cities throughout the country,
they also needed to compete with the local government. There was no doubt that their
state-owned background allowed them to have more resources and initiatives in the
game with the local government. Especially in the third and fourth-tier cities, they were
popular and gained favors from local government, thus, they could have better chances
to get better development conditions.
The third means was short-term opportunism. This kind of developer did not take real
estate development as a long-term business of the enterprises. They set up a real
estate project company because of an opportunity to obtain land and funds. Their only
goal was to make a profit on this project. Thus they did not focus on the long-term
policy trend, nor the property management after the project delivery. When the real
estate industry turned prosperous, the number of developers suddenly increased, most
of which was this kind of company. Some companies seized the opportunity to make
a huge profit, but after the delivery, there was no perfect property management follow-
up, which made the residents’ living experience poor and led to the property
218 Xu Zongheng, born in 1955, graduated from University of China Political Science and Law. He worked in the Organizational Department of SMPG in 1993 and served as Deputy Secretary and Mayor of SMPC from June 2005 to June 2009. In June 2009, Xu Zongheng was investigated on suspicion of serious violation of discipline. On May 9, 2011, the Intermediate People's Court of Zhengzhou City, Henan Province, made a judgment of first instance, found Xu Zongheng guilty of bribery and sentenced him to death with a two-year suspension of execution.
86
devaluation. However, some development failures were entirely due to the developer’s
lack of abilities to cope with the sudden shift of policies. In 1993, a large number of
abandoned sites appearing in Hainan and Beihai were caused by such opportunists.
These practices resulted in many land problems and a huge backlog of funds, and also
caused losses to the buyers. A certain number of abandoned sites in a city not only
damaged the urban landscape but also made people lose confidence in urban
development.
The fourth method was deception, which was particularly prominent in the rushed
construction of urban villages, as mentioned in chapter two. Shenzhen villagers rushed
to build illegally regardless of policies and regulations to obtain more area for rent or
more compensation for demolition. They bet on not being discovered, and the
government would not punish the public after discovery. This competition ended in a
compromise of the Shenzhen government. In addition to urban villages, some illegal
buildings were built by deception, often involving the cover-up of some officials, which,
in fact, was a way of rent-seeking. These buildings did not conform to planning and
building regulations, causing potential safety hazards and impacts on the daily
operation of the city, and seriously wasted public resources as all districts of Shenzhen
set up a special department to investigate and deal with illegal buildings, which also
indicated the universality and seriousness of these problems.
After completing the shareholding system reform, Wang emphasized Vanke’s
normativeness and transparency. He declared that he and Vanke never paid bribes.
Vanke did not belong to any of the above types. Moreover, Wang and Vanke were
recognized by the industry as “the good children of the government”,219 which meant
that Vanke’s operation was always following the government policies, and even
endorsed some government control policies. So, how did Vanke deal with the
prevailing rent-seeking requirements and how to respond to government policies and
regulations?
Wang divided the enterprises of SSEZ into three categories according to different
development stages: policy type, market-policy type, and market-creativity type. The
policy-oriented enterprises were omnipotent enterprises developed in the early 1980s
relying on the preferential policies of the SSEZ. They mainly referred to the companies
established by the Shenzhen government, for instance, the original parent company of
Vanke, the SSEZ Development Company. The market-policy type was an enterprise
that developed in the mid-1980s to find market opportunities in the policy. The market-
creativity type was the one that started to develop in the market by its originality and
capacity in the 1990s.220
Vanke was a market-policy company, which competed and grew in the market, but
219 Hongyan Cai. Criticism on Vanke: Reflections on China’s Real Estate Development (Beijing: China Development Publishing House, 2009), 210. 220 Shi Wang. Enterprise Investment Strategy in Transition Period. Vanke Weekly ed. Vanke: Viewpoint about the Real Estate (Guangzhou: Huacheng Press, 2004), 89.
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depended much on policies. After undergoing the macro-control in 1993, Vanke
reflected on its blind expansion in the first decade and realized that the real estate
industry had strong policy sensitivity. Because real estate projects lasted a long time,
they were highly vulnerable to the impact of policies and regulations. Therefore, only
a full understanding of the market situation and policy trends was conducive to
grasping the opportunities. 221 But at the same time, Wang also suggested that
developers should not over-consider policy factors, but should pay more attention to
their professional competence.222 These two arguments seemed to be contradictory.
In fact, Vanke did not ignore policy factors, it just did not solve problems through rent-
seeking, deception, and other illegal means, but instead improved its professional
capacity to cope with policy changes and external adverse factors. Wang believed that
everyone had both the devil side and the angel side. Thus, officials accepted bribes,
and at the same time, they pursued honor. Vanke insisted not to bribe, but to do
projects professionally, contributing to the development of the city, and the
performance of local officials as well. In the long run, those officials would also support
Vanke as they hoped to link with the reputation of no bribery.223
Vanke’s initial involvement in real estate was an opportunistic manifestation. The high
return of real estate made Vanke experience a round of blind expansion. Vanke
embarked on the path of professional development after constant mistakes, reflection,
and adjustment. Vanke founded Shenzhen Wanchuang (万创) in 1994, an institution
specializing in residential design research. In 1999, Vanke Architectural Research
Center was established, relying on professional expertise to conduct thorough
research on social change, policy orientation, industry trends, and new housing
technology. On the surface, Vanke could always follow the government’s policies in its
development. In fact, Vanke carried out market prediction based on professional
research and made countermeasures and major decisions in advance. Moreover,
when companies were professional and sufficiently strong, they would stand in policy
discourse to affect government regulations and urban development potentially.
Although Shenzhen had conducted its first land auction at the end of 1987, it was only
an attempt at land reform. Most of the land was sold by direct agreement, while the
real estate development license was only granted to construction companies and
companies recognized by the government. In general, as a trading company, Vanke
could not get land through agreement unless it became a “government-recognized
company” through rent-seeking. The land auction was the only way to obtain the
qualification of real estate development. Due to lack of experience in real estate and
calculation errors, Vanke spent 20 million yuan to obtain a residential landplot
No.H201-3 with only 4,141 square meters in the second land auction of Shenzhen in
November 1988. Compared with the first land auction in 1987, which cost 5.25 million
for 8,588 square meters, the first land parcel of Vanke came at a sky-high price.
221 Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 122. 222 Ibid., 152. 223 Shi Wang. My Change: 40 Years of Personal Modernization. (Beijing: Joint Publishing, 2019), 190.
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According to the buildable area of 10,600 square meters, the land price per square
meter of floor area reached nearly 2,000 yuan, which was higher than the sale price
per square meter of floor area around that region in the market at that time. Many
people, including Vanke insiders, advised Wang to pay a fine for breach of contract.
But in order to enter the real estate industry, Wang insisted on keeping the land and
even obtained another parcel of land also by auction in December of the same year.
Development on high-priced land could only be rewarded by selling at a high housing
price. Therefore, Vanke attempted to win the market and customers through careful
planning and product positioning, good design in architecture, innovative marketing,
and high-quality property management (These are discussed in the following section).
The difficulties of land acquisition in Shenzhen, such as high land price and various
negative factors for development, made Vanke redouble its efforts to survive. They
were committed to studying the market and cultivating Vanke’s product series, to
improving the competitiveness of Vanke products through planning, design and
environment building, at the same time, to striving to improve and upgrade Vanke
property management continuously. Unfavorable conditions forced Vanke to struggle
and develop an elite team of development, design, market, and property management.
In 1991, Vanke’s difficult situation in Shenzhen also prompted it to carry out cross-
regional development and preemptively occupy markets in Shanghai, Tianjin and so
on. Vanke’s experience proved that it was a feasible way to deal with external
disadvantages through professional creativity. Vanke’s professional team also devoted
itself to the study of government policy and urban master planning to discover the
urban development laws and process for decision-making on the development
sequence of Vanke’s projects. With the gradual standardization of market economy,
Vanke’s professional operation gradually became its advantage for success.
“As Shenzhen entered the real estate sector ahead of other cities, it would be the first
city to complete the market adjustment, and its housing demand grew steadily because
of the steady economic development”.224 In 1995, Vanke made the decision to return
to the Shenzhen market and listed Shenzhen as a key development city. Vanke had
decided to take real estate development as its leading business and developed
Shanghai City Garden successfully. It copied this experience in projects in Beijing and
Shenyang, initially forming a series of products of “City Garden”. But at that time, Vanke
still had some blindness and opportunistic approach in land reserve and project
selection. After returning to Shenzhen, Vanke missed some development opportunities
because of the lack of understanding of Shenzhen’s urban development rules and
urban master planning. Shenzhen’s urban development was different from the
traditional “single center” structure of Beijing and Shanghai, taking the form of “clusters
in a belt shape” structure. Each cluster developed a center based on different
industries and features, which was the result of the geographical features and
economic development of Shenzhen city. The flow or accumulation of population and
resources was determined by industry division and regional interests. According to
224 See Vanke Co., Ltd. Vanke Annual Report 1995.
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urban planning and the demands in economic development, new group centers
appeared in turn, Luohu (罗湖) first, then Futian (福田) and Nanshan (南山), then
Bao’an (宝安) and Longgang (龙岗), and finally Yantian (盐田). The two parcels Vanke
acquired in 1988 were in the only developed Luohu District at that time, which was the
inevitable choice. However, when Vanke returned to Shenzhen at the end of 1995,
Shenzhen's urban development was no longer the same. In the urban master planning
of 1986, the Futian Central District was designated as the urban financial, commercial
and cultural center of Shenzhen. The Futian CBD planning also carried out several
rounds of planning competitions and demonstrations from 1990, and the infrastructure
construction began in 1997. Relying on Shenzhen University, Shenzhen High-tech
Industrial Park commenced construction in Nanshan District in 1996. At the same time,
the planning and construction of Binhai Avenue in 1996-1997 expanded Shenzhen
rapidly to Nanshan and Bao’an district. Shenzhen had begun to take on the form of
multi-center urban development. However, Vanke still stuck to the mature Luohu. With
relatively high land prices, Vanke developed projects of Vanke Guiyuan, Caiyuan, and
Junyuan in Luohu District. Therefore, Vanke missed the opportunity to enter Nanshan
and Bao’an at a low cost, and did not leave any of Vanke’s works in Futian central area
either.
It was not until 1998 when Vanke obtained the land of “Vanke Wonderland” (四季花城)
in Longgang District outside the Second Line with a little reluctance, Vanke, besides
focusing on housing itself, began to study purposively the relationship between the
project and the urban development, including the connection between internal
circulation and urban transportation, the integration of community public facilities and
urban functions, and the connection of community open space and urban space. The
success of Wonderland made Vanke realize the importance of studying urban planning
and development to grasp the opportunities in advance. In the urban master planning
of 1996, Shenzhen city was planned to expand to the outside of Second Line, in which,
the central development axis from Futian CBD to Banxuegang (坂雪岗) area (part of
Longgang District) and the successive settlements of Huawei and Foxconn in Bantian
(坂田) area attracted Vanke’s attention. Vanke seized the best opportunity to enter
Longgang District, and successively obtained land for projects of Wonderland phase
5-7, Vanke City, and the Fifth Garden, reaching a land reserve of 95 hectares (see
diagram 3.1). Vanke also realized the scarcity and non-replicability of high-quality
natural resources in the city. Therefore, Vanke acquired the project land of the Eastern
Coast and the 17 Miles, with the area of around 33 hectares, before the eastern Yantian
District exploited its tourism industry vigorously.
Vanke carried out in-depth research on the development of these large-scale projects
in terms of planning, transportation, architectural form, open space, public facilities and
so on, focusing on the integration with the city, and proposed the concept of the “open
community”. The successive launches of these projects not only were sought after by
buyers, winning a high reputation in the market but also being cases for industry
counterparts’ visiting and learning (see picture 3.2-3.5). More importantly, these
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projects played a more significant role in promoting Shenzhen’s 1996 edition of urban
master planning, that was, the expansion of urban space to outside the Second Line.
Before the completion of Vanke projects, the Banxuegang area was large-scale urban
villages, which meant low-quality housing, poor living environment, and potential safety
hazards, and not helpful for attracting high-tech talents. Most of Huawei’s employees
chose to settle their families inside the Second Line, mainly in Nanshan and Futian.
Huawei had to provide shuttle services to its employees, increasing operating costs
and time cost, and adding pressure on urban transportation. Vanke’s projects provided
high-quality and affordable housing for the high-tech parks of Bantian area, as well as
public facilities serving people’s daily life. Vanke contributed to the development of
Bantian area as it helped Bantian gain popularity and enhanced the area’s appearance
and regional value. More real estate companies and other industries were attracted to
invest in Longgang District.
The projects of the Eastern Coast and the 17 Miles were Vanke’s great success in
Yantian District, which were impeccable from the quality of the buildings to the creation
of living environment, as well as the full use of natural landscape resources. However,
the 17 Miles once pushed Vanke to the center of public opinion. The Golden Bay Resort,
which was one road away from the 17 Miles, brought a lawsuit against Longgang
Branch of Shenzhen Land and Resources Bureau, because the land, which Longgang
Branch granted to Vanke for commercial housing development, was part of the 154-
kilometer-long Golden Coast of Shenzhen eastern area (see diagram 3.2). SMPG had
forbidden any development within the area of Golden Coast since 2000. With the
investigation of the court, Southern Weekend made the matter public on January 8,
2004, immediately causing a public outcry. The project’s ultra-low land price and
violation of government protection regulations plunged Vanke, which always
advertised itself as against bribery, into a huge crisis of confidence. Vanke provided
the contract for cooperation with other companies, as well as the "Real Estate
Certificate", "Construction Land Planning Permit" and "Construction Engineering
Construction Permit" issued by the government in 2002, which showed Vanke was
legal in both procedure and documents. Although evidence proved that Vanke did not
directly offer a bribe, public opinion believed Vanke did enjoy the results of bribery. In
addition, developing a section of public coastline into a private beach for a small
number of people, Vanke did not coordinate the relationship with the city as a whole,
nor did it take into account the fairness of enjoying public resources, which damaged
the good public image of Vanke. Because Vanke did not violate the law, the matter
finally disappeared and faded out of people’s sight. None of Wang and Vanke’s
publications mentioned this matter. It is difficult to work out any details now. Upon
limited information, I could not presume that Vanke played a specific role in this matter.
However, the incident demonstrated the chaos of management in Shenzhen’s urban
development and the irregularity of developers’ operations at that time. The fact that
17 Miles permanently cut off the coastline of Shenzhen's Golden Coast indicated that
any developer or project would have more or less an impact on urban development
and people's lives. Whether the impact was positive or negative, it required real estate
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companies to control their operations, and more importantly, the government needed
to establish an effective supervision and management mechanism.
Diagram 3.1 Vanke’s projects in Bantian area, Longgang District, Shenzhen
Source: diagram drew based on Shenzhen map.
Diagram 3.2 Vanke 17 Miles in Yantian District, Shenzhen
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Source: diagram drew based on Shenzhen map.
Photo 3.2 Vanke Wonderland, Longgang District, Shenzhen
Source: taken from the field research in Vanke Wonderland Shenzhen, 12/12/2018.
Photo 3.3 Vanke the Fifth Garden, Longgang District, Shenzhen
Source: Hong Kong Science and Information International Publishing Co., Ltd. ed. Poetic Dwelling:
Vanke’s House (Wuhan: Huazhong University of Science and Technology Press, 2007).
Photo 3.4 Model rooms of Vanke the Fifth Garden
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Source: Hong Kong Science and Information International Publishing Co., Ltd. ed. Poetic Dwelling:
Vanke’s House (Wuhan: Huazhong University of Science and Technology Press, 2007).
Photo 3.5 Vanke East Coast, Yantian District, Shenzhen
Source: Hong Kong Science and Information International Publishing Co., Ltd. ed. Poetic Dwelling:
Vanke’s House (Wuhan: Huazhong University of Science and Technology Press, 2007).
Through the study of the trend of urban planning and development, Vanke gradually
changed from an ignorant opportunist who took land blindly to an active player who
mastered the law of urban development. At the same time, Vanke learned how to
coordinate and influence the urban development process. As for the housing policies
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issued continuously by both the central government and local governments, Vanke
generally adopted a positive attitude to rapidly adjust its development strategy. Based
on the prediction of industry development, Vanke could start some new development
strategies and measures in advance. In fact, Vanke learned these experiences from
trial and error. In Vanke’s real estate business in 1993, office projects accounted for
75%, and housing only accounted for 25%. Macro-control caused Vanke’s high-rise
office projects in Tianjin, Wuhan, and Shenzhen to shut down and show signs of failure.
Vanke took rectification measures to change buildings’ function. Only the Haishen
project in Shenzhen was successfully transformed into a high-rise residential project,
Vanke Junyuan, and avoided losing money. Tianjin and Wuhan projects were caught
in long-term losses and buyers’ lawsuits. They were not completely solved until 2005,
and Vanke certainly paid high costs.
After the abolition of the welfare housing system in 1998, Vanke believed that
commercial housing would be transformed from luxury consumption belonging to a few
people to mass consumption of ordinary people. Based on the analysis of policy and
the pre-judgment of the market, together with the expensive lessons before, Vanke
firmly made ordinary housing its main business and prudently built fewer high-rise
buildings. In June 2000, Vanke led the establishment of the China Real Estate
Developers Collaboration Alliance, and launched the “New Housing Movement”,
proposing the slogan “Towards the New Economy and Pay Attention to Ordinary
People”. Wang Shi’s comment on ordinary people was: white-collar workers, blue-
collar workers, freelancers, and small and medium-sized business owners, who did
not enjoy political, economic and cultural privileges. This group were the mainstream
consumers in the present and future housing market. This group of people comprised
the majority of urban residents, and their income and consumption level were the
average level of the city.225 Vanke not only advocated industry counterparts to build
urban houses for ordinary people but also practiced this concept itself. Ten years later,
in 2011, 88% of Vanke’s sold products were ordinary housing with floor area under 144
square meters per unit, and 53% were under 90 square meters. Moreover, 64% of
Vanke products were for first home purchases and first home improvement.226
The constant rising of housing prices was the distinctive feature of China’s real estate
industry. The growing gap between the rich and the poor was criticized as a by-product
of real estate development. To control housing prices was one of the main reasons
why the government continued to regulate housing development. The government’s
macro-control was bad news in the real estate industry, always causing collective panic
among developers and investors. Vanke was an enterprise that publicly welcomed the
government’s regulation and control. Wang even wrote a rational treatment of
government macro-control into the Vanke Annual Report in 2005 to help Vanke
investors understand the significance of macro-control. He pointed out that the rapid
225 Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 215. 226 Shi Wang. The Way: Vanke and me 2000-2013 (Beijing: CITIC Press, 2014), 33.
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rise in housing prices should not be considered positive for developers who were
committed to long-term goals, instead, they should be highly vigilant. Real estate was
a young industry in China. When the marketization was not yet mature, the
government’s macro-control was conducive to the rational and healthy growth of the
industry.227 Then he interpreted in detail the “Opinions on Stabilization Housing Prices”
transmitted by the General Office of the State Council to seven ministries and
commissions of the Central Committee in May 2005. He believed that the central
government supported the real estate industry as the pillar industry of the national
economy, and the control was to take into account the principles of fairness and
marketization. The purpose was to make the real estate industry develop healthily.
Thus, investors should eliminate uncertainties about the future of the industry.228
The fairness principle mentioned in the Opinions and the definition of ordinary housing
(land saving, small size, reasonable price) made Vanke realize that when the housing
prices rose year by year, many ordinary families could not afford to buy a house.
Although the housing of low / middle-income people was a problem that government
should solve, Vanke suggested that it was also the responsibility of real estate
companies to pay attention to the housing problem of this group of people. In 2005,
Vanke spent one million yuan to launch a campaign named “Conch Action” to focus on
the housing for low and middle-income people, collecting nationwide solutions for
urban low-income residents. Thirteen schemes from 263 candidates were selected for
publication, which was submitted to the Housing and Real Estate Department of the
Ministry of Construction. Inspired by the traditional housing of Hakka people, Vanke
developed a pilot project for urban low-income people. The Wanhui Building229 started
construction in November 2006 and was put into use in May 2008. It was listed as a
“pilot project for rental housing for the low-income group” by Guangdong Provincial
Construction Department. This was Vanke’s first attempt at the rental apartment. Now
Vanke has a special series of rental departments which is introduced below. In
December 2007, Vanke and the Culture and Education Section of the British Consulate
General jointly hosted the second “Conch Action”, with the theme of a comparative
study on “Sino-British Resolving Housing Problems for Urban Low-income People”.
The results of the activities were edited and published in the book Two Cities Notes –
Sino-British Thoughts on Solving the Problem of Social Housing. The book presented
the thoughts of the academic circles of the two countries on the housing problem of
urban low-income people. Introducing the British housing security policy was
worthwhile, and the core idea was the overall affordability of housing and sustainability
of communities. Through these activities and pilot project, Vanke actively
demonstrated to public opinion and the government that Vanke was willing to assume
social responsibility as a corporate citizen.
227 See Vanke Co., Ltd. Vanke Annual Report 2005. 228 Ibid. 229 Referring to the Hakka traditional residential form, Wanhui Building is a six-storey circular building with a floor area of 12,000 square meters, and can accommodate up to 1800 people. The main types of rooms are small apartments of 35-40 square meters, with a monthly rent of about 450 yuan. There are also some collective dormitories with 40 square meters for six people.
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After introducing the policy of stabilization housing prices in 2005, the central
government launched the policy to adjust the structure of commercial housing products
in 2006, namely the 90/70 policy.230 This policy was a heavy blow to the developers
who were accustomed to developing high-end housing with a large floor area. The
high-end properties were generally built on land with a good location or with beautiful
natural landscape. These land prices were bound to be much higher than the land for
building ordinary small-sized products. To develop small-sized housing on these lands
would greatly reduce developers’ profits, or even make a loss. Because of the different
buyers, small-sized housing was very different from the high-end product in
architectural design and supporting public facilities. If developers had no experience
in small-sized housing, they were more likely to fail. Design companies and architects
were very busy in that year, and experienced many strange design requirements from
developers. Some developers asked for design study of small-sized products, while
others asked for working out some flexible methods, such as designing small units
within 90 square meters, but after removing some walls between two small units, they
could be changed to a large apartment, in which reasonable floor layout and functions
were certainly required. At the same time, some local governments implemented some
flexible methods to maintain land finance. For example, the method of regional balance
was ‘invented’, that was, the 90/70 policy was implemented in the whole city or some
designated regions instead of implemented in each land parcel, which gave many
developers the disguised opportunity to develop large-sized housing. Vanke had long
proposed that small and medium-sized units were the development trend of urban
housing. It established a special team to study small-sized units since 2001. Vanke
became the first real estate company to respond positively to the 90/70 policy, and
quickly captured several “90/70” plots in Hangzhou, Shanghai, and Guangzhou while
other developers were still panicking or thinking about countermeasures. This policy,
which caused a headache for most developers, had instead become a boost to Vanke’s
land acquisition, which also showed that Vanke’s forward-looking market research
enabled it to respond quickly to this type of policy and turned its disadvantage into an
advantage.
From 2004 to 2006, although the central government introduced intensive macro-
control measures, in fact, the restraint of house prices was only temporary, and there
was soon a retaliatory rebound. House prices were still on the rise, especially in the
second half of 2006 when house prices began to jump up. The average house price in
Shenzhen doubled from 6,419 yuan per square meter in 2004 to 13,370 yuan in 2007
(see table 3.3). Vanke's business income also increased fivefold from 7.667 billion in
2004 to 35.527 billion in 2007 (see table 3.4). In the land auctions of 2006 and 2007,
the new records of the highest land price in every city was constantly broken, making
230 90/70 Policy meant that in 2006, nine ministries and commissions, such as the Ministry of Construction, jointly formulated the “Opinions on Adjusting the Housing Supply Structure and Stabilizing Housing Prices”. It stipulates that from June 1, 2006, the proportion of housing area under 90 square meters per unit (including affordable housing) for newly approved and newly started commercial housing construction must reach more than 70% of the total area.
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to the rejoicing of the entire real estate industry. Vanke also participated in this carnival.
In July 2007, Vanke spent 2.68 billion yuan to win a plot in Tangxia Dongguan with a
starting auction price of only 640 million yuan, making it “King of Guangdong Land”.
After 239 rounds of fierce competition in September 2007, Vanke won a parcel in
Fuzhou with 2.72 billion yuan, making it the “King of Fuzhou Land”. The land price per
square meter of floor area already reached 7,096 yuan, which was higher than the sale
price per square meter of floor area around that parcel.231 The birth of every “king of
the land” caused the house prices of the area to fall into madness. Many being offered
for sale properties were immediately withdrew from the market and it was announced
that the sales would re-open after the price adjustment. As Wang said in the Vanke
Annual Report 2005, real estate companies should be highly vigilant when housing
prices continued to rise. At the Vanke regular meeting in November 2007, the market
report from the department of strategy and investment management showed that the
real estate market in major cities, such as Shenzhen, Shanghai, and Beijing, appeared
to follow a clear downward trend. Vanke felt deeply that the adjustment of the market
itself was already inevitable. Thus, Wang announced in December that Vanke would
no longer seek to obtain the “king of the land”. Vanke cut the new-start construction
plan for 2008 by 20%, and soon lowered it again to reach 38%. Meanwhile, the
management team decided to adjust the house price. On December 9, the average
opening price of Guangzhou Golden Kangyuan was lower than that of the surrounding
properties by 3,000-4,000 yuan per square meter, which was followed by reduced
prices in all Vanke’s housing projects all over the country successively.232 Wang later
responded to a reporter’s question in a media interview, saying that he agreed with the
view that there was a turning point in the real estate market. Neither Wang nor Vanke
management team expected that their actions of adjusting the company’s operation
according to their market predictions would trigger huge reactions from the housing
industry counterparts, governments, and consumers at different levels. Real estate
industry counterparts believed that Vanke had become the driving force of government
macro-control in an attempt to shuffle the industry in price reduction. At the government
level, because of land finance, some local governments were reluctant to see land
auctions fail and house prices decline. They secretly agreed to stay away from Vanke.
Some cities even sent an investigation team to check Vanke’s accounts and taxes. The
house price reduction should be good news for most consumers, but the buyers who
bought Vanke’s products before the price decline felt deceived. They rushed to Vanke’s
sales office to make trouble, smashing the sales office and even injuring some staff.
Until the National Day holidays in 2008, the housing prices all over the country declined,
but the market still reacted coldly. With the financial turmoil caused by the subprime
mortgage crisis in the United States sweeping the world, people had to admit that
Vanke’s price adjustment was based on the rational judgment of the market, and
Vanke’s awakening was just a little earlier than everyone else.
When Wang’s theory of turning point had been fermenting for almost one year, Vanke’s
231 Wang Shi. The Way: Vanke and me 2000-2013 (Beijing: CITIC Press, 2014), 188. 232 Ibid., 189.
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biggest concern was the saying that some cities would stay away from Vanke. Real
estate business needed to coordinate with many government departments to get their
approval, such as land, planning, construction, transportation, infrastructure, taxation,
sanitation, education and so on. If a real estate company was isolated by the local
government, it could hardly do any development in the city. Vanke, although having
earned a high position in the industry, also had to maintain its relationship with local
governments carefully. In the maintenance of government relations, Vanke’s approach
was not to please a major official, because Wang had always adhered to the normative
and transparent operation of the company. Vanke responded positively to government
policies through its business operations, thereby expressing its support for the
development of a city and the work of the local government, certainly taking into
account the growth of the company’s business as well.
The Wanhui Building, mentioned above, was only a pilot project for a low-rent
apartment, but Vanke had seen through this pilot that rental apartments were a new
business with market demand and could help alleviate the pressure of the government
housing security system. Therefore, at the time of the company’s 30th anniversary in
2014, Vanke proposed that the company’s new ten-year goal was to be an urban
service provider, and the added business segments included long-term rental
apartments. In 2015, Vanke formed a series of apartment products, namely “Vanke Yi”
(万科驿). More than 1,000 apartments were launched, and 20,000 apartments were
being prepared for opening.233 On June 3, 2016, the General Office of the State
Council officially launched “Opinions on Accelerating the Cultivation and Development
of the Housing Rental Market”, promulgating a series of policies to encourage and
standardize the housing rental market. Long-term rental apartments began to become
a hot market that many developers were competing for. In May 2016, one month before
the introduction of the Opinions, Vanke integrated all its long-term rental apartment
products and launched a unified brand, entitled “BoYu” (泊寓). By the end of 2017,
Vanke BoYu opened more than 30,000 apartments in 29 cities and already acquired
more than 100,000 rooms. Vanke became the largest provider in long-term rental
apartments in China, aiming to be a leading residential rental enterprise in the world.234
In the second housing reform plan of Shenzhen, it was clearly stated that the proportion
of public rental housing products was 20%. Due to the scarcity of urban land in
Shenzhen, how to obtain land for affordable housing construction is a great challenge.
Shenzhen’s urban villages occupy about 320 square kilometers of urban land. How to
effectively utilize them is the focus and difficulty of Shenzhen urban construction.
Shenzhen proposed urban villages regeneration since 2004, but with the increasing
cost for demolition and relocation, it was more and more difficult to use the method of
demolition. The comprehensive renovation is the most practical method at the present
stage. In order to cope with the development of the housing rental market, in 2018,
Shenzhen proposed to collect not less than 1 million sets of self-built houses or
233 See Vanke Co., Ltd. Vanke Annual Report 2015. 234 See Vanke Co., Ltd. Vanke Annual Report 2017.
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collective properties through acquisition, lease, and reconstruction during the 13th Five-
Year Plan period, which would be put into the unified lease management system after
quality and fire safety inspection.235 In addition, in the Master Plan of Shenzhen Urban
Villages 2018-2025 (see photo 3.6), areas of 99 square kilometers were defined as the
scope of the comprehensive renovation, that was, the scope without demolition and
new construction (see photo 3.7).
Vanke launched the "Wancun Plan" (万村计划) in 2017 and established Shenzhen
Wancun Development Co., Ltd. specializing in comprehensive renovation and leasing
operations of urban villages, upgrading the public facilities of urban villages, and
providing standardized leasing services. At the same time, Vanke signed a strategic
cooperation agreement with Shenzhen RenCaiAnJu Group236 to cooperate fully in
talent housing and social rental housing.237 It is the responsibility of local governments
to develop and manage affordable housing. However, it is difficult for local
governments to carry out large-scale advancement due to the lack of funds, human
resources, and development experience. Therefore, only with the help of social capital
and enterprise strength can the tasks issued by the higher-level governments be
fulfilled as soon as possible. The expansion of Vanke's rental housing business fully
conformed to the policies and measures of the central government and Shenzhen local
government in the new round of housing system reform, and naturally received strong
support from the municipal government and the district governments. This was a win-
win model for Vanke to respond to government policies.
All these decisions made by Vanke were not only based on Vanke's judgment of the
industry and the need for its business adjustment but also conformed to the
government's policies and guidelines. Although some public opinions considered that
Vanke would particularly please the government and deliberately be a "good child" of
the government, no one would believe that Vanke developed to a company of this scale
and level in more than 30 years simply by flattering the government.
Photo 3.6 Existing layout of urban villages Shenzhen
235 “Shenzhen Housing Rental Pilot Work Program” http://www.sz.gov.cn/cn/xxgk/zfxxgj/tzgg/201708/t20170828_8289080.htm (access on 28/2/2019) 236 Shenzhen RenCaiAnJu Group Co., Ltd. was established on June 30, 2016. It is a platform for Shenzhen Municipal Party Committee and Municipal Government to guarantee the housing for talents. It is a municipal wholly state-owned company, specially responsible for the investment, construction, and operation and management of talents housing in Shenzhen. 237 See Vanke Co., Ltd. Vanke Annual Report 2017.
100
Source: Master planning of Shenzhen Urban Village 2018-2025.
http://www.szlh.gov.cn/qgbmxxgkml/csgxj/zwxx/tzgg/201811/t20181106_14465445.htm
(access on 25/2/2019)
Photo 3.7 Scope of the comprehensive renovation of urban villages
Source: Master planning of Shenzhen Urban Village 2018-2025.
http://www.szlh.gov.cn/qgbmxxgkml/csgxj/zwxx/tzgg/201811/t20181106_14465445.htm
(access on 25/2/2019)
3.5 Vanke’s Products, Marketing, and Property Service
101
Developers have to deal with governments at different levels, while they also have to
face customers at the downstream level, i.e., buyers and residents. The success of
developers depends on whether they can occupy the market and make profits, in short,
whether their houses are sold out and their customers are satisfied. At the beginning
of China’s real estate industry, most people were still solving the problem of having a
house. Thus, apart from the floor area and the price, no one put forward any concerns
about the architectural style, functional rationality, beautiful environment, and good
maintenance and service. That was a time of a seller’s market, when buyers would
accept any product provided by developers, as long as it was a house for living. With
the improvement of living standards, people began to pursue quality of life and taste,
naturally producing various requirements for housing which were closely related to
everyday life. The real estate market changed into a buyer’s market. With the rise and
popularity of the Internet, people could collect information from many sources and
communicate extensively. Customers gained a complete right of choice. Therefore, to
maintain market share, real estate companies’ products, marketing, and aftersales
service were all about buyers. The demands and requirements of customers have
become the driving force for developers to change and innovate. The interaction
between developers and buyers is also a key driving force for the development of the
real estate industry.
In the early days of his involvement in the real estate industry, Wang proposed that
Vanke aimed to “promote a new way of life”. He suggested that from the beginning to
the end, Vanke did not “take profit as its sole goal, nor did it merely provide customers
with residence, but provide perfect service to satisfy people’s pursuit of the comfortable,
convenient and perfect way of life”.238 Therefore, customer’s needs and satisfaction
were the core goals in the entire process of Vanke’s project, from planning, design,
and construction, to delivery and property services.
Being a video equipment trader, Vanke was a layman in the real estate industry at the
very beginning. But a layman still had the advantage that the company was not bound
by rules and regulations and dared to innovate. Huang Tieying239 argued that Wang
was a rare entrepreneur who “maintained a fresh and open learning attitude towards
the world”, and Vanke was “a frightening company because they never refuse to
learn”.240 Vanke learned advanced market and service concepts from its early learning
models, Sony Corporation, the trading partner, and Sun Hung Kai Properties, the giant
of Hong Kong real estate industry. Afterward, Vanke formed its characteristics in
marketing and after-sales service and established its own brand. Vanke’s first project,
238 Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 82. 239 Huang Tieying (黄铁鹰), Master of Industrial Economic Management, Renmin University of China.
From 1993 to 2000, he served as the general manager of China Resources Venture. Since 2001, he began to be a visiting professor at Guanghua School of Management, Peking University, teaching MBA practical case course. In 2010, he was awarded the only China Best Business Case Study Award by Harvard Business Review. He is the world's most published scholar in the Chinese edition of Harvard Business Review. 240 Xinzhi Lu. Vanke Battle (Chengdu: Southwest University of Finance and Economics Press, 2017), 65.
102
Tianjing Garden, was launched to the market with a short and confident slogan, “Tianjin
Garden, Shenzhen Housing’s Tomorrow”, which demonstrated the determination and
pride of a new real estate company. Tianjing Garden built the first model room in China
to promote sales. Now the model room in housing sales is already a standard
configuration. But at that time, it was the first time to truly present the future daily life,
such as washing, cooking, eating, and sleeping, in such a space with the same size
and layout, and delicate decoration before the building was completed. The buyers got
a specific image of their future life in the model room, which attracted many people’s
visits and led to unprecedented sales levels.
When Tianjing Garden was delivered in 1990, Vanke’s property management company
was also established. Wang proposed to introduce Singapore’s model of property co-
management and Sony’s awareness of after-sales service. Vanke put forward specific
requirements for property management, such as no scrap of paper on the ground, no
bicycle lost in the community, and plants were kept flourishing. These were strict
standards in Shenzhen in 1990, and the newly established property company kept to
them. Clean, safe and green communities became the basic characteristics of Vanke
property management. In April 1991, Tianjing Garden set up the first owner committee
in China to represent all the owners in the management of the community. It was the
“highest authority”, holding a monthly meeting to discuss major issues of the
community. In 1994, the property management company spent 1.5 million yuan on
building a swimming pool. To cover part of the cost and daily maintenance, it was
proposed to implement the membership system, with a membership fee of 20,000 yuan
for each household. However, the owner’s committee objected to this proposal,
arguing that the pool should serve most owners, and membership fees should be
determined through public opinion polls. The result of the opinion poll was that 2,000
yuan was acceptable by most households. In taking into account the difficulties of
investment and maintenance, the owner’s committee finally set the membership fee at
5,000 yuan, which satisfied both sides.241 Nearly 30 years later, Tianjing Garden today
is still clean, tidy and safe (see photo 3.8).
In addition to the co-management model, Vanke property management launched a
hotel-style management model to provide hotel services based on the needs of
commercial & residential property customers. With the realization of intelligent
buildings, Vanke tried an unattended management model to make residents feel more
private. In the project of Vanke Wonderland, housekeeper’s room was designed at the
entrance of each residential group to provide “old housekeeper” service. The
neighborhood watch management model was introduced to make the residents feel a
greater sense of belonging and warmth. The property company also set up a special
customer research team to study service models for different real estate products and
built a service system, that was “recognizing customers – knowing customers – helping
customers – understanding customers – moving customers – achieving customers”. In
2007, Vanke Property Management Co., Ltd. changed its name to Vanke Property
241 Ibid. 184.
103
Service Co., Ltd. The difference of one word reflected the upgrade of Vanke's customer
philosophy. Vanke property service company won the first place in “China’s
Comprehensive Property Management Strengthen”, and more than 60% of its
customers came for the brand of Vanke’s property service.242 Nowadays, Vanke has
realized intelligent management in all aspects of a community, such as entrance & exit,
visitors, seniors & children safety, community monitoring, parking, and equipment
management like water, electricity, fire, and elevators. In 2014, Vanke launched the
RUI platform (睿平台) based on mobile internet to promote the renewal and upgrading
of management and service means. The RUI platform directly connected community
residents and service personnel to create a better experience for customers with higher
efficiency and more distinctive personalized service.
Vanke Property not only provided service but also was responsible for the building of
community vitality and culture. In 2012, Vanke put forward the concept of "three good
residence", that was "good houses, good services, and good neighbors". It upgraded
to a new “three good” system - "good quality, good service and good community" in
2014, which further strengthened the importance of the community. After the residents
moved in, the property company would help organize activities groups and regularly
host community events to promote community life. Vanke obtained household
feedback through third-party investigations. If the resident knew fewer than 12
neighbors, the property company was unqualified. To achieve the criteria of a good
community, it was necessary for the property service team to organize activities so that
the residents had more opportunities to know each other.
Photo 3.8 Tianjing Garden, Luohu District, Shenzhen
Source: taken from the field research in Vanke Tianjing Garden Shenzhen, 12/12/2018.
242 Lijuan Liu. Vanke 30 Years: Product and Marketing (Beijing: China Architecture & Building Press, 2016), 170.
104
However, it is certainly not enough for a good community to rely solely on property
management. A good community must first have a good space support. Neighborhood
relationship is an important factor in a good community, which takes time to build
through the process of “encounter – acquaintance – familiar”. The community public
space system with convenient use and pleasant scale can increase the opportunities
for people living in different groups and floors to repeatedly meet in their daily life and
develop into close neighborhood relations. Public spaces include community parks,
corner green spaces, group green spaces, children’s playgrounds, sports area,
promenades and greenbelts, bus stops, and public buildings such as shops, clubhouse,
and residential lobbies. Residents are willing to use these facilities and spaces, which
have reasonable layout and streamlined design, and identification system. When they
meet for certain times, they can establish contact with each other. Vanke’s community
space was constructed from project planning. Taking Shenzhen Vanke Wonderland as
an example (see photo 3.9-3.10), the overall planning adopted the structure of “open
community – gated groups”, which made mixed community possible and made the
community more vigorous. In gated groups, the enclosed group layout formed a semi-
open and defensible public space, which made the residents in the group feel more
sense of domain and security. In such a space, together with some appropriate activity
facilities, it was easy to promote the occurrence of neighborhood communication. In
terms of the streamline and spatial organization, the home route and walking greenway
were designed with the combination of bus stops, community commerce, clubhouse,
and other facilities. These were the successful attempts of Vanke to build a vibrant
community.
Photo 3.9 Plan of Vanke Wonderland
Source: diagram drawn based on the plan of Vanke Wonderland Shenzhen.
Photo 3.10 Vanke Wonderland, Longgang District, Shenzhen
105
Source: taken from the field research in Vanke Wonderland Shenzhen, 12/12/2018.
In addition, Vanke paid more attention to the long-term development of the community,
which referred to the long-term stage from the buyers’ residence after the completion
of the sales and delivery. As part of the urban organism, the construction completion
of the community is only the beginning of its growth process. Housing is a special
consumer product with the characteristics of fixedness and high value. A family may
live in a house for a lifetime. Even if it is for a relatively short period, it is normally at
least several years or more than ten years. While living standards improve constantly
and the city continues to develop and transform, if the community remains unchanged,
it appears obsolescent very soon, and gradually is unable to meet people’s daily needs.
When Vanke built the Shanghai City Garden, Wang put forward the idea “affordable,
livable, sustainable”,243 meaning that developers could not sell their houses regardless
of the dynamic development of people’s lives and the community after buyers settled
down. Given a large number of complaints arose from the quality problems of planning
and design and engineering construction in Wuhan Vanke Wonderland in 2001, Mo
Jun put forward the viewpoint that “our work is 70 years effective”.244 Vanke began to
pay attention to the long-term development of residential areas.
243 In Chinese wording is “买得起,住得进,留得下”. See Vanke Residential Planning Research Group,
School of Architecture, Tsinghua University and Vanke Building Research Center. The Vanke Way: How We Think Vanke’s Perspective on Urban Community Development (Nanjing: Southeast University Press, 2004), 143. 244 Mo Jun, who joined Vanke in 1991, served as the company's executive vice president in 2001. He published "Our Work is 70 Years Effective" in the total 415 issue of Vanke Weekly in 2002. He proposed that Vanke should have a long-term concept, that was, Vanke's development in the industry was long-term, customers' consumption of Vanke's products was long-term, and Vanke's service to customers was long-term. He also believed that developers were system integrators and service providers, and in no case could the responsibility of the problem be passed on to others (designer, builder, supplier, etc.), because our houses only had Vanke brand. See Vanke Weekly ed. Vanke: Viewpoint on Corporation Management (Guangzhou: Huacheng Press, 2004), 134-135.
106
In cooperation with local universities, Vanke carried out a series of follow-up surveys
on the problems existing in the operation of communities, which was from the
perspective of both users and operators. In 2002, Vanke Architectural Research Center
and School of Architecture and Civil Engineering of Shenzhen University jointly
surveyed Shenzhen Vanke Wonderland. In 2003, it cooperated with the School of
Architecture & Urban Planning of Shanghai Tongji University to research Shanghai City
Garden. In the same year, Vanke Residential Area Research Group was formed with
the School of Architecture of Tsinghua University to research 12 Vanke communities
that residents had been living in for a long period. In these investigations, it was found
that Shanghai City Garden left four parcels undeveloped due to some accidental
factors. After ten years, these parcels solved the need of the community middle school
for expansion, increased the number of parking lots and the area of green spaces, and
provided the construction area in line with the needs of urban development to build a
large regional supermarket. But in Shenzhen Vanke Wonderland, because there was
no reserved land, it could only change the activity space on the first overhead floor into
the community supermarket and parking lots, which brought new problems in the
entrance & exit setting and the streamlines organization. In November 2003, Vanke
carried out a survey on the surrounding environment and public facilities because of
complaints from residents about noise and odor.245 Through a series of investigations,
Vanke established the view of urban management and flexible planning, that was, to
consider the relationship between residential areas and urban development in the early
stage of project planning, as well as the growth of communities and the rational
allocation of resources. Therefore, Vanke began to pay attention to the reservation of
land for future development and the possibility of conversion of buildings’ functions at
the planning and design stage and allocated public facilities which could serve
residents for a long time, like commerce and ordinary clubhouse.
Property management and long-term community development are important, but in an
instant, it is the quality of the house itself that make consumers decide to make the
purchase. House quality usually includes design quality and construction quality.
Design quality refers to convenient, efficient and reasonable layout, as well as
structural and pipeline design safety. Construction quality refers to the use of qualified
materials and construction in accordance with the design and national standards,
without leakage, cracking, deformation and other problems. The government has a
specific quality management department to review every stage from design to
construction. The department grants developers the construction permit, the sales
permit and the delivery permit upon the quality acceptance of each stage. Also, it is
stipulated that developers must employ a third-party supervision company to enter the
construction site to monitor daily construction quality. Quality is usually one of the
important factors for consumers to decide the purchase, and to reduce after-sales
complaints and maintenance, developers usually set up internal review departments
245 Vanke Residential Planning Research Group, School of Architecture, Tsinghua University and Vanke Building Research Center. The Vanke Way: How We Think Vanke’s Perspective on Urban Community Development (Nanjing: Southeast University Press, 2004), 143-146.
107
and develop strict review standards and procedures to control the quality of all links
from design to construction.
The design layout is usually the first concern of the buyers. Vanke’s leading business
direction was developing ordinary housing, but its products were not confined to that,
contrarily, had a very rich product series. In the 20 years of development, Vanke formed
four mature standardized product lines, namely, Golden series, City Garden series,
Wonderland series, and Top series. The first three series were distinguished by
geographical location, while the Top series was based on the possession of scarce
resources. The Golden series was the residence in the urban core area, enjoying
convenient transportation and fashionable urban life. The City Garden series was the
community located on the edge of the city. It was a bit far from the city center, but the
transportation was still convenient. The public facilities were also good, and the cost
of living was lower than that of the city center. The Wonderland series was located in
a suburban or a satellite town, far from the city center, and the public facilities were not
perfect. It was suitable for young people who were first-time home buyers and families
who wanted to purchase a second home to enjoy a leisurely life. Each series was
subdivided into different types. Taking the Golden series as an example, it was
subdivided into three types: service apartments for investment, apartments for people
wanting to upgrade their residence, apartments for first-time buyers. Under each type,
different residential areas and types of needs were separated according to family
structure, consumer age, and purchasing purposes, and the proportion of each type of
apartment in the project according to the market research (see table 3.5).
At the beginning of its third decade, Vanke drew on the model of Pulte Homes, which
was one of the best developers in the United States, where, like China, there were vast
territory and a fragmented market. The US real estate market divided customers into
first-time home buyers, first-time home changes, second-time home changes, and
active elderly home buyers, while Pulte Homes was the only developer in the US to
offer mainstream products in all four market segments. Pulte Homes was worth
learning from for Vanke in terms of cross-regional operation, land reserve mode,
sustainable profitability, market share, customer segmentation, and relationship
maintenance. 246 Therefore, in the ten-year long-term development plan, Vanke
proposed the idea of moving from “professionalization” to “refinement” in order to
achieve “quality growth”. Vanke’s operation changed from a project-centered mode to
a customer value-centered mode. Under the customer segmentation strategy, Vanke
was not limited to “physical” methods such as occupation, income, and age. It started
from customers’ intrinsic value to establish a gradient product system according to
customers’ different life cycle. It aimed to create value for customers and achieve their
lifetime loyalty.247 Subsequently, Vanke developed a “full lifecycle product” to meet the
needs of customers of different ages and life stage (see table 3.6).
246 Shi Wang. The Way: Vanke and me 2000-2013 (Beijing: CITIC Press, 2014), 87-88. 247 See Vanke Co., Ltd. Vanke Annual Report 2004.
108
Table 3.5: the subdivision of the Golden Series
Types Land
Characteristics
Customer
Demand
Customer Segmentation Main
housing
types
proportion Family
structure
age Purchase
motivation
G1
service
apartment
1 dense office
buildings, high
commercial value
2 municipal
facilities
3 good
transportation, but
with noise
1 convenient
for business
2 good
quality and
service
- businesspeople investment 1 room
- Top
businesspeople
investment 2/3
rooms
G2
For
upgrading
1 convenient
transportation and
quiet
2 good facilities
To improve
residential
quality
10% Three
generations
35~45 improving 4
rooms
40% Nuclear family
(with teenage)
40~45 improving 3
rooms
40% Nuclear family
(with child)
35~39 improving 3
rooms
10% Senior couples 45~50 “empty
nest”
2
rooms
G3
For
dwelling
1 dense public
transportation
2 passable facilities
3 medium quality
Low total
prices
85% Young couples 25~35 dwelling 2
rooms
15% Young people 25~30 dwelling 1/2
rooms
Source: Liu Lijuan. Vanke 30 Years: Product and Marketing (Beijing: China Architecture & Building Press,
2016), 39.
Table 3.6: Vanke full lifecycle products
products subdivision series characteristic description
single apartment
ant workshop 45m2, integrated household appliances
solution, mix use function
MI(米) apartment
25m2, free conversion of three modes of
residence, office and leisure, movable furniture,
online sale
tiny apartment 18m2, function mixed and shared in limited
space
growing family
90+ series reserved space for growing, high space
utilization, full furnishing solution
happiness series
extending the housing lifecycle, reducing the
pressure of changing housing, complete
function in the small area
YUE(悦) series freely assembled decoration house, innovations
in details
109
RUI(睿) series flexible and changeable spaces, assemble
furniture
UP series changeable layout, individualized assembly,
whole lifecycle community, entire living system
high-end family
international series
Mature commerce, full-age education, scientific
and technological wisdom, green life, intimate
service, fine decoration
jade series urban core area or rare resources, celebrity
class, intelligent home
seniors housing
embedded small
institutions
small institution providing 24-hour care,
catering, day care, health management, and
other seniors’ services in the newly-built
community
urban seniors service
complex
self-care apartment+ nursing apartment+
medical supporting+ commercial facilities
whole lifecycle seniors
service community
community-wide aging friendly facilities,
pension apartment, pension institution, medical
institution, seniors college, seniors restaurant
Source: summarized from Liu Lijuan. Vanke 30 Years: Product and Marketing (Beijing: China Architecture
& Building Press, 2016), 44-58.
In the Vanke Annual Report 2004, Vanke also planned to establish Vanke residential
standards to improve housing quality and cost-effectiveness through factory
production, and to carry out the research and development of possible future
residential buildings with harmonious, natural and ecological standards, so as to
contribute more independent intellectual property rights to the residential industry. It
was not only the necessary route for Vanke to develop on a large scale but also an
important measure to improve the quality of Vanke products. In the early stage of
Vanke, because of the rapid cross-regional development, resulting in the financial
shortage, and Vanke being originally a non-professional real estate company with
insufficient expertise in construction, there were often problems of construction work
needing to be re-done and delays in Vanke’s development. The quality of Vanke
projects was uneven, which was the focus of complaints from customers. In the initial
stage of China’s real estate development, it was a seller’s market. Because of the
scarcity of products in the market, developers could sell off their plans at a rate of more
than 90%. Thus, quality issues and customers’ complaints were delayed, and would
not affect sales. At that time, Vanke put forward the view that “property management
was Vanke’s last line of defense”248, because many construction quality problems could
only be solved in the stage of property management after the delivery, which cost a lot
of human resources and funds. However, after 1995, many companies invested in real
estate development, and more and more commercial housing in the market.
Consumers had more choices and they were more inclined to see the completed
248 Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 135.
110
buildings before deciding on the purchase. All construction quality problems were
exposed at the sales stage. Therefore, Wang Shi stated that “quality was the lifeline of
Vanke real estate”249 and designated the year 1996 as “quality management year”,
determined to solve the quality issues of Vanke products.
In the real estate industry of Shenzhen, there was always a saying, “wen ke (文科 literal
arts) Vanke, li ke (理科 science) Zhonghai250(中海)”, which meant that Vanke was good
at marketing, sales and property management, while Zhonghai was good at building
engineering and cost control. As Vanke and Zhonghai maintained good relations with
each other, Vanke sent staff to Zhonghai to study project management and cost control,
while Zhonghai also sent people to Vanke to learn marketing and personnel training.
Zhonghai’s business scale was once three times that of Vanke. However, Zhonghai
was hit badly in the Asian financial crisis of 1998. At that time, Wang tried to lobby Sun
Wenjie, the general manager of Zhonghai, to merge Vanke with Zhonghai, so as to
complement each other’s strengths and become a company with advantages in all
aspects of project development. Wang’s suggestion did not receive a response from
Sun. Thus, Vanke launched a poaching plan in 2000, called “Piracy Plan”, especially
for outstanding expertises of Zhonghai. In the following years, there were dozens of
mid-level and above technical cadres joining Vanke. By 2004, according to Vanke
personnel department, 40% of general managers of first-line companies came from
Zhonghai.251
Joining with Zhonghai’s technicians, Vanke’s engineering quality was improved.
However, upon continuing to adopt the traditional on-site pouring method, the quality
of projects still depended on the personal level of construction workers and managers.
Some frequent quality problems in residential buildings could not be thoroughly solved,
such as the leakage of rooves, doors and windows, and walls. With the company’s
expansion, the traditional building mode turned out to be an obstacle to Vanke’s large-
scale development. Therefore, Wang proposed the standardization and
industrialization of residential buildings and commissioned the Vanke Architectural
Research Center to carry out the research and development.
Wang’s idea of housing industrialization was not understood by other developers and
even internal personnel, because there was no case worldwide of real estate
companies promoting housing industrialization. In Japan, it was jointly promoted by
builders and parts suppliers, while in Singapore, Hong Kong, Europe, and the United
States, it was realized by construction companies under the leadership of government.
Actually, housing industrialization was not a strange word in China. As early as in the
1950s, China learned from the former Soviet Union the standardization,
249 Ibid. 250 Zhonghai Real Estate is a central enterprise under China Overseas Development Limited. It was founded in Hong Kong in 1979 and committed to the development of real estate in Hong Kong. It was listed on the Hong Kong Stock Exchange in 1992. Since 1988, it started its domestic real estate business in Shenzhen and expanded to major cities in the country. Zhonghai made Shenzhen its headquarters and gradually shifted the focus of its business to the domestic market. 251 Wang Shi. The Way: Vanke and me 2000-2013 (Beijing: CITIC Press, 2014), 25.
111
industrialization, and mechanization of the construction industry, mainly developing
some prefabricated components and construction machinery. In the 1960s and 1970s,
the standardization design and the production capacity of the components were further
improved, but as the key technical problems were not solved, the prefabricated parts
at that time were usually associated with poor quality, safety issues and high cost. In
1994, the Ninth Five-Year Plan of Science and Technology officially put forward the
housing industrialization. The Ministry of Construction promulgated the “Outline of the
Pilot Work for the Housing Industry Modernization” in 1996, and established the
Housing Industrialization Promotion Center in 1998. Seven national housing
industrialization bases were set up, including Tianjin Construction Steel, Beixin Group,
Haier Group, and Zhengtai Group. However, the technology of the residential industry
was still at a low level, and the industrialized production system was not formed. The
enterprises in the whole industrial chain failed to cooperate with each other, and it was
still not applied in practical projects.
In this context, the Vanke No.1 experimental building was completed in the first half of
2006. Through this construction, the Architectural Research Center generally
understood what kinds of products could reflect the characteristics and advantages of
industrialized housing. The No.1 experimental building was just a temporary building,
which was demolished six months later. After that, Vanke bought a parcel with an area
of 200 mu 252 in Songshan Lake, Dongguan to establish the Vanke Housing
Industrialization Research Base.253 At the end of 2006, the No.2 experimental building
was started and completed soon. The research data showed that the construction error
rate could be reduced to 0.01% and the leakage rate at the joint of the outer wall and
the window frame was 0.01% after the industrialization. The margin of error was
calculated by the millimeter. Moreover, the large-scale industrialization mode made the
construction process and residential products more environmentally friendly, and the
resource utilization more reasonable: steel formwork had a high reuse rate; waste
could be reduced by 83%; material loss was reduced by 60%; building energy saving
was more than 50%; site workers could be reduced by up to 89%; construction periods
could be shortened by 25~35%.254 For the Architectural Research Center, the purpose
of R&D was its practical application. But it was in the experimental stage, and there
were many uncertain factors. Moreover, without the support of upstream and
downstream industrial chains, and no mass production being formed, the cost would
increase by nearly 40% when compared with the traditional construction method. At
that time, it was the golden stage of real estate development. Developers made huge
252 Mu (亩) is a specific unit of land area in China. One mu equals 667 square meters. So, 200 mu is
133,400 square meters. 253 Originally, Vanke Housing Industrialization Research Base was planned to be set up in Shenzhen, but the land in Shenzhen was too expensive, and the Shenzhen Construction Bureau did not understand why Vanke was engaged in industrialization research, believing that Vanke was only looking for a pretext to
take land, so it refused Vanke’s request for land. In fact, local officials in Dongguan (东莞) do not
understand why real estate developers do residential research either, but because Songshan Lake (松山
湖) was a new area at that time, the presence of Vanke, as such a well-known company, was of great
significance to the development of the new area, so they agreed to Vanke's land requirements. See Shi Wang. The Way: Vanke and me 2000-2013 (Beijing: CITIC Press, 2014), 126-127. 254 Lin Ding. Technological Vanke. IT Manager World, No.20 (2007), 60-64.
112
profits as long as projects were completed quickly. If Vanke’s own front-line companies
were unwilling to industrialize, how to promote industrialization to the entire industry?
Eventually, Shanghai Vanke accepted the task of trying industrialization. In September
2007, the No.20&21 buildings in Shanghai Vanke’s project of New Mileage were
topped out, becoming the first commercial housing built by factory method in China.
Although the prefabrication rate of these two buildings was only 37%, which could only
be regarded as a rudimentary level of the housing industrialization, it gave Vanke great
confidence and gave a shock to the real estate industry in China. Following the
Shanghai company, Shenzhen Vanke also built a building with factory technology in
the project of the Fifth Garden. At the same time, the Industrialization Base continued
to launch the No.3 building, which optimized and updated the technology constantly.
The No.4 building was completely designed and built according to the industrialized
development process for the first time. The No.5 building built three types of standard
products to meet the needs of customers who changed their housing for the first time
to improve their living conditions. For large-scale industrialization promotion, the No.6
building produced exquisite effects that could not be achieved by hand. 255 On
November 12, 2007, Vanke Housing Industrialization Base was officially listed as
National Industrial Base and became the only research base set up by a real estate
company in eight national bases. In 2009, the Beijing Construction Committee took the
lead in subsidizing industrialized housing, and successively, Shanghai, Kunming and
other cities began to implement subsidizing policy. In 2010, Vanke built Longyueju, an
affordable housing project, for the Shenzhen government. The use of industrialized
technology made the construction faster than, and quality clearly superior to, other
projects. It became a project that gained attention and recognition by governments at
all levels. The newly commenced construction area with industrialized method reached
84% in Vanke projects in 2017.256
Through the implementation the housing industrialization project, Vanke solved the
problem of product quality, realized large-scale development, and practiced the
concept of environmental protection and green development. In addition, housing
industrialization, subverting the tradition, also subverted all aspects of Vanke’s internal
operations. Not only within Vanke, the upstream and downstream industries that
cooperated with Vanke, such as component manufacturers, furniture suppliers, and
construction parties, had to be redefined according to industrial standards. Although
Vanke industrialization had made great progress, it still needed the cooperation of
policies and upstream and downstream industrial chains to be fully promoted in the
real estate industry. Therefore, as Wang said, “the housing industrialization was still on
the way”.257
As mentioned above, the first core value of Vanke is to make customers proud by
continuous provision of products and services beyond customers’ expectations. Vanke
255 Shi Wang. The Way: Vanke and me 2000-2013 (Beijing: CITIC Press, 2014), 176. 256 See Vanke Co., Ltd. Vanke Annual Report 2017. 257 Shi Wang. The Way: Vanke and me 2000-2013 (Beijing: CITIC Press, 2014), 177.
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spared no effort to implement customer-oriented credos in product design, construction
quality, and property services. Vanke educated a large number of Chinese customers
about what a good quality house was and what good service was. However, customers
had a wide range of demands and complained about Vanke frequently. Many instances
of Vanke’s reflection and progress started with customer complaints.
Wang recognized early that the Internet revolution would be a powerful force for
transformation of the housing market and urban life. Before the Internet became
popular, developers had a high degree of control over information. Every time a new
project, a new concept or a new layout was launched, developers made all the
annotations. Buyers only accepted information passively as they had no chance to
hear other consumers’ opinions and make extensive comparisons. The popularity of
the Internet gradually freed consumers from the status of having limited access to
information, and the situation of information asymmetry had been improved. Vanke
believed that the interaction with buyers on an equal information platform enabled
Vanke to face its consumers truly and to grasp the ever-changing demands of its
customers. At the same time, it also challenged the adaptability, innovation and
management capabilities of Vanke employees. In 1992, Vanke Weekly started
publishing, mainly for internal communication and external publicity of real estate
trends, company products, and corporate image. In 1999, Tencent258 launched QQ,
an instant messaging network tool. This convenient, open and free communication
completely changed the way in which Chinese people exchanged information. Inspired
by this, in 2000, Vanke launched its online forum, www.vankeweekly.com, which
opened the panels of “Wang Shi Online” and “Complaint Vanke”. Everyone could
communicate online directly with Wang Shi, and all customers could complain to Vanke
publicly.
Anyone who has visited Vanke sales office or who has seen Vanke sales brochure
would find the signs to inform them of unfavorable factors and potentially problematical
information within one kilometer outside the boundary of the project, such as high-
voltage lines, refuse transfer stations, public toilets, construction site noise, highway
noise, etc., and with specific location indications as well. Sales staff would also verbally
convey this information. This practice of informing about disadvantages originated from
a two-year complaint in Vanke Wonderland of Wuhan (武汉). In 2001, when Vanke
Wuhan company signed a land use agreement with Donghu district government of
Wuhan, it was stipulated that the garbage dump, which was about 800 meters away
from the site, would be closed and greened by the government within two to three
years. In early 2002, the first phase of the project began to sell. In June, some buyers
noticed the problem of the garbage dump and began to discuss it publicly in the Vanke
258 Tencent was founded in Shenzhen in November 1998. It was listed on the main board of the Hong Kong Stock Exchange on 16 June 2004. QQ launched by Tencent in 1999 provided users with a huge and convenient communication platform, which profoundly affected and changed the communication mode and living habits of hundreds of millions of Chinese. Tencent is currently one of the largest internet integrated service providers in China, and also one of the internet enterprises with the largest number of service users in China.
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online forum. The apartments were delivered at the end of August when it was exactly
the hot period of summer. Some residents began to complain about stench and flies.
Wuhan Vanke’s staff thought this was an issue outside the red line of the project. They
also believed the government would close the dump soon. Thus, the problem was
underestimated, and the residents’ complaints were not appreciated. In the summer of
2003, instead of being closed, the garbage dump was illegally expanded and started
burning garbage. Stinks and flies had seriously affected the daily life of residents.
Owners made fierce complaints on Wang Shi Online and held a protest rally at the
opening of phase III on September 29. Wang promised that Vanke Headquarters would
set up a special team to deal with this matter, puting funds into improving the conditions
of the garbage dump and urging the government to relocate it. In December 2003, the
new site of the garbage dump was approved, and the original garbage dump would be
transformed into a garbage transfer station. Based on the lack of understanding of the
garbage transfer station and the distrust of the government, some owners also lost
their trust in Vanke. They assembled through the Internet and expressed their strong
opposition by hanging banners and slogans, and large-scale mass complaints finally
broke out. While visiting and appeasing the residents, the Vanke special team
intensified its efforts to manage the garbage dump and used more resources to seek
any possibilities to relocate the garbage transfer station. On June 30, 2004, the delivery
day of phase II and III, the garbage dump was permanently closed, and all the
coverage work was completed. This two-year complaint was finally resolved.259 Vanke
carried out an internal review of this incident, recognizing that the company often did
thorough research within the project red line, but paid little attention to the external
environment. Wuhan branch did not pay enough attention to the initial stage of
complaints, and failed to feedback the most authentic information to the headquarters,
which delayed the best time to handle the incident properly, and finally led to the
occurrence of mass complaints. Since then, Vanke formulated the principle and
specific practice of informing customers of unfavorable factors. This information
transparency not only made buyers consume transparently but also allowed Vanke to
avoid unnecessary complaints in the future.
Housing is a special kind of consumer goods, which has a high price and affects
people’s daily life. Therefore, buyers complain whenever they feel unsatisfied. If
complaints are not properly responded to, buyers often take more drastic measures.
With the help of the Internet, consumers with the same appeal can easily form alliances
to make greater momentum to attract the attention of developers and public opinion,
or even government departments. Even if developers pay more attention to quality and
management, it is impossible to achieve zero complaints, because companies cannot
pursue zero complaints with unlimited input costs and regardless of profit, meanwhile,
customers are not all rational enough to make reasonable complaints. Thus,
complaints can only be minimized, but a zero record is impossible.
259 Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 277-280.
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Although meeting and exceeding customers’ needs is the core value of Vanke, Vanke
did not compromise in the complaint of Shenzhen Golden Home. Golden Home is a
high-density project near the city center. Due to the limited land area, Vanke created
the concept of “pan club” to solve the problem of lack of green space and activity
venues. It expanded and organized the functions of a clubhouse in outdoor spaces,
roof gardens, and overhead floors, and perfectly integrated activities with the
landscape. This project was sought after by the real estate and design circles. Golden
Home was naturally a great success in sales. But in December 2001, almost every
balcony or window of the four street-facing buildings of the project was marked with
the extremely eye-catching characters: “Be deceived in purchase”. It turned out that
the owners of the phase I and II strongly protested against the construction of the third
phase on the eastern side of the community (see photo 3.11). They pointed out that
there was no so-called phase III in Vanke’s sales brochure and community planning
model when they bought the house. Vanke’s behavior violated the promise of sales,
which would seriously affect their future living environment and quality of life, lower the
property value, and infringe on the owners’ rights and interests. The residents
collectively blocked the construction site of phase III, causing conflicts with security
personnel. Subsequently, they rushed to and blocked the street holding the banner of
“Be deceived in purchase”, which affected the urban traffic until they were finally
persuaded to withdraw by the traffic police. In Vanke’s explanation, the third phase was
in the original planning and also marked in the sales brochure (but some owners
denied noticing it). The original program of the third phase was “commerce + hotel +
apartment”, which was now adjusted to “commerce + residence” to avoid a series of
negative effects brought by hotel operation, such as personnel flow, noise, sanitation,
etc.. Moreover, in the adjusted plan of phase III, the floor area was downsized
(commercial area 7,300 square meters less and residential area 1,300 square meters
less respectively) to reduce the buildings’ height and volume, which meant Vanke
sacrificed nearly 100 million yuan of sales income. At the same time, the 750 square
meters of green space shared by residents and commercial customers was adjusted
to a roof garden of about 2000 square meters exclusively for the residents, adding
leisure facilities and swimming pool. Vanke believed that these adjustments were in
line with the interests of residents in Phase I and II. The most important thing was that
the plan modification was approved by Shenzhen Planning and Land Resources
Management Bureau. 260 The owners refused to accept Vanke’s explanation, and
finally took Vanke to court for “sales fraud” and asked for compensation of 1,500 yuan
per square meter. Vanke insisted this requirement was unacceptable as it was without
factual and legal basis. On January 29, 2002, the Futian District Court of Shenzhen
held a three-hour court debate on the case. On February 28, under the auspices of
Shenzhen Planning and Land Resources Bureau, the owners' representatives and
Shenzhen Vanke reached a preliminary understanding and formally signed a
settlement agreement.261
260 See “Vanke’s notes on the Golden Home incident and the response to the owners”. http://bbs.szhome.com/30-30-detail-39293.html (access on 6/3/2019). 261 See “Around the change of planning of Golden Home phase III”. http://www.vankeweekly.com/?p=70388 (access on 6/3/2019).
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Nowadays, many people thought that collective action was easy to create a powerful
public opinion and force the government and enterprises into submission. This was
particularly easy to happen in some sensitive social issues, such as demolition and
reconstruction of old urban areas, children’s enrollment, and the doctor-patient
relationship. People even thought that with the help of public opinion, they could ignore
the legal and moral constraints. It was wondered whether this incident of Vanke Golden
Home would enable consumers to re-examine the boundaries of their rights and
interests and the bottom line of their actions? On the other hand, Vanke experienced
a severe crisis of trust, which also allowed Vanke to reflect on the approach in dealing
with customer relations. Although Vanke stood on the legal and reasonable side, Wang
still formally responded to the media in a press conference for publishing the annual
report on March 15, 2003, which also happened to be the Consumer Rights Day of
China. He believed that there were always contradictions between developers and
buyers. The question was whether the contradictions were expressed fiercely. In the
Golden Home incident, he reflected that it was inappropriate for Vanke not to publicize
the adjustment and seek owners’ opinions (although the Planning Bureau said the
planning adjustment did not require the consent of the residents). Because the new
planning was more beneficial to the buyers and got approval from the Shenzhen
government, Vanke failed to pay enough attention to and deal with the incident in time
at the beginning, which led to the deterioration. Vanke needed to reflect carefully to
avoid similar incidents.262
Photo 3.11 Shenzhen Golden Home, Futian District, Shenzhen
Source: Shenzhen map and field research in Vanke Golden Home Shenzhen, 12/12/2018.
In the same year of the Golden Home incident, Vanke experienced another fierce
262 See “Wang Shi’s talk about the Golden Home incident”. http://bbs.szhome.com/30-24600-detail-72171-0-1-1.html (access on 6/3/2019).
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group event, the Zhongnan Bus incident. Shenzhen Wonderland, as mentioned above,
was an iconic project of Vanke. Now people can choose a convenient subway or bus
to go there. However, when the project was delivered, it was a desolate suburb, with
inconvenient public transportation. For the residents’ convenience, Vanke launched a
paid service of a private bus for the residents. However, in August 2000, Shenzhen
Transportation Bureau issued a document prohibiting the operation of the private
residential bus. Vanke had to introduce professional social resources and reached a
cooperation agreement with Zhongnan Buses. In April 2001, the Wonderland special
bus was officially operated by Zhongnan Buses. Since then, complaints about
Zhongnan Buses appeared in the owner online forum, focusing on unreasonable
schedule, random adjustment, random stops, serious overload, expensive tickets but
poor service attitude, and so on. Vanke communicated with Zhongnan Buses, but with
little success. Complaints increased rapidly. Since August 17, 2001, a series of
problems occurred, like bus delays, too many owners could not get on the bus, and
buses did not stop at the station. On August 21, a scheduling problem occurred. After
some owners waited for too long a time, they intercepted seven Zhongnan buses in
the central urban area during the evening rush hours, resulting in a large area of
congestion. Vanke managers and the deputy general manager of Zhongnan Buses
rushed to the place and cooperated with the traffic police to manage the traffic. Before
the coordination meeting was over, six drivers of Zhongnan Buses suddenly rushed to
one of the Wonderland buses and hit the owners. The act of beating people caused
the incident to escalate rapidly. Hundreds of Wonderland residents gathered in the
community square to demand the severe punishment of the beaters, protesting that
Vanke did not honor its promise. Managers from Vanke and Zhongnan Buses held
dialogue with the residents’ representatives overnight to avoid further escalation. After
several days of communication, a consensus was finally reached. Zhongnan Buses
promised ten rectification measures, and made a public written apology to all owners,
punished the perpetrators accordingly, and set up a complaint hotline.263 The lesson
for Vanke from the bus incident was that although the special bus service was
outsourced to the Zhongnan Buses, Vanke's owners recognized the Vanke brand and
blamed Vanke's service for the problems. Therefore, when part of the work of property
management was handed over to another company, Vanke still needed to offer strict
management and supervision. The standard of Vanke service could not be lowered
because of the outsourcing of service.
When the problem involves urban village reconstruction and low-income people, the
relationship between developers and consumers is more sensitive. On June 11, 2018,
an "Open Letter to Foxconn Employees" was posted in the factory area of Shenzhen
Foxconn, which attracted workers to stop and read and was quickly forwarded on the
Internet. The purpose of this letter was to ask Foxconn for a pay increase because
rents had been rising in recent years, but workers' wages had not changed accordingly.
In particular, the letter mentioned Vanke’s renewal project in Qinghu village next to the
263 Shi Wang, Chuan Miu. The Way and Dream: I Spent 20 Years with Vanke. (Beijing: CITIC Press, 2006), 227-228.
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north gate of Foxconn Longhua factory. They were worried that the rent of urban
villages would be doubled or even tripled after the renovation by Vanke. With the help
of the Internet, the letter was widely disseminated, causing unexpected repercussions
at different levels in Shenzhen and triggering discussions on Shenzhen workers’ living
conditions, rental market, and housing prices. Many voices were aroused to condemn
Foxconn's oppression on workers and question Vanke's “Wancun Plan”. In fact, the
day before the letter was posted, on June 10, a group of migrant workers living in urban
villages around the Foxconn factory held a tenants’ meeting and wrote down the Letter
to Vanke, Landlords and Regulatory Department from Representatives of 130,000
Foxconn Workers, which was published in a Wechat public number and widely and
quickly disseminated. The Letter mentioned that Vanke signed a cooperation
agreement with the landlords of urban villages, which may cause the rent increase,
which should be monitored by the relative government department. Vanke, who was
pushed to the top of the storm, responded quickly on the evening of June 11, promising
to keep the rent within the current price range after the renovation. Vanke took two
completed urban village renovation projects as examples, Xinweizai Village and Yutian
Village. The environment and safety of these two villages were greatly improved after
the renovation, and all the apartments were equipped with household appliances and
furniture, while the price was still maintained in the previous rent range.264 At the 2017
Annual General Meeting of Vanke on June 29, some shareholders questioned the
“Wancun Plan”. Vanke once again responded that although there were many
uncertainties and difficulties, Vanke would maintain the stability of rent and provide a
better environment and services for tenants.265
Following the Foxconn Incident, there were many rumors that many long-rent
apartments failed to operate, and some long-rent apartment companies have
withdrawn from the market. Vanke has also been rumored to have terminated the
“Wancun Plan”. Although Vanke has repeatedly refuted rumors, it was an indisputable
fact that it was difficult to make profits from long-rent apartments in a short term. This
incident reflected the current situation of competition and interaction among Shenzhen
government, developers, and housing consumers. For the government, addressing
affordable housing for low- and middle-income people is the biggest problem in
residential development. For developers, it is a difficult decision to participate in
affordable housing construction.
Vanke’s core value was to meet and exceed the customers’ expectation, adhering to
the initial goal of promoting a lifestyle through its constant practice in product design,
R&D, construction quality control, transparent sales, property services and long-term
development of communities. Vanke's continuous progress in exploration also brought
consumers a lot of new knowledge and ideas in housing. Through interaction with
residents, whether organizing community activities or dealing with fierce complaints,
Vanke always learned and made progress. There were many voices on the Internet
264 Details see http://www.sohu.com/a/235754608_627934 (access on 30/7/2019). 265 Details see https://new.qq.com/omn/20180629/20180629A1B7OQ.html (access on 30/7/2019).
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that have different views on Vanke for various complaints. But as Wang said that
developers and owners were always in conflict, developers and consumers should
gain experience and lessons in dealing with these contradictions. The positive
interaction between the developer and the buyer can achieve understanding and
tolerance to a certain extent, which is more conducive to the progress of developers to
build better houses and communities, and ultimately benefit buyers.
3.6 Conclusion
In rapid urbanization, the unremitting efforts of developers have promoted the
development of urban housing and the improvement of Shenzhen’s urban spatial
structure and urban images, and improved ordinary people’s living quality and
environment.
Vanke is major study of private companies in Shenzhen. Vanke experienced diversified
development and went through a long period of adjustment to embark on the road of
professional real estate development. After achieving refinement and industrialization
in residential buildings, Vanke repositioned itself as an urban service provider. It has
also experienced a series of incidents, such as the near breakdown of the capital chain,
almost being swallowed by the capital market, participating in the high-priced land
competition, complaints from buyers and even fierce conflicts. In these incidents,
Vanke has constantly learned lessons and adjusted itself, and finally become the
leader in China's real estate industry.
Vanke has certain representativeness, but more significant is its uniqueness. Every
developer that can survive must have its uniqueness, forming a set of survival rules, a
set of methods to play with the government, and a way to respond to buyers’ needs.
The early era when opportunists could stand out had passed. Nowadays, the real
estate industry has changed from an emerging industry to a traditional industry in the
Internet age. In the tripartite game relationship, how can the developer cope with the
government’s policy adjustments calmly and maintain good relations with the
government? And how can they satisfy the needs of buyers and win the trust of
consumers? From the case study of Vanke, it can be seen that responding to the
government and satisfying the buyer are not the goal of the developer, but are the ways
to achieve the goal. Developers are now more like resource integrators. The birth of a
real estate project is the integration of capital, policy, status and future of the city, needs
and pursuits of people's lives, new materials and technologies. To be a successful
integrator and to achieve sustainable development, the most important thing is to
improve the company's professionalism. Only when the company is strong can it
assume the role of the integrator and integrate the upper and lower relationships to
form a joint effort to promote urban development in China.
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Chapter 4: Housing Choice: Housing Conditions and Transportation
4.1 Introduction
On November 16, 2002, an article entitled "Shenzhen, Who Abandoned You" was
posted on the forum of People's Network. It spread quickly through the Internet and
was published in the Southern Metropolitan Daily later. It attracted the attention of the
SMPG and triggered a heated discussion from the top of the government to the bottom
of the ordinary people. All of them were concerned about the future of Shenzhen's
urban development.266 In this way, Shenzhen people expressed their thoughts about
the city and participated in its development. With the development of mobile Internet,
and the rise of we media, people expressed their ideas and appeals faster and in more
diverse ways. People's voices were more and more easily heard, and their choices
were more and more valued. In addition to this obvious and strong way of expression,
people's behavior and choices in everyday life were an expression, affecting all
aspects of the city imperceptibly.
In the development of housing, people's choice of housing and spatial use of housing
and community were particularly important. Developers as large as Vanke also needed
to strive for product research and development constantly, and quality improvement to
meet the requirements of consumers. The Shenzhen government also strengthened
the construction and supply of affordable housing because of the demands of
Shenzhen people. In the housing system, although standing at the lower level, the
buyers express their opinions by using the right of choice. Although the choice of the
buyers is within the range provided by the government and developers, their choice
266 On September 16, 2002, Ping An Insurance announced that it would invest two billion yuan to build Ping An Financial Building in Lujiazui Financial and Trade Zone in Shanghai. This sounded like Shenzhen's enterprises were expanding northward, but according to insiders, the core business departments of Ping An Insurance had already moved to Shanghai. On October 12, 2002, there were rumors that two high-tech enterprises of Shenzhen, ZTE and Huawei, intended to move their headquarters to Shanghai. More shocking news ensued. According to some media reports, the relocation of China Merchants Bank to Shanghai was being demonstrated. CITIC Securities Headquarters planned to move back to Beijing. The Hantang Securities Headquarters established in Shenzhen had moved to Shanghai. Wal-Mart, the world's top 500, would move its purchasing headquarters from Shenzhen to Shanghai in the near future. At the same time, talent from different industries was also moving with the tide, turning their sights to the Yangtze River Delta region. A survey of College Students' employment intentions showed that Shanghai and Beijing were the most attractive cities for college students. 32.37% of college students regarded Shanghai as their first employment goal, 27.67% in Beijing and 12.13% in Shenzhen. More and more excellent enterprises and skilled workers were looking to Shanghai, Beijing, Guangzhou and other places. In this competition for economic discourse power and high-level talent in the 21st century, Shenzhen had obviously fallen behind. Without policy advantages and subject to economic and geographical conditions, Shenzhen's disadvantage was becoming more and more obvious in the competition. Shenzhen, once the frontier of China's reform and opening up, once the most dynamic city in China, once created many miracles of the special economic zones, once a shining young city, but now it seemed to have lost its luster. At the end of 2002, upon seeing the outflow of talent and enterprises from Shenzhen, a man named Wo Zhongxiao, who was a financial securities researcher and enterprise capital operation planner, deeply felt that Shenzhen was losing its advantage. He published the long article "Shenzhen, who abandoned you "
on the Internet under the name of "wo wei yi kuang" (我为伊狂), which aroused millions of netizens from
all over the country to participate in the discussion.
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can make the developers adjust the development strategy and improve the design and
construction quality, and can also influence the government to adjust policies, urban
planning, and the layout of public facilities. After moving and settling down in the new
home, the residents participate and affect the formation of the living environment and
community style through their practice of everyday life, and further to affect the
appearance of the urban region.
In the past two years, the author interviewed total 34 Shenzhen people about their
daily life stories to figure out their standards of housing choice, and the way they used
community space. The author also learned about their interaction with developers and
the government and their understanding of Shenzhen's urban development in the
economic reform. Without setting specific questions in the interview, the study purpose,
and the purpose and content of the interview were introduced first, then the interviewee
freely told their Shenzhen stories. Among the interviewees, two were school cadres
who talked about education, one was an insurance company manager who introduced
the old-age community, one was a real estate agent talking about how housing prices
in a certain area were affected by schools, one was a retired cadre of Shenzhen
Housing Bureau who gave a briefing on the general housing development in
Shenzhen, and the other 29 interviewees told their Shenzhen stories. These
interviewees were recommended by relatives, friends, and former colleagues, and
screened for coverage and representation through age, gender, and occupation. Most
of the 29 respondents who told Shenzhen stories were married, ranging in age from
1950s to 1980s. The number of males and females was nearly equal (see figure 4.1).
Interviewees were from various walks of life, including government employee, retiree,
real estate agent, employee in foreign enterprise, lawyer, housewife, cleaner, doctor,
self-employee, company founder, employee in state-owned company, investment
manager, beautician, law enforcement staff and other professions. Five of the 29
people had never bought a house in Shenzhen. The rest bought a house or lived in a
house bought by their parents. Some of them owned more than two houses. Most of
the interviewees had cars, but in recent years many people chose to travel by public
transportation (see figure 4.1).
The questionnaire included questions in housing, transportation, education, pension,
and daily consumption (see appendix 01). Questionnaires were sent out by paper and
Wechat electronic forms, with 42 and 45 questionnaires retrieved, respectively, then
totaling 87 valid questionnaires. Paper questionnaires were placed in a street office in
Futian District. People who came to handle affairs were invited to fill in it. Wechat
electronic questionnaires were distributed on the Internet by relatives, friends, and
previous colleagues. Thus, the respondents were quite random. The majority of
respondents were married, aged from birth years in the 1960s to 1990s. The number
of females was more than males (see figure 4.2).
Through the interpretation and analysis of the information obtained from interviews and
questionnaires, and combining with the theory of daily life, this and the next chapter
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determine the principle concerns in Shenzhen people’s everyday life, then lead to the
research of development in housing and community, transportation, education, and
pensions. It aims to explore further how Shenzhen's housing development affected the
improvement of people's living environment and quality, and how people's everyday
life influenced housing development and urban development imperceptibly.
Figure 4.1: general information of interviewees
Source: based on the data collected by interview from 2/2018 to 2/2019.
Figure 4.2: general information of respondents
Source: based on the data collected by questionnaire survey from 2/2018 to 2/2019.
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4.2 Housing and Community
The interviewees were emotional, especially those who came to Shenzhen in the early
years. They witnessed the change of Shenzhen from a border town to today's megacity.
They recalled their past life and work by reviewing their housing experiences. Most of
them changed from single to having a family and children, and their living standards
improved greatly, especially the improvement of housing conditions. Ordinary people's
housing experiences formed the history of Shenzhen's housing development.
4.2.1 Iteration of Housing and Community
Most of the 116 respondents (including interview and questionnaires) once lived in
dormitories. The conditions of dormitories varied according to the units they worked for
(details see appendix 02). Similarly, most respondents once rented houses. The rented
houses had different types, such as peasant houses, single dormitories, and suite-
house, which were mainly determined by the tenant's working place, income level, and
family structure. The rented houses were mostly small size and could only meet the
needs of life (details see appendix 03). After that, most respondents bought houses. In
the early stage, they bought small-profit houses provided by units or the government
in the housing reform. The type and area of the house were determined by scores
based on their working years and grades. The choice was limited in the available small-
profit houses (details see appendix 04). Some respondents had to buy commercial
housing in their first purchase because they did not meet the criteria for buying small-
profit housing. Some respondents, who had economic abilities, were able to buy
commercial housing to improve living conditions later. When buying commercial
housing, the housing selection criteria varied from person to person, but generally, the
main factors of housing selection were price, location, and house layout. Everyone's
economic situation, family population, living habits, aesthetic standards were very
different, so people bought very different commercial houses. Commercial housing had
a wide range of options, which could meet the needs of various groups of people.
Meanwhile, the design and construction quality of commercial housing were much
better than that of small-profit housing (details see appendix 05).
These descriptions could help to restore the iteration process of Shenzhen housing
and the characteristics of housing in different ages. Referring to Maslow's hierarchy of
needs, a hierarchy of housing needs (see figure 4.3) was constructed to explain that
the iteration process of housing was a process in which people's understanding of and
demand for housing were constantly improving. From having no shelter to having a
room to live, the basic living need was solved. With the improvement of living standards,
people wanted to separate different living spaces, and with various household
electronic appliances into the house, the demand for physical spaces made the house
layout more reasonable and better quality. People improved their appreciation of
housing greatly and started to pursue individuation, which made residential design
tend to be more refined, adding many intentional elements such as style and taste. At
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the same time, people expanded the demand from the housing itself to the residential
community, and put forward security, landscape, rich spaces and other needs for
planning and environment, and then required higher-level needs for neighborhood
relations, living atmosphere, etc., generating a sense of pride and belonging and
ultimately realizing the vision of the ideal home.
Figure 4.3: hierarchy of housing needs
Source: hierarchy of housing needs is built based on Maslow's hierarchy of needs, see Maslow, A.H.
(1943). "A theory of human motivation". Psychological Review. 50 (4): 370–96.
Housing is not a fast consumable. Once residential buildings were built, they would
exist in the city for at least decades. Different types of houses, as long as they were
not temporary buildings, could almost all be found in Shenzhen. Buildings of different
ages coexist in the city to build a city's architectural history. Following the descriptions
of the respondents, the author visited several residential buildings of different ages as
the following analysis of housing cases in different periods. When people were
accustomed to seeing that today’s residential buildings were beautifully designed and
constructed, with reasonable functions and spaces, as well as the stylish landscape
and perfect facilities in communities, the design and construction of early residential
buildings in Shenzhen looked rough, and the materials and technology were backward.
But in fact, Shenzhen's housing development was in the leading position in China since
the economic reform. Many old houses were once high-end residential buildings or
design models. They were learning examples for government officials or developers in
inland cities to visit. Housing in different periods should be understood in the context
of economic and social development in the specific period.
a. Dormitory
Most Shenzhen people working in a unit could live in dormitories in the 1980s and
1990s, when the welfare housing system was still on effect. Units responded by
arranging accommodation for their employees. There were not many rentable houses
available in the market. Shenzhen developed a dense processing industry as the main
industry at that time. Industrial zones were built very quickly, but housing and living
facilities were insufficient. All units had to deal with the living needs of their workers.
The dormitory conditions were quite different. Dormitories provided by government
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departments, state-owned enterprises, and foreign enterprises were generally better
than others. Most of these dormitories were built and managed properly. Each room
had a specific bathroom and housed no more than four people. Factory dormitories
were humble buildings or temporary buildings, usually housing eight people, with
shared bathrooms on a whole floor. The worst of all were the dormitories for
construction workers, which were temporary shelters with dozens of people living
together. Even in the same unit, people of different positions and levels had different
living treatment. For example, factory managers and technicians occupied better
dormitories, which accommodated up to four people, while ordinary workers’ rooms
housed eight people. They occupied different buildings normally, so that managers and
workers would not be mixed together.
After the housing marketization, units no longer solved the housing problem and
gradually did not provide dormitories. Some enterprises provided rental subsidies to
ease the burden of their employees. Many factories, especially labor-intensive
factories, still provided dormitories for workers, because factories were mostly located
in remote areas with insufficient rentable room around, and workers earned limited
income unaffordable for renting their houses individually. Compared with the past, the
dormitory of workers has been greatly improved, equipped with toilets, water heaters,
air-conditioning, and washing machines. A room normally housed four to six residents.
The accommodation was free except for roommates sharing the bills of water and
electricity. One interviewee, the chairman of a factory labor union, said now it was
difficult to recruit workers because young people born after 1990 were unwilling to be
a worker and could not bear a tough life, thus, poor accommodation could not keep
workers at all. It could be seen that although dormitories were the most basic form of
housing, their conditions and quality were important factors affecting people's choice.
Thus, this was a problem that employers had to deal with carefully. Most of the former
dormitory buildings now still exist, but they are no longer used and managed as
dormitories. When housing reform was carried out in the 1990s, most of the suite-
house dormitories were sold to employees as welfare houses. The single-room
dormitories were handed over to the property management department or professional
property rental management company for social rental.
Dormitories had two main architectural forms. One was the outside-corridor strip-
shape building 267 , mostly labelled as bachelor quarters. Early outside-corridor
dormitories used an outer corridor to connect more than a dozen single rooms. Each
floor shared a bathroom and shower. Stairs and public rooms were usually placed in
the middle of the strip-shape building for each room’s convenient access. Clothes
hanging in the corridor was noticed by passers-by, then, people lost some privacy. And
dripping water from clothes made people uncomfortable. The floor layout of dormitories
267 The outside-corridor dormitory is in line with the climate characteristics of southern cities. The southern climate is wet in spring and hot in summer, and the outside corridor is suitable for ventilation. It is not cold in winter, so walking on the outside corridor does not feel cold. The building does not need heating, so it does not cause energy loss. In the north, the inner corridor is often adopted because of the cold winter, the outside corridor is not conducive to wall insulation and heating energy is more likely to be lost.
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was improved gradually. A balcony was added first to solve the problem of drying
clothes; then a bathroom was added to occupy part of the balcony (see photo 4.1).
Another form was the suite-house, which was a flat with one to four bedrooms (mainly
two and three bedrooms) and an independent kitchen and bathroom. When used as a
dormitory, each room was usually occupied by two people or a family, sharing the
kitchen and bathroom. For example, Tongxinling community was the earliest
government dormitories. There were two main floor layouts, two bedrooms in area of
70 square meters (for four people or two families) and three bedrooms in 78 square
meters (for six people or three families) (see photo 4.2). Some units with good
economic conditions would allocate a whole suite-house to those employees who
reached the required level and had a family.
Photo 4.1: typical floor layout of outside-corridor dormitory
Source: sketch based on the observation in the field research
Photo 4.2: Tongxinling community, Futian District, Shenzhen
Source: pictures from housing sale website https://sz.centanet.com/xiaoqu/xq-prrdaaffjd/ https://sz.esf.fang.com/chushou/18_216786929_18270816x2810287424_160001149.htm https://sz.esf.fang.com/chushou/18_216807885_16417957x2810287424_160028599.htm
(access on 26/5/2019)
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Several respondents lived in different dormitories of Shekou Industrial Park, which
were built early and maintained well, and still in use. The author visited Sihai (四海)
and Shuiwan (水湾) C zone. Sihai dormitory had no balcony, and clothes were fully
hung over in corridor. Some rooms also had the air conditioners hung on the wall of
the corridor (see photo 4.3). Each room of Shuiwan C zone had a balcony, which was
used as a kitchen by the tenant. So, clothes still were hung over in corridor. The
dormitories in these two zones were rented to various kinds of tenants, which seemed
to be chaotic. The number of people living in a room was uncertain and determined by
the tenants themselves. Some rooms even housed three generations. With the
permission of a tenant in Shuiwan C zone, the author entered the room to take photos
(see photo 4.4). The tenant was a couple and came from other province to work in
Shenzhen. The grandparents had to come together to help taking care of the child. So,
total of five people in three generations lived in this single room. The balcony was
transformed into a simple kitchen fueled by canned liquefied gas. The monthly rent of
a single room was 1500 yuan, and the price increased every year.
This was an epitome of the living conditions of the low-income people in Shenzhen,
who usually did not have Shenzhen household registration and were not qualified to
apply for low-rent housing in the housing security system. They could only rent old
residential buildings or urban villages with poor living conditions at affordable prices.
One family and even three generations were crowded in limited space. This was the
most difficult problem that the SMPG has not been able to solve for a long time. As a
migrant city with 70% of the non-registered population, if the government only focused
on the livelihood of the registered population, the people who provided all kinds of
basic services and construction for Shenzhen would have to leave because of the
unaffordable housing and other livelihood problems. A city that only had the elite class
was not sustainable development. In Shenzhen's latest housing reform document,
some people who provided basic services for the city had been included in the urban
low-rent housing plan for the first time. This was a decision after deep reflection and a
good start. However, with Shenzhen's huge non-registered population, when could
break the barrier of household registration was not a matter of the day.
Photo 4.3: Sihai dormitory, Shekou Industry Park, Shenzhen
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Source: photo was taken in the field research on 10/12/2017.
Photo 4.4: Shuiwan C zone dormitory, Shekou Industry Park, Shenzhen
Source: photo was taken in the field research on 10/12/2017.
b. Small-profit Housing
Small-profit houses were developed by Shenzhen government and distributed to
government employees and eligible applicants in the 1980s and 1990s. Most of them
were multi-story buildings. Since the 1990s, there were high-rise small-profit houses.
In the early years, some enterprises built their own houses or bought commercial
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houses and then allocated them to their employees as small-profit houses. After the
1990s, individuals directly applied to the government for purchase, provided that they
were married, and both husband and wife were registered residents in Shenzhen. The
multi-story residential areas built by the government in the 1980s mainly included
Tongxinling, Yuanling, Xiabumiao (下步庙), Hongli Village (红荔村), etc. The houses
built by enterprises were mainly Huaguoshan community (花果山社区), Rose Garden,
Zhaobei community (招北小区), Airong Garden (爱榕园) and Cuizhu Garden (翠竹园)
in Shekou Industrial Park. These houses were initially allocated as dormitories to
government employees and business employees. In the late 1980s, the government
encouraged employees to buy their private houses. These houses were sold at low
prices from ten thousand to tens of thousands of yuan and turned into private
properties in the subsequent housing reform. In the 1990s, municipal and district
governments began to build large-scale small-profit housing communities, which were
mostly multi-story and high-rise mixed communities, including Meilin Village (梅林村),
Yitian Village (益田村), Taoyuan Village (桃源村), Sanhuan Village (三环村).
Mao Wei defined the housing built before 1996 as the first generation of Shenzhen
residential products. Although the author disagrees with this one-size-fits-all approach,
his argument that the first generation of products was "extensive development" and
belong to "subsistence type and low-cost consumption" 268 was worth learning.
Although Shenzhen housing was advanced in design, it still aimed at meeting people's
basic living needs and focused on practicability. In the stage of multi-story residence,
the function of residential space was ambiguous. There was usually only one living-
room, without distinction between the living room and dining room. And there was only
one bathroom without the concept of the master suite (see photo 4.5). Consumers
usually only cared about whether the floor layout was square and practical, without
concern for the external environment and management. Therefore, most multi-story
residential communities adopted the determinant arrangement most in line with the
requirements of orientation, lighting, and ventilation. Planting trees between buildings
meant greening areas. Without awareness of community and safety management,
passive security was carried out only through the anti-theft doors of each building and
the anti-theft nets of each apartment (see photo 4.6). The supporting facilities also
focused on practicability, mainly equipped with farm markets, schools, kindergartens,
small shops, etc. There were no facilities and spaces for leisure, entertainment, and
sports. In materials and technology, the domestic standard at that time was followed.
In the early stage, a large number of prefabricated panels and prefabricated doors and
windows were used. The cement label of the wall was low, and the yellow mud mortar
with poor cohesion was used in large quantities. The overlap of prefabricated panels
was only 10-12 centimeters which created safety risks. Later, it began to use the cast-
in-place floor, but the floor design thickness was only 10 centimeters and often was
built as 8 centimeters by jerry-building. People could have a shaking feeling when
moving on such a floor269. By the time of building high-rise small-profit housing, all
268 Wei Mao and Xiaomo Wang. Revolution of Living (Beijing: Haichao Press, 2000), 6. 269 Information collected in the interview
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aspects were greatly improved. In floor layout plan, stairs, kitchens, and bathrooms
got natural light. The concept of double bathrooms and dry-wet zoning begun to be
applied in the bathroom design. The enclosure layout has emerged in the community
planning to create public community space. The seperation of people and vehicles in
circulation planning was adopted to enhance the security of the community.
Shenzhen was financially weak and had a large gap in housing at that time. Therefore,
the construction of small-profit housing, especially in the early stage, required both
cost control and tight construction time, so the construction quality of small-profit
housing was relatively low. Most importantly, people were at the bottom of the housing
demand at that time; that was, people required basic accommodation to meet their
basic living needs. Moreover, compared with the living standard in the hinterland, the
suite-housing in Shenzhen was an advanced design, which made most of the new
arrivals in Shenzhen satisfied with the great improvement in housing condition.
However, the design and construction of small-profit houses could not represent the
material and technical standards at that time, but could only be used to understand the
level of economic development and people's understanding of and demand for living
conditions in Shenzhen, because the design and construction of commercial houses
which would be discussed below were much higher than small-profit houses. Although
these early houses were dilapidated, with various problems that could not meet today's
standards, they occupied the best location in the city. After years of development, the
nearby public facilities were perfect, and there were usually famous schools around
them. Therefore, the purchase and lease of these houses were very active, climbing
to extremely high prices. This part will be detailed in the following chapter on education.
Photo 4.5: Huaguoshan community, Shekou Industry Park, Shenzhen
Source: pictures from housing sale website https://shenzhen.qfang.com/sale/100254276 https://shenzhen.qfang.com/sale/100237294 (access on 27/5/2019)
Photo 4.6: weak prevention of gates and anti-theft nets
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Source: photo was taken in the field research on 10/12/2017.
c. Commercial Housing
The development of commercial housing began in the early 1980s, but almost all of it
was sold to overseas people. The Donghu Liyuan was the earliest commercial housing
in Shenzhen. Yijing Garden 270 (怡景花园), which was also located in Luohu District,
construction commencing in 1982. It included 42 six-story apartments and 266 two-
story villas, all of which were sold to Hong Kong people or overseas Chinese (see
photo 4.7). The pictures of Yijing Garden indicated that the design level and
construction quality of commercial housing was much higher than that of dormitories
and small-profit houses in the same period. Commercial housing development had the
freedom to base itself mainly on the developers' judgment of the needs of target
customers, cost control, and revenue expectations, without being limited to the national
housing design and construction standards. In addition to overseas people, some rich
private owners who were not qualified to buy small-profit housing also began to buy
commercial housing. But until 1998, when the state formally abolished the housing
welfare system of physical housing distribution, commercial housing with the public as
the main consumer was beginning to be built in large quantities.
270 Yijing Garden was a high-end residential community located in Huangbeiling, Luohu District, with a total land area of 27.78 hectares and a construction area of 103,000 square meters. It was built from 1982 by Shenzhen Special Economic Zone Real Estate Company, and completed in 1988. It was divided into five groups with 42 six-story apartments and 266 two-story villas. The planning of the project flexibly used the terrain and natural landscape. The Y-shaped and rectangular floor layout ensured a good orientation and landscape, and does not produce sight interference. The facade of the building was of Spanish style, with high-grade materials and exquisite construction. The community was equipped with a primary school, a kindergarten, a shopping center and entertainment places. The whole area was carefully planted and maintained, forming a very pleasant living environment. For more information, see Department of Real Estate Industry, Ministry of Construction of PRC, China Real Estate Association, Shenzhen Construction Bureau, Shenzhen Land Bureau and Shenzhen Real Estate Association, co-ed. Shenzhen Real Estate Guide (Beijing: China Architecture & Building Press, 1990), 180-183.
132
With the increasing commercialization of housing, the real estate market changed from
a seller's market to a buyer’s market. Developers needed to focus on studying and
guiding the needs of buyers and to try to meet the needs of consumers on the premise
of controllable costs and predictable benefits. From the interviewees' conversations,
they were not critical when they lived in dormitories or bought small-profit houses,
because they understood that they did not have the right to choose in the welfare
distribution system. They felt lucky that they were qualified to enjoy this welfare system;
thus, even upon complaining about quality problems or various inconveniences, they
still accepted this condition. But purchasing commercial housing was different as they
spent a lot of money, or even lifetime savings, thus, everything should be critically
considered to meet most of their living needs. After the full commercialization of
housing, the housing development started flourishing. It could be said that the
development of commercial housing reflected the upgrading of people’s needs in living
conditions, and the diversity and complexity of housing development.
The evolution of commercial housing in Shenzhen has gone through the process of
building demand refinement, environmental demand refinement, and cultural demand
refinement. These processes occurred in sequence, but they were compatible, that
was, the requirements for buildings themselves would only become higher and higher,
rather than losing the requirements of the building because of the occurrence of
demand for the environment or culture. The evolution of commercial housing was also
a process of learning from overseas architectural design and planning concepts, which
was a process from blind plagiarism to the integration of local elements and re-
innovation.
Photo 4.7: Yijing Garden, Luohu District, Shenzhen
Source: Department of Real Estate Industry, Ministry of Construction of PRC, China Real Estate Association, Shenzhen Construction Bureau, Shenzhen Land Bureau and Shenzhen Real Estate
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Association, co-ed. Shenzhen Real Estate Guide (Beijing: China Architecture & Building Press, 1990), 180-183.
a) Architecture
Hong Kong residential building was the earliest imitation object of Shenzhen housing.
As many commercial houses were purchased by Hong Kong people, the design of
high-rise residential buildings in the 1980s directly referred to Hong Kong's design from
the floor plan to the elevation. The most common type was the “井”-shaped layout of
eight dwelling units on each floor. Such a floor plan could reduce public area and
achieve a higher utility rate271. In addition to the “井”-shaped layout, there were other
similar floor plans (see photo 4.8). Such designs had great limitations on orientation
and landscape, such that only half of the dwelling units could enjoy good orientation or
landscape. Meanwhile, it was prone to produce irregular shaped living-rooms or
bedrooms. All respondents expressed their preference for a regular floor plan for easy
furniture arrangement. Developers also found that units with irregular-shaped rooms
were often difficult to promote.
Living space in Hong Kong was very crowded, so the area of a dwelling unit is usually
small. Therefore, with the improvement of living standards in Shenzhen, the floor layout
of Hong Kong was gradually not in line with people's needs. Shenzhen people began
to require functional zoning in their houses, such as division of living room and dining
room, en-suite master bedroom, and distinctions between dry and wet areas. At the
same time, washing machines, refrigerators, and other large electrical appliances were
widely used in the family in the 1990s. The air conditioner began to become a necessity
in a southern city. The size of the television was growing. Therefore, the living-room
needed to be enlarged constantly, and the kitchen needed to reserve the locations and
plugs for various kitchen appliances. The design of service balcony (i.e., double
balcony layout) for placing a washing machine and drying clothes began to be popular.
The design of building façades began to set up a standardized location for the external
machine of the air conditioner. Many families began to demand more functional rooms,
such as porch, study, helper's room, storage room, etc. These demands were gradually
emerging with the improvement of people's living standards, which led to the
continuous reform and improvement of Shenzhen's residential design and construction,
towards a more rational and humane direction.
But at the same time, in order to please consumers, some developers deliberately
enlarged the areas or promoted some personalized layouts. There once appeared a
trend of large-scale housing in Shenzhen, which actually led to some meaningless
large size and non-practical spaces. Another once attractive design to highlight
personality was duplex house in high-rise apartments (see photo 4.9). This was a
special design to satisfy people's desire to live in villas. However, it often resulted in a
271 utility rate refers to the ratio of saleable area to construction area. In China, a house is priced at per square meter of construction area, thus, the total selling price of a house is price of per square meter plus construction area. Construction area includes salable area and allocated public area, such as lobby, stairs, lift, corridor, community club. Saleable area is the real area that a house occupied, excluding the public area, but including the area of balcony and walls. Carpeted area is the real useable area in a house.
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too complex layout, a lot of wasted traffic area, and unfriendly steps for the elderly and
children.
When consumers’ requirements were met, developers began to work out various
details to attract buyers by introducing innovative products each time, such as the
design of storage spaces, the efficient kitchen layout, and even the height and style of
switches and doorknobs. The most typical examples were bay-window and entrance-
garden (see photo 4.10 and 4.11). The bay-window was the window protruding out of
the wall. Initially, the bay-window was designed to add the facade elements and
enlarge the window area to obtain more natural light and wide vision. Later, the height
of the bay-window was higher and higher, and the width of the protruding part was
wider and wider, which evolved into a means to increase the carpeted area. The
entrance-garden referred to the design of the porch into a large balcony, with natural
light and decorating as a garden. Zhonghai Sunshine Palm Garden initiated the first
entrance-garden, which was sought after by consumers. Because, first of all, the
lighting and greening porch made it more comfortable to go home, secondly, the
balcony area was only calculated half in the salable area, which could reduce the total
price. The buyers usually close the entrance-garden with glass when decorating, and
turned it into the carpeted area. Developers used the bay-window and entrance-garden
as extra features to create an attractive and long-lasting selling point.272 Because, for
the buyers, it cost the same to get a bigger area. Several respondents said that the
extra area was an important factor in their decision to buy a house.
In facade design, most of the early houses were simple matchbox-like forms. In the
late 1980s and early 1990s, developers began to pay attention to facade design. They
started with some changes in windows, balconies, and rooves; then they began to
introduce some architectural styles of a specific school or a famous place. In the mid-
1990s, European style buildings were once popular. Even a "Eurostyle Street" was
developed in Futian Free Trade Zone. Buildings’ novel appearance could really satisfy
people's desire for the outside world in a short time. Several respondents mentioned
that when they bought their first home, they were first attracted by the good looks of
the building. As long as the floor layout was reasonable, they made a quick decision to
purchase. As people were getting more and more aware of the outside world’s
standards, those buildings which were poorly imitated were quickly abandoned by
consumers. Forms of residential facade began to be included in the overall planning,
focusing on close integration with the community spaces and environment. The
architectural style was more and more rich, and details were more and more elaborate,
which attracted buyers, and, at the same time, improved the urban landscape greatly.
Photo 4.8: “井”-shaped floor layout and other similar plans
272 Developers used various means of "stealing area" to attract buyers, which attracted the attention of the government. Many cities have revised the calculation method of building area to eliminate the use of gray space in policy by design to achieve sales highlights of the so-called "gift area".
135
Source: Mao, Wei and Wang, Xiaomo. Revolution of Living (Beijing: Haichao Press, 2000), 41-44.
Photo 4.9: duplex house in a high-rise apartment
Source: Mao, Wei and Wang, Xiaomo. Revolution of Living (Beijing: Haichao Press, 2000), 53-54.
Photo 4.10: bay-window
Source: pictures from housing sale website https://cuihaihuayuan.fang.com/ (access on 29/5/2019)
Photo 4.11: entering-garden
136
Source: pictures from housing sale website https://sz.esf.fang.com/chushou/18_217469042_18429701x2810017978_164332463.htm
(access on 29/5/2019)
b) Planning and Landscape
Whether the floor layout of residential buildings met the requirements of comfort, safety,
convenience, and health in consumers' daily life was always one of the most basic and
important factors considered by buyers. Meanwhile, people began to pay attention to
the living environment outside the buildings, such as greening, landscape, activities,
safety, transportation, parking, and so on. Environmental demand refinement
prompted developers to make many changes in project planning and landscape design.
Many foreign planning theories and design methods were applied to community
planning and design and became a key selling point for successful sales.
China's residential area planning followed the Soviet Union's principle, which
originated from Perry's theory of “neighborhood units”. 273 The principle of
neighborhood units guided the planning and construction of urban residential areas
worldwide and was deepened and developed in different practices. One of the most
famous practices was the construction of Radburn in 1933, a new town in the suburbs
of New York. The planning of this new town inherited the tradition of Ebenezer
Howard’s Garden City and applied the principle of neighborhood units. It also made
appropriate improvements to respond to the increasing number of cars and traffic
accidents. The practice of completely separating pedestrian traffic from vehicle traffic
was called the “Radburn Principle”,274 which has been adopted by residential planning
and construction in many countries. Binhe community (滨河小区 ) was the first
residential area in Shenzhen to integrate the concept of separation of people and
vehicles. It connected the residential buildings by a walking corridor and separated the
road under the corridor275. Although it was through simple architectural design and
273 Clarence Arthur Perry. Housing for the Machine Age. (New York: Russell Sage Foundation, 1939), 50-51. 274 Shiwen Sun. Modern Urban Planning Theory. (Beijing: China Architecture & Building Press, 2005), 325. 275 Dachang Chen. Planning of Shenzhen Binhe Community: A Real Case of Large Space Community.
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incomplete separation of pedestrians and vehicles, People found it refreshing when it
was completed in 1986. Meilin Village 276 , planned and designed by Hong Kong
architect He Xianyi, was built in the late 1990s and the first large-scale community to
realize the separation of pedestrians and vehicles in planning. From then on, the
concept of the “Radburn Principle” was applied to many projects, which became the
basic requirement of residential planning, especially meeting the concern of families
with older people and children.
Since Howard put forward the theory of the Garden City and constructed the modern
planning theory system, urban development in western countries applied the urban
planning method, which was based on the modern architectural movement, that
focused on the composition and organization of urban physical space. Beginning in
the 1960s, the post-modern urban researchers reflected and criticized the American
urban construction after the Second World War, and proposed that cities should be re-
conceptualized and built from the perspective of urban life and human activities. Some
of these ideas had far-reaching implications for China's planning and housing
development, including Jane Jacobs's view of urban vitality and mixed blocks in The
Death and Life of Great American Cities 277 , and New Urbanism's theory, which
emerged in the 1990s. The idea of New Urbanism was put forward in view of the
development of suburban areas in the United States. It suggested that suburbanization
in the United States was an inefficient development model that wasted land, energy,
and resources and that a single population structure led to the disappearance of urban
life characteristics. New Urbanism advocated the development and maintenance of an
inclusive neighborhood community whose housing could adapt to various families with
different sizes, ages, cultural, and income. It placed well-equipped public facilities in
the most accessible location for residents. New Urbanism’s design method included
two modes, TND (Traditional Neighborhood Development) and TOD (Transit Oriented
Development).
Since the late 1990s, Shenzhen began to expand rapidly to Nanshan District and
Bao'an District. With the development of large-scale residential communities, the
theory and method of New Urbanism were appropriated by many developers. Some
referred to its planning methods and more to the ideal of reviving the lifestyle of
traditional European small towns as a marketing promotion. Shekou Industrial Park,
Urban Planning Society of China, ed. City Planning Review, No.06 (1985), 20-24. 276 Meilin Village is located in the south of Meilin Reservoir in Futian District. It is a large-scale small-profit residential area developed and constructed by Shenzhen Residential Bureau. It covers a land area of 38.38ha, with a total building area of 747,600 square meters, GFA 3.5 and a greening rate of 46%, and a total of 2,910 parking lots. A total of 13 districts in Meilin village are high-rise buildings. Each building is overhead at the first floor and duplex at the top. With high standards of planning and design, high quality construction and high level of property management, Meilin Village is known as "the first village in Asia". 277 Jacobs questioned all the academic approaches and argued that urban renewal did not respect the needs of most city-dwellers. She observed and analyzed the day-to-day street life and a wide variety of neighborhoods in many American cities to find out that the environment, which promoted frequent communication and activities, could produce the value that all people needed. She put forward four factors critical to the healthy development of a city, which are primarily mixed land use, small blocks, a mix of building ages, and concentration of urban activities. See Jane Jacobs, The Death and Life of Great American Cities, (Harmondsworth: Penguin Books, 1964).
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which put forward and practised the concept of "comprehensive community
development", was a successful case that fitted Jacobs' viewpoint and New
Urbanism's theory. Compared with many super-large communities which were only
built as gated "dormitory towns", Shekou Industrial Park was a truly multi-functional
and mixed community, which realized the integration of urban functions and had the
characteristics of cultural symbiosis, scale economies, and social coordination. 278
While Seaside Florida, the representative project of New Urbanism, was planned and
constructed in a short period, Shekou Industrial Park was a natural growth process. As
the earliest construction area in Shenzhen, its formation was influenced by many
complicated political and economic factors. Thanks to Yuangeng’s adherence to the
idea of building the most livable coastal town, Shekou became a desirable place where
many Shenzhen people chose to work and live (see photo 4.12). Several respondents
had been working and living in Shekou since they first came to Shenzhen in the 1980s.
Shekou Industrial Park provided them with job opportunities, dormitories to live in,
affordable small-profit houses and optional commercial houses. Their children were
born and raised in Shekou. All schools, from kindergarten to high school, were built
and run by Shekou Industrial Park, and were within walking distance. There were also
hospitals, commercial and cultural facilities to meet their needs in health, shopping,
cultural and leisure entertainment, and other needs of daily life. They chose to live in
Shenkou throughout their lives.
Shekou’s development mode was formed in a specific period. A similar development
in Shenzhen was the Overseas Chinese Town, which also originated from the
acquisition of large-scale land and independent development power during the initial
development period of Shenzhen. Most developers did not have such conditions and
opportunities to conduct development in a scale of a new town. Most projects only
provided commercial housing and corresponding service facilities. To label themselves
as the New Urbanism, these projects mainly imitated its public open space, pedestrian
system, spatial layout, architectural style and so on, and then combined exquisite
pictures and words in the brochure to promote a more humanistic lifestyle. Some
smarter developers, such as Vanke, fully integrated with the city in space, facilities,
transportation and other aspects of planning (as detailed in chapter 3) to achieve the
effect of enjoying both a beautiful and private residential environment and a dynamic
urban life, rather than a gated “urban isolate island”.
In addition to planning concepts, landscape design and construction of residential
communities were also important means for developers to meet the consumers’
upgrading environmental needs. Although there were some famous gardens in
Chinese history, such as Suzhou Garden and Beijing Royal Garden, before the 1990s,
few Chinese universities offered landscape architecture as a specialty, and there was
no landscape designer position in design companies. People's understanding of
278 Zheng Hu, Shaobin Lin, Xinzhi Lu, ed. The China Merchants and China’s Real Estate Industry (Beijing: ZhongHua Book Company, 2010), 173.
139
landscape was limited to urban parks, greening, and planting. The code of residential
area planning stipulated the proportion of green land in a residential area. As long as
the green area with grass and trees could meet the requirements, the residential
community met the national standard.
By the mid-1990s, when people's demand for residential buildings was met, they
began to pay attention to the living environment outside the door. People could not be
satisfied with simply laying lawns and planting trees in the open space of the
community. When there were few native landscape designers in China, landscape
design companies from Hong Kong, Europe, and the United States quickly became
hot resources for real estate development. All spaces outside the residential building
became the scope of the landscape. Landscape design first needed to coordinate with
the style of planning, architecture, and sales, then to consider people's outdoor
activities to arrange different hard and soft landscapes, also to consider seasonal
factors with different colors of plants, and so on. The landscape was not only a topic
to be considered at the beginning of a project, but also a key selling point. Various
sales advertisements made people intuitively understand how developers created a
living atmosphere through landscape design and sold a designed lifestyle to
consumers (see photo 4.13). Exquisite pictures and gentle or exciting words stimulated
consumers' senses and aroused their yearning for a better life. The beautiful and
stylish landscape could attract consumers in an instant and make the purchase more
likely. However, in the interviews, the respondents' requirements for the living
environment were safety and hygiene first, and then friendly neighbors and beautiful
landscape, which indicated that, in the long-term everyday life, the most important
factors in a community were safe, hygienic, practical, convenient conditions, and
friendly neighborhood relations, rather than the style of the landscape.
Photo 4.12: images of Shekou Industrial Park
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Source: photos were taken in the field research in 2017 and 2018.
Photo 4.13: using landscape as highlights of sales promotion
Source: Shenzhen Real Estate Association, ed. Classical Properties Advertisement (Shenzhen HK Guangzhou). (Nanchang: Jiangxi People Publishing House, 2002), 44,45,57.
c) Cultural and Humanistic Environment
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When the physical elements of architecture and landscape were met, consumers had
a new pursuit, that was, cultural and psychological needs, which were often vague and
would change at different stages of life. This higher level of requirement could be
summarized as social stratification, emotional attribution, and ideal home. From the
perspective of housing and community research, social stratification was the stratum
represented by the community and neighborhood, emotional attribution referred to the
sense of community identity and belonging, and ideal home referred to the ideal living
space and style. These aspects were not separated but overlapped to varying degrees.
After the implementation of reform and opening-up policies, China has developed into
a stratified society. There is a great disparity between the rich and the poor in Chinese
society at present, which is particularly evident in the expensive commodity of housing.
The rich often have more than one house, and the poor cannot afford even a room. All
respondents put the housing price as the first consideration. Consumption ability must
be met before other requirements could be put forward. However, I did not fully agree
with the opinion that the widening income gap led to social strata stratification, and
then transformed into residential differentiation279. It was obvious that wealth as the
most important factor, has led to social stratification and the resulting differentiation of
living space in American cities. Poor people were concentrated in urban centers, while
the middle class and the wealthy chose to live in the suburbs. Unlike urban
development in the United States, Shenzhen has no obvious downturn in its central
area and the process of middle-class migration to the suburbs. Apart from wealth, there
are other equally important reasons for the differentiation of living space in Shenzhen.
From the process of Shenzhen's urban development, the early Futian District and
Nanshan District could be understood as the suburbs of Luohu District, while the
districts outside the Second Line (today's Bao’an, Longgang, Longhua, etc.) could be
understood as the suburbs of the area of inside the Second Line. When people chose
to buy houses in Futian District and Nanshan District, or Bao’an and Longgang
afterward, it was not because of the decline of Luohu District or the areas inside the
Second Line. They moved to other districts not for better living conditions, but in order
to get closer to work to reduce the time and cost of commuting every day, or because
the same amount of money at that time allowed for larger housing in those new
development zones.
Unlike the American mode that residential communities spread to the suburbs, the
development of Shenzhen was the demand for capital expansion and industry
development preceded residential construction. Shenzhen formed different centers
through industrial development and then developed residential and other supporting
facilities around new centers. Every district in Shenzhen mixed with old buildings,
urban villages, and new residential communities. Shenzhen presented a highly mixed
development. Walking on the streets of Shenzhen, there might be new high-end
communities on this side of the road, while on the other side there were dense urban
villages. Therefore, the differentiation of living space in Shenzhen occurred in every
279 Guangjin Chen. Housing: The Landmark of Social Class. Quality: Brand, No.01 (2003), 25-27.
142
small area, distinguished by the walls and gates of each residential area.
In Shenzhen, the housing differentiation caused by wealth only occurred at the top
level, that was, families who bought the most high-end houses with good natural
resources could be identified as the richest families. The purchase of other normal
commercial housing could only show that the buyers’ wealth was affordable to the price
of the house, but it did not mean that their wealth was similar. People with different
wealth and occupation chose the same community for different reasons. After
removing the price factor, that was, on the premise of affordable housing prices,
respondents considered different factors. The top ones were children's education,
working distance, house layout, internal and external environment of the community. It
could be seen that when they bought a house, mostly in the 1990s and 2000s, they
considered location, transportation, and the house itself rather than any cultural and
humanistic factors. But when it came to their desire for housing and living environment
for their next new house, they mentioned more humanistic factors, such as the
accomplishment of neighbors, neighborhood relationship, cultural atmosphere, and so
on.
The 40 years history of Shenzhen was quite different from those historic cities, like
Shanghai and Guangzhou, where the temperament of each district had already been
formed in history. The social stratification and value of each district had been rooted in
the minds of most local people. When Shanghai Pudong New District was still
undeveloped, there was a saying that one would rather have a bed in Puxi than a
house in Pudong, which highlighted the established social stratification and regional
value. Therefore, when buying a house, people in these cities would first choose a
suitable area for themselves or the area they desired.
Home-owners in Shenzhen chose to buy houses mostly based on their conditions and
the needs of the floor layout and community environment at that time. Now people who
planned to buy another house began to pay attention to their needs of the cultural
environment. This upgrading housing demand was obtained from the past living
experience. People gradually knew at what level they were more comfortable in their
residence and what kind of residential atmosphere promoted them with more sense of
identity and belonging, and then they could sum up their requirements for the ideal
home. Several respondents living in Futian District said they would like to stay in Futian
even if they planned to move their house, because "it took us more than a decade to
wait until finally all the facilities in Futian District were completed and mature. Thus, we
were reluctant to move to a new district boasting a promising future even if the house
price was cheaper there. This kind of cultural atmosphere will not be formed in less
than ten years.” Several respondents experienced living in several districts, believing
that Luohu District was the most lifelike and humane place, so they chose to live in
Luohu for a long time. Some other respondents preferred communities in districts
outside the Second Line, which were new and large, and cheaper with more potential
for development. Each person formed different feelings for different districts in their
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living experience. Overall, respondents born in the 1960s and 1970s tended to stay in
the areas inside the Second Line, namely, Luohu, Futian, and Nanshan, while those in
the 1980s and 1990s thought that living outside the Second Line was also acceptable
as long as the facilities were perfect.
Based on interviews, it discussed the iteration process of Shenzhen housing
development from architecture to community planning and landscape, and also
explored the process of Shenzhen people's demand for housing from material factors
to cultural needs. In the process of living in different communities, Shenzhen people
not only summarized and clarified their needs for housing but also involuntarily
participated in the remodeling of Shenzhen's living space in their daily life, which
helped to form the humanistic charateristic of different regions.
4.2.2 Space Reshaping
Michel de Certeau suggested that space was a practiced place. The street
geometrically defined by urban planning, was transformed into space by walkers280.
Likewise, houses and residential areas were built by the government or developers,
which were only places. After the houses were allocated to employees or bought by
consumers, they became meaningful spaces through the residents’ practice. In
Lawrence’s words, that was to make a house a home, which was a complex entity that
defined and was defined by cultural, sociodemographic, psychological, political, and
economic factors281. After residents moved in, in the process of using the public space
and facilities of a residential area, the unique “propriety”282 of the community was
formed, which made a built place a community space shared and maintained by all
residents. If a consumer purchased a second-hand house, he/she often transformed
the house into a space suitable for his/her family through decoration and transformed
the space of others into his/her own space through residential practice. In terms of
community space, the already inhabited community was a space with established
meaning. For new arrivals, they should observe, learn, and adapt to the community
propriety to integrate into the new space. At the same time, their use of community
space and facilities might also bring some new elements to the community, causing
some, maybe minimal, changes.
Unlike French residential community described by De Certean in the 1970s, which was
an open residential block, the Chinese residential area was a residential space with
fences and entrance guards. Each community was developed by different developers
and handed over to the property management company for management and
operation after the sale. Therefore, compared with urban public space, housing was a
private space, while community space was a semi-public and semi-private space
280 Michel de Certeau. Translated by Rendall, Steven. The Practice of Everyday Life. (Berkeley: University of California Press, 1984), xxi. 281 Roderick J. Lawrence. What Makes a House a Home? Environment and Behavior, Vol. 19 No. 2, March 1987. 155. 282 Michel de Certeau, Luce Giard, Pierre Mayol. Translated by Tomasik, Timothy J.. The Practice of Everyday Life, Volume 2: Living & Cooking. (Minneapolis: University of Minnesota Press, 1998), 19.
144
between them as it was only used by people in the residential area. Housing and
community spaces were the carriers of people’s everyday life. People were constantly
reshaping spaces in their practice of everyday life, adjusting their behaviors, and
expressing their demands. Residents' reshaping of living space included the reshaping
of the house and the community. Diagram 4.1 showed how people changed the
housing and community from places to spaces in their everyday life.
Diagram 4.1: space reshaping model
a. Spatial Separation in Early Residential Buildings
In the early stage of Shenzhen's housing development, according to the descriptions
of interviewees who came to Shenzhen in the early 1980s, houses were only some
independent buildings, the community and supporting facilities had not yet formed.
Everyone lived in the humble collective dormitory and family dormitory, so at that time,
people's transformation of space was limited to the interior space of the room. Although
space was limited and the conditions were simple, people could still find a compromise
in the limited space to meet their needs. Whether in a dormitory or a family home,
everyone was eager to have a private space. A worker's dormitory usually housed eight
people, and the bed was the only private space. Many workers, especially females,
used curtains to surround the bed to form their own closed private space, turning a
piece of board on the bed into a bookshelf and tabletop, stretching a rope for hanging
clothes, spreading a cloth on the bed to make a visitor’s seat. A space of 1 m*2 m was
changed from sleeping space to the living room, study, and bedroom (see photo 4.14).
In the family dormitory, a family’s life was usually arranged in a room. Because the
structure and age of family members were different, families had different ways of using
space. One interviewee described in detail the embarrassing period in which five
members in three generations of her family lived in one room for six months. Their
dormitory was one bedroom in a three-bedroom suite-house, sharing kitchen and
bathroom with the other two families (three members in each family). In the beginning,
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only the couple lived in the room which was quite spacious with a queen-size bed, a
wardrobe, and a table. Moreover, the couple went out early and returned late and
seldom ate at home, so sharing the kitchen was not a problem. Sharing the bathroom
was not very convenient, but it was still acceptable. Later, her son came to Shenzhen
for a reunion with his parents and going to school. As the couple often needed to work
overtime and travel on business, the grandparents had to come to take care of their
grandson. Not to mention the busy situation of 11 members of the three families sharing
a kitchen and a bathroom, their room was already very crowded with five people. Upon
the arrival of her parents and child, she bought a bunk bed (1.2m lower bed and 1m
upper), and the queen-size bed was moved next to the window. But the child was eight
years old, and he was unwilling to squeeze into a bed with his grandmother. So she
bought a folding mattress, which was laid on the floor at night for her son, and put it
away during the day. It was finally unbearable after squeezing in like that for half a year.
She gave up her dormitory and rented a two-bedroom suite-house. Although it cost
extra money, the quality of life was greatly improved, and her mood was good every
day.
The families living in family dormitories for a long time usually did some fixed space
separation. First of all, wooden boards or curtains were used to separate the room as
a bedroom and a living room. The living room was a space with different functions
according to different periods. It was a dining room when eating, a study room when
children were doing their homework, and a sitting room when guests were visiting.
Some families even set up a small kitchen in the corner of the living room to avoid
crowding in the shared kitchen. Families with a child needed to separate the bedroom
according to their child's age. When the child was young, they usually shared a space.
The growing-up child would ask to separate his/her sleeping space to keep a little
privacy. If there was more than one child in the family, or with the elderly living together,
it usually needed a bunk bed to solve the problem. Personal privacy space was
narrowed down to a bed’s space. And “family members had to renegotiate with one
another regarding not only the use of space but also the maintenance of intrafamily
relations”.283 At that time, there was no concept of a residential community, but there
were still public spaces, such as corridors, which connected every room, stairs, and
public bathrooms and kitchens. The corridor was usually used to hang clothes, and the
corridor space around each room’s entrance was usually diverted to store debris, place
a bicycle, or even set up a simple kitchen. The privatization of public space was a
common phenomenon at that time. It was also a tacit acquiescence of mutual
understanding under crowded living conditions.
These were not unique phenomena in Shenzhen, but very common in other part of
China in the early period of reform and opening-up, which was exactly the housing
conditions in China as already described in chapter two. It could be imagined when
Shenzhen provided suite-houses, how exciting this was for Chinese people who were
283 Yan Yunxiang. Private Life Under Socialism Love, Intimacy, and Family Change in a Chinese Village 1949-1999. (Stanford: Stanford University Press, 2003), 131.
146
accustomed to bearing the crowded and privacy-deprived living conditions. Only after
the housing commercialization, did Chinese people have their private living space,
which could be used according to their ideals.
Photo 4.14: reshaping a bed space
Source: sketch based on the description of the interviewee. Photo from website.
b. Decoration
For a commercial house, the developer provided standard and designed layout,
normally, with two types of delivery standards, un-finished house, and finished house.
An un-finished house was a house that living spaces were delimited, such as living
room, dining room, bedroom, kitchen, and bathroom, and all pipe connections were
made, but without sink, faucet, or other fixtures and end elements. Buyers needed to
renovate and decorate the house after the delivery. Many people would redesign the
layout and the wiring on the premise that the structure was safe. Therefore, the houses
delivered as un-finished houses would present completely different standards and
styles after being decorated by different buyers. A finished house had decoration
finished according to the standards set by developers. Buyers only needed to buy
furniture and electrical appliances to move in. Some buyers did not alter the layout and
decoration of the house at all but added some ornaments. Some buyers were not
satisfied with the standard decoration and redecorated the house.284
284 A finished house generally has different decoration standards for buyers to choose, with different decoration prices. Developers unify purchase of building materials and unify decoration construction, which is more conducive to environmental protection, and avoids the interference caused by each family’s decoration after the delivery. A finished house is very popular with dual-worker families who do not have time to do decoration. They generally express their personalized pursuits through ornaments and furniture. The disadvantage of finished house is lack of personality, which is not favored by some consumers. Redecoration of finished houses is a great waste and produces many construction waste. Developers generally do not allow buyers to carry out secondary decoration, especially in the industrialized housing,
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Buyers’ reshaping of living space usually began with the decoration and ornament of
their houses, which was the process of personalizing the house. Buyers needed to
adjust the floor layout because of family structure and age or to create some special
spaces for living habits or hobbies, such as study, gym, children's playroom, bar and
so on. Different decoration standards led to great variations in cost of decoration
materials, lamps, furniture, electrical brand, etc., which reflected the economic strength
of families. The decoration style reflected the buyer's hobbies and tastes. For example,
some people liked magnificent European style, using complex ceiling and wall lines,
gorgeous stone paving, and matching with shining crystal chandeliers and European-
style furniture with complicated details to create the feeling of European aristocratic
life. Some people liked traditional Chinese style, such as screen, mahogany furniture,
and some others chose a simple modern style. Property management companies
would not interfere with the household decoration as long as the decoration did not
endanger the building structure, affect neighbors, and litter construction waste.
House decoration was a process in which the consumer showed his/her individuality
completely and independently. It not only met the needs of life but also satisfied his/her
aesthetic taste and realized the individual's living ideal. But housing decoration was
also subject to various constraints, such as the buyer's economic capacity, the market
for available decoration technology, materials, household appliances, furniture and so
on. In decoration style, unless the buyer had a strong personal hobby, most of them
were influenced by the prevailing decoration style. The house decoration was a
process of constantly listening to the enthusiastic suggestions from designers, friends,
and other families, comparing the market supply and prices. The individualization of
housing implied the prevailing residential culture and the level of economic
development at that time.
c. Dwelling Practices
The residents’ practices did not stop here. It was through the dwelling practices that
the construction of a home could be completed in the daily use and running-in. The
dwelling was the most individualized practice. Everyone was unique in using space
and placing personal items. A place inhabited by the same person for a certain duration
drew a portrait that resembled this person based on objects and the habits that they
implied.285 When children grew up from babies to teenagers and then to young people,
their rooms were constantly changed, not only the size of the bed, desk, and chair, but
the furnishings on the desk, paintings on the walls and books on bookshelves. Children
who used to like to get into their parents' beds suddenly preferred to stay in their rooms
with the door closed and loudly play the music that their parents couldn't understand.
The most typical example was the “fighting” for the kitchen. The prosperity of a family
as many walls, pipelines, fixed decoration are integrated. If necessary, secondary decoration needs to be approved by developers and designed and constructed by professional companies. 285 Michel de Certeau, Luce Giard, Pierre Mayol. Translated by Timothy J. Tomasik. The Practice of Everyday Life, Volume 2: Living & Cooking. (Minneapolis: University of Minnesota Press, 1998),145.
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was expressed first in its daily diets.286 China had a long dietary culture. The dietary
habits of each region are different. The ingredients and condiments, cooking tools and
methods required by different cuisines varied greatly. Shenzhen was an immigrant city,
where people from different regions formed families. The most important but difficult
thing to reconcile was eating habits. According to the questionnaire survey, in
Shenzhen families, the “elementary, conventional, and pedestrian” task of buying food
and cooking was no longer the job only for women, which was helped by parents, or
shared by the husband and the wife, or assigned to helpers (see figure 4.4). If husband
and wife from different province cooked in turn, the kitchen would have cooking traces
of different cuisine and different people. For example, if the wife wanted to cook
Sichuan cuisine, spicy seasonings were placed prominently on the pantry. When the
husband who wanted to cook Shanghai cuisine took over the kitchen, Shanghai cuisine
seasonings hidden in the cabinet would be put out, and all other tools would also be
adjusted to the husband's habitual position. When another person cooked, the
adjustment would be gone through again. But over time, cooking in a family was slowly
compromised, with couples accepting each other's way of eating, or trying other dishes
which were tried when eating out, then brought back to practice at home. Because of
the free flow of people, goods, and information in modern society, people were willing
to try new things. They were more inclusive of other cultures, especially diet. Pluralism
and inclusiveness permeated in every aspect of everyday life in Shenzhen.
One respondent pointed out that when she decorated the house, because she and her
husband seldom cooked at home, she made the kitchen into an open kitchen,
connecting to the dining room, which made the dining space look big and matched her
western simple style. After having a baby, the grandparents came to take care of their
grandchild. They cooked at home every day, and they liked to cook Sichuan cuisine,
which made the smell of pepper and chili spread throughout the house. They had to
install a partition between the dining room and the kitchen, and also installed a more
powerful kitchen ventilator. There were many similar examples. The problems of
residential space, especially the details, were always found after use. Over time, the
structure of the family population changed, and the living space needed to be adjusted
accordingly. A family was always in constant adjustment to adapt to its members’ needs
of daily life.
Developers also paid more and more attention to the study of needs in the daily life of
different family structures in order to solve more problems in the design stage and
launch more selling points in the sales stage. For example, many people liked the open
kitchen, but because most Chinese cooking methods were smoky, they had to
abandon the idea. So some developers designed a special kitchen, which was divided
into two parts, one was the closed cooking area, the other was open and connected
with the dining room. At first, the design was very popular. But after practical use, it
was found that the cooking area needed to connect with other areas, such as the sink,
refrigerator and so on, to facilitate the cooking. The households had to move the
286 Ibid. 152.
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partition to between the kitchen and the dining room. Later, in some large-scale house
design, there appeared double kitchens, a closed Chinese kitchen for stir-fried dishes,
a Western kitchen open and connected with the dining room, mainly for the sake of a
good space. In such a small space as a house, “the design, the meaning, and the use
of home interiors are intimately related to a range of cultural, sociodemographic and
psychological dimensions.”287
Figure 4.4: buying food and cooking in Shenzhen families
Source: based on the data collected by my survey from 2/2018 to 2/2019.
d. Reshaping Community Space
Reshaping the space inside the house was an individual behavior, while the reshaping
of the public space in the community was the result of the public daily life practice of
all residents. Pierre Mayol defined the neighborhood as “mastery of the social
environment,”288 and “an object of consumption that the dweller appropriates by way
of the privatization of public space.” 289 These were good approaches for a
neighborhood in an open block. However, the Chinese residential areas discussed in
this chapter needed another explanation. According to clause 73 of the Property Law
of the People's Republic of China, roads, greening, public facilities and service houses
in residential areas were common properties of all owners. Therefore, when
purchasing a house in a gated residential area, the owner was granted the right to use
these spaces, while the owner had to pay property management fee monthly to
maintain the normal operation of public facilities and spaces. Households acquired
facilities, space, and services through purchase, so space practice in the community
was a kind of consumption paid in advance, not aiming at “according the maximum of
time to a minimum of space in order to liberate the possibilities for wandering about.”290
287 Roderick J. Lawrence. What Makes a House a Home? Environment and Behavior, Vol. 19 No. 2, March 1987. 155. 288 Certeau, Michel de, Giard, Luce, Mayol, Pierre. Translated by Tomasik, Timothy J. The Practice of Everyday Life, Volume 2: Living & Cooking. (Minneapolis: University of Minnesota Press, 1998),9. 289 Ibid. 13. 290 Ibid.
3.70%
17.30%1.20%
14.80%
32%
17.40%
13.60%
BUYING FOOD
helper mother father parent wife husband the avaliable
150
Although dwellers had the right to use them, these spaces and facilities were still public
and common to all households. Thus, a community was still “a collective organization
of individual trajectories,”291 in which the practice is “a tacit collective convention,
unwritten, but legible to all dwellers through the codes of language and behavior.”292
These codes were named “propriety” that every dweller was subjected by it to
collective life. 293 When interviewees described the community they lived in, they
usually included several aspects, such as safety, hygiene, landscape and environment,
and neighborhood. In the questionnaire survey, gardens (lawns), small shops and
fitness equipment (including swimming pools and children's playgrounds) were the
most frequently used by dwellers in communities, while dwellers were most concerned
about the safety, hygiene and neighborhood relations in residential areas. All
respondents agreed that property management companies were responsible for
maintaining the safety, the cleanliness, and normal use of public facilities and spaces
of communities, which were services they should receive when they purchased houses
and paid management fees. They also agreed that if the property management
company could not meet the requirements of the residents, they had the right to
change the property company. There were many owners' rights protection incidents in
recent years in Shenzhen in which the owners of a community jointly terminated the
contract with the property company. At the same time, most of the interviewees
mentioned the accomplishment of people. That was to say, most residents realized
that dwellers’ dress, behavior, way of occupying and using spaces, and communication
with others in public all affected the construction of the overall image of the community.
Compared with the role of property management, propriety was the hidden force to
maintain the harmony, attraction, and civilization of a community, which determined the
degree of civilization of a residential area. As Wang Shi’s impressive sentiment
expressed, only the spirit could keep a community alive vividly.294
The limitation of "environmental determinism"295 has been recognized. People had
generally accepted the interaction between human and environment; that was, the
environment created humans, while humans also created an environment. Designers
and developers designed and built the physical space of a community, and property
management companies maintained the space. But it was only with dwellers’ activities,
that space was complete. Material space had a certain restrictive effect on people's
behavior, so people had the most basic consensus on the behavior of public space.
Due to the different residents, each community formed propriety with its characteristics,
which could be understood as the common signature of community dwellers.
Expressed in the plainest language of the respondents, that was this community had
a strong cultural flavor, and the accomplishment of people in that community was not
291 Ibid. 15. 292 Ibid. 16. 293 Ibid. 19. 294 Shi Wang. The Way: Vanke and me 2000-2013 (Beijing: CITIC Press, 2014), 133. 295 Environmental determinism is one of the main western viewpoints on children's psychological development from the end of 19th century to the beginning of 20th century. It holds that human behavior and psychological development are entirely determined by the environment. The representative is J Watson, the representative of American psychologist's behaviorism.
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good. Similar cultural literacy and similar requirements for living space shares by most
dwellers would promote the formation of propriety or produce resonance in a
residential area, and then produce a sense of pride and belonging to the community.
Taking Liangzhu Culture Village in Hangzhou as an example, it was Vanke’s model
project of "Three Good Communities." Vanke built many cultural facilities in this project,
including a special training college for older people, a play and adventure center for
children, a villagers' study, a cultural and art center, and a church (Meili Zhoutang).
The most prominent thing was that on February 27, 2011, after two years of
consultation, discussion, and revision, the Villagers' Convention, which was agreed by
3653 dwellers, was formally issued. In a total of 26 clauses of the Convention, they did
not use words like prohibition but used words such as our initiative, our advocacy, and
other words to stimulate self-discipline, which were full of residents' vision of ideal life.
The Convention was initiated by dwellers and became a code of conduct for all
dwellers to abide by.296 The residents themselves created the atmosphere of this
idealist, full of pride and belonging to the community. These cultural facilities and
cultural atmosphere attracted more people with the same cultural aspirations to buy
their houses in this community.
When a respondent was asked if he had a plan to buy another house, he said that he
had bought a house elsewhere, but he didn't want to move. He has lived in the current
house for seventeen years. Although the environment of the old community was not
very good, the neighbors knew each other, which made him have a sense of security.
The sense of security for a community came not only from security equipment of the
community and security measures of the property management company but also from
the common defense of residents. When people had a sense of pride and belonging
to the community they lived in, the community space became a "defensible space".
That was, the sense of pride and belonging was transformed into a sense of
responsibility for the safe, effective, and good management of good living space.297
They were unconsciously suspicious and vigilant of strange faces and unreasonable
behavior in the community. When dwellers took the maintenance of community security
as their responsibility and consciously safeguarded the security, not only the security
of the community was improved, but also the internal links of dwellers and the
community were strengthened.
Vanke conducted community surveys with the outcome that if a dweller knew fewer
than 12 neighbors, the management company had the responsibility to organize
activities to make them know each other. It indicated that the construction of a
community first needed the mutual recognition of residents. In the questionnaire survey,
60% of the respondents knew only a few neighbors, 20% did not know even one
296 Lijuan Liu. Vanke 30 Years: Product and Marketing (Beijing: China Architecture & Building Press, 2016), 99. 297 Oscar Newman conducted a systematical research by linking households and residential areas with criminal behavior and psychology. He proposed the concept of ‘defensible space’. for more information see Sun Shiwen. Modern Urban Planning Theory. (Beijing: China Architecture & Building Press, 2005), 336-337.
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neighbor, and only 20% said they knew a lot. Those who knew nobody were single
dwellers who temporarily rented a house. They thought it unnecessary to know people
for a short period of staying anyway, so they stayed in their house every day after they
went home and did not participate in any activities in the community. The residents
who knew a lot of people were usually those who lived longer in the community or had
children and older people in their families. It was understandable that living for a long
time and having more chances made it more natural to meet more people. But it was
an interesting thing that most respondents said that they knew other dwellers of the
community only because there were older people and children in their families, which
raised a new question: who was the real user of the community space? From another
point of view, the question was, who should be considered more when developers
designed and built communities?
Shenzhen was the youngest city in China, with an average age of 33 in 2018. In the
1980s and 1990s, the average age was in the twenties. At that time, one saw people
working in a hurry, but not so many children and older people in Shenzhen. However,
the situation already changed in the past decade. In today's communities the following
scenario took place. In early morning, old people (including a small number of young
and middle-aged people) did exercises. Around seven o'clock, school children and
workers rushed to schools or stations, and some private cars drove out of the garages.
At eight to nine o'clock, old people, or full-time mothers, or nannies went shopping or
took children who were not yet in kindergarten age to play in gardens. Students came
from schools and played downstairs, moments later, they went home for lunch. At two
o'clock, the students went to school again. At four to five o'clock, students left school.
Some students continued to attend extra-curricular classes. Some children played in
the open spaces of the community. Older people chatted, or played chess, or played
other activities in groups, and they picked up the children or watched the children by
the way. After dinner, some people came out for a walk or play. Shenzhen was still a
fast-paced city. Most families were double-employed. The family and children
depended on the care of older people and nannies. Even if the wife resigned to take
care of the children at home, they usually hired helpers to do housework. Young and
middle-aged people had a strong ability to travel by themselves, driving, or taking
public transportation. Their activities and social activities could go far beyond the
community. For them, the house and community were mainly a place to rest at night.
Therefore, it was mainly the elderly and children who stayed in the residential area for
a long time. They used community space, exchanging family information, and
establishing contacts. Young and middle-aged people learned about daily events of
the community through descriptions of the elderly and children. In addition to the
principle of proximity enrollment, children living in a community often went to the same
school, so they were both neighbors and schoolmates. Over time, the parents also
knew each other because of their children. The interesting thing was that the parents
called each other by their children’s name, such as Ming’s father or Fang’s mother.
Because the parents were identified by the children, the children were considered to
represent the parents and families. Therefore, the parents required the elderly and
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children to have decent clothing and speech that could represent the family in the
community. Propriety in the residential area was shown through the elderly and
children, but behind it was the acquiescence of families.
Shenzhen people did not pay much attention to the community space when buying
houses in the early stage, as long as space was relatively open and greening was well
done. With the birth of children and the arrival of older people, Shenzhen people began
to express concern over whether there were any facilities for the elderly, and any
spaces suitable for older people’s leisure and children’s games, and whether there
were high-quality resources for children’s education. The Chinese culture of supporting
the elderly, caring for children, and sharing the joy of family ties was deeply rooted.
With more and more families choosing to settle in Shenzhen, developers were certainly
aware of this shift in consumers’ demand. As long as the problem of children's
education and aging people's care in a family was solved, the family's worries were
almost solved. Therefore, many developers used the provision of high-quality schools
for children, and safe and convenient facilities and environment for the elderly as
selling points, which is discussed in the next chapter.
4.2.3 Conclusion
The layout design and quality of the housing and the community are always the most
important factors to be considered when people decided to buy a house. With
Shenzhen people's understanding and demand for housing ranged from blank to
pursuit of high-quality buildings and landscapes, to the construction of an ideal home
with a sense of pride and belonging, Shenzhen's housing and community experienced
an iterative process from architectural design and construction quality to community
planning and landscape, and to the formation of a humanistic community. Meeting the
needs of home buyers and dwellers was an important driving force for developers to
constantly adjust residential products and improve the quality of buildings and
community environment.
4.3 Transportation Development
Apart from the quality of housing and community, another important factor affecting
buyers' choice of a house is traffic conditions. Transportation is a way to connect cities
and various places and facilities within a city. The purpose of people using
transportation is to travel from one place to another, realizing the spatial transfer of
people, goods, and information. Since the city appeared, the expansion of urban space
was mostly based on the development of transportation. At the beginning of the reform
and opening-up, Shenzhen was selected as SEZ largely because of its geographical
advantages with Hong Kong, i.e., its convenient transportation with Hong Kong. SSEZ
first developed Luohu District and Shekou Industrial Park also because of their
transportation advantages. At that time, both the only entry port to Hong Kong and the
only railway station of Shenzhen were in Luohu. Shekou Industrial Park was very close
to Hong Kong, Guangzhou, Zhuhai, and Macau by waterway. Therefore, Shekou Port
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was put into construction since 1979, and it started operation since 1980, which solved
the problems of freight and passenger transportation in the early stage of Shekou
Industrial Park. Transportation itself is a huge research topic. This section only
discusses how Shenzhen's public transport development closely related to residential
development and people's daily life.
4.3.1 Development of Public Transportation in Shenzhen
Interviews showed that traffic congestion was one of the main reasons for people's
dissatisfaction with Shenzhen, ranking second only after housing prices. Because of
traffic jams, many people chose to travel by public transit even if they had a private car.
As far as commuting was concerned, 42.5% of them chose bus and metro (see figure
4.5). Most respondents spent less than an hour on a single commute, and the tolerable
limit for a single commute was one and a half hours. Apart from the reasons for traffic
congestion and parking difficulties, the most important reason for people to choose
public transport was that Shenzhen's public transport system was convenient and well-
equipped. The Report on the Analysis of Big Data of Public Transport in Major Cities
of China in 2017 pointed out that comprehensive analysis based on rail transit index,
basic indicators of public transport and other dynamic indicators revealed that
Shenzhen's public transport service index ranked the highest in China at 0.756, higher
than Guangzhou's 0.641, Shanghai’s 0.641 and Beijing's 0.595. The 500-meter
coverage rate of Shenzhen's was 91%, which was the only city with more than 90%.298
In the questionnaire, the respondents' answers also reflected similar information.
Among the scores of public transport and facilities, the majority were excellent (4 and
5 points). Among them, the convenience, and the comfort, cleanliness, and safety of
facilities were more rated than 70%; and the transfer time, waiting time, congestion
and convenience for information were more than 50%. The most needed improvement
was convenience for the disabled, which was only 42.2% (see table 4.1-4.2).
It was hard to imagine that forty years ago, the development of public transport in
Shenzhen was almost blank. Wu Songying described the first day of his transfer to
Shenzhen in 1981. At around 15:00 on July 18, he came out of the Shenzhen railway
station, but he could not find a bus. Two men who were dressed like peasants told him
that there was no bus in Shenzhen and they could send him to the government office
by their bicycles. Because Wu had baggage, two bicycles were required, which would
mean a charge of a total of ten yuan. Wu thought it was too high as his monthly salary
was only 60 yuan at that time. Meanwhile, he worried about his safety upon his first
arrival. Thus, he turned down the offer. Later, he came across another young man who
was also going to report to the government office. They decided to walk together to the
298 The Report on the Analysis of Big Data of Public Transport in Major Cities of China in 2017 was sponsored by Gaode Map and published in cooperation with the Academy of Science of the Ministry of Transportation (Key Laboratory of Intelligent Transportation Industry in Urban Public Transportation / Data Application Center of Integrated Transportation), School of Transportation Science and Engineering, BeiHang University. The rail transit index includes the density of rail transit network and the link-up ratio of rail transit. The basic indicators of public transport include the 500-metre coverage rate and the network coverage rate. Other dynamic indicators include opening level of public transport, walking distance and transfer times.
155
office. It took them more than half an hour walking, and it was almost 18:00 when they
arrived at the destination299. According to the file of Shenzhen Transportation Bureau,
the first bus line in Shenzhen was set up in 1975. The first bus departed from Qiaoshe
(侨社) in Shenzhen Town, Bao'an County to Dongmen (东门) Bus Station. This bus
was run by Shenzhen Town Bus Company of Bao’an County, which was a collective
ownership enterprise, and also the predecessor of Shenzhen Bus Group Co., Ltd.300
According to the statistics of public transport, there were six operational bus lines in
Shenzhen in 1981 (see table 4.3). It was estimated that there were too few operating
buses, and Wu did not find them, or there was no bus line where Wu was heading,
which could not be confirmed now. But in any case, it indicated that the starting point
of Shenzhen's public transport development was very weak. In the 1980s, Shenzhen's
development was almostly confined to Luohu District and Shekou Industrial Park.
Many people rode bicycles or walked, and the demand for public transport was not
high. Therefore, the government-monopolized public transport services adopted in
Shenzhen did not appear to be a problem. However, since the end of the 1980s,
Shenzhen's population grew rapidly, and the scope of urban commuting expanded
rapidly from Luohu to Futian and Nanshan. The original public transport service was
insufficient to meet the rapid growth of public transport demand.
Figure 4.5: questionnaire data for commuting mode
Source: based on the data collected by my survey from 2/2018 to 2/2019.
Table 4.1: questionnaire data for public transportation
public transport
score riding
convenience
transfer
convenience
waiting
time crowding
299 Songying Wu. The Hardships and Splendor of Shenzhen (Guangzhou: Guangdong People’s Publishing House, 2015), 39-42. 300 For more information, see http://jtys.sz.gov.cn/zwgk/jtzx/gzdt/qt/201808/t20180823_13962030.htm (access on 27/6/2019)
20.0%
42.5%
37.5%
Commuting Mode
drving a car public transportation walking
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1 2.2 4.4 8.9 6.7
2 4.4 4.4 13.3 13.3
3 20.0 35.6 24.4 24.4
4 33.3 20.0 33.3 33.3
5 40.0 35.6 20.0 22.2
Source: based on the data collected by my survey from 2/2018 to 2/2019.
Table 4.2: questionnaire data for facilities of public transportation
facilities of public transport
score comfort cleanliness safety convenience
for disable
convenience for
information
1 2.2 0.0 0.0 11.1 2.2
2 6.7 4.4 8.9 11.1 15.6
3 17.8 20.0 17.8 35.6 22.2
4 37.8 31.1 33.3 17.8 31.1
5 35.6 44.4 40.0 24.4 28.9
Source: based on the data collected by my survey from 2/2018 to 2/2019.
Table 4.3: statistic of public transportation of Shenzhen (1979-2017)
year
number of
operation
bus lines
total passenger
traffic of bus
lines (10000
person)
length of
operation
rail lines
(km)
total passenger
traffic of rail
transport
(10000 person)
number of
operation
rail lines
1979 2
1980 3
1981 6
1982 7
1983 9 1,399
1984 19 2,974
1985 27 5,184
1986 29 5,827
1987 32 9,068
1988 37 16,399
1989 38 16,747
1990 42 21,947
1991 51 19,821
1992 55 27,248
1993 61 30,600
1994 68 31,020
1995 80 35,390
157
1996 89 35,495
1997 125 36,202
1998 137 37,250
1999 145 40,600
2000 131 42,800
2001 138 47,072
2002 138 51,714
2003 185 50,719
2004 208 100,820
2005 227 101,621 22 5766 2
2006 277 123,084 23 8990 2
2007 316 135,668 24 11765 2
2008 340 145,701 25 13550 2
2009 578 213,603 25 13823 2
2010 758 228,058 64 16271 4
2011 825 223,735 177 45985 5
2012 854 228,305 177 78129 5
2013 881 220,178 177 91715 5
2014 886 225,739 177 103675 5
2015 903 206,892 177 112188 5
2016 976 186,799 285 129713 8
2017 992 165425 297 165545 9 Source: Shenzhen Statistics Bureau, NBS Survey Office in Shenzhen, ed. Shenzhen Statistical Yearbook 2018. (Beijing: China Statistics Press, 2018), 412.
a. Minibus in Memory
In order to alleviate the problem of inadequate bus services, Shenzhen began to
introduce minibusses to supplement the bus service. In January 1990, Shenzhen
promulgated the Interim Provisions on the Operation and Management of Small and
Medium Buses in Shenzhen. Public minibusses were operated on the market, and the
government did not grant financial subsidies. Market demand attracted a lot of capital
into public transport services. The rapid development of public minibusses improved
Shenzhen's public transport situation and temporarily supported the rapid
development of SSEZ. The experience of riding minibusses become one of the
deepest memories of people living in Shenzhen in the 1980s and 1990s.
Originally, minibusses had fixed running routes and stations, but to attract passengers,
all minibusses ignored the fixed stations. In actual operation, as long as someone
waving on the street, the minibus stopped immediately and let the passenger get on,
and the minibus also stopped immediately as soon as a passenger said he/she wanted
to get off. At that time, the call to get off a minibus was made in Cantonese, so "Youlo"
(有落) was the first Cantonese that everyone from hinterland learned in Shenzhen, and
now it was a good memory. In addition to the convenience of “waving and stopping”,
the operation routes and times of minibusses filled the gaps of the bus route. Buses
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only operated on major urban roads, while minibusses could reach many narrow roads
and remote areas. Buses started at 6:00 in the morning and ended at 10:00 in the
afternoon at that time. On the contrary, minibusses operated for a longer time, some
even overnight, which was particularly important for people who worked early or night
shift, or sometimes got out early and returned late. However, minibus services brought
convenience to Shenzhen people, it also brought many problems. Because of the low
admission requirement and insufficient government supervision, many small-scale
private entities operated public transport services. They stopped at any time to attract
passengers; they drove at very fast speed to run more rounds; they often overloaded
to sell more tickets. As a result, the phenomenon of random parking on urban roads
was serious; sudden pulling over and pulling out often caused traffic accidents; poor
vehicle condition and poor service were often complained of by passengers. Moreover,
there were many unemployed floating populations in Shenzhen at that time, and the
urban security work was weak. Minibusses became frequent places for theft and
robbery. One interviewee recalled that he used to take minibusses from Luohu to
Shekou, and thieves cut his trousers many times. If the thieves were found in the
process of stealing, they would directly take out a knife to conduct a robbery.
In response to various problems of minibusses, Shenzhen Transportation Bureau tried
a variety of techniques of control, including revoking some drivers' operating licenses
of as they violated regulations many times, prohibiting overloading, prohibiting pulling
over suddenly outside fixed stops, etc., but with little effect. In 2003, The Bureau started
the deployment to withdraw minibusses from central urban areas gradually. In April
2005, the Bureau launched a “San Ge Yi Pi Plan”, that was, by eliminating, transferring
to the third-class bus network outside the Second Line, and converting to bus routes,
the minibusses were gradually cleaned up. Until June 2006, minibusses formally and
completely withdrew from the lives of Shenzhen people inside the Second Line. The
withdrawal of minibusses was rejected by many citizens at the beginning. Although
there were various problems in the operation of minibusses, their service was
important to their daily life. There was an online forum called Mayor's Hotline, which
was a channel for citizens to communicate with government officials. Some people
complained in the forum that their commuting time without minibusses was more than
twice as long as before. Some people complained that they could not find a bus to go
home at night and could only get on a taxi. Some people issued fierce criticisms that
the government withdrew minibusses when there was no perfect alternative, which
was a sign of disregard for people's livelihood, and a decision made at will in an air-
conditioning office. Someone even demanded the resignation of the director of the
Bureau. The complaints and demands of the citizens urged the Bureau to take many
measures to improve the operation capacity and efficiency of public transport, such as
increasing the number of buses and the density and length of the line network,
prolonging the operation time, construction of bus lanes301, planning and construction
301 Shenzhen’s bus lane was built in 1997 and Shenzhen was the first city in China to set up a bus lane. Since 2010, the annual growth of bus lanes has averaged 19%, which has basically formed a scale network. By 2018, 1016 lane-kilometers of bus lanes were set up, reaching 7.8%. For more information, see http://jtys.sz.gov.cn/zwgk/jtzx/gzdt/qt/201808/t20180823_13962030.htm (access on 27/6/2019).
159
of the subway, among which the subway brought great convenience to Shenzhen
people because of its outstanding characteristics of large capacity, safety, and punctual
operation.
b. Shenzhen Metro
Shenzhen had long had the idea of building a metro. In December 1992, the feasibility
study of Line one was started. It was not until 1998 that the project was approved by
the former State Planning Commission of China. The construction began in April 1999
and Shenzhen became the fifth city to construct rail transit in China. The trial operation
of phase one of Line one was conducted on December 28, 2004. In the year when
Line one started construction, Shenzhen began to compile the Comprehensive
Transport and Rail Transit Planning of Shenzhen and put forward the development
goals and strategies of the long-term rail network. In October 2001, the Comprehensive
Plan for the Short and Medium-Term Development of Shenzhen Urban Rail Transit
was compiled, putting forward a railway network plan of eight lines with a total length
of 246.4 kilometers. Then, in September 2003, the General Office of the State Council
issued the Notice on Strengthening the Management of Construction of Urban Rail
Transit (the State Office [2003] No. 81), which required all cities, which planned to build
urban rail transit projects, to compile urban rail transit construction plans and submit
them for joint examination and approval by the State Development and Reform
Commission and the Ministry of Construction. The State Council would do the final
examination and issue the approval.302 Upon revising and improving the Short and
Medium-Term Development Plan, Shenzhen compiled the Shenzhen Urban Rail
Transit Construction Plan, which was approved in March 2005. By 2018, Shenzhen
had built eight subway lines (see photo 4.15) and two tram demonstration lines. In the
latest publication of Shenzhen Rail Transit Line Network Planning (2016-2030) (see
photo 4.16), 32 urban rail lines were planned for construction by 2030, with a total
scale of about 1,142 kilometers. The plan put forward the integrated transportation
development goal to realize the "45/70/70" by 2030, namely, 45 minutes' access
between the main and subsidiary centers of the city; public transport accounting for
more than 70% of motorized travel; rail transit accounting for more than 70% of public
transport.303
Statistical data show that the total passenger traffic of rail transit has increased rapidly
302 According to document No. 81, the cities declaring the development of metro should meet the following basic conditions: the general budget revenue of local finance is over 10 billion yuan, the GDP is over 100 billion yuan, the population of urban areas is over 3 million people, and the passenger flow of planned lines is over 30,000 people in one-way peak hours. Since the issuance of document No. 81, the construction of Metro has reached a climax in major cities. As of 2017, 33 cities in China have built rail transit. As some cities blindly declare the construction of Metro in spite of local financial resources, resulting in heavy local debts, the General Office of the State Council issued and implemented the Opinions on Further Strengthening the Management of Planning and Construction of Urban Rail Transit on July 13, 2018. It is stipulated that the city declaring the construction of Metro must meet the following conditions: the general public finance budget revenue exceeds 30 billion yuan, the GDP of the region exceeds 300 billion yuan, and the permanent population of the urban area exceeds 3 million people. At the same time, document No. 81 was abolished. 303 More information see Shenzhen Rail Transit Network Planning from http://pnr.sz.gov.cn/xxgk/gggs/201711/t20171107_451023.html (access on 27/6/2019)
160
(see table 4.3). 165.45 million, the number of 2017, was 28 times as many as 57.66
million in 2005, with an average annual growth rate of 23% in 12 years. Moreover, the
total passenger traffic of rail transit surpassed that of bus lines for the first time in 2017,
which had already declined for three consecutive years. It indicated that with the
improvement of the Shenzhen Metro line network and the linkage development with
surrounding land, Shenzhen people were more inclined to use the Metro to travel. In
addition to the advantages of safety and punctuality, some main stations of the Metro
often developed underground commercial spaces, which usually sold daily
commodities, fashion goods, snacks, specialty foods, and so on. Therefore, people
could conveniently carry out daily shopping, or meet friends for meals by taking the
subway. Some large metro businesses have developed into Metro malls and become
travel destinations. Subway stations were usually connected with the underground
space of the surrounding areas. People could directly reach the major shopping malls,
cultural and entertainment facilities, such as libraries, museums, the grand theatre, the
gymnasium, theme parks, and some important buildings, through the underground
corridor of the subway. This kind of accessible underground space is especially
suitable for the climate in Shenzhen, that is rainy and wet in spring, and sunny and hot
in summer. People can reach their destination directly without going out of the ground
and avoiding bad weather.
Shenzhen Metro also connects with long-distance transport networks and with major
ports to achieve seamless connections. The terminals of Line one and Line four are Lo
Hu Port and Futian Port, respectively, which connect Hong Kong's railways directly to
major urban centers of Hong Kong. Line eleven is an express metro line that can reach
Shenzhen Bao’an International Airport. Line two can reach the Shekou Cruise Center,
which is not only the port of cruise ships but also the wharf for ferries going to Hong
Kong, Macao and several cities in the Pearl River Delta. Lines four and five connect
directly to Shenzhen North Railway Station, which is the high-speed railway station
admitting all the high-speed railway lines in and out of Shenzhen. Another high-speed
railway hub is Futian Station, which is an important station of Guangzhou-Shenzhen-
Hong Kong High-speed Railway. People can go directly to West Kowloon, Hong Kong,
and realize one place and two inspections. Lines two, three and eleven meet here and
jointly build a large underground transportation hub in the center of Shenzhen City.
Photo 4.15: Shenzhen metro line map
161
Source: http://www.szmc.net/page/html5.html (access on 29/06/2019).
Photo 4.16: overall plan of Shenzhen Rail Transit Network Planning
Source: http://pnr.sz.gov.cn/xxgk/gggs/201711/t20171107_451023.html (access on 29/06/2019).
4.3.2 Public Transport and Housing
a. Public Transport and Housing Location Value
The Trade-Off Theory was usually used to explain the relationship between residential
location and transportation, which was established by W. Alonso and W. Evans in the
162
1960s,based on their studies on residential location from the perspective of the
relation between urban land-use and transportation system. They argued that housing
costs were lower, but transportation costs were higher when further away from the city
center, conversely, transportation costs were lower, but housing costs higher when
near the city center. When people chose a residential location, they considered both
transportation and housing costs simultaneously. The best location was with the
minimum sum of the two costs. Therefore, when deciding the location of a house,
people would consider the necessary living area and transportation cost based on their
family income. The transportation costs included direct payments and opportunity
costs for relative time304. However, this theory was based on the American housing
development model and some restrictive assumptions; it was not entirely applicable to
housing consumption in Shenzhen. First of all, housing prices in Shenzhen did not
decline as obviously as those of the United States from the city center to the suburbs.
Secondly, public transportation costs in Shenzhen were not worth mentioning at all
compared with housing prices. For example, Shenzhen Metro adopted the mileage
sectional fare system. The metro fare included starting price and mileage price (with
one yuan as a progressive unit). The starting price was 2 yuan for the first 4 km. The
mileage price was divided into three sections, from 4 km to 12 km, 4 km per yuan; from
12 km to 24 km, 6 km per yuan; more than 24 km, 8 km per yuan. Taking Shenzhen
metro line one as an example, from the first station, Luohu, to the last station, Airport
East, the journey was 40 kilometers with 30 stations and It only cost 9 yuan. Therefore,
people completely neglected transportation cost when buying a house. Only low-
income people would consider the daily transportation expenditure when renting a
house.
Although the direct cost of transportation was not a consideration of buyers, interviews
and questionnaires showed that transportation was one of the important factors that
people considered when buying or renting a house, second only to price and housing
pattern. What consumers were concerned about was the transport convenience, that
was, the time cost of transportation. For home buyers, the spatial distance between
the residential area and the central area was not a problem, but the accessibility of
their regular destinations was an important issue. Regular destinations included
husband’s and wife's workplaces, children's school and family's daily shopping place.
The focus of traffic demand varied with family population structure. All respondents
with children agreed that children should go to school within half an hour, ideally within
fifteen minutes, whether by car or on foot. Families with older people generally required
shopping places within walking distance. Working people preferred a commuting time
within one hour. Therefore, when people chose a house, young people usually
preferred to live in the city center, close to workplace and entertainment. Families with
children tended to choose residential areas close to good schools, taking into account
the time of parents' commuting. As traffic congestion in Shenzhen became more and
more serious, people with fixed commuting places tended to choose public transport
304 For more information, see Shiwen Sun. Modern Urban Planning Theory. (Beijing: China Architecture & Building Press, 2005), 277.
163
services. Therefore, when people chose their residence, they mainly considered their
commuting time by public transport. Whether there was a suitable public transport line
near the community and the distance between the house and the stations were the
traffic factors that people seriously considered when they bought a house.
The distance and accessibility of stops determined the convenience for people to travel
by public transport, which was not only a factor affecting the housing choice of ordinary
families but also the important factor affecting housing prices. The research on the
influence of the Shenzhen Metro line one on the housing price along the line showed
that the affected areas of the subway in terms of the real estate value were in the area
of 600 meters radius from the subway stations. The average increase of house price
in the 600-meter radius area was 16.95%, and the increase of house price in the 400-
meter radius area was more obvious, with an average increase of 23.03%. The biggest
impact of increased value was the houses which were 100m-200m away from subway
stations, that the house prices were 30.62% higher than those of the houses which
were 700m-800m away from stations305. This research was conducted one year after
the first phase of the operation of Line one, which was the only subway line in
Shenzhen at that time. Meanwhile, other public transport facilities and the use of
private cars in Shenzhen were not developed perfectly. Therefore, the impact of Line
one on residents' lives and housing prices along the line was huge. But once the metro
line developed into a network covering the whole city, and the whole public transport
service system has developed to a certain extent, the impact of public transport on
housing prices was not so obvious and important. Especially nowadays, the 500-meter
coverage rate of Shenzhen's public transport reached 91%, which meant that residents
in most areas could find ways of public transport within walking 500 meters. A single
mode of public transport could no longer be used as a selling point in the real estate
market. Only houses with multiple traffic advantages could make use of traffic
advantages as a selling point and raise the price accordingly.
b. Public Transport and Housing Development
Traffic and residential spatial distribution are interrelated and mutually restrictive.
Residential spatial distribution would affect the direction and flow of traffic routes, while
traffic route layout changes the residential spatial structure and people's choice of
housing. In the early stage when the development of urban road and traffic facilities
were not yet developed perfectly, traffic conditions were the focus of developers when
they bid on the land, and also the key factor for consumers to consider when buying
houses. Shenzhen compiled urban planning in every developmental stage, according
to which roads and other public facilities were built. However, the demand for capital
expansion promoted the advanced development of Shenzhen’s industries. The influx
of population made the development of residential buildings flourish everywhere,
exceeding the step-by-step development of roads, transportation, municipal
infrastructure, and public services. At that time, developers often got some parcels of
305 Jiefen Zheng, Hongyu Liu. The Impact of URRT on House Prices in Shenzhen. Journal of the China Railway Society Vol.27 No.5 (2005), 11-18.
164
land, surrounding which there were not any roads and pipelines of water and electricity.
Thus, developers had to assume some functions of governments to develop the city,
that was, to build roads around the parcel and lay underground water, electricity and
gas pipelines according to the requirements of urban planning. The government would
deduct part of the cost from the land fee. It was a common method in Shenzhen in the
early period that the government used the funds of developers to carry out urban
construction.
Apart from building roads and supporting facilities, developers often needed to solve
dwellers’ travel problems. Otherwise nobody would buy the houses. Therefore, many
developers offered special bus services to provide paid transportation services for
dwellers of the community. Vanke’s Zhongnan Bus Incident (mentioned in chapter
three) happened in the period when the Shenzhen government withdrew the public
minibusses, and prohibited the special community buses run by developers as well.
Not only developers but also many large enterprises run special buses for their staff to
solve daily commuting problems for their employees, such as Huawei and Sanyo
factory. Compared with the dirty and messy public minibusses, the clean and orderly
private buses of communities and enterprises were also a major feature on the streets
of Shenzhen in the 1980s and 1990s.
When the east-west urban arteries, Shennan Road, Binhe Road, Binhai Avenue and
Beihuan road, were built one after another, Shenzhen was able to expand rapidly to
Futian District and Nanshan District. Super-large and well-equipped communities such
as the Great Azure Coast, Dingtai Fenghua, and Zhonghai Sunshine Palm Garden
emerged, and people's housing choices rapidly shifted towards Nanshan District.
However, there was a long-term dualistic development inside and outside the Second
Line. One important reason was the traffic problem. From outside to inside, all vehicles
and people needed to go through checkpoints. Although there was no need to check
identity certificates later, the limited number of corridors became the traffic bottlenecks,
which were extremely congested areas for commuting every day. One interviewee said
that in 1995 he paid 800 yuan per month to rent a single room (public toilet) in a tin
house on Hubei Road, Luohu District, which was illegally built on the top floor of a six-
story farmer's house. The housing conditions were very poor. It was too hot in summer
to stay before 22:00, while it was cold in winter. In summer, when typhoons occurred,
he had to go downstairs to avoid the potential risk of collapse. The only advantage of
this room was that he could walk to the office. Bearing for such conditions for about
one year, he moved to Buji (布吉), a town located outside the Second Line. He shared
a three-bedroom suite-house with two friends, which was one of the best residential
buildings in Buji at that time. He also paid 800 yuan per month for his room. His housing
conditions were greatly improved, but it was extremely painful to go through Buji
checkpoint every day. There was no way out for him as his income only allowed him
to choose between housing conditions and convenient transportation. When good
traffic conditions were scarce resources, the impact of traffic on house prices and rents
was obvious. Nowadays, the previous checkpoints are still extremely busy traffic areas
165
every day. But with seven metro lines headed to the outside area of the Second Line,
the real estate industry was flourishing, and the gap of housing prices between the
inside and outside of the Second Line was getting smaller and smaller.
With successful industrial transformation and development, Shenzhen continued to
attract a large number of people to gather to the city. Shenzhen's urban development
space was insufficient, which was the bottleneck of Shenzhen's further development.
The rising housing prices made Shenzhen more and more unaffordable. Relieving
industry and population to its surrounding cities was the way out for Shenzhen to
continue its development. In recent years, Shenzhen has continuously strengthened
its development cooperation with Dongguan and Huizhou in various aspects. In 2014,
Transportation Bureau of Shenzhen, Dongguan and Huizhou jointly organized and
compiled the Integrative Transportation Planning in Shenzhen Dongguan and Huizhou,
which covered seven special topics, i.e. regional road network convergence, inter-city
rail transit, port and shipping integration, air traffic integration, planning of regional
integrated passenger transport hub, planning of regional logistics park layout, and
inter-city public transport integration306. At that time, the GBA was not proposed. The
Transportation Planning mainly aimed to help Guangdong to build the Pearl River Delta
into the most competitive metropolitan area in the world and form a pattern of
coordinated regional development. This plan was also a programmatic document
guiding the integration of transportation in the three cities, and an important basis for
compiling related transportation plans. The Shenzhen Rail Transit Line Network
Planning (2016-2030) proposed the idea of connecting seven of these lines with urban
rails of Dongguan and Huizhou. In the project design, these lines would be reserved
possibilities at the Shenzhen border for extending to the surrounding cities or
transferring to the surrounding urban rails. A consensus has been reached between
Shenzhen and Dongguan on the connection between the feeder line of Shenzhen Line
six and Dongguan Line one and entered the specific implementation stage. Rail transit
made it possible to construct one-hour life circle in three cities of Dongguan, Shenzhen,
and Huizhou.
The 13th Five-Year Plan of Shenzhen's Housing Security Development put forward that
during the 13th Five-Year Plan, Shenzhen would build 400,000 new affordable housing
and talent housing, of which no less than 300,000 would be talent housing. However,
there was a serious shortage of land for urban construction in Shenzhen. In order to
achieve this goal, it would be important to adopt inter-city cooperation of Shenzhen,
Dongguan, and Huizhou in the development and construction of talent housing. It can
be predicted that the land development around the rail stations of Dongguan and
Huizhou, which are connected with the Shenzhen track, will benefit. Land prices and
house prices will have the opportunity to rise. This is not only a development
opportunity of real estate companies but also provides more housing options for
Shenzhen residents.
306 For more information, see Integrative Transportation Planning in Shenzhen Dongguan and Huizhou http://jtys.sz.gov.cn/zwgk/xxgkml/ghjh/zxgh/201507/t20150721_5670372.htm (access on 27/6/2019)
166
The establishment of the Guangdong-Hong Kong-Macao GBA consolidated
Shenzhen’s opportunity to expand the developmental space. On 31st October 2017, a
press conference on a new round of urban master planning was held in Shenzhen.
The idea of building a ‘50km metropolitan circle’ was put forward, that was, Shenzhen
would build a metropolitan transportation network within an area of 50km radius to link
closely to Guangzhou, Hong Kong, Huizhou, Zhongshan, Zhuhai, Dongguan, forming
a metropolitan circle around Shenzhen307, which would break through the bottleneck
of insufficient space and provide new sources for capital expansion to usher in a new
round of development.
4.3.3 Conclusion
Travelling is one of the routine activities in people’s daily life. The satisfaction and
comfort of travel are largely dependent on transportation conditions. With the
increasing traffic congestion and the development and improvement of public transport,
more and more Shenzhen people choose to use public transport. Transportation,
especially the accessibility to the public transport, is another important factor affecting
buyers' housing choice.
In the past 40 years, public transport in Shenzhen has developed from a blank field to
achieving the highest score in China. Moreover, with the coordinated development with
surrounding cities, public transport is extending outward, forming a regional network,
providing opportunities for Shenzhen’s spatial expansion. This provides development
opportunities of real estate companies in both Shenzhen and sounding cities, and
provides more housing options for Shenzhen residents as well.
307 See the press conference on the compilation of ‘Shenzhen Master Planning (2016-2030)’, http://www.sz.gov.cn/cn/xxgk/xwfyr/wqhg/20171031/ (access on 12/9/2018)
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Chapter 5: Housing Choice: Children’s Education and Age Care
5.1 introduction
With urban development, more and more people settled down in Shenzhen, bringing
families reuniting from their hometowns or setting up new families in Shenzhen. The
sight of hurrying working people was gradually changed by the leisurely elders and
children in parks and community spaces. Shenzhen was gradually transforming into a
settled city with a normal population structure of all ages. The increase in the
population of the elderly and children not only had a significant impact on family life
but also affected the requirements of urban housing and public facilities profoundly.
Innovative industries and rapid development were the advantages of attracting talent
in Shenzhen. However, the keys to retaining talent in a city, which were affordable
housing, education, medical treatment, and pension facilities, were the weakness of
Shenzhen. This chapter focuses on children’s education and old-age care to explore
their relationship with housing development, respectively.
The relationship between education and housing has been mentioned for several times
in the above chapters. Children’s education was the greatest anxiety of Chinese
parents nowadays, especially in the one-child family. The hopes of two generations,
parents and grandparents, were pinned on a child, hoping he/she would be outstanding
and bring honor to the family in the future and have a better life as well. The whole
family’s resources were devoted to children’s education, including early education,
talent and skill training, improving academic performance, and so on. To get into a
famous university, children would be better studying in good primary and secondary
schools, which pushed parents into paying a huge price to buy housing around high-
quality education resources to get admission tickets for children. Developers seized on
this mentality and tried different ways to tie their development projects to education so
that their residential products could be sold out faster and at much higher prices. When
various grievances in high prices of school-housing (学位房 ) and inequality of
educational resources became more and more serious, the government had to take
some measures to curb the spread of such resentment. In the first part of this chapter,
the information obtained through interviews and questionnaires is taken as the entry
point, taking the Shenzhen Experimental School (SES) as the main case, to discuss
the process and methods of bundling housing development and education in
Shenzhen.
The second part is about pension issues. The aging problem is quite challenging in
many countries. China stepped into the aging society in 2000, and currently in the
stage of accelerating development. Shenzhen is relatively a young city and has not yet
entered an aging society; pensions do not seem to be of the greatest concern to people.
However, In the interview, some interviewees have expressed their concern about the
pension issue. People born in the 1960s and the early 1970s are close to retirement
age. They expressed their wishes of moving to a different house which had more
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suitable spaces and convenient facilities for the elderly, after their children go to
universities. Young people began to think about their parents' pension, hoping that
there are appropriate social institutions or community services to share their pressure.
Therefore, the early attention to and discussion of pension issues will be beneficial to
Shenzhen’s future housing development and urban development.
5.2 Anxiety of Children’s Education
5.2.1 Compulsory Education in China and the Development of Shenzhen
Schools
At the fourth session of the Sixth NPC on April 12, 1986, China adopted the Law on
Compulsory Education308 , beginning to implement nine-year compulsory education,
which was for children and adolescents of the right age from six years in primary school
to three years in junior middle school, with the basic characteristics of being
compulsory, free and universal. Compulsory education implemented the principle of
proximity enrollment. Each public school was allocated a catchment in its adjacent
residential area.
The table 5.1-5.3 show respectively the number of secondary schools, primary schools,
and kindergartens, full-time teachers and enrolled students in Shenzhen from 1979 to
2017. Although the number of students increased rapidly (the number of middle school
students in 2017 was 30 times that of 1979, primary school students 20 times and
kindergarten students 110 times, respectively), the number of schools and teachers
were also growing at the same time. And the average growth rate of teachers was even
greater than that of students. The growth rate of schools was not so fast in terms of
quantity, but it can be inferred from the average number of students in schools that
schools increased their capacity by expanding their size. For example, the average
number of pupils in a primary school in 2017 was 2,820, 13 times that of 208 in 1979.
Calculated by 45 pupils per class309, there were ten classes per grade on average in
primary schools in 2017, while in 1979 there were no more than five classes in a whole
school, which was too small in scales. When compared with the average annual growth
rate of Shenzhen’s permanent population, 10.2%, which was based on the population
of 12.53 million in 2017 and 31.41 million in 1979, the average annual growth rates of
students in primary and secondary schools were lower. This showed that Shenzhen
was more attractive to young people, who did not establish a family yet. At the same
time, it could be speculated that quite a few people who had families worked in
Shenzhen but left their children to be raised in their hometowns, especially the families
without Shenzhen household registration. On the other hand, the rapid growth of young
308 The current Compulsory Education Law of the People's Republic of China was revised and adopted on June 29, 2006 on the basis of the Education Law of 1986, and has been implemented since September 1, 2006. Nowadays,12 years of compulsory education is under discussion and pilot stage. 309 The number of 45 students per class in primary schools is regulated by educational codes. In fact, some good schools have 50-70 students in each class. Some schools have insufficient students, with less than 45 students in each class, while international schools or some private schools basically control 30-35 students.
169
children in kindergartens, especially in the past decade, showed that more and more
young families had settled in Shenzhen. Coupled with the second-child policy and the
relaxation of the enrollment conditions for children without Shenzhen household
registration, it was foreseen that the capacity of kindergartens, primary schools and
middle schools in Shenzhen would become serious issues in the coming years. The
problem of insufficient public service facilities that did not develop synchronously in
Shenzhen’s rapid urban development has gradually emerged in recent years.
Table 5.1: number of secondary schools, teachers, and students in Shenzhen (1979-
2017)
year
number of
secondary
schools (A)
full-time teachers
in secondary
schools (B)
students in
secondary schools
(C)
C/A C/B
1979 24 752 13686 570 18
1980 24 625 12296 512 20
1981 26 676 13088 503 19
1982 28 860 17080 610 20
1983 30 1044 20982 699 20
1984 35 1372 27636 790 20
1985 38 1902 35334 930 19
1986 40 2138 40208 1005 19
1987 43 2376 44910 1044 19
1988 47 2603 43267 921 17
1989 47 2771 45056 959 16
1990 49 2915 46473 948 16
1991 51 3255 50625 993 16
1992 53 3533 55857 1054 16
1993 51 3892 60337 1183 16
1994 56 4290 66073 1180 15
1995 62 4675 71540 1154 15
1996 71 5004 76949 1084 15
1997 73 5276 82155 1125 16
1998 78 5502 86009 1103 16
1999 83 5935 91260 1100 15
2000 94 6596 106996 1138 16
2001 107 7224 126190 1179 17
2002 132 8643 150654 1141 17
170
2003 179 9989 179628 1004 18
2004 216 11625 211224 978 18
2005 245 14196 240508 982 17
2006 260 15678 256630 987 16
2007 273 17846 279180 1023 16
2008 277 20091 298939 1079 15
2009 285 21335 316024 1109 15
2010 295 22417 334752 1135 15
2011 299 23897 346942 1160 15
2012 302 25807 359643 1191 14
2013 314 27048 371735 1184 14
2014 325 28320 378690 1165 13
2015 335 29252 385221 1150 13
2016 352 30674 396455 1126 13
2017 368 32590 417641 1135 13
annual average growth rate from 1979 (%)
3.77% 11.14% 7.77%
Source: Shenzhen Statistics Bureau, NBS Survey Office in Shenzhen, ed. Shenzhen Statistical Yearbook 2018. (Beijing: China Statistics Press, 2018), 381-384.
Table 5.2: number of primary schools, teachers, and students in Shenzhen (1979-2017)
year
number of
primary schools
(A)
full-time
teachers in
primary schools
(B)
students in
primary schools
(C)
C/A C/B
1979 226 1588 47022 208 30
1980 238 1763 49168 207 28
1981 244 1948 51560 211 26
1982 246 1954 54538 222 28
1983 248 2025 56319 227 28
1984 260 2282 62021 239 27
1985 258 2749 70277 272 26
1986 257 2977 77884 303 26
171
1987 255 3265 84601 332 26
1988 257 3571 96474 375 27
1989 264 3810 104041 394 27
1990 263 4221 111711 425 26
1991 260 4514 118460 456 26
1992 261 4832 127978 490 26
1993 267 5342 139272 522 26
1994 269 6015 147186 547 24
1995 274 6429 157210 574 24
1996 274 7046 170983 624 24
1997 275 7567 190192 692 25
1998 286 7940 215652 754 27
1999 325 8914 256060 788 29
2000 353 11550 313852 889 27
2001 377 13254 363637 965 27
2002 395 15763 415097 1051 26
2003 376 17920 469684 1249 26
2004 378 19660 526419 1393 27
2005 358 23866 566278 1582 24
2006 357 25203 564891 1582 22
2007 347 27209 575160 1658 21
2008 342 28540 585852 1713 21
2009 346 28906 589481 1704 20
2010 340 29769 618459 1819 21
2011 334 31186 651307 1950 21
2012 333 33496 683058 2051 20
2013 335 35546 730232 2180 21
2014 331 39115 793178 2396 20
2015 334 42630 864841 2589 20
2016 337 46975 910974 2703 19
2017 342 50805 964510 2820 19
172
annual
average
growth
tate
from
1979
(%)
0.13% 8.15% 5.13%
Source: Shenzhen Statistics Bureau, NBS Survey Office in Shenzhen, ed. Shenzhen Statistical Yearbook 2018. (Beijing: China Statistics Press, 2018), 381-384.
Table 5.3: number of kindergartens, teachers, and students in Shenzhen (1979-2017)
year
number of
kindergartens
(A)
full-time teachers
in kindergartens
(B)
students in
kindergartens
(C)
C/A C/B
1979 90 4587 51
1980 52 159 3377 65 21
1981 32 141 5074 159 36
1982 50 259 7723 154 30
1983 69 365 9252 134 25
1984 87 575 21140 243 37
1985 79 483 14338 181 30
1986 273 573 22703 83 40
1987 187 1005 26072 139 26
1988 195 937 27106 139 29
1989 207 1193 34781 168 29
1990 228 1317 36041 158 27
1991 257 1451 43877 171 30
1992 282 1698 49985 177 29
1993 281 2288 56024 199 24
1994 333 2745 63316 190 23
1995 349 3202 62571 179 20
1996 380 3665 68769 181 19
1997 446 4613 71378 160 15
1998 488 5257 77623 159 15
1999 560 6092 88322 158 14
2000 562 7234 93164 166 13
2001 588 7690 103083 175 13
173
2002 634 8893 110390 174 12
2003 656 9539 123856 189 13
2004 699 10670 133019 190 12
2005 744 11973 147672 198 12
2006 758 12815 152330 201 12
2007 819 14381 169496 207 12
2008 865 15761 191222 221 12
2009 974 18133 211182 217 12
2010 1040 20786 260873 251 13
2011 1093 21627 285146 261 13
2012 1186 24154 316929 267 13
2013 1313 26803 368937 281 14
2014 1402 28782 399014 285 14
2015 1489 31704 438498 294 14
2016 1579 33746 463319 293 14
2017 1683 36904 504955 300 14
annual
average
growth
tate
from
1979
(%)
4.66% 62.46% 28.70%
Source: Shenzhen Statistics Bureau, NBS Survey Office in Shenzhen, ed. Shenzhen Statistical Yearbook 2018. (Beijing: China Statistics Press, 2018), 381-384.
5.2.2 The Anxiety of Middle-class Families
As far as the current school capacity is concerned, the places in Shenzhen’s nine-year
compulsory education system are sufficient for children and adolescents who meet the
requirements of enrollment. That is, as long as the required documents are available,
both children with/without Shenzhen household registration can enter the compulsory
education system. Since all the children can apply for a place in a school, what are the
worries of the parents, and what kind of parents are worrying? According to the
statement of the interviewees, in the 1980s and 1990s, education did not become the
anxiety of ordinary families in Shenzhen. Most families (including those without
Shenzhen household registration) followed the principle of proximity enrollment and
obtained places in schools near their houses. Parents were generally concerned about
whether the distance from school to home was reasonable for children to walk or ride
bicycles. However, with the increasing competition in society, parents were gradually
174
anxious about their children’s education. According to the interview statistics, except
for the four unmarried interviewees, 20 of the 25 married interviewees said they had
bought/rent or would buy/rent a school-housing, accounting for 80%. Similarly, the
survey showed that 78% of married respondents had bought or planned to buy a
school-housing. Meanwhile, most respondents thought that the monthly cost of
children’ education was very high, ranging from 10 to 50% of household expenditure.
Most of these anxious people were born in the 1970s and 1980s, whose children were
mostly born after 2000, being in different school-ages from kindergarten to middle
school. Even a mother with her baby just a few months old was already anxious about
which school her baby should go to and when she should buy a school-housing. This
anxiety about children’s education was common among middle-class families. What
they worried about was not whether the child had a place in school, but whether and
how to obtain high-quality educational resources.
The research on China’s middle-class has been a hot topic in recent years. Although
there are different definitions of the middle-class, the evaluation criteria are usually
income, wealth, occupation, lifestyle, and so on. McKinsey divided China's middle-
class into two categories in 2014. The popular middle-class referred to the family's
annual income of RMB 66,000 to RMB 106,000, which accounted for 54% of urban
households in 2012. The upper-middle-class referred to the family's annual income of
RMB 106,000 to RMB 229,000, which accounted for 14% of urban households in 2012
and was predicted to reach 54% in 2020310. Hurun Report (胡润百富)311 suggested
that apart from the basic requirement of “well-educated, non-manual workers, with
income above the middle level”, the middle-class was a social group with higher
consumption and investment abilities after excluding basic living expenditure, such as
clothing, food, housing, and transportation. Hurun Report also set up a standard for
middle-class families that the proportion of average annual expenditure of basic
household consumption in the allotment income was less than 50%. Then, a new
middle-class standard of China was put forward312.
According to the Hurun Report’s survey, behind their bright appearances, most of the
new middle-class people felt anxious. Among all kinds of anxieties, the first focus was
on children’s education, accounting for 45%. The well-educated people in the new
middle-class attached great importance to children’s education. They deeply believed
that, to a certain extent, educational background determined the future social status
310 McKinsey & Company. The Chinese Middle Class in the Next Decade: Their Features and Constraints. China Development Research Foundation Research Reference, No.4, 8/5/2014. 311 Hurun Report Inc. was established as a research unit in 1999 by British accountant Rupert Hoogewerf. It has grown into a leading luxury publishing group based in Shanghai, China. Hurun Report Inc has four divisions: Media; Conferences & PR; Market Research; and Investments. Within the Media Division, the titles are Hurun Report, Hurun Schools Guide, Hurun Horse & Sports, Wings & Water. More details see http://www.hurun.net/CN/Home/Index (access on 26/9/2019). 312 Criteria of China's new middle-class: 1. 300,000 of household income in first-tier city, more than 200,000 of household income in other cities; 2. more than 3 million of household net assets; 3. at least one property in permanent residence; 4. private cars, 5. university education; 6. white-collar workers or gold-collar workers or professional freelancers; 7. subjective self-identity as middle-class; 8. main force of the middle class is those born in 80s, then, followed by the 70s and 90s. More information see Hurun Report: China New Middle Class Report 2018. 11.
175
and identity of their children. They desired and pursued high-quality educational
resources. The average expenditure of new middle-class families on children’s
education in 2018 was RMB 90,000.313 The new middle-class worries largely about
identity. They are in the middle of the high-income and low-income groups, with the
worry of ‘going forward or going backward.’ They want to stabilize the current status of
middle-class while looking for the opportunity to step on a higher level. Meanwhile,
they hope to pass the legacy to the next generation. As today’s society and technology
are developing so fast making the future full of uncertainty, education is the most
reliable and important way for them to invest in their children’s future.
5.2.3 How Difficult to Enroll in a Famous School in Shenzhen?
For enrolling in a primary or middle school in Shenzhen, the following documents are
required, household registration certificate (child’s birth certificate, household
registration book) and residence certificate (property certificate or rental contract). If
the child is without Shenzhen household registration, the parents are required to
provide their Shenzhen resident registration with a record of continuous residence for
more than one year, and social insurance certificate with a record of participation in
pension insurance and medical insurance for more than one year314. If the number of
students in the catchment exceeds the planned enrollment number, the priority of
enrollment is determined by the scoring method, which is calculated based on
household registration, years of purchase property or rent, and years of parents’
participation in social security. Each district has different scoring standards. Generally,
the basic point of those with Shenzhen household registration and owning property in
the catchment is higher than those without Shenzhen household registration and
renting houses. A longer period of purchase or rental houses and a longer period of
parents’ participation in social security get higher points. Taking Futian District’s
enrollment in 2018 as an example (see table 5.4), those with Futian household
registration and owning property in the catchment scored 20 basic points higher than
those without Shenzhen household registration and renting houses. Therefore,
children who were not in category A have no chance to enroll in a famous school at all.
Even if they were in category A, places in a famous school were still not secured. It
was necessary for their parents to buy a school-housing as early as possible to get
higher bonus points (living for more than eight years and four months can get the
highest ten bonus points). In addition, for the most popular school zones, such as
Baihua Zone in Futian District315 (see photo 5.1), there applied a lock-in regulation,
313 See Hurun Report: China New Middle Class Report 2018. 19. 314 Because Shenzhen had a high proportion of population without Shenzhen household registration, solving the problem of compulsory education for non-household-registered children had always been a major problem of municipal and district education bureaus. Because of the insufficient school places many children who could not provide complete documents were excluded from Shenzhen schools through the implementation of “Shenzhen Temporary Population Children's Compulsory Education Management Measures” (Shenzhen [2005] 125). And now the adopted "Shenzhen non-household-registered Children to Receive Compulsory Education Management Measures" (Shenzhen [2018] 3) was much simpler than before, so that non-household-registered children can enroll in schools and grow up around their parents. 315 Baihua zone means the residential areas within the catchment of several famous primary schools (Liyuan, Yuanling, Experimental primary school) and junior middle schools (Experimental Middle school
176
which meant that a house could not be used for enrollment within six years after a child
enrolling in a primary school, or within three years after using to enroll in a junior middle
school. This measure was to curb the rapid turnover of school-housing, which made
the number of enrollees stay high every year316.
Table 5.4: enrollment scoring method of Futian District, Shenzhen (2018)
category criteria basic
points bonus points
A
parents own a house (more than 51%
of the property right) in the school
catchment, with the child registered in
that house.
80 1. bonus for continuous residence
(cumulative no more than 10 points)
B
parents own a house (more than 51%
of the property right) in the school
catchment, but the child not registered
in that house.
75
a. owning the property: from the
date of issue of real estate
certificate, every full month earn 0.1
points
C
owning one of the following special
properties in the catchment, with the
child registered in that house. 1. The
parents own special housing, such as
self-built housing, fund-raising
housing, ancestral housing, military
housing or business apartment, with
legal certification materials. 2. the
parents own a house (less than 51%
of the property right). 3. the
grandparents own a house, with the
three generations registered in that
house.
70
b. owning a special property:
provision of proof of actual
continuous residence (utility bill),
every full month earn 0.1 points
D
owning one of the following special
properties in the catchment, but the
child not registered in that house. 1.
parents own special housing, such as
self-built housing, fund-raising
housing, ancestral housing, military
housing, or business apartment, with
legal certification materials. 2. the
parents own a house (less than 51%
of the property right).
65
c. provision of no-house certification
earns 2 points. From the lease filing
date, every full month earn 0.1
points, cumulative no more than 10
points
and Experimental junior high school). 316 Before the lock-in rule was enacted, a family purchased a school-housing for their child to enroll in a famous school. After all the documents handed in and checked, and the child got the enrollment, they sold the house. As a result, the school-housing turned around once a year, pushing up the house price and increasing the application numbers every year.
177
E
the child is registered in Futian
District. The parent rent a house or
provide valid resident certification in
the catchment.
65
2. bonus for family planning: one-
child earn 6 points; birth based on
policy earn 5 points; birth not based
on policy, but paid the social
compensation fee, earn 3 points.
F
the child is not registered in Futian
District. The parent rent a house or
provide valid resident certification in
the catchment.
60
notes: in the case of the same
points, Shenzhen registered
students will be enrolled
preferentially. The remaining places
will be enrolled according to the
cumulative time of social security of
father or mother of the non-
Shenzhen registered students.
Source: official website of Futian Education Bureau
https://www.szftedu.cn/xxgk/tzgg/201804/t20180413_97866.html (access on 25/5/2019)
Photo 5.1: Baihua Zone and Yuanling Zone in Futian District
Source: map based on screen-shot of google map (access on 18/6/2019); catchment of Futian District see the official website of Futian Education Bureau https://www.szftedu.cn/xxgk/tzgg/201804/t20180413_97866.html (access on 28/5/2019)
Choosing housing for children’s education is not only to obtain high-quality educational
resources, but also to a deeper social context, a process of social stratification of
today’s families and the future stratification for children. Among the interviewees, those
who chose to buy or rent housing in Baihua Zone believed that not only were their
children enrolled in a famous school, they were able to study in an environment with
good student sources. These families got to know each other and gathered because
of similar social levels and similar educational goals. Children’s education was a
starting point for them to develop extensive communication and information exchange,
which formed and solidified the social circle in that area. The famous schools that were
generally recognized by Shenzhen people were tested by the performances in high
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school entrance examinations and university entrance examinations for many years.
Taking the key undergraduate admission rate in 2018 as an example, the rate of the
whole Shenzhen city was 33.16%, while the rates of the top four senior high schools
of Shenzhen were almost all above 90% (see table 5.5). So, being able to study in
these senior high schools meant almost reaching the threshold of key universities.
However, senior high school was not in a compulsory system, which meant the
enrollment was based on the annual entrance examination. Therefore, studying in a
good primary school and junior high school was the guarantee of entering a good
senior high school. Buying a school-housing for high-quality primary and junior high
school 317 was considered by middle-class families when their children were in
kindergarten or even infants shortly after birth. After the high school entrance
examination in every year, all kinds of overwhelming property promotion on the internet
were for school-housing according to the new ranking of the examination. Those, who
no longer needed the school-housing, wanted to sell out, while those, who wanted to
get a place in good schools, needed to buy in, which was the annual carnival of real
estate agents.
Table 5.5: key undergraduate admission rate of Shenzhen 2018
2018 2017 2016
undergraduate
admission rate
key
undergraduate
admission rate
key
undergraduate
admission rate
key
undergraduate
admission rate
All Shenzhen high
schools 74.32% 33.16% 29.57% 29.01%
Shenzhen Middle
School 100.00% 95.30% 95.16% 94.09%
SES (High School) 100.00% 95.20% 97.00% 95.24%
Shenzhen Foreign
Languages School 99.61% 90.93% 96.00% 95.07%
Shenzhen Senior
High School 100.00% 89.10% 92.00% 90.47%
Sources: https://www.sohu.com/a/276065524_515502 (access on 27/5/2019) and
https://www.sohu.com/a/233066081_515502 (access on 27/5/2019)
5.2.4 Education Opportunity and Real Estate Industry
317 This refers to public schools, excluding private schools, because private schools do not enroll students according to the school catchment, but in the whole city. For example, Baihe Foreign Language School, which is often ranked first in the middle school entrance examination, attracts more than 10,000 students to apply for every year, but only 600 students are enrolled.
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a. The Effect of Famous Schools on Housing Price
People’s pursuit of high-quality educational resources has led to the housing prices
rising successively around famous schools. Baihua zone where SES is located and
Yuanling zone (园岭, see photo 5.1) where Hongling Middle School (红岭中学) is
located are taken as examples. In the first half of 2019, the average house price of
Baihua zone reached over 100,000 yuan per square meter, 45.4% higher than that of
Futian District and 43.1% higher than that of adjacent Yuanling zone, while the price
of Yuanling zone was only 1.6% higher than that of Futian District (see table 5.6 and
figure 5.1). Baihua and Yuanling are located in almost the same geographical location,
with the same external transportation, commercial, and cultural facilities. The great
difference in house prices can be estimated as having two reasons. Firstly, Hongli
Middle school in Yuanling zone is a famous school (within the top eight), but in the
minds of parents, there are still great differences between the top four schools (SES is
within the top four, see table 5.5) and the top eight. In the high school entrance
examination of 2018, Hongli Middle School was ranked 24th, achieving 41.7% above
400 points, while SES was ranked 3rd, with 62.55% above 400 points318. Parents spent
a lot of money to buy a school-housing to seek the opportunity for their children
entering the top senior high schools eventually. So the ranking of schools obviously
affected the housing prices of the zone. The second reason is about the residential
building itself. Yuanling was one of the earliest family dormitory communities for
government employees, which were quickly-built and low-quality multi-story buildings
without elevators. Comparatively, Baihua’s buildings were built as commercial housing
with the quality much better than Yuanling’s buildings. The prices are, undoubtedly,
higher. The prices of school-housing were not only higher than the surrounding areas,
but also rose more rapidly when prices rose and were more resilient when prices fell.
One interviewee bought a multi-story apartment in Baihua zone for 1.4 million yuan in
2007, which the former owner bought for only 700,000 yuan in 2006. After her purchase,
the price of the apartment continued to rise, rapidly reaching 1.8 million yuan in several
months. By 2008, when the housing prices fell sharply nation-wide, her apartment once
fell to 1.2 million yuan, but soon stopped falling and rose again slowly, which convinced
her that school-housing was very resilient.
These famous schools, which have been running for decades, have accumulated their
influence on the prices of school-housing for many years, which generally followed the
changing trend of the prices of the whole city. However, if a famous school set up a
new campus in a district, the change in housing prices would deviate from the normal
growth rule of the market. Still taking SES as an example, in order to bring high-quality
educational resources into the Bantian area, Shenzhen Experimental Educational
Group was appointed by SMPG to take over Xincheng School in Longgang District and
set up the Bantian Teaching Department in 2017319. The Group dispatched the principal
318 Only students with 400 or more points in the middle school entrance exam can enroll into a good senior high school. More information see http://news.szhome.com/283942.html (access on 29/5/2019). 319 Bantian area of Longgang District is the area where high-tech companies gather in Shenzhen. Huawei is the largest and contributes a huge amount of tax revenue to Shenzhen. Huawei employees' dormitories are in Bantian, and many employees have bought houses near the company. But because there are no
180
and main cadres and teachers from the Experimental Junior High School to integrate
this huge campus, which covered nine-year compulsory education from primary school
to junior high school, with the Group’s teaching idea and management method. As
early as in the demonstration stage of this takeover, there were many rumors and much
speculation, all of which were predicting the re-division of the catchment after the
takeover. Meanwhile, the housing prices around Xincheng School begun to rise slowly.
In September 2017, when the Baitian Teaching Department was officially listed, the
enrollment of 2017 was over, so that the new school just followed the previous
enrollment of Xincheng School. The first enrollment of Bantian Teaching Department
would begin in April 2018, that meant, the catchment of the new school in 2018 would
not be officially announced until March 2018. However, when I visited the surrounding
communities (see photo 5.2) of the Bantian Department on January 2, 2018, a real
estate agent said that the housing prices of several communities which were predicted
in the catchment had risen by nearly 50% in less than one year from the beginning of
the rumor, from 40,000+ yuan to 60,000+ yuan per square meter. According to my
observation, the area was not yet maturely developed, where some roads were still
under construction without public transportation access. As for commercial facilities,
there was only a community-level supermarket in Vanke Great Mansion (万科金色半
山) and small shops in urban villages. Moreover, these communities were surrounded
by a large number of urban villages with an unpleasant environment. Based on normal
market rules, it would take years for housing prices of the area to rise to 60,000+ yuan
per square meter. This case showed that high-quality educational resources had a
huge stimulating effect on the real estate industry. It is not hard to understand why
developers try various ways to tie their residential product to education.
Table 5.6: the average housing price of Futian District, Baihua zone and Yuanling Zone
average price of
Futian District
(yuan)
average price of
Baihua Area (yuan)
average price of
Yuanling Area
(yuan)
2019 70069 101865 71185
2018 67774 101601 72784
2017 62171 86269 70517
2016 60232 84377 68689
2015 45997 67044 52063
2014 34158 42683 35116
2013 28888 40541 31350
2012 24026 33009 25982
high-quality schools in Longgang District recognized by Huawei employees, their children choose to go to school inside the Second Line (Futian, Nanshan, etc.), but the daily traffic causes a lot of trouble. Therefore, Huawei directly requests the municipal government to inject high-quality education resources into the Bantian area. Because of the importance of Huawei, and rumors that Huawei is moving away from Shenzhen for a long time, the municipal government finally instructed the Experimental School to take over the Xincheng School. The above information is provided by the respondent.
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2011 23927 _ 26344
2010 19907 _ 21780
average
growth rate 2.80% 2.98% 2.52%
Source: https://www.anjuke.com/fangjia/shenzhen2010/futian/ (access on 29/5/2019)
Figure 5.1: comparison of the average housing price of Futian District, Baihua zone
and Yuanling Zone.
Source: based on table 5.6, https://www.anjuke.com/fangjia/shenzhen2010/futian/ (access on 29/5/2019)
Photo 5.2: communities around Bantian Department of Shenzhen Experimental Group
Source: map based on screen-shot of google map (access on 18/6/2019); photo taken in the field research on 2/1/2018.
0
20000
40000
60000
80000
100000
120000
2019 2018 2017 2016 2015 2104 2013 2012 2011 2010
Average Prices (yuan)
average price of Futian District average price of Baihua Area
average price of Yuanling Area
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b. Making a Famous School
a). How Shenzhen Experimental School Became a Famous School?
As of 2017, there were 342 primary schools and 368 secondary schools (including
junior and senior high schools) in Shenzhen. Why did only a small number of schools
stand out as good schools320 recognized publicly and make Shenzhen people willing
to pay a lot of money for an enrollment? Was it because of the government’s
positioning and resources investment or the school’s operation and management?
One interviewee, who is in a management position in SES, suggested that an excellent
school lay in positioning first, then school operation concept. SES was the first public
school founded by SSEZ government on May 3, 1985.321 According to her statement,
the SES was set up to support the newly-built high-rise residential community in
Baishaling (白沙岭) zone. The west area of Baishaling community began to develop in
1984 and obtained development funds through pre-sales. Because of the imperfect
commercial housing market at that time, most of the domestic commercial housing was
purchased by units (dan wei) and distributed to units’ staff. Most commercial houses
in Baishaling were purchased by large-scale state-owned units, such as the Nuclear
Power Group. From the community planning to architectural design, the buildings of
Baishaling community were high-grade residences at that time. Most of these
apartments were allocated to high-level employees, many of which were senior
intellectuals and managers recruited from other cities to support Shenzhen’s early
development. Therefore, the government decided to establish a high-positioning
school to meet the educational needs of their children. At the same time, such a high-
positioning school was also in line with the municipal government’s plan to build a
school that conformed to the reforming and innovative spirit of SEZ.
SES was to set up a one-stop teaching model to explore the growth and education of
children aged from three to eighteen, that was, from kindergarten to high school. Its
positioning decided that SES would be a famous school at the beginning, which then,
determined the allocation of its good resources. Most of its cadres and teachers were
recruited from some famous schools of Beijing, Shanghai, and Guangzhou. The first
principal, Jin Shiru (金式如), was the vice-principal of a well-known middle school in
Shanghai, and the first dean came from Guangdong Experimental School, the most
famous middle school in Guangdong Province. Based on the concept of “sound
personality education”, SES applied elaborate management and emphasized the role
of teachers’ demonstration of words and deeds and family parenting in children’s
quality education. In knowledge teaching, English was taught from year one in primary
320 Shenzhen's good middle schools, among the people, have statements of top four and top eight. The top four refer to Shenzhen Middle School, Shenzhen Foreign Language School, SES and Shenzhen Senior High School. The top eight includes Hongling, Yucai, Cuiyuan and Baoan. Regarding primary schools, there are three to four famous ones in each district, such as Luoling, Cuizhu, Jintian in Luohu District, Liyuan, Yuanling, Meilian in Futian District, and so on. 321 It refers to the first public school built by the municipal government of SSEZ after its establishment. Shenzhen originally belonged to Bao'an County. Before the establishment of SSEZ, there were some public schools in Bao'an County. For example, Shenzhen Middle School, one of the top four schools, was founded in 1947 and became the only key school of SSEZ in Guangdong Province in 1983. There were also some public schools built by the district government that preceded the construction of Experimental Schools, such as Yucai School in Shekou Industrial Zone.
183
school (English was taught from year seven in other schools). Mathematics in year one
used a self-compiled experimental textbook, which focused on the training of
intelligence and ability. The unified national textbook was adopted from year two.
Although it was a supporting facility of Baishaling community, as a municipal school,
SES did not enroll students compliant to the school catchment, but all children of
Shenzhen could apply for it. The enrollment of kindergarten and primary school was
decided by interviews (including interviews with parents) and drawing lots when junior
and senior high schools selected students by examination. Students studying in
experimental kindergarten and the primary school could go straight to junior high
school. After several years of practice, the educational concept of SES had taken root
and been passed on to the next cohort. Students who graduated from the school
generally showed the quality of physical and mental health, and their academic
performance was also at the forefront of the city. Shenzhen people gradually
recognized it as a famous school.
As a measure to expand high-quality educational resources, Huanqiang Middle School
(华强中学), which was under the jurisdiction of Futian District, was incorporated into
SES in 1998 and became the Junior High School Teaching Department. Huaqiang
Middle School was a district school, applying the school catchment enrollment policy.
Since then, SES also began to follow the catchment policy. In 2001, appointed by the
municipal government, SES merged the Asia-Pacific (Shenzhen) International School,
which was in debt, and established the Senior High School Teaching Department.
Shenzhen Experimental Education Group was founded on September 3, 2003, which
was the first public education group in Shenzhen initiated by SES322. In 2017, also
appointed by the municipal government, the Bantian Teaching Department was
founded to bring high-quality educational resources to the Bantian area. The
Guangming Teaching Department in Guangming New District was open in 2018, which
was a boarding senior high school.
The establishment and development of SES indicated that since education was a
public service responsible by local governments, the formation of a good school firstly
relied on the government positioning. From the beginning, SES was a high-quality
school founded by the municipal government. Huaqiang Middle School and Xincheng
School were merged into SES through the administrative decision of the government
and became famous schools pursued by Shenzhen parents. Every district in Shenzhen
hopes that famous schools, like SES and Shenzhen Middle School will run schools in
their district to increase high-quality educational resources. However, the interviewee
322 Shenzhen Experimental Education Group currently has six public school departments and four educational institutions. Among the public schools, Middle School Department, Junior High School Department, and Primary School Department are in Baihua zone, Futian District, with total area of 80,000m2, Senior High School Department is in Nanshan District, with the area of 70,000 m2, Baitian Department is in the Yangmei Community, Longgang District, with the area of 48,000 m2, Guangming Department is in Guangming New District, with the area of 93,600 m2. The four educational institutions are preschool education center, education training center, dental clinic and teachers and students service center. More information see the official website http://www.szsy.cn/category/category/402881e856e3516f0156e4659312000e.shtm (access on 28/5/2019)
184
said that besides the government's positioning, whether a famous school could be
formed depended on the educational concept and management. Many district schools
initially had a high positioning with sufficient investments, and eventually fell into the
second or third class. That was just because of the poor implementation of the concept
and poor management. Consequently, the public did not recognize them as famous
schools. On the other hand, as for the Experimental Education Group itself, there was
no great willingness to run schools in different districts, because they were
government-funded, not profit-making commercial education institutions. Expanding
into running school would only increase the pressure of the Group's operation. To truly
run a branch school, the Group would need to dispatch cadres and teachers who had
been working in the school for many years from other teaching departments, which
would dilute their high-quality human resources. Achievement might not be seen in a
short period, because it took many years to train good teachers, and it also took a long
time to integrate culture and idea to turn a school into the SES pedigree. A real famous
school could not be made immediately just by changing a name, which, however,
parents might not understand. All the parents did was to send their children to a good
school to relieve their worries. When the expectation was not satisfied, complaints and
resentment arose, which would damage the reputation of the Experimental School.
b). How Developers Made Famous Schools?
Contrary to the caution in expansion of public schools, which was represented by SES,
developers used people’s pursuit of high-quality educational resources to develop into
powerful means to promote their products, creating the concept of educational/cultural
real estate, even forming a model for replication. Most of the famous traditional schools
were concentrated in urban built areas, where the surrounding areas had been
developed. The soaring property prices and rapid turnover only made the agents of the
three-tier real estate market happy, which was meaningless for developers who were
constantly building new projects. Developers needed to find another way to tie up with
education.
b.1) The Case of Biguiyuan International School
The classic case is the project of Shunde Country Garden (顺德碧桂园). In 1992, Yang
Guoqiang (杨国强), the founder of Country Garden Group323, developed his first project,
Shunde Country Garden, which was a villa project with a land area of 1800mu. The
project was in a remote area with inconvenient transportation and incomplete
supporting facilities. Even worse, it unfortunately met the macro-control started in 1993.
Only a few villas were sold, which was expected to become an abandoned site. To
save the project, Yang adopted Wang Zhigang’s 324 proposal to build Biguiyuan
323 Country Garden was founded by Yang Guoqiang in 1992. Now it is one of the largest real estate enterprises, listed on Hong Kong Stock Exchange’s Main Board. It ranks among “The World’s 500 Largest Public Companies” as per Forbes. Country Garden is not just a developer and operator of residential communities, but also constructs and operates green, ecological and smart cities. In 2016, Country Garden’s residential property sales exceeded USD43 billion, covered approximately 37.47 million square meters, and ranked among top three real estate enterprises globally. More information see https://en.bgy.com.cn/about.aspx (access on 30/5/2019). 324 Wang Zhigang (王志纲), was born in August 1955, is a famous consultant in China. He graduated from
185
International School which was the first exclusive private school in Guangdong
Province. To run Biguiyuan School well, Yang used all available resources. With the
help of Liao Bingquan, the first principal, Biguiyuan and Beijing Jingshan School325
reached a three-year cooperative school-running agreement. 326 Through radio
advertisement, Biguiyuan Jinshan School soon became very famous in Guangdong
Province and in Hong Kong, enrolling 3000 students for the first time. Not only did the
school drive the sale of houses out, but it also raised several hundred million yuan by
collecting 300,000 yuan per student upon enrolment as an education reserve fund.327
This ‘interest-free loan’ freed Yang from the threat of shortage of funds, also became
the capital of his expansion and development. From then on, the exclusive private
school became the standard matching in all projects of Country Garden, achieving the
legend of “real estate + education”. Biguiyuan International School was the first
officially authorized International Baccalaureate (IB) school in China, providing Primary
Year Program (PYP), Middle Years Program (MYP), and Diploma Program (DP). Its
university enrollment rate was 100%, 30% of whom were enrolled by the top 50
universities in the world. Dreams of entering world famous universities, like magnets,
helped the Country Garden attract numerous consumers who wanted their children to
enjoy high-quality teaching resources. It can be said that the Biguiyuan School made
Country Garden successful, which finally developed into one of the greatest real estate
enterprises in China. In 2014, Country Garden integrated all its educational resources
to set up the Country Garden Education Group, which was renamed Bright Scholar
Education Group328 in May 2017, and then listed on the main board of the New York
the Department of Economics of Lanzhou University in 1982. From 1982 to 1984, he was engaged in the research of economic theory in the Academy of Social Sciences. From 1985 to 1994, he was a reporter of Xinhua News Agency. In the second half of 1994, he became an independent planner. Wang Zhigang Studio was founded in 1995 and he himself was chief planner. He was deeply involved in the process of China's marketization and urbanization, and carried out strategic planning for thousands of enterprises and hundreds of cities. Yang Guoqiang’s initial intention was to use Wang’s status as a journalist to help in advertisement, but Wang said that Yang could not save the project without major action, so he planned an international school and a five-star club for Biguiyuan. From then on, the slogan of Biguiyuan was “to give you a five-star home”. 325 Beijing JingShan School was founded in 1960, and became one of the national key schools in 1977. It provides 12-year education from primary school to senior high school. It is a well-known school in China. 326 Liao Bingquan (廖秉权), who was the vice-editor of Guangdong Higher Education Publishing House,
was hired as the first principal of Biguiyuan international School at a high salary. And Liao's classmate Cui
Mengming (崔孟明) was the principal of Beijing Jingshan School at that time. These private contacts led
to the cooperative school-running agreement. 327 Education reserve funds were a popular financing mode of private schools in the Pearl River Delta in the 1990s. It was a one-time fee collected when students enrolled into the school, which was used for the daily management and operation of the school. The amount ranged from 100,000 to 300,000 yuan. It promised that the capital (without interest) would be refunded within one year after students transfer or graduate. Essentially, this was a disguised financing method. Many school investors used this money not for school operation and management, but for other investments. If the investment failed, the education reserve fund could not be returned. As mentioned above, the acquisition of Asia-Pacific International Schools by SES was due to the fact that the International School was unable to repay the education reserve fund, and the government asked SES to help cleaning up the mess. In fact, there were many disputes because the reserve fund could not be returned. So, in 1998, the Guangdong Provincial Government decided to prohibit private schools from collecting the education reserve funds. On December 29, 1999, the Guangdong Provincial Education Department put forward “Suggestions on Solving the Problem of Educational Reserve Fund of Private School”. Then, the provincial government office forwarded the document Guangdong Provincial Government No.6 to the municipal and county governments and relevant departments. More information see http://www.gd.gov.cn/gkmlpt/content/0/136/post_136969.html (access on 30/5/2019) 328 Education Group changed its name in order to make its brand de-Country Garden and more conducive
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Stock Exchange.
From the case of Biguiyuan School, it is not difficult to find out that the most direct way
to tie up with education is to create a famous school in one’s project. The planning and
design code of urban residential areas requires each residential area to be equipped
with schools329. In the previous planning management system, schools were included
in the parcel of land that developers obtained. Developers decided the numbers, size,
and location of schools according to residential population prediction. Upon completing
construction, schools were transferred to the local government, who was responsible
for running schools. Most developers did not like to build schools in their projects,
especially projects in a good location but small land parcel, because schools occupied
part of the land and had to meet various special planning and design codes. Moreover,
many people did not like their houses too close to a school because of the noise of the
school bell, reading aloud, broadcasting, playground activities. Some developers,
especially for large-scale suburban projects with imperfect public facilities, would use
this opportunity to make a famous school to create a sales highlight for the project.
b.2) The Success and Failure of State-owned Private School
There were three ways for developers to make famous schools. The first way was to
negotiate with the government to get the right for running the school, creating its
educational brand, or introducing a well-known educational brand. This kind of school
was called a state-owned private school, which was a non-profit educational institution.
As there was no government funding, the school charged a tuition fee, which would
not be as high as the fee of an exclusive private school, like Biguiyuan School. For
example, Shenzhen Sinolink Primary School (百仕达小学) was founded in 1999, which
was the supporting school of Sinolink Garden (百仕达花园). The developer was based
in Hong Kong, and many buyers were also Hong Kong people, so Sinolink Primary
School adopted the Hong Kong mode to run the school, implementing small class sizes
(32 students in a normal class, and 16 students in English class), and using an English
textbook in Hong Kong version. The original purpose of running Sinolink Primary
School was to satisfy the needs of the buyers’ children to obtain Hong Kong-mode
education so as to connect with the secondary education in Hong Kong, which was
also a sales highlight of the houses for Hong Kong buyers (see photo 5.3). The majority
of the students enrolled were owners’ children of Sinolink Garden, and other students
were enrolled through examinations if there were spare places. It was unexpected that
such educational methods as small-class teaching, strengthening English teaching
and etiquette education, were sought after by many parents. Sinolink Primary School
to focusing on the development of international education professionally. As of August 31, 2018, Bright Scholar Education Group has 6 international schools, 15 bilingual schools and 44 kindergartens in 8 provinces, with more than 36,000 students. For more information, see http://www.sohu.com/a/289717391_120030331 (access on 30/5/2019). 329 According to Code for Planning and Design of Urban Residential Areas GB50180-93, which was used since 1993, school were built based on the population of residential areas. Now, schools are designed according to 15-minute pedestrian-scale neighborhood and 10-minute pedestrian-scale neighborhood after the Code for Planning and Design of Urban Residential Areas GB50180-2018 was implemented since December 1, 2018. See Appendix B.0.1, C.0.1 of Code for Planning and Design of Urban Residential Areas GB50180-2018.
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gradually became a well-known private school, which not only attracted Shenzhen
students but also students from other cities. But instead of developing the education
industry, Sinolink company adhered to the principle of running a school delicately and
serving the owners, so it enrolled only 128 students in four classes per year and never
expanded its scale. The competition for the enrollment in Sinolink Primary School was
fierce every year that thousands of children handed in their application forms. The most
direct way to get a place was to buy a house in Sinolink Garden, which was also in the
catchment of Dongxiao campus of Cuiyuan Middle School (翠园中学), which was the
best middle school of Luohu District. Therefore, the average housing price of Sinolink
Garden was usually over 30% higher than that of Luohu District.
Photo 5.3: advertisement of Sinolink Garden
source: Shenzhen Real Estate Association, ed. Classical Properties Advertisement (Shenzhen HK Guangzhou). (Nanchang: Jiangxi People Publishing House, 2002), 60.
Vanke took a similar approach in the project, Shenzhen Wonderland, but failed. The
main reason for the failure lay with the owner rather than in Vanke. Built in 2002,
Huacheng Primary School (花城小学) was the supporting school of Vanke Wonderland.
Vanke negotiated with the government of Longgang District to run the school as a
state-owned private school that Vanke paid all start-up fees and charged tuition fees
as daily operating expenses. In order to make it a good school, Vanke introduced SES
as the school-running party and its initial name was Shenzhen Experimental
Wonderland Primary School. SES sent out a team, including major cadres and
teachers, to make the school running successful, and the parents satisfied. But three
years later, because some parents, mainly owners of Vanke Wonderland, thought that
it was unreasonable to charge tuition fees for compulsory education, they requested
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the government of Longgang District to take it back and turn into a public school. After
multi-party consultation, the school-running contract with SES was terminated in
August 2005. The school was changed back to the public school and renamed
Huacheng Primary School. After the withdrawal of SES, the follow-up team appointed
by the government did not maintain the level of teaching and management. Huacheng
Primary School gradually became an ordinary public school and lost the opportunity to
become a famous school. 330 Those owners of Wonderland who had caused the
trouble were regretful that their children lost the chance to study in a good school.
Meanwhile, their properties lost the opportunity for rapid appreciation through being
located in the catchment of a famous school. The tuition fee of a state-own private
school was actually affordable. In order to keep their children in SES, some owners of
Wonderland had to pay several times as much than the price of their Wonderland’s
houses to buy or rent a school-housing in Baihua zone. An owner of Vanke Wonderland
said that she could not afford to buy a two-bedroom apartment in Baihua zone with the
money she sold her Wonderland duplex house with the area of 200+ square meters,
not to mention the excellent community environment and property service when
comparing with the Baihua zone. But he family still moved to Baihua zone for the sake
of her child’s education. Vanke’s attempt to tie up its project with education failed under
the intervention of the owners. It was estimated that the owners did not anticipate the
withdrawal of SES, or did not realize that the team of SES played such a key role in
teaching and school management that it was hard to maintain the quality by the follow-
up team. They also did not expect that the competition for high-quality educational
resources in Shenzhen would become so fierce in a few years, and the housing prices
around a famous school would increase more than ten times. The government, the
developer, and the owners were all losers in this group intervention event. For Vanke,
the loss was that in the following development of phase 4-7, the houses could not be
sold out faster and at higher prices. The government of Longgang District lost a famous
school which could enhance the regional value and had to send a team of cadres and
teachers and make a financial allocation to the school. This event also indicated that
in 2005, the educational resources were not so tight, and the pursuit of famous schools
was not so fierce. After all, since 2008 the housing prices in Baihua zone kept rising all
the way.
b.3) Excellence Group’s Successful Experience
The second way for developers to make a famous school was to introduce a famous
school and pay the related introduction fee and part of annual operation costs, but
maintain the public nature of the school. The district government and the introduced
school signed the cooperation agreement directly. This was a way that the government
would like to favor, so that to expand high-quality educational resources and enhance
regional value for the district, without causing public dissatisfaction as a private school
charging tuition fees. It was also a better way for developers who did not intend to
develop education business because there was no follow-up issue after the successful
introduction of a famous school. The effect of the famous school on real estate projects
330 Information collected from interviewees.
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was long-lasting, which was the best advertisement for the follow-up phases of the
project. Excellence Group (卓越置业集团 ) adopted this model in its super-large
development in Nanshan District, the project of Great Azure Coast (卓越蔚蓝海岸),
which started construction in 1999, providing 5,000 residential units from 70 square
meters to 230 square meters. Compliant with planning codes, two kindergartens, one
primary school, and one middle school were built in this project, all of which were
entrusted to Beijing Normal University for operation and management. Nanshan
District government and Beijing Normal University signed a cooperation agreement on
running the school, and Excellence Group promised to provide 2 million in operating
fees per year. Nanshan School Attached to Beijing Normal University was started in
September 2000, running as a twelve-year public school. The reputation of Beijing
Normal University was an important selling point of the project (see photo 5.4), bringing
great added value. In the Autumn Real Estate Fair of Shenzhen in 1999, the media
rated Great Azure Coast as the most popular development, and in the Spring Real
Estate Fair of 2000, according to the market survey of the Shenzhen Real Estate
Trading Center, the project was ranked first in the overall ranking.331 Nanshan School
Attached to Beijing Normal University has become a well-known school in Nanshan
District. In 2018, it achieved the undergraduate admission rate of 95% and the key
undergraduate admission rate 30%, being ranked 12th of all Shenzhen schools. The
average housing price of Great Azure Coast was about 40% higher than that of
Nanshan District. The third way was the Biguiyuan model, setting up an exclusive
private school, and creating its educational brand. But for the first three years of
Biguiyuan School, it needed to rely on the reputation of Beijing Jingshan School, that
was to say, it had to take the first step depending on the high-quality educational
resource recognized by the public.
Photo 5.4: advertisement of Great Azure Coast
Source: Shenzhen Real Estate Association, ed. Classical Properties Advertisement (Shenzhen HK Guangzhou). (Nanchang: Jiangxi People Publishing House, 2002), 58.
b.4) Educational Foundations Run by Big Enterprises
Nowadays, many real estate enterprises set up educational foundations for
educational investment and running schools. For example, Vanke founded Vanke
Education Development Foundation in 2015, and education become an independent
331 Wei Mao and Xiaomo Wang. Revolution of Living (Beijing: Haichao Press, 2000), 187.
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department in Vanke’s business transformation. Vanke Education Development
Foundation cooperated with Shenzhen Middle School in 2015 to establish Vanke
Meisha Academy (万科梅沙书院), an international school specializing in connecting
with university study abroad programs. Vanke's education business not only explored
various modes of the full-time teaching system but also actively built the quality-
education bases, including urban camps, community camps, and outdoor camps.332
Vanke Education was still in the exploratory stage and did not found a viable and
scalable business model, but its purpose was clear, that was to improve its new
concept, building a customer life-cycle ecosystem, which would provide all-round daily
life services for Vanke customers. Vanke recently upgraded its education department
to a business sector, and the chief executive officer of Southern Regional Business
Group, also a senior vice president of Vanke Group, has been transferred to the CEO
of Meisha Education Sector333, which showed the determination of Vanke to develop
education.
Many large-scale enterprises in other industries also begun to invest in education. For
example, Tencent (腾讯) Foundation cooperated with the government of Futian District
to establish the Shenzhen Mingde Experimental School (明德实验学校) in September
2013, which was the first non-state-run public school in Shenzhen and a new
cooperative mode of running schools. The government provided school land-use,
school buildings, and teaching equipment, and allocated educational subsidies
according to the expenditure standard per student as was the practice in other public
schools. Also, the school received a large amount of Education Fund provided by
Tencent every year, which was used to subsidize the salaries of principals and teachers,
as well as teaching incentives, reform, and innovation. According to the “Framework
Agreement on Cooperative Running of Schools”, the Shenzhen Mingde Experimental
Education Foundation and the Mingde School Board, which were jointly composed of
the Futian District Government and Tencent Foundation, were the main management
bodies of the Mingde School and implemented the principal responsibility system
under the leadership of the board of directors. Mingde School adopted a small class
system with 35 students in each class and carried out several reforms in teaching
management techniques. Within a few years, Mingde School quickly became a school
recognized and sought after by the public. In 2016, Mingde School merged Bihai
Primary School in Futian District into Mingde education system and established Bihai
Campus. The enrollment of Mingde School was in full compliance with the principle of
the catchment enrollment and scoring method promulgated by Futian Education
Bureau334 (except for the quota reserved for Tencent employees each year). The
Xiangmihu (香蜜湖) area where the Mingde School is located and the OCT area where
the Bihai Campus is located are already luxury residential areas in Shenzhen, but the
Mingde School had an even greater effects on the average housing price in these two
areas soaring to the top of Shenzhen.
332 See China Vanke Co., Ltd. Vanke Annual Report 2017. 333 See http://www.vankeweekly.com/?p=86053 (access on 2/6/2019) 334 More information see the school official website https://www.mingdeschool.org/ (access on 1/6/2019)
191
Large companies, like Tencent, invested in education not only to benefit itself in tax
revenue and social reputation but also to help local governments expand high-quality
educational resources to benefit society. However, Mingde schools are located in
luxury residential areas, coupled with the stimulation of the famous school effect on
the house price and rent, they are no longer high-quality educational resources that
ordinary families can enjoy. If Tencent could promote other enterprises to make the
same contribution in education and popularize high-quality educational resources, that
would be the good fortune of most Shenzhen families. However, the current situation
in Shenzhen was that the number of school places was very limited. District
governments were busy solving the problem of insufficient places and have not yet
tackled the problem of popularization of high-quality resources. Each district could only
make one or two famous district schools as demonstrations and individual
achievements of government officials.
In addition to Tencent, several well-known Internet and high-tech companies in China
also invested in education. For example, in cooperation with Tsinghua Affiliated
Secondary School, Huawei established an international school, A+W Academy (爱为
书院), in 2017 in Dongguan Songshan Lake High-tech Park, where Huawei Terminal
Headquarters are located; Alibaba Partners invested in the establishment of Hangzhou
Yungu School in 2017; Jingdong (京东) announced in October 2017 that it would
introduce Renmin University of China Affiliated Secondary School in the Yizhuang (亦
庄) Development Zone in Beijing, and that the construction would be completed and
the school would open in two years. The government strongly supported these
companies to set up branches of famous schools in their industry parks, solving the
problems of children's education for their employees and providing more educational
resources for society. However, these are private schools which charge high tuition
fees, although the enrollment is not restricted by school catchment. It is obviously
unaffordable for ordinary families.
b.5) Making Famous School in Surrounding Cities
The shortage of educational resources in Shenzhen, especially the shortage of high-
quality resources, have made the surrounding cities sell their real estate products to
Shenzhen consumers with education as a selling point. Huizhou city (惠州), located in
the eastern part of Shenzhen, has long been selling houses to Shenzhen people with
the selling point that their housing prices were much lower than that of Shenzhen. With
Huizhou incorporating into the Guangdong-Hong Kong-Macao Greater Bay Area, as
well as the construction plan of intercity track and the concept of Shenzhen-Huizhou
one-hour living circle being carried out, the Dayawan District (大亚湾区), which is
closest to Shenzhen, advertised itself as the first destination for Shenzhen to expand
eastward, undertaking Shenzhen’s industrial transfer and population spillover.
Dayawan District strove to create a high-quality living and educational environment to
attract Shenzhen consumers. The Special Planning for Kindergartens, Primary and
Secondary Schools in Dayawan District (2018-2022), released in February 2019,
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proposed that in the planning period, 36 kindergartens would be built to add 13,195
pre-school places and 21 primary and secondary schools would be built to add 33,180
places. It also proposed to actively promote cooperation in running schools with
domestic/abroad well-known educational resources.335 Before this planning, Dayawan
District has introduced some famous schools. In 2017, the Huizhou Municipal
Government signed a strategic cooperation framework agreement with Guangdong
University of Foreign Studies. The primary school and junior high school of Guangwai
Dayawan Foreign Language School was opened in September 2018. Developers
always had foresight in the linkage of real estate and education. As early as in 2012,
the Huizhou Galaxia Dante (developed by Galaxy Holding Group based in Shenzhen)
introduced the Middle School Attached to South China Normal University, one of the
most famous schools in Guangdong Province, which created a sales myth for five
consecutive years. In 2015, the Middle School Attached to Central China Normal
University was introduced to Huizhou Logan City (developed by Logan Property based
in Shenzhen). When Excellence Group developed the eastern Great Azure Coast in
Huizhou, it successfully cooperated with Beijing Normal University again to open a
branch school. The interesting thing was that these developers were all from Shenzhen.
They brought Shenzhen's successful experience of bundling education to their new
projects in other cities and sold it back to Shenzhen people. Education must probably
be the most lasting selling hotspot of houses. In the case of insufficient urban space
and shortage of educational resources in Shenzhen, it is a solution to relieve the
problem with the help of other cities in the Greater Bay Area. However, education is
one of the basic public services related to every family and an important aspect of
reflecting a city's human settlements environment. However educational resources are
provided, they should be under the government’s overall planning and control.
5.2.5 Governments’ Action
In the early stage of Shenzhen's urban development, schools were positioned by the
government and provided government resources according to different positioning.
After the commercialization of housing, it was usually the developers which built
schools. They participated in the school positioning for the sake of their housing sales
and even grasped the initiative sometimes. Some developers introduced a famous
school and ran it seriously. But some just pasted a famous brand for the housing sales
temporarily, without putting in good teachers and management. In the long run, the
glory brought by the famous school faded away, and the school became an ordinary
school. Shenzhen Taoyuanju (桃源居) is a super large-scale community with a total
floor area of 1.8 million square meters. It introduced Tsinghua University to establish
Shenzhen Tsinghua Experimental School. In the beginning, it attracted so many
parents that the houses were quickly sold out as owners had a big discount on tuition
fees (see photo 5.5). However, the teaching performance was not as good as people’s
expectation. In addition to the dispute between several shareholders, Tsinghua
335 For more information, see the official website of Dayawan District http://www.dayawan.gov.cn/pages/cms/dyw/html/news-zwyw-df6320bc839f49d8ae61cb055891c5fa.html?tmp=0.2516299925753297 (access on 2/6/2019)
193
University eventually withdrew and the school renamed as Shenzhen China-Australia
Experimental School in 2016. This case proved that the quality of running a school
could not be guaranteed if it was not effectively supervised when the developer lost
the motivation to run the school after completing the sales mission.
Photo 5.5: advertisement of Taoyuanju
Source: Shenzhen Real Estate Association, ed. Classical Properties Advertisement (Shenzhen HK Guangzhou). (Nanchang: Jiangxi People Publishing House, 2002), 51-52.
According to the current residential planning requirements, the location and scales of
schools were determined in the stage of regulatory planning. Local governments were
responsible for school positioning and construction. Schools plots were no longer
packaged in residential development by developers. It was also stipulated that
developers could not bundle schools as sales advertisements. However, when
developers developed a high-end real estate project, bringing in high-quality
population and attracting follow-up investments, it was indisputable that they wanted
some matching high-quality educational resources. Moreover, governments
themselves did not have sufficient financial and human resources to cope with the
pressure of insufficient public facilities brought about by the increase of population.
Therefore, governments would cooperate with developers to introduce famous schools
or support them to run private schools, which was one of the efficient ways to use
social capital to increase high-quality educational resources. For schools, they would
have the opportunity to expand their scale and influence, to form the brand of the
educational group, and to provide more opportunities and growth space for teachers.
But as mentioned above, the expansion of educational groups should not be too fast.
Otherwise, the resources of high-quality cadres and teachers would be diluted to affect
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the teaching quality and school management, that eventually made the school ordinary,
without any difference except for pasting a brand name. There was a game among the
government, developers (enterprises) and schools to balance their needs and interests,
and the ultimate impact was on each family. In this process, what role should the
government play to balance the interests and ultimately benefit each family?
Since the third plenary session of the Eighteenth Central Committee of the CCP in
2013, the educational reform and development strategy of "separation of supervision,
operation, and evaluation”336 has been clearly defined. The educational departments
of governments at all levels have been busy coping with the state policy, building
several demonstration schools through cooperation with enterprises, or hiring highly-
paid principals throughout the country, which were then widely publicized by the major
media. How could this be fair to a large number of principals and teachers in public
schools? There were many new or expanded schools in Shenzhen every year, but it
was impossible for every school to recruit a principal with a salary as high as a million.
Even if a high-priced principal was recruited, he/she might not necessarily improve the
quality of education, let alone know how to promote the independent running ability
and improve the quality of all public schools. High-quality teaching resources were still
concentrated in limited schools and people. Families without Shenzhen household
registration were still worrying about getting a place, while middle-class families were
competing for high-quality educational resources.
Ordinary people in China were very sensitive to educational issues. As long as the
interests of their children were involved, they would desperately safeguard their rights.
There were disputes caused by children's enrollment in school every year. In the
enrollment of junior high school of SES in 2012, according to the classification method
at that time, the number of students who were in category A exceeded the total places.
The school made an artificial subdivision according to the time of buying houses, giving
priority to the children whose families had bought houses for a longer time. More than
one hundred parents whose children did not get the enrollment protested at the
entrance of the municipal government office building. Ultimately, the government could
only compromise and distribute students among several good schools337. This event
led to the implementation of the scoring system from 2013. In 2015, because the price
of school-housing rose too fast and the number of enrolled students was too large, the
regulations of school-housing lock-up (six years in primary school and three years in
junior middle school) were promulgated. The government constantly refined the
336 The “Outline of the National Mid-long-term Education Reform and Development Plan (2010-2020)”, published in July 2010, initially put forward the idea of "separation of supervision, operation and evaluation". In November 2013, the Third Plenary Session of the Eighteenth Central Committee formally defined the educational reform and development strategy of "separation of supervision, operation and evaluation". At the National Annual Conference on Education held in January 2014, Yuan Guiren, the Minister of Education, made a principled explanation on the "separation of supervision, operation and evaluation", that was "government macro-management, school running independently and wide participation of society". On May 4, 2015, the Ministry of Education issued "Several Opinions on Promoting the ‘separation of supervision, operation and evaluation’ and Promoting the Change of Government Functions" 337 Information collected from interviewees.
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conditions for enrollment, reflecting the growing contradictions in education. But these
regulations only played a restrictive role and could not solve fundamental problems.
Not only famous school like SES, but every school with a good reputation has become
the target of parents’ competition. For example, the Vanke Lucheng Foreign Language
Primary School, which opened in 2015, was a supporting school of the Vanke Lucheng
Project (万科麓城). Upon construction, the school was transferred to the Longgang
District government, and Vanke Education Development Foundation got the contract
to run the school. According to an informed interviewee, Vanke employed the retiring
principal of Futian Liyuan Primary School (荔园小学) with an extremely high salary to
manage the school and earned a good reputation. As a public school, its enrollment
catchment was defined by Longgang District Education Bureau, which included the
surrounding Iihu community and Yicui community. In the first two years of the school,
the shortage of school places did not emerge because there were not many residents
in Vanke Lucheng. By 2017, with the increase of households and the rapid increase of
children in school age, some owners’ children of Vanke Lucheng could not enroll in
Lucheng Primary School because their points were lower than those of the residents
in surrounding communities. The residents of Lucheng protested and demanded that
Longgang Education Bureau adjusted the admission rules to give priority to children in
Lucheng Community, while residents of Lihu Community and Yicui Community argued
that public schools should fairly enroll according to the school catchment and points
which was defined by the government. The government finally ruled that enrollment
could only be based on the published school catchment and points system of that year,
and would adjust according to the number of children in each community in the next
year.
Public schools’ enrollment wanted to reflect the fairness of compulsory education but
led to the abnormal rise of school-housing prices. Ordinary people eventually blamed
social injustice, which aroused more resentment and anger. This was a situation that
the government did not expect. Moreover, the enrollment upon catchments was
contrary to the principle of “separation of supervision, operation, and evaluation” in the
educational reform. Although public schools were advocated to run independently, they
needed to enroll students according to the catchment and scoring method defined by
governments, thus, even the independent enrollment could not be realized. Students
also had no rights to choose schools independently. The founder and the first principal
of SES, Jin Shiru, foresaw the shortcomings of the current catchment and the result in
competition for school-housing. He put forward the concept of the large catchment
more than ten years ago; that was, putting several schools at different levels into a
large area and deciding to enroll in which school by interview and drawing lots. As
there were different levels of schools in a large catchment, buying a house next to a
good school was no guarantee to enroll in this school, which could reduce the
possibility of irrational speculation of school-housing. But somehow this proposal was
not adopted at that time. Now some districts were experimenting with some large
catchments. But this method could only be implemented when there was no great
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disparity in housing prices in the area. It was impossible to implement in Baihua zone
nowadays because people spent more than 10 million yuan on buying school-housing,
but being assigned to a low-level school with the surrounding housing prices less than
half of the prices they paid. The result would inevitably lead to mass incidents aroused
by families who purchased expensive school-housing, which was the last thing the
government expected. All kinds of cases showed that the educational reform carried
out by the government has not touched on the core issues, and has not solved the
most concerning problems of ordinary people. Moreover, the current government only
relied on one or two school-running cases to propagate and respond to the
requirements from the upper-level government.
5.2.6 Conclusion
School-housing in Shenzhen was certainly not a unique phenomenon, but unlike some
first and second-tier cities which had many famous private schools, the quality of
private schools were generally lower than public schools in Shenzhen. The top ten
schools in Shanghai were almost private schools. Many families who could afford
tuition fees would choose private schools, invisibly leaving more public schools to
ordinary families. Comparatively, most of the famous schools in Shenzhen were public
schools, so all the people went after these few good schools. In addition, Shenzhen
had left many gaps in public facilities such as schools and hospitals in its early
development. Compared with Beijing, Shanghai, and Guangzhou, which have a long
history and have a progressive development of education, Shenzhen is short of
schools, especially high-quality resources, which has promoted the irrational prices of
school-housing and resulted in more real estate projects tied to education.
It was undoubtedly good to make up for the shortage of education with the help of
enterprises. But the tie-up between education and real estate was currently limited to
the level of interests, which ended upon the completion of the purchase transaction.
Just as Wang Shi suggested that the development of the community was just starting
when the household began to move in. Only when the binding of education and
housing was not temporary, but a long-term relationship, the community could fulfill
certain social education responsibilities and the binding relationship was of great
significance. For example, working parents were unable to take care of their children’s
eating and rest, entertainment and study after school, which has resulted in various
institutions running in many residential communities in Shenzhen, providing training
classes and noon/evening care with different qualities and expensive fees. If the
residential community sent buses to take the children back to the community after
school, arranging lunch, setting up game rooms and study rooms for children to be
entertained or study, and even having some good quality tutors helping children’s study,
the families in the community did not worry about the safety and food of the children,
and there was no need to look for expensive day-care or home-work tutoring classes
outside. This kind of community education service would undoubtedly impress buyers
and establish more lasting customer relationship.
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At the government level, when the officials were concerned not only with the short-
term success of their tenure, but the long-term development of urban education, they
could do something down-to-earth which was not effective in the short term, but
important in the long run. For example, if the large catchment could not be
implemented immediately, a future time node could be set up, like in six years (just
after the six years lock-up of the place in primary schools), during which continuous
propaganda would be carried out so that the public could have a period of time to
accept and adapt to the new rule. But the officials would rather do nothing for fear of
mass incidents affecting their performance in their tenure. For another example, if the
cost of hiring a high-priced principal was effectively used to improve the teaching
quality in several schools, the overall quality of education would be improved over time.
But the fact was that in the officials’ tenure, limited funds were spent on one or two
schools for praise by the upper-level authorities. Only when the government transforms
into a service-oriented government, rather than a GDP government or a performance-
oriented government, can the contradictions in education be fundamentally solved.
The importance of education for the future development of the country is not the focus
of discussion. It is to emphasize that education is an important issue in the daily life of
ordinary people. Especially nowadays when education is tied up with housing, solving
the problem of education can make most families enjoy settlement in a city, which is a
crucial point in the competition of talent and resources.
5.3 Age Care
5.3.1 Aging trend
According to the criteria set by the United Nations "Population Aging and Its Socio-
economic Consequences" in 1956, when the proportion of the elderly population aged
65 years and over in a country or region exceeded 7% of the total population, it meant
that the country or region had entered the aging society, reaching 14% was deep-aging
society, and up to 20% was super-aging society. In 1982, the Vienna World Assembly
on Aging Issues set that if the proportion of the elderly aged 60 years and over in the
total population was more than 10%, the country or region was regarded as an aging
society. Whatever the criteria, according to the data of China National Census (see
table 5.7), China has become an aging country from 2000. From 2000 to 2010, the
average growth rate of the population aged 65 and over was 2.39%. At this rate, China
will enter deep-aging in 2030 and super-aging in 2045. Aging is a serious problem
facing or about to be faced by countries all over the world. Shenzhen is the youngest
city in China. In the 2010 Census, 1.76% of the population over 65 years old (see table
5.8) was far below the national average. Shenzhen's aging problem seemed to be far
away from Shenzhen people. However, it must be noted that from 2000 to 2010, the
average growth rate of the elderly population in Shenzhen was 5.86%, which was
much higher than the national average growth rate, 2.39%. On the one hand, it showed
that the early builders of Shenzhen have entered the aging stage; on the other hand,
more and more families have settled in Shenzhen and brought in the elderly. This was
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similar to the population of children aged 0-14, which the proportion was much lower
than the national level, but the growth rate was much higher. During the 40 years of
reform and opening-up, Shenzhen has created an astonishing speed of development
by relying on a large number of working populations from the whole country. The low
population of children and the elderly have made Shenzhen underdeveloped in public
facilities such as education, medical care, and pension services. Now the problem is
gradually emerging. The contradiction in education is the proof, and the aging problem
in Shenzhen is inevitable and should be taken into serious consideration in advance.
Table 5.7: national data of the National Census of 2000 and 2010
age national data of the
2000 Census (%)
national data of the
2010 Census (%)
average growth rate
(%)
0-14 22.9 16.61 -2.75
15-59 66.63 70.08 0.52
60 and above 10.45 13.31 2.74
65 and above 7.19 8.91 2.39
Source: official website of National Bureau of Statistics China
http://www.stats.gov.cn/tjsj/pcsj/rkpc/5rp/index1.htm (access on 16/6/2019).
Table 5.8: Shenzhen data of the National Census of 2000 and 2010
age
Shenzhen data of
the 2000 Census
(%)
Shenzhen data of
the 2010 Census
(%)
average growth rate
(%)
0-14 8.5 9.84 1.58
15-64 90.39 88.4 -0.22
65 and above 1.11 1.76 5.86
Source: official website of Shenzhen Municipal Government
http://www.sz.gov.cn/tjj/tjj/xxgk/tjsj/pcgb/200812/t20081202_2061590.htm and
http://www.sz.gov.cn/sztjj2015/xxgk/zfxxgkml/tjsj/tjgb/201606/t20160614_3697014.htm (access on
16/6/2019).
5.3.2 Pension issue in China
In Chinese traditional culture, filial piety is very important, and supporting the elderly is
the natural responsibility of children338, so the traditional pension way in China is family
support. Before the reform and opening-up, the population was less mobile, and
people's living place was relatively fixed. As the one-child policy339 had not been fully
338 Many idioms in China teach and remind people to support their parents with filial piety, such as 百善
孝为先(Filial Piety comes before all good moralities); 四代同堂(four generations under a household); 养
儿防老(raising children for supporting in old age); 多子多福(more happiness comes with more offspring);
父母在不远游(not to travel far away while your parents being with you). 339 China's family planning policy began in the 1970s. At first, it was not enforced compulsorily, but advocated two children were the maximum number of births. In September 1982, the 12th National Congress of the CCP made family planning a national policy, and the one-child policy began to be
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implemented, there were siblings in almost every family. The social security regulations
were imperfect. Under the combination of all the social and family factors, family
pensions conformed to both tradition and reality. However, with the implementation of
the one-child policy, China's family structure has gradually become a 4+2+1 model,
that was, a couple from only-child families had four older people to support, which
overwhelmed family support. The rapid development of urbanization has not only
brought many people from the rural populations to cities but also made the flow of
urban population more frequent. Therefore, it became normal that adult children and
their parents lived in different cities. Moreover, the social pension security and medical
security systems were gradually improving, and the economic dependence of retired
older people on their children was decreasing. In addition to these objective factors,
subjectively, nowadays older people were healthy, knowledgeable, dynamic, and with
economic ability, which was quite different from the traditional aging people. They were
more concerned about themselves and pursuit qualities of life in all aspects, such as
housing, food, clothing, sports, traveling, social activities, wellness, and medical
service. Thus, in addition to family pensions, community pensions and institutional
pensions have emerged in the past decade. However, these new ways were still in
their infancy. In the Special Planning of Pension Facilities in Shenzhen (2011-2020),
the planning goal was to establish a pension service system based on home, which
relied on communities and was supported by institutions. It was planned to achieve the
goal of “9073” by 2020, that was, 90% of the elderly were cared for by families with
support of the social security system and service system, 7% of the elderly were
provided with daycare and care services by the community, and 3% of the elderly lived
in pension service institutions. It indicated that 90% of the elderly still relied on family
support.
In the survey from February 2018 to February 2019, regarding the question of parents’
pensions, 56.5% of the 85 valid answers said that their parents were in their hometown.
In the question of which pension mode was adopted, 59% of the 83 valid answers were
family pensions (see figure 5.2). The answers to these two questions were similar in
interviews. Many respondents’ parents chose to stay in their hometown, especially
those with other children or relatives in the hometown. Most respondents themselves
also tended to family pensions in the future. But their home-based pension plans were
quite different from the traditional family pension. Most of them had their own houses
and social pension security. Some people also bought commercial pension insurance
and medical insurance. So, they did not plan to rely on their children340. They chose to
stay at home because they liked the atmosphere at home and the freedom to invite
friends and relatives to get together. When they needed to be taken care of, they hoped
to get professional nursing service on call from the community or society. At present,
many families hire nannies to take care of the elderly at home. But the general quality
of nannies is low, as they can only cook and do housework, without any training in
strictly implemented. October 29, 2015, the Fifth Plenary Session of the Eighteenth Central Committee announced that a couple can have two children. 340 some interviewees’ original wording was that they did not want to be the burden of their children.
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caring for the elderly and patients. Therefore, interviewees proposed professional
nurses as they believed that they have the financial ability to get better services. A
considerable number of respondents born in the 1960s and 1970s said that they no
longer needed a school-housing or to be close to their children’s schools as their
children would soon enter high school or university, and they could choose a new
house for the sake of themselves. Without the restrictions of schools and education,
parents' choices were much freer and more diversified. Generally speaking, apart from
the housing layout itself meeting the requirements of use, most of them wanted to live
in a beautiful and clean community in a busy area of the city, enjoying both the
community environment and convenient transportation, medical treatment, cultural
facilities in the city. Therefore, the pension is not just a matter of building specialized
nursing homes, but every developer and every community can participate.
Figure 5.2: the result of pension mode survey
Source: based on the data collected by the survey from 2/2018 to 2/2019.
In addition to state-owned nursing homes, in recent years, real estate companies and
insurance companies were mainly involved in the pension industry. They have
established different pension models in terms of products and operation. As Shenzhen
is a young city, the demand for aging products is not comparable to that of some aging
cities, so the pension projects of these institutions rarely settled in Shenzhen. But as
mentioned above, the growth of aging population in Shenzhen is in an accelerating
process. Thus, the analysis of these products will help Shenzhen to form a pension
product model suitable for its conditions. The following section will take Vanke as the
case study for real estate companies, Taikang (泰康 ) as the case of insurance
companies to analyze these two major non-governmental pension industry models.
5.3.3 Vanke’s Pension Scheme
Vanke first mentioned the aging housing and the aging care industry in its 2015 Annual
Report. Similar to the development experience of the aging market in the United States,
Vanke predicted that in the year 2030, China's aging care and aging real estate would
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each have 1 trillion market opportunities.341 Therefore, the aging industry became one
of the new sectors of Vanke's business transformation. Vanke's first large-scale
pension community, Hangzhou Suiyuan Jiashu (随园嘉树)342, was put into operation in
2015. By 2016, more than 600 older people had moved into the community, which
became a reception and site for visiting in the 2016 G20 Summit.343
Wanyi Pension (万颐养老) is a subsidiary company of Vanke which operates the
pension industry in South China. Its pension business is based on three levels: city,
community, and home, forming three major products including Rongyue (榕悦), Zhihui
Fang (智汇坊), and Zhihu Jia (智护家).344 Zhihui Fang and Zhihu Jia were developed
based on Vanke's built community and would be replicated in all Vanke residential
projects. Zhihu Jia was a home-based pension service center in communities,
providing private customized door-to-door services. The professional team included
doctors, rehabilitation teachers, social workers, etc. It provided a variety of services
including health inspection and assessment, daily life care, professional nursing care,
rehabilitation physiotherapy, meal delivery, home-space aging adaptation and
transformation. This service enabled the elderly at home to receive professional care
and relieved the worries of their busy children. Zhihui Fang was a community-based
age care center, providing comfortable units with aging-safe design and professional
health care services, and organizing elderly activities so that the elderly enjoyed a high-
quality aging life in a familiar neighborhood. Zhihui Fang mainly provided short-term
care services to the elderly who were in poor health or whose children had left for a
while.
Rongyue was a full aged-care center for urban elders, which included two core
functional areas, Rongyue senior apartment, and Rongyue nursing home, respectively
providing aging care and rehabilitation services for active elders and elders in need of
care. Rongyue was an example of urban renewal. It renovated old buildings’
appearance, functions, and interior aging adaptation to not only give the old buildings
a new outlook and improve the urban landscape, but also to bring new functions and
elements to meet the new needs of urban life. Vanke expanded its new business and
helped the government to provide old-age service facilities. For example, Zhuhang
Buiding (珠航), an office building built in 1985, has been transformed into Guangzhou
Rongyue-Binjiangzhong (榕悦滨江中), which was open in March 2019 (see photo 5.6).
Upon moving into Rongyue-Binjiangzhong, the deposit was collected first; then the
monthly fee was divided into bed fee, meal fee and nursing fee, and the water and
electricity fee was charged according to the actual use (see table 5.9). Compared to
the per capita disposable income of urban residents in Guangzhou in 2018 was 59,982
341 See China Vanke Co., Ltd. Vanke Annual Report 2015. 342 Hangzhou Suiyuan Jiashu is an area of the Vanke Liangzhu Culture Village project. It provides 575 residential units suitable for the elderly, with a home care center and rehabilitation center co-operated with Taiwan's professional medical institutions. The whole project is designed to be barrier-free and it is operated by selling the residential right. For more information, see Liu Lijuan. Vanke 30 Years: Product and Marketing (Beijing: China Architecture & Building Press, 2016), 59. 343 See China Vanke Co., Ltd. Vanke Annual Report 2016. 344 More information see http://www.gzvankecare.com/index.aspx (access on 4/6/2019).
202
yuan per year345, the per capita annual fee of Rongyue double room was 73,200 yuan.
Therefore, families with lower and middle income had difficulty affording this
consumption, but for new middle-class families, this was an affordable price by using
parents' pension and children's subsidies.
Most of Wanyi's projects were currently open in Guangzhou. There was only one
Rongyue project in Shenzhen, the Futian Welfare Center, which was a private project
in cooperation with the government of Futian District. Futian Welfare Center was built
in 1998. Its old buildings and facilities, unprofessional service, and low quality made
the seniors very unwilling to stay. There were only 88 older people in this 320-bed
welfare center when Vanke took over. Since the signing of the cooperation agreement
in 2016, Vanke invested more than 10 million yuan in carrying out over 40 aging
modifications, adding 100 new beds and increasing the activities area by nearly 1600
square meters (see photo 5.7). In 2018, it was reopened to provide the elderly living,
catering, nursing, and various recreational activities. There were a community health
service station and a pharmacy, where medical social insurance could be used directly.
420 beds of the Center included 150 policy beds and 270 commercial operating beds.
The policy beds were mainly provided to the eligible elderly in Futian District.346 The
charges were unified according to the standards of Shenzhen Development and
Reform Commission and Shenzhen Civil Affairs Bureau (see table 5.10). The
commercial operating beds were open for social application. Vanke set the price
according to the market value of Shenzhen's pension industry (see table 5.11). Futian
Welfare Center was the first state-owned private pension institution in Shenzhen. By
introducing experienced social capital such as Vanke, the hardware and software of
the Center were greatly improved, and the original state-owned assets were revitalized.
It not only ensured that the policy beds served the elderly with low income but also
increased the commercial beds to meet the needs of different levels of pension,
thereby achieving a triple-win in government public service, social benefits, and
business operation.
The cooperation between Vanke and Futian Welfare Center was a good model. But
from another point of view, what problems did the government-run nursing homes have
to make the elderly unwilling to stay? In addition to Futian Welfare Center, the seniors
housed in the aging institutions run by local governments never reached their capacity
and even decreased year by year (see table 5.12). The number of beds increased by
182.5% in 2017 compared with 2005, while the number of occupants increased only
44.6% and the occupancy rate halved. It was speculated that there were probably the
345 More information see http://gjdc.gz.gd.gov.cn/dcsj/201902/t20190215_154585.html (access on 5/6/2019). 346 According to the "Shenzhen Public Pension Institution Admission Assessment and Waiting Management Measures" promulgated by Shenzhen Civil Affairs Bureau and implemented from April 1, 2018, applicants for admission to public pension institutions must first satisfy the following conditions: 60 years old and above, Shenzhen household registration, no violent tendency and stable mental state, no infectious diseases, voluntary admission. Then, the application is sorted according to scores of age and ability assessment. The elderly get higher scores are eligible for admission first. The principle is to live in the district institution where the elderly’s household registration belongs, but applying across districts is also available.
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following reasons: one was that Shenzhen people tended to rely on family pensions,
and the elderly who were not really alone would not move to the nursing home;
secondly, the threshold for application was set too high and it was only open for the
elderly with Shenzhen household registration; the third was the obsolete facilities and
low-quality service made seniors unwilling to stay. These speculations cannot be
confirmed at present. However, the occupancy rate improved after Vanke’s takeover347,
which meant that the demand existed, but without a satisfactory solution. The local
governments should reflect on this problem.
Table 5.9: fee standard of Guangzhou Rongyue Binjiangzhong
type unit area
(m2)
bed
(yuan/m)
nursing
(yuan/m)
meal
(yuan/m)
total amount
(yuan/m)
double room 54 3500 800 1800 6100
single room 47 5500 800 1800 8100
Source: https://www.anyang100.com/guangzhou/18059.html (access on 5/6/2019)
Photo 5.6: Rongyue-Binjiangzhong, Guangzhou
Source: Pictures of Zhuhang see http://gz.86office.com/rent/269056.htm (access on 18/6/2019). Pictures of Rongyue see http://www.vankeweekly.com/?p=85907 (access on 18/6/2019).
Photo 5.7: Futian Welfare Center
347 In August 2018, Futian Welfare Center reopened after Vanke's renovation. By May 2019, the number of elderly people living in policy beds increased from 88 to 105, and the occupancy number of commercial beds reached 85. The total occupancy rate increased from 27.5%, before the renovation, to 45.2%. The data were provided by Futian Welfare Center.
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Source: Pictures from http://www.gzvankecare.com/index.aspx (access on 18/6/2019).
Table 5.10: fee standard of policy beds of Futian Welfare Center, Shenzhen
type meal
(yuan/m)
bed
(yuan/m)
nursing
(yuan/m)
total amount
(yuan/m)
third-grade
nursing
800 710
620 2130
second-
grade
nursing
1100 2610
first-grade
nursing (A) 1650 3160
first-grade
nursing (B) 2980 4490
super-grade
nursing 4180 5690
Source: The data were provided by Futian Welfare Center.
Table 5.11: fee standard of commercial beds of Futian Welfare Center, Shenzhen
(1): triple-rooms
type meal
(yuan/m)
bed
(yuan/m)
nursing
(yuan/m)
total amount
(yuan/m)
third-grade
nursing
1000 2800~3700
1500 5300~6200
second-grade
nursing 3000 6800~7700
first-grade
nursing (A) 4000 7800~8700
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first-grade
nursing (B) 5000 8800~9700
super-grade
nursing 6000 9800~10700
specialized
nursing 8000 11800~12700
(2): double-rooms
type meal
(yuan/m)
bed
(yuan/m)
nursing
(yuan/m)
total amount
(yuan/m)
third-grade
nursing
1000 5500~5600
1500 8000~8100
second-grade
nursing 3000 9500~9600
first-grade
nursing (A) 4000 10500~10600
first-grade
nursing (B) 5000 11500~11600
super-grade
nursing 6000 12500~12600
specialized
nursing 8000 14500~14600
Source: The data were provided by Futian Welfare Center.
Table 5.12: basic statistics on social pension institutions in Shenzhen
year number
of units
number
of beds
number of year-end
population housed
occupancy
rate (%)
2005 26 2919 2340 80.16
2006 27 3419 2457 71.86
2007 27 2288 1316 57.52
2008 29 2797 1530 54.70
2009 30 3597 1760 48.93
2010 30 3597 1742 48.43
2011 30 4597 1869 40.66
2012 31 5194 2063 39.72
2013 31 4908 2554 52.04
2014 31 5996 2448 40.83
2015 31 6662 2745 41.20
2016 34 7116 3213 45.15
2017 35 8247 3384 41.03
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Source: Shenzhen Statistics Bureau, NBS Survey Office in Shenzhen, ed. Shenzhen Statistical Yearbook 2018. (Beijing: China Statistics Press, 2018), 401.
5.3.4 Taikang Model
Founded in 1996, Taikang Insurance Company is currently one of the largest insurance
and financial services institutions in China. In 2008, Taikang submitted to China
Insurance Regulatory Commission (CIRC) the feasibility report and pilot application for
the investment of life insurance funds in the pension community, which was approved
on November 19, 2009. Its subsidiary, Taikang Community, was founded on March 18,
2010, responding to the construction and operation of pension communities. On June
16, 2013, Taikang’s first pension community, Yan Garden (燕园) was opened in Beijing,
and in November 2015, its first rehabilitation hospital was completed in Yan Garden.
Up to date, Taikang has laid out pension communities in 15 cities throughout the
country. Apart from Yan Garden, Taikang has opened Shen Garden (申园) in Shanghai,
Yue Garden (粤园) in Guangzhou and Shu Garden (蜀园) in Chengdu348(see photo
5.8).
Compared with Vanke's pension model, Taikang Community had five characteristics.
First of all, the customer base was different. Based on its residential community
products and customers, Vanke created three levels of aging services. Community-
level institutions mainly serve community residents. Vanke's aging services were more
popular. Taikang was based on its insurance products and customers, and its original
intention was to repay its high-end customers. Purchase of two million Taikang annuity
insurance obtained a qualification of guaranteed residence (policy-holder or insurant).
An insurance policy related to the residence rights of the other five persons. The
spouse of the policy-holder got preferential residence rights, that was, the spouse
could stay in the same room without paying entrance fees and 50% discount on home
expenses, and the parents of the policy-holder and spouse got priority residence rights.
The age of resident was 60 years for men and 55 years for women. The second feature
is a combination of medical care and aging care. While Vanke cooperated with other
medical institutions, Taikang built its special rehabilitation hospital in each aging
community, which was mainly responsible for rehabilitation and common and chronic
diseases of the elderly. It also established a green channel with grade A hospitals in
the city to ensure first aid and effective referral. On September 2, 2014, Taikang
Community launched the "Global Medical Direct Train" service in Yan Garden to
expand top international medical resources. It established a green international referral
channel with Johns Hopkins Hospital, one of the top hospitals in the United States.
The third feature was specialization and large scale. Vanke's pension business
provided a wide range of services for different levels and needs, and in the form of
many small institutions embedded in existing communities. Taikang communities were
special communities which were especially location selected, designed, and built to
provide housing and services only for the elderly. They served regional and urban
customers on a relatively large scale. For example, Yan Garden had a building area of
348 http://www.taikangzhijia.com/licheng.html#2007 (access on 5/6/2019).
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310,000 square meters and provided 3,000 residential units. Upon the investigation of
many pension institutions in Europe, America and Japan at the beginning of its
establishment, Taikang Community chose CCRC (Continuing Care Retirement
Community) as its development mode, which was a particular type of retirement
community. CCRC offered four zones with different levels of health care: independent
living zone for active elders who did not need personal assistance; assisted living zone
for people who required a little help with the activities of daily living; memory care zone
for people who suffered from the Alzheimer’s disease; and an on-campus Health Care
Center with skilled nursing and rehabilitation (for both short-term and long-term).
CCRC fully covered older people’s requirements in health care. When their physical
condition and self-care ability changed, they could get the corresponding living space
and care service, staying in their familiar environment without moving to another
community. Another distinguishing feature of specialization was special design
adapted to the needs of the elderly. In every Taikang community, there were more than
60 design details and convenient facilities for the elderly, such as barrier-free design
measures which helped to prevent seniors from falling and which were wheelchairs
accessible, turning space for a wheelchair in all foyers and corridors, walk-in bathtub,
and bed with defecation facility (see photo 5.9). These details made the daily life of the
elderly safer and more convenient. The fourth characteristic was the form of residence.
Vanke's Guangzhou Rongyue was a renovation of the old office building, and its rooms
were similar to hotel rooms. Some rooms of Futian Welfare Center were a bit like a
dormitory. Taikang Community was just like an ordinary residential community with
different types of houses, single room, one bedroom, two bedrooms (see photo 5.9).
All rooms could be decorated according to the resident’s preferences to create a home
atmosphere. There were squares, green spaces, and walkways in the community, as
well as public facilities to enrich the cultural and recreational life of the elderly, such as
the senior university, social clubhouse, restaurant, library, and spiritual homes for
different religions. Older people could develop their hobbies and interests in the
community and build friendly neighborhood relationships. The last feature was the
realization of migratory pensions. Customers could choose to stay in any Taikang
communities as long as they obtained the residence qualification. With the large-scale
national layout of Taikang Community, the main regions and cities would have
Taikang's pension institutions. Older people could choose to live in different cities in
different seasons, which was more conducive to the health of the elderly. They could
also choose to live in different cities according to their descendants’ family locations
so that they could get together with different relatives. In particular, active elders could
live in different cities throughout the country for short or long periods to experience
different urban cultures and environments.
In terms of cost, a huge amount of insurance was purchased only to obtain occupancy
qualification. The residents needed to pay monthly expenses, including room fees and
meals. Nursing fees were paid according to actual use. The fees for each community
varied slightly according to the consumption level of different cities. Taking Yue Garden
as an example (see table 5.13 and 5.14), the monthly fee for a self-care zone was
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10,600 yuan in 2018, which was much higher than that of Rongyue. The residents of
Taikang Community were its high-end insurance customers, so the beneficiaries were
actually a small circle. According to the statistics of Yan Garden, 32.4% of the residents
were senior retired cadres, 33.3% were senior intellectuals, and 24.3% were business
owners or senior managers. Moreover, Taikang Community has sold more than 70,000
occupancy qualifications, thus, a new regulation was implemented from 1 April 2019,
that those who bought two million in insurance were only guaranteed to move in before
the age of 80, while only those who bought three million insurance were guaranteed to
stay for their lifetime from reaching the prescribed age.
Photo 5.8: Taikang Community national layout
Source: official website of Taikang Community http://www.taikangzhijia.com/ (access on 19/6/2019)
Photo 5.9: Taikang Yue Garden, Guangzhou
209
Source: photo taken in the field research on 20/1/2019.
Table 5.13: fee standard of self-care zone of Taikang Yue Garden
type
unit
area
(m2)
entry fee per
unit (yuan)
one
resident
(yuan/m)
two
residents
(yuan/m)
meal
(yuan/m/person)
one room 42 200,000 8,800 11,000
1,800
1 livingroom
1 bedroom 64 200,000 13,400 15,600
1 livingroom
1 bedroom 78 200,000 16,800 19,000
1 livingroom
2 bedroom 117 200,000 26,700 28,900
Source: information collected in the field research in Yue Garden in 20/1/2019.
Table 5.14: fee standard of nursing-care zone of Taikang Yue Garden
type care
grade
deposit
(yuan/person)
room (yuan/m)
nursing
meal
(yuan/m
/person)
single
room
small double room large double room
one
resident
two
residents
one
resident
two
residents
assist in life 1
200,000 8,600 10,300 12,500 13,600 15,800
5,600
1,800
2 7,100
professional
care
3 8,600
4 10,600
memory
impairment 5 13,600
Source: information collected in the field trip in Yue Garden in 20/1/2019.
5.3.5 Conclusion
Although Shenzhen is not under pressure from pension at present, with the rapid
increase in the number of aged people, this problem would become more and more
serious. It is the government’s responsibility to provide pension security. On the one
hand, Shenzhen government should reflect on the facilities and operation modes of
the state-owned nursing homes, and make full use of public pension resources through
self-rectification or learning from the state-owned private mode of Futian Welfare
Center to meet multi-level pension needs. On the other hand, the government had to
partly rely on social capital to invest in the pension industry to meet the diversified
needs of the elderly.
As the representative of the insurance company, Taikang has formed a large-scale and
specialized chain operation mode by bundling insurance with aging communities and
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high-end medical services. However, Its model had great limitations-only serving high-
end customers in the insurance business, it was difficult to extend to other strata at
present. As a developer, Vanke tried a different way, that is to make full use of its
developed communities in various cities to add aging services, as well as its
experience in residential design and construction, and property service to establish
urban-level aging institutions through old building renovation or cooperation with
governments. Vanke has formed replicable aging products and service system. Its
model made the aging care popularized, which could benefit most residents in the
community.
For ordinary people with average income, Taikang model is only an ideal but
unattainable way. According to the traditional and actual situation of China, for a long
time, family pension is still the mainstream. The retired or about to retire people in
Shenzhen have higher requirements for the housing, environment, facilities and
professional care for aged peolpe, because most of them have financial preparation,
rather than relying solely on their children. Thus, Vanke’s model is more conducive to
the family pension that most Chinese people preferred at present.
As mentioned above, Vanke’s Zhihu Jia provided service of home space aging
adaptation and transformation, which improved the elderly's ability to live
independently, and the comfort and convenience of family pension. Upon this, rather
than to carry out transformation after construction completion, it is better to involve the
design for aged in housing spaces and public spaces and facilities of communities in
the early stage of development, or at least to reserve the possibility of renovation for
aged accommodation. Community planning should also reserve more flexible space
for community pension service facilities. By adding the elements of aging adaption
from the stage of housing development, a large number of residential areas can
become elderly friendly communities, so that most residents have a certain quality of
life when turning old.
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Chapter 6 Conclusion: Affordable and livable city
In the process of rapid urbanization in today’s China, people migrated to cities and
tried to settle down in order to get more resources and enjoy a better life. Solving the
basic needs for livelihood of housing, education, medical treatment, and pensions for
a large population has always been a major issue in city life. Shenzhen has made a
great achievement in housing development, with only 2,200 square kilometers of
space accommodating nearly 20 million people. At the same time, the rise of this
megacity has also caused many city problems, such as the dual development inside
and outside the Second Line, the large-scale urban villages, the serious lack of space,
the high price of housing to stop enterprises and talent, the insufficiency of public
facilities, and so on. These issues concerning people's livelihood and retaining talent
will be obstacles to the further development of Shenzhen.
The process of housing development in Shenzhen is a tripartite competing process
among the government, developers, and buyers. In the framework constructed with
planning theory and social science theory, the above chapters discuss the roles of the
three groups and the competition and cooperation between them by enumerating
detailed documents, data, design cases, interviews, and community survey analysis.
It was the mutually reinforcing joint forces that pushed forward the housing
development of Shenzhen in the last 40 years. The three groups had their own
interests in different stages. Through competition and cooperation, the interests of the
three groups reached a certain balance. With the development of the city, new
demands emerged and the balance was broken, then new competitions started. All
groups have to adjust their strategies and methods constantly. This tripartite
competition and cooperation will continue to arise.
In China’s urban development, the government has always been the chief planner and
player. Stability and growth are the goals of the government in governing the city. By
maintaining urban stability, attracting talent and capital, and realizing the sustained
growth of the city economy, the government officials can realize their political aspiration
and personal promotion. By controlling land supply, formulating policies of land,
housing finance, urban planning and approval, the government controlled the progress
and direction of housing development at the dominant level. The role of government
and the way of control were changing at different stages. The early days were in an
unconventional stage when the government had to accommodate the requirements of
enterprises on many issues because capital was needed for the original accumulation
of the city. When the urban operation entered a normal orbit, the government was
better at controlling it by state means. However, with the increasing degree of
marketization, the drawbacks of administrative control became more and more obvious.
The government had to turn to the role of guidance and supervision for continuing to
use the demand for capital expansion and the power of enterprises to promote urban
development. As for the general public, the government used administrative means to
manage the flow of population and control their needs in the early stage. With the
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gradual loosening of the Hukou (户口 household registration system), the deepening
of the market economy, and the rise of self-consciousness, people could choose their
places of work and life according to their wishes and conditions. The flow of population
in and between cities became frequent. A certain settled population is a necessary
condition for the stable development of the city. Therefore, the government needs to
build public facilities, such as transportation, education, medical treatment, and old-
age care, to provide convenience for citizens and improve their quality of life, which
can attract talents to settle down. In recent years, housing measures and household
registration policies that attracted talents have been introduced one after another in
many cities, which was the proof of talent competition among cities.
In the new era of urban development, it is necessary for Shenzhen, which is
congenitally insufficient in space, to seek a solution in the surrounding cities for the
dispersion of industry and population. Within the city itself, urban regeneration and
affordable housing are the new focuses of urban construction. All these problems of
cooperation within or between cities must be solved at the government level first, so
the role of the government becomes particularly important at this stage. Shenzhen
government needs to build a good environment for investment and life through policy
formulation, public facilities, and infrastructure construction to attract capital and talent
inflows.
The second group is the developers. Although large enterprises, like Vanke, are
increasingly emphasizing the social responsibility of corporate citizens and
participating in various public welfare undertakings and construction of urban public
facilities and affordable housing, the purpose of enterprises and capital is always to
make profits. In order to survive and make more profits, they had to deal with
government departments, even some officials and individuals. In order to gain a larger
share of the market, they continued to research and innovate to meet the demands of
consumers. With more critical insight into buying houses, consumers were demanding
more on the quality and environment of housing and community. At the same time,
developers had increasing difficulties and high costs of land acquisition. Therefore, real
estate companies felt that “the era of rapid expansion of scale and making huge profits
had come to an end.”349 In recent years, although the leading real estate enterprises
still took real estate as the pillar industry, they have launched a diversified industrial
layout to seek transformation. Wanda branched into cinema investment as early as
2003 and began to set up a cultural group to develop the tourism and sports industry.
In 2014, Vanke announced that in the next ten years, it would still focus on residential
development, but it was necessary to explore new business models. Vanke then began
to engage in long-rent apartments, education, pension, and other industries.
Evergrande Group (恒大), which was ranked the first among real estate enterprises
with income exceeding 450 billion in 2018, mainly invested in cultural tourism, health
industry, and high-tech industry in recent years. The Country Garden Group (碧桂园),
which is in the top three of real estate companies, has achieved the layout of the whole
349 See Vanke Co., Ltd. Vanke Annual Report 2014.
213
industry chain. Its business involves building materials, design and construction in the
upstream, and decoration, furniture and appliances, property management and hotel
operation in the downstream. In recent years, it devoted itself to the development of
industrial real estate by combining the agriculture and robotics industry.
The market force determines that enterprises invest resources in industries with stable
returns and profit-seeking. If the government needs the contribution of enterprises in
the construction of urban public facilities and affordable housing, it should offer
attractive conditions. Otherwise, it is difficult to achieve a win-win situation in the game
under the market economy. Although there are still many large-scale state-owned real
estate enterprises in China, such as Poly Group, Zhonghai, China Merchants Group,
Overseas Chinese Town, China Resources, etc., which can operate according to the
government's will to a certain extent, these state-owned enterprises have already
embarked on the road of market-oriented operation. China will certainly not return to
the previous road of the planned economy. Dealing with the delicate and sensitive
relationship between government and business is one of the key issues for the further
development of cities.
The third group is buyers who flocked to cities for better job opportunities and living
environment. Shenzhen is transforming from an immigrant city to a settled city. The
living standard of Shenzhen people has greatly improved. A considerable number of
them have accumulated certain wealth. With the rapid rise of the new middle class,
people’s demands for living standards have become higher and higher. Everyone has
different standards of satisfaction, but people have the same basic needs for housing,
education, transportation, and so on. The purpose of consumers is to obtain good living
conditions and occupy good public resources, for which they need to play games and
compromise with the government and developers. Unlike the government and
enterprises who work out short-term and long-term planning and formulate clear goals
and strategies for development, the buyers’ competition is often fragmented and
obscure. They only want to safeguard their own interests and achieve their personal
goals. Therefore, ordinary people unconsciously express their wishes through their
choices and actions in daily life to achieve some small goals. But in some special cases,
because of some common interests and demands, people get together to express their
appeal through group events, such as people's illegal construction in urban villages,
resistance in demolition and relocation, disputes caused by school enrollment and
school-housing, community rights defense by the residents, and so on. With the
flourishing of the Internet, people’s wishes were expressed in various ways and spread
timely and widely, which made ordinary people more inclined to use media publicity
and public power to achieve their demands.
Affordability is the basic concern of the people, while livability is the basic condition for
the people to be willing to take root in a city. The housing problem in Shenzhen,
whether buying or renting, has become a highly sensitive social issue, which can easily
attract the attention of the whole people. Moreover, the government's strategy was to
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maintain social harmony and stability in recent years. People have been brave and
good at expressing their demands through the Internet and we media. They could
quickly make a wide impact, thus forcing developers to respond quickly. At the same
time, they brought the government in and asked the government to supervise and help
them play games with developers and landlords. The government and developers have
to pay more and more attention to the voice of the people.
The convenient and rapid information dissemination was a double-edged sword. It
enabled people to gain and disseminate information quickly and led to a certain effect
on the government and developers. At the same time, negative information was also
spread rapidly, giving some people with ulterior motives a channel to stir up the public
sentiment to achieve their purpose. Every day on the Internet, there are farces with
constantly reversing plots. Numerous onlookers irresponsibly express their opinions,
making the Internet full of junk information, which is not conducive to the real appeal.
The relevant institutions need to spend a lot of resources to verify the truth, and calm
the public mood, which often delays the solution of the problem, or leads to the problem
unsolved. Moreover, frequent reversals of truth and falsehood make the public's trust
in the government and enterprises decrease, and the trust between people also
decreases. Therefore, the public has the right to make their voices heard but also
needs to treat the information responsibly and express themselves more rationally.
In the market economy, developers are the holders of resources and the suppliers of
housing. Whether it is market operating and pricing or government intervening pricing,
if the developers cannot make profits, they will stop losing and leave the market. As to
consumers, if their competition is unsuccessful and they cannot afford to rent a house
in Shenzhen, they will eventually choose to leave and find their affordable city. It is very
difficult for the government itself to carry out the regeneration of urban villages.
Meanwhile, the government needs to maintain social order. Therefore, the government
has to find a balance point in the game, which can not only maintain the enthusiasm
of developers’ investment but also provide an affordable and livable urban environment
for the citizens. At the same time, both sides should be effectively monitored to
maintain the tripartite game in a certain degree of balance.
Wang Jianlin350 once said: China’s economy was a government-led economy, and
governments held the dominant power and the power of life and death. 351 This
probably represented the views of most entrepreneurs on the government. The forty-
year history has proved that the strong government has played an important role in
policy formulation and implementation in China. It has taken China on the road of
developing a market economy with socialist characteristics, greatly enhanced China's
world status, and improved people's lives. The status of a strong government will exist
in China for a long time. The key to China's long-term development lies in how the
government effectively uses its might. The government is a crucial factor in the tripartite
350 Wang Jianlin is the founder and chairman of Wanda group. 351 Jianlin Wang. Wanda Philosophy. (Beijing: CITIC Press, 2015), 94.
215
game with enterprises and people. Its decision-making determines whether the game
is carried out within a certain range and whether it can reach a certain degree of
balance. Only when the three groups interact benignly to achieve a certain degree of
benefit, respectively, the maintenance of this dynamic balance promotes the further
development of Chinese cities.
A city is all about people as the city emerged for the gathering of people and prospered
because of human innovation. 352 The competitiveness of the city is finally the
competition for human talent. This thesis constructs a research framework which
combines theories of planning and social science and conducts comprehensive urban
research from the perspectives of space, policy, and people's daily life. The
government, developers, and consumers are together put into a framework for
research, which makes it different from the other research. Through the study of
Shenzhen housing development, it points out the importance of urban housing
development in attracting talent and retaining capital. It also points out that the tripartite
game and the establishment of balance through cooperation and compromise in the
game is the driving force of urban housing development. As the leading force of urban
development in China, the Chinese government professed to represent the people’s
interests, but not the interests of capital. The Central Government has realized that
“the major contradiction in our society has been transformed into the contradiction
between the people’s growing need for a better life and the uneven and inadequate
development.”353 Only by safeguarding the interests of the people and building an
affordable and livable city can the city attract talent and maintain social stability. This
is the cornerstone of sustainable urban development in today’s China.
The GBA is a national-level urban development group, and also the ocean pearl in the
T-shape strategic development structure in China (see diagram 6.1). It is also known
as one of the four great bays of the world, together with the New York Bay Area, Tokyo
Bay Area, and San Francisco Bay Area (see diagram 6.2). New York Bay Area is
characterized by finance, San Francisco Bay Area is famous for its innovative
technology because of Silicon Valley, and Tokyo Bay Area is an industrial complex bay
area. In addition to their respective advantages, they also share the same
characteristics: the gathering of universities and talents, the high proportion of service
industry, and the perfect system of construction and co-ordination. The Tokyo Bay Area
fully reflects the capability of the Japanese government in system planning, overall
352 Edward L. Glaeser. Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier. (New York: Penguin Press, 2011). 353 See Xi Jinping’s report in the opening meeting of the 19th National People’s Congress of the Chinese Communist Party in October 2017. http://cpc.people.com.cn/19th/GB/414745/414754/ (access on 4/9/2018). Including this report, the CCP has submitted three reports on major social contradictions. In the 8th NPC in 1956, it was first proposed that the main contradiction was “the contradiction between the people’s demands for the establishment of an advanced industrial country and the reality of a backward agricultural country”, then put forward that the main task was to vigorously develop the social productive forces. The second time was in the 6th Plenary Session of the 11th Central Committee of CCP in 1981. It was pointed out that the main contradiction was between the growing material and cultural needs of people and the backward social production. The focus of the work of the Party and the state must be shifted to the economic development and the construction of socialist modernization.
216
design, and implementation. The development of the New York Bay Area benefited
from the perfect urban planning and implementation system of the Regional Plan
Association (RPA), which was established in 1922. At the end of 2017, RPA issued the
Fourth Regional Plan. This plan “seeks to address issues including housing
affordability, overburdened transportation infrastructure, and vulnerability to climate
change—by addressing the underlying shortcomings in the region’s governance
structures.”354
Compared with the three well-known bays, although GBA has the largest area, the
largest population, and the second-largest economy volume after New York Bay, there
is much room for improvement in its hardware and software, including the number of
colleges and universities, talent introduction and flow mechanism, system construction,
regional development coordination and so on. All these aspects require the Central
Government to play a key role in top-level design and coordination.
Diagram 6.1: T-shape strategic development structure in China and the area of
Guangdong-Hong Kong-Macao Great Bay
Source: diagram is drawn based on “Opinions on Establishing a More Effective Regional Coordination Development Mechanism” issued by CCP Central Committee and State Council on 29/11/2018, and “Development Planning Outline of Guangdong-Hong Kong-Macao Great Bay” issued by CCP Central Committee and State Council on 18/2/2019.
Diagram 6.2: the four Great Bay Areas of the world
354 In 1922, some of New York’s most prominent business and professional leaders joined forces to launch an ambitious effort to survey, analyze and plan the future growth of the metropolitan region. This initiative was the first to recognize a New York metropolitan region– one that encompassed New Jersey and Connecticut. The results of this effort were the publication in 1929 of the landmark “Regional Plan of New York and Its Environs,” the first long-range, region-wide master plan for the New York metropolitan region, and the formation of the Regional Plan Association, an organization whose purpose at the time was to see that the plan was implemented. Details see https://www.rpa.org/regional-plans#fourth-plan (access on 25/9/2019).
217
Source: diagram is drawn based on google map.
The establishment of the GBA has brought great opportunities to the cities in and
surrounding the bay area. As one of the core cities, Shenzhen gained development
opportunities and great challenges at the same time. Hong Kong, which also belongs
to the GBA, has a prominent advantage in the financial industry, shipping, and sound
urban management and public service system. At the early stage of Shenzhen's
development, Hong Kong had always been the model and development goal.
Guangzhou is one of the earliest commercial ports in China and has always been the
gateway city of South China. It is now the political and cultural center of the GBA, as
well as one of the international transportation hubs and science and technology
development centers. Shanghai, the central city of the Yangtze River Delta, has been
the financial and economic center of China since its port opening. Beijing, the central
city of Beijing-Tianjin-Hebei urban agglomeration, was the capital city of the Ming and
Qing Dynasties and has always been the political and cultural center. All these cities
were gradually formed in history, with a solid foundation and distinct historical imprints.
These urban residents have obvious local characteristics in their daily life habits and
social ties.
New York, which is also the core city of a bay area, experienced the decline of
218
downtown and suburbanization process in the 1950s and 1960s, and the central area
revival in the 1980s and 1990s. Over the past three decades, the New York
government has worked to restore the quality of life of its citizens in New York City. In
1993, 22% of people who left New York said that safety and school quality were the
reasons for their departure, and in 2006, only 8% left for the same reasons. New York
is now facing the situation that “a growing population, aging infrastructure, a changing
climate, and an evolving economy posed challenges to our city’s success and quality
of life,” and it recognized that “today’s mobility of people and capital has created a
fierce competition among cities.”355 So they created PlaNYC as “a bold agenda to
meet these challenges and build a greener, greater New York”356 to compete for the
best ideas and the most capable and highly-trained workforce. This planning focused
on functional and cost-effective infrastructure, quality of life, and sustainability. In
housing and neighborhood, they put great efforts into creating and preserving
affordable housing, creating capacity for new housing, and encouraging sustainable
neighborhoods. Affordable housing continues to be a priority. At the moment, over half
of the households spend more than 30% of their gross income on housing costs, and
only 64% of apartments are affordable to a median income New Yorker.357 Thus, the
city employs targeted programs to create new affordable housing. For the sustainability,
mix-used neighborhoods are desirable, which are with a variety of employment
opportunities, and local retail and services within walking distance of residences. Upon
the applying of transit-oriented re-zonings, over 87% of new housing started since
2007 have been within a half-mile of transit.358
Compared with New York and other megacities of China, Shenzhen is special with its
urban history only 40 years short. Even compared with the Asian megacity of
Bangaluru (formally Bangalore before 2006), which also rose in the 1980s, the
development process of the two cities was different, and the problems they faced were
not exactly the same. Bangaluru has a longer urban history than Shenzhen. It was the
capital city of Karnataka State since 1830. Because of its good environment and
business foundation, Bangaluru was selected as the national industrial and high-tech
development base after India became independent in 1947. It set up several national
high-tech research centers, such as national defense research, scientific research,
aviation laboratory, etc., and established several famous universities in India. A large
number of skilled workers gathered in Bangaluru, which attracted high-quality
enterprises and manufacturers. Infosys, a famous Indian company, was founded in
1981 and moved to Bangaluru in 1983 because several first-class engineering colleges
provided the talent needed. With the benefits of the Asia Pacific market and the low
cost of setting up factories in India, Bangaluru attracted the attention of international
software and high-tech companies since the late 1980s. Texas Instruments began its
355 PlaNYC, A Greener and Greater New York. Update April 2011. City of New York, Mayor Michael R. Bloomberg. Details see http://www.nyc.gov/html/planyc/downloads/pdf/publications/planyc_2011_planyc_full_report.pdf (access on 25/9/2019) 356 Ibid. 357 Ibid. 358 Ibid.
219
outsourcing business in Bangaluru since 1987. International Business Machines
Corporation (IBM) entered Bangaluru in 1991. The Indian government spared no effort
to promote the development of Bangaluru. In 1991, the government built SoftNet for
data transmission at high speed. In 1999, the Ministry of IT Industry was established,
and IT ACT came into force in October 2000 to provide legal protection for the steady
development of e-commerce in India. Bangaluru eventually developed into one of the
world IT centers knowns as the “Silicon Valley of India”. The rapid development of the
high-tech industry has exposed India's backward infrastructure, making Bangaluru
adopt a special urban development strategy. Since the establishment of the Electronic
Software Park in the 1980s, Bangaluru has built some modern Science and
Technology Parks in the north and south of the old town. The Parks had perfect
facilities and beautiful environment, attracting enterprises and talents from all over the
world, which became a sharp contrast with the backwardness of the city outside the
Parks.
Just like Shenzhen, Bangaluru’s development was mainly based on the government’s
policies and benefited from foreign investment. Due to the private land ownership in
India, the construction of infrastructure was very difficult, which led to isolated Science
and Technology Parks in the outlying areas, forming a complete dual development of
the city. On the contrary, China's land policy enabled Shenzhen to carry out large-scale
construction of urban road, greening, and infrastructure. Although there are a large
number of urban villages in Shenzhen, it has achieved a high level of the overall
development. The backward environment outside the Parks has become the
bottleneck of Bangaluru’s further development. Thus, the development of
transportation and housing was the priority in the new urban master planning (RMP
2031). The government promoted the development of affordable housing by reducing
GST, providing housing loan interest relief and subsidy, which attracted some famous
developers, such as Salarpuria Sattva, to enter the development of affordable housing.
It can be seen that, on the one hand, Shenzhen faces similar problems in the land,
housing, and public facilities as those megacities, no matter how historic or emerging
they are. On the other hand, Shenzhen's urban development is beyond the norm and
carries its characteristics. Every city's space and residents' daily living habits and
needs are consistent with the city's temperament. Shenzhen’s characteristics are
youth and innovation, pluralism and tolerance. Shenzhen has been recognized as “the
hothouse of innovation” by the world and won the title of “silicon delta.” 359 The
transformation and upgrading of Shenzhen's industry, the second housing reform, and
the mechanism of encouraging entrepreneurship all embody Shenzhen's urban culture
and spirit. Although Shenzhen has an open urban culture, the development of
Shenzhen has expressed a strong will of the government since the establishment of
SSEZ. The positioning of Shenzhen and the preferential policies were determined and
offered by the Central Government, which was the main reason why Shenzhen could
359 Economist. April 6 2017. Detail see https://www.economist.com/special-report/2017/04/06/shenzhen-is-a-hothouse-of-innovation (access on 24/9/2019).
220
take off. Private enterprises account for most of the enterprises in Shenzhen, which
makes Shenzhen’s enterprises more vigorous and innovative. Shenzhen people are
more daring to express themselves because of their young and innovative
temperament. Young people born after the 1990s no longer inherit the centuries-old
tradition of Chinese people owning their houses. Their interest in buying houses has
declined, but their pursuit of quality of life and education is on the rise. The
characteristics of these three groups make the tripartite game in Shenzhen more
frequent, direct, and dynamic.
In the T-shape strategic development structure, with Beijing as the core city, the
Beijing-Tianjin-Hebei Urban Agglomeration occupies the north part. The Xiong’an New
District (see diagram 6.3) was established to undertake the non-capital functions360and
become the development engine of the urban agglomeration. Xiong'an is a national-
level new district after SSEZ and Pudong New District. Forty years' development
experiences and lessons of Shenzhen and Pudong make the planning and
development of Xiong'an New District stand at a high starting point. Unlike Shenzhen,
which pursued speed and quantity in the early days of economic reform, Xiong'an
pursues quality development. After the establishment of Xiong'an New District was
announced on April 1, 2017, all the land was strictly controlled by different level of
governments, and no large-scale construction was carried out. It took 21 months to
compile the urban master planning and other special planning. At the same time, it
carried out the preliminary work of ecological coverage, environmental remediation,
low-end industry liquidation and relocation, etc. to ensure that the new district was
constructed under the planning. Development priority was given to transportation,
public facilities, and affordable housing. While Shenzhen pioneered the first land
reform and housing reform 40 years ago, Xiong’an is now the pilot of the new round of
land and housing reform in China. It declared that it would not carry out large-scale
land expropriation, and would not engage in land finance. Low housing prices would
be its core competitiveness. Different from Shenzhen, which was a pilot of economic
reform, without experience and capital support, and relying on the courage of leaders
and the compromise for capital to obtain development opportunities, Xiong’an is a new
development on the accumulation of 40 years urban development experiences, with
China being the second-largest economy in the world. It is obviously fully dominated
by the state. It may not make the same mistakes as Shenzhen, but in the process of
urban development, the competition among the government, enterprises, and citizens
will inevitably appear, maybe in different forms. Although the government is more
empowered, it will still need to balance the tripartite game and make the three groups
realize their own interests.
360 Non-capital functions refer to universities, research institutions, medical institutions, financial institutions, high-end service industry, high-tech industry, green agriculture, etc. details see Planning Outline of Xiong’an New District, Hebei Province. http://www.scio.gov.cn/tt/zdgz/document/1627988/1627988.htm (access on 16/10/2019).
221
With the rise of megacities and the enhancement of collaborative development among
cities in the urban agglomeration, cities should be studied in a regional framework.
Thus, regional perspective is the base for the urban research of China’s contemporary
cities. Although Xiong'an New District has a completely different starting point when
comparing with SSEZ, the basic development path is still to provide residents with a
high-quality living environment, perfect public facilities, and promising development
opportunities. Therefore, the urban study needs in-depth research of ordinary people’s
everyday life as it can truly grasp people's needs and hidden ideology for practical
achievement. The method and focus of future urban history studies are to expand to
the region extensively in spatial research, and to make a more comprehensive study
deeply in people’s everyday life.
Diagram 6.3: Xiong’an New District in the Beijing-Tianjin-Hebei Urban Agglomeration
Source: diagram was drawn based on the Planning Outline of Xiong’an New District, Hebei Province.
222
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http://www.gov.cn/
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China
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http://www.sz.gov.cn/cn/
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http://www.szpl.gov.cn/
7. Shenzhen Statistics Bureau
http://www.sztj.gov.cn/
8. Shenzhen Transportation Bureau
http://jtys.sz.gov.cn/
9. Qian Zhan Data Base
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14. Shenzhen Experimental Education Group
http://www.szsy.cn/
240
Appendix 01: Questionnaire
( questionnaire distributed is in Chinese )
调查问卷
A.个人信息
A1. 您的性别:1 男 2 女
A2. 您出生于哪一年?
A3. 您的婚姻情况 1 已婚 2 离异 3 丧偶 4 未婚 5 未婚,与恋爱对象同居 6 其他
A4. 您的受教育情况 1 小学及以下 2 初中 3 高中 4 专科 5 大学 6 研究生及以上
A5. 您曾从事的工作 (请由近及远列举)
A6. 您是哪一年来深圳的?
A7. 您来深圳的方式?
A8. 您来深圳的目的?(可写多个理由)
A9. 您计划一直在深圳居住吗?1 是 2 否 (可否说明计划离开的原因,例如想去别的地方
寻找机会、房价太高、回原籍养老等)
A10. 你喜欢深圳什么方面? (可写多个,从最喜欢写起)
A11. 你最不喜欢深圳什么方面? (可写多个,从最不喜欢写起)
B. 住房情况
B1. 目前与您居住在一起的有——人?他们是父母?配偶?子女?恋人?合租者?
B2. 您目前和曾经居住过的房子情况 (请从目前开始倒序填写,请包含时间、地点、产权、
房子类型、房间数、大约面积等信息)
时间段 住 宅 位
置
工 作 地
点
产权 住 宅 类
型
平 面 格
局
面积 是 否 有
小 区 环
境
例如:93-
98
罗湖 福田 合租 公寓 两 房 一
厅 一 厨
一卫
65 无
B3. 你在选择住房的时候,主要考虑哪些因素?(请从最主要的开始写,最多不超过 5 个)
B4. 您通常在哪里得到房子信息?
B5. 请列举三个您最认可的开发商,为什么认可他们?
B6. 去看房的时候,售楼人员的介绍对你影响多大?100%,80%,50%,30%,0
B7. 去看房的时候,样板房对你的影响多大? 100%,80%,50%,30%,0
B8. 您的小区有业主委员会吗?你认为业主委员会能帮助业主的诉求吗?
B9. 您认为房价的变动是什么造成的?(可写多个,请从最主要的开始写)
B10. 您认为每个月房子还贷占家庭收入百分之多少是合理的?————%
B11. 您对小区花园环境最看重哪些方面? (可写多个,请从最主要的开始写)
B12. 您认识邻居和小区里的人吗?1 认识很多 2 认识几个 3 基本不认识 是怎么认识
的?
241
B13. 小区公共空间和设施中,您使用最多的是什么? (可写多个,请最多列举三个)
B14. 您认为您所居住的小区中最需要改进的地方是什么?
B15. 装修房子时您曾经对房子原有格局进行很大改动吗?比如改变厨房、卫生间位置、打
墙等,为什么需要改动?
B16. 在五年之内你有换房打算吗?如果有的话,是什么原因?
C. 出行与日常消费
C1. 您目前住在哪个区,上班在哪个区?
C2. 请问您每天上下班的交通方式。
C3. 请问您每天上下班花在路上的时间(单程)
C4. 如果您是乘坐公交的,您需要转几趟车?
C5. 从您家到公交站或地铁站的距离大概多远?————米,如果走路需要——分钟?
C6. 您使用共享自行车吗?是在什么情况下使用的?
C7. 您觉得深圳的公共交通方便吗?
C8. 您觉得深圳的公共交通设施好吗?
C9. 目前,您每个月用于出行交通的钱占家庭收入的——%?您认为每个月用于交通的钱占
家庭收入——%是合理的?
C10. 与购物中心的距离是您选择住房的时候会考虑的重要因素吗?
C11. 您家谁负责买菜?日常买菜在超市还是市场?
C12. 您家是每天买菜还是几天或一周买一次菜?
C13. 您去购物是步行还是坐车?
C14. 您有进行网购吗?
如果有网购,请问你在网购和去实体店购物的比例大概是多少。
C15. 您家每月用于食品消费占家庭收入——%
C16. 您购物时多数采用何种支付方式?(例如:刷卡、现金、支付宝、微信支付等)
C17. 休闲时间一般做什么?
D. 教育
D1. 您有孩子吗?(有的话)今年————岁?
D2. 幼儿园之前孩子是否上过(或打算上)亲子班或早教班等机构?
D3. 幼儿园期间是否上过(或打算上)课外培训课程?有哪些?
D4. 孩子上过(或打算上)哪些培训班或补习班
小学期间:———————————————————————————————————
—
初中期间:———————————————————————————————————
—
高中期间:———————————————————————————————————
—
D5. 小孩是否参加过(或打算参加)假期培训或游学营?
D6. 小孩是否在国外留学?或是否有打算送小孩国外留学?原因是什么?
D7. 小孩是否上过午托班/晚托班?
D8. 您是否曾经/打算买(或租住)学区房?
D9. 您认为孩子的学校离家里多远合适?(例如:步行 XX 分钟,或坐车 XX 分钟)
D10. 目前,您每个月用于孩子教育的钱占家庭收入的——%?您认为每个月用于小孩教育
242
的钱占家庭收入——%是合理的?
E. 养老
E1. 您的父母(或配偶的父母)是否已经/即将退休?
E2. 父母计划(或已经)在深圳养老还是回家乡养老?
E3. 您父母的养老费用由谁承担?
E4. 您是否有计划过自己将来的养老?(例如:养老地点、财务安排等)
E5. 您倾向于何种养老方式?(传统的家庭养老、社区养老、养老机构养老)为什么?
E6. 您是否有购买商业养老保险?
E7. 您所在的小区是否有养老方面的协助?有的话,请列举。
E8. 您所在社区的公共设施和空间中是否有为老人的专门设计?有的话,请列举
QUESTIONNAIRE
(translation based on the Chinese version) A.Personal Information
A1. Gender:1 male, 2 female
A2. Year of birth: ______
A3. Marital status: 1 married, 2 divorced, 3 widowed, 4 single, 5 live with a partner
A4. Education 1 primary school, 2 junior middle school, 3 senior middle school, 4 diploma,
5 university, 6 master degree and above
A5. Your Job: ________
A6. When did you come to Shenzhen? ________
A7. How did you come to Shenzhen?
A8. What was your purpose to come to Shenzhen? (can have more than one reason)
A9. Do you plan to stay in Shenzhen for long? If not, please indicate the reason.
1 yes, 2 no, because______
A10. What do you like about Shenzhen? (can have more than one aspect, please start
from the like best)
A11. What do you dislike about Shenzhen? (can have more than one aspect, please start
from the dislike best)
B. Housing Information
B1. How many people live with you at present? Are they parents? Spouse? Children?
Partner? Flatmate?
B2. Information on your current and previous residences
Time
frame
House
location
workplace Property
right
Type of
house
Number
of rooms
area community
B3. What factors do you consider when choosing a house? (can have more than one factor)
B4. Where do you usually get house information?
B5. Please list the top 3 developers in your mind. And why do you recognize them?
243
B6. How much influence does the introduction of the salesperson have on you when you
inspect the house? 100%,80%,50%,30%,0
B7. How much influence does the show room have on you when you inspect the house?
100%,80%,50%,30%,0
B8. Is there an Owner's Committee in your community? Do you think the Owner's
Committee can help the owner's claim?
B9. What do you think caused the increase of house price?
B10. What percentage of household income do you think it is reasonable to repay the
mortgage every month?
B11. What aspects do you attach most importance to your community environment? (can
have more than one aspect)
B12. Do you know any people in your community? And how did you know them?
1 many, 2 several, 3 none
B13. Which public spaces and facilities do you use the most frequently? (can have more
than one space of facility)
B14. What do you think need to be improved in your community?
B15. Did you make a big change in the original layout when you decorated your house?
For example, change the location of kitchen, toilet, wall, etc., why need to change?
B16. Do you have a plan to move to another house in five years? If so, what is the reason?
C. Transportation and Daily Consumption
C1. Which district do you live and which district do you work?
C2. What is your commute mode?
C3. How long is your single commute time?
C4. If you use public transport for your commute, how many transfers do you need in your
single commute?
C5. How far is it from your house to a station? (space distance or time for walking)
C6. Do you use a shared bicycle? Under what circumstances is it used?
C7. How you think about the public transport in Shenzhen?
C8. How you think about the facilities and services of public transport in Shenzhen?
C9. What is the proportion of your monthly travel expenses to your family's income? How
much do you think is reasonable?
C10. Is the distance with a shopping mall an important factor in your choice of housing?
C11. Who is in charge of daily shopping in your family?
C12. How is the frequency of daily shopping in your family?
C13. Your transportation mode for daily shopping. Walking? Public transport? Driving a car?
C14. Do you do online shopping? What is the proportion of online shopping and shopping
in physical stores?
C15. What is the proportion of your family's monthly food consumption to household
income?
C16. What kind of payment do you usually use when you shop? Such as cash, card, Alipay,
Wechat pay.
C17. What do you usually do in your leisure time?
244
D. Education
D1. Do you have a child? If so, how old is your child?
D2. Has your child attended (or planned to attend) parent-child classes or early childhood
classes before kindergarten?
D3. Has your child taken (or intended to take) extra-curricular training courses during
kindergarten? And what kind of courses?
D4. What training courses or remedial classes has your child attended (or intended to
attend)?
During primary school:
During junior middle school:
During senior middle school:
D5. Has your child attended (or planned to attend) vacation training or vacation camps?
D6. Has your child ever studied abroad? Or is studying abroad? Or plan to study abroad?
D7. Have you sent your child to noon-care or evening-care?
D8. Have you ever/intended to buy (or rent) a school housing?
D9. How far do you think the distance between your child's school and home is appropriate?
(can be expressed as the time spent to go to school by walking/on a bus)
D10. What is the proportion of your child's education expenses to your family's income per
month? How much do you think is reasonable?
E. Pension
E1. Have your parents (or the parents of your spouse) retired? Or going to retire?
E2. Have your parents got (or planned to get) aging care in Shenzhen or in the hometown?
E3. Who will bear the pension expenses of your parents?
E4. Have you planned your future pension? (location and financial arrangements, etc.)
E5. Which pension mode do you prefer? And why? (traditional family pension, community
pension, institution pension)
E6. Did you buy commercial pension insurance?
E7. Is there any assistance in aging care in your community? If yes, please list them.
E8. Is there any special design of spaces and facilities for older people in your community?
If yes, please list them.
245
Appendix 02: Summary of interview finding: dormitory
time location type condition description and comments
1974
Factory Dorm
(Longgang
Sugar Factory)
One
family
one
house
Two-story building, one
bedroom one living
room, with kitchen and
bathroom
Factory had satisfactory profit so the
community is well maintained
1982
Factory dorm
(rice noodle
factory)
One
family
one
room
Bamboo Shed, bunk
beds, and public toilet
and shower
Worst accommodation ever been in, felt
like refugee, storm ripped the whole
rooftop off twice
1982-
89 Company dorm
First two years lived in a
steel sheet dorm,
moved to YuanLing
dorm in 1984, one
person per room, got
assigned a 3 bedrooms
dorm in 1989
At the start we just put up with it, we all
did not know how long we would stay.
then I joined another company in 1984,
they rented a whole building and
assigned every employee an individual
room, in 1989 in another company, I got
a suite-house as family dorm, which I
bought in the housing reform in 1992.
1983
SheKou
Shuiwan C
zone single
dorm
Two
people
one
room
multi-story dorm with
outside corridor, the
most inside was a
balcony and bathroom,
we made a stove for a
mini kitchen
40m2 per room, for cadre, two people
shared a room; for workers, the same
room housed 6-8 people.
1984
Luohu District
government
dorm
One
Family
one
room
20m2 flat house, no
toilet, made a wood-
fired stove by myself
A family of four living together was too
crowded, but that was the condition back
then, we were considered the better
ones, I knew a lot of people lived in
temporary sheds or even in the open air.
1985
Finance
Bureau family
dorm
One
family
one
suite-
house
multi-story building, two
bedrooms one living
room
newly built government family
dormitories, in comparison to the factory
dormitories before, conditions were
much better.
1986 Company
Dorm
Two
people
one
suite-
house
multi-story building,
one bed one living-
room, with kitchen and
bathroom
The area was rural without shops
around, I drove to do shopping or change
a gas bottle. (Interviewee was a
driver). other people could only ride a
bike or use a wooden trolley
246
1989
Shekou Sihai
Apartment,
Sanyo Factory
Dorm
Four
people
one
room
multi-story outside-
corridor dorm, with
bathroom, hot water
supplied on level one,
air con and hot water
were added afterwards
SheKou Industrial Park built standard
dormitories for factories in SheKou,
normally six people a room, better
industries could reduce to 3-4 a room,
after Sanyo moved, they still provided
dormitories with better conditions, 40m2
for 3 people, equipped with fridge, hot
water, air conditioning and washing
machine, they used to charge 50 yuan
per person, now it is free, workers only
need to pay electricity bills.
1990 Shekou
Binlang Garden
Single
room
multi-story outside-
corridor dorm, with
bathroom and electric
stove, hot water on level
one, only need to pay
electricity bills
SheKou Industrial Park built standard
dormitories for factories in SheKou,
normally six people a room, better
industries could reduce to 3-4 a room
1990
Sanjiu
Pharmaceutical
Factory dorm
Four
people
one
room
multi-story outside-
corridor dorm, the room
was big and with
bathroom. One room
housed max of four
people, some only two
people.
the factory was far from the city, many
facilities were built in the factory area,
shops, canteens, tennis courts, game
rooms, which satisfied all common living
needs
1991 Factory dorm
eight
people
one
room
flat house, public
bathroom, also had a
canteen
All the factories had dorms, for eight
people or tens of people, all types of
houses along with all the bad conditions
1992 PingHu Factory
Dorm
tens in
a room
Simple bungalow, rural,
could hear insects, very
poor conditions
Did not expect Shenzhen to be like this,
it was even worse than where I came
from, nearly couldn't make it
1992 street office
dorm
four
people
one
suite-
house
Bungalow, brick wall, tin
roof with asbestos tile,
two people in a room,
shared bathroom and
kitchen, no water heater
This was the housing treatment for
single workers.
1993 Foreign
company dorm
Four
people
one
room
Dormitory with inner
corridor, with bathroom
and small balcony, no
kitchen
The accommodation was acceptable as
a new comer to Shenzhen
247
1993 Longgang
factory dorm
Two
people
one
room
The company rented
two five-story farmer's
houses, for
management and
engineers, three or four
bedrooms and one
living room, two people
in each room, shared
living-room, kitchen,
and bathroom
Longgang was full of factories,
surrounded by farmer houses, and
factories usually rented farmer's houses
as dorms. Workers were usually in
dorms with worse conditions.
1996 SAST Group
dorm
One
family
one
room
The house layout was
three bedrooms and
one living room. Three
families shared the
kitchen and bathroom,
which were very busy.
I had my kid and my parents with me. My
family, five people lived in a room for half
a year and it was too crowded, then the
company assigned a dorm in Xiangmi
village and it came with two bedrooms
one living room
1997 Huawei
company dorm
One
people
per
room
Multi-story building,
three-bedroom, living
room and dining room
The house was nice, but the room was
not free, the rent was deducted from my
salary
1997 SEG Apartment
Four
people
one
room
Outside-corridor
dormitory, each room
with kitchen, bathroom,
and balcony, maximum
for four people
only cost me around 20 yuan in
accommodation per month. Those from
companies without dorms could only rent
houses by themselves and it cost at least
hundreds, they could only afford farmer
houses anyway.
1997
Baishizhou
Qiaozhou
Garden
One
people
per
room
The company's
property, three-
bedroom suite-house,
one room for one
person
I used to rent farmer houses around
Caiwuwei for convenience to walk to
office, then it got broken into, I felt it not
safe then moved to company's dorm. It
was still convenient as commuting bus
was provided.
1997 Dorm
Two
people
one
room
When I managed the
engineering project, I
stayed in a work shed
with dozens of workers.
When I was not with the
project, I had a
dormitory in the
company, suite-house
with three bedrooms
and one living room, two
people in each room.
At that time, the work shed was a large
shared room supported by several steel
pipes and enclosed by iron sheet. Tens
of people lived together, and washed
with cold water even in winter. Now the
work shed conditions are good, which
are movable board rooms with
bathroom.
248
2001 Beauty salon
dorm
Two
people
one
room
suite-house with three
bedrooms, living-room,
dining room, kitchen
and bathroom, two
people per bedroom
Skilled workers lived in better dormitory,
and low-level handymen lived in much
worse conditions.
2003 Zhongdian
Dorm
Two
people
one
room
suite-house with two
bedrooms and one
living room, the living-
room was also divided
into a bedroom, so five
people in a house,
shared kitchen and
bathroom
It was very happy to have a dormitory in
Shenzhen at first. At least I did not have
to rent a village house like other people,
and the dormitory was on the opposite
side of the company office. It was very
convenient.
2006 Hospital Dorm
Two
people
one
room
it was the upstairs to the
hospital canteen, suite-
house with two
bedrooms, kitchen and
bathroom. Two people
in a bedroom and paid
around 200 yuan per
month per people
I haven’t thought that there was such a
poor dormitory in SSEZ. There were nly
two beds in it, not even a table and a
cabinet. There were even mice, worse
than a university dormitory.
2010 Military
quarters dorm
one
family
one
suite-
house
the house was with four
bedrooms and one
living room in an area of
110 square meters. And
the location was very
central in the city
In military quarters, ordinary soldiers
lived in barracks with more than a dozen
people, and officers were assigned
suite-houses. The higher the rank, the
better the house.
2011 Unit dorm
Two
people
one
room
Old house of the 1980s,
outside corridor linked a
dozen single rooms,
with separated small
kitchen and bathroom,
only need to pay
electricity
In 2014, as a Shenzhen registered
resident, I began to queue up for
government's low-rent housing. The
government's low-rent housing was
definitely cheaper than renting a house
in the market, and the environment was
much better than the urban village. there
cost700-800 yuan for a room in urban
village, and 1200 yuan if with a balcony.
249
Appendix 03: Summary of interview finding: rental housing
time location type condition description and comments
1989
Shekou
farmers
house
single
room
Bungalow, no kitchen
and bathroom,
conditions were worse
than that in my
countryside
At that time, many Hong Kong people
rented a farmer's house to set up a small
workshop-style factory. N dormitory was
provided. 4-5 workers usually rented one
farmer's room with the monthly rent about
150 yuan. sometimes the room housed 5-
6 people. Everyone was unstable at work
and could only afford such a condition.
1991
Shekou
Nanshui
Village
farmers' room
single
room
Three-story building with
four single rooms on
each floor, approximately
16 square meters, public
kitchen and washroom
Monthly rent 220. The factory only
provided single dormitory. Workers rented
their house if married, the factory
subsidized the renting fee. After two years,
I was in line with the double-employment
condition to apply for the transit-house of
the industrial park. the rent was 90 yuan in
the beginning, and then it rose to 360 yuan
later.
1995
Luohu District
farmers
house
single
room
An illegal building built
with iron sheets above
the six-story farmer
house. A public toilet on
each floor.
The room was very bad quality, very cold
in winter and hot in summer. When
typhoon came, we had to run downstairs
to avoid, fearing that danger would occur.
The advantage was in the city center,
close to the workplace. The monthly rent
was high as 800 yuan, and was exactly my
basic monthly salary.
1995
Luohu Buxin
suite-
house
Multi-story building, first
suite-house with one
bedroom, living-room,
bathroom and kitchen,
then after married,
changed to two
bedrooms suite-house
After having a fixed income, I started to
rent a house. I often moved at the
beginning because of the rent and
location, I rented this house for almost 20
years after I got married. Because the
children needed to be steady to go to
school. Over ten years, the rent has risen
from 1,000 to 3,000 yuan. When the
house price was low, my income was not
stable, so I didn't apply for a loan to buy a
house. I didn’t expect the house price to
rise so fast, and I can’t afford it now.
1996 Lianhua Bei
community
suite-
house
Multi-story building, two
bedrooms and one
living-room
Close to workplace, the environment was
good, no children yet, so did not matter the
house was a bit small.
250
1996 Shangbumiao
community
suite-
house
Multi-story building, two
bedrooms and one
living-room
My family just came for reunion and I
moved out the single dormitory and rented
a small suite-house as a starter home.
1997 LuoHu suite-
house
from single room to suite-
house, from one bed
room to three bedrooms.
I have been renting houses for 20 years
and moved a dozen times. Some of my
friends even moved several times a year.
I combine my home and my office in a
suite-house now for convenience. I
missed the best time to buy a house. I
can’t afford it now. I bought a house in my
hometown. When I am old, I will go back
to my hometown.
1997
Shekou
WanXia
Farmers'
House
suite-
house
Multi-story building, two
bedrooms, living-room,
kitchen and bathroom
Monthly rent 1350 yuan, rented for more
than ten years already, I regret not buying
a house when even it was zero down
payment. I did not dare to buy mainly
because I feel too insecure in Shenzhen, I
was always afraid of losing my job one
day. I bought a house in my hometown. It
seemed to leave myself a way out.
1998 Baishizhou suite-
house
Old multi-story building,
two bedrooms, living-
room, kitchen and
bathroom
Monthly rent 1300 yuan, I was paid 1300-
1400 yuan per month at that time, meant
my family paid a person's salary to rent a
house, the pressure was very huge.
1999 LianTang suite-
house
Multi-story building,
three bedrooms, living-
room, kitchen and
bathroom
I moved 9 times before buying a house in
2006. I once lived in Liantang, Dachong,
and Baishizhou. I started out renting
sharing with friends. Later I met my wife
and we rented a house. I started renting a
one-bedroom house for about 700 yuan,
and then rented two bedrooms, one living-
room for 1500 yuan
2002 Dongmen Single
room
A shopping mall was
separated into many
single rooms about 20
square meters for each,
public bathroom, no
kitchen
monthly rent 450 yuan, and shared with
my sister. the conditions were not good
but the fee was affordable, and the
location was good.
251
2004
Farmer's
house in
Buxin
suite-
house
a suite-house with two
bedrooms and one living
room in a ten-story,
handshake building,
without an elevator, the
area was about forty
square meters
In 12 years, the rent rose from 750 to 1100
yuan, and the management fee was 100
yuan per month. In 2016, the building was
identified as a dangerous building. The
government stipulated to demolish it, but
the landlord concealed the government
notice for a long time, and wanted the
tenant to live for as long as possible. The
government gave each household
relocation fee of 3000 yuan, but was
embezzled by the landlord. We did not
know where to report it.
2007 Luohu Ocean
Building
suite-
house
High-rise building, small
duplex, 30 square
meters with one
bedroom and one living-
room, very comfortable
small house
Monthly rent 2200 yuan, although it was a
high rental fee, it was just on the street
opposite to my workplace and very
convenient
2008 Qingshuihe suite-
house
urban village, 17 square
meters, one bedroom,
one living, kitchen,
bathroom and balcony
affordable monthly rent 650 yuan, many
young people often got together to eat up
late at midnight, I liked the atmosphere of
the village.
2009 Yuanling
community
suite-
house
Multi-story building, two
bedrooms, living-room,
kitchen and bathroom
monthly rent 6000 yuan, school-housing,
the house is very small and very old, the
surrounding environment is also very
crowded, but the facilities are very
convenient, especially a lot of tutoring
institutions. We will not stay here after the
child goes to high school.
2009 Luohu Ocean
Building
suite-
house
High-rise building, two
bedrooms
The monthly rent was around 5000-6000
yuan five or six thousand. It was
expensive probably its very convenient
location. I rented because my father was
sick and had to move to take care of him.
2010 Sungang
Village
suite-
house
urban village, one
bedroom, one living,
kitchen, bathroom and
balcony
Monthly rent 1300 yuan, plus water and
electricity and property management,
around 1400-1500 per month, good
location, affordable
252
2015 Hezheng
New Garden
suite-
house
High-rise building, three
bedrooms, living-room,
dining room
monthly rent 6000 yuan, the child wanted
to go to Shenzhen Middle School, but our
school-house was for Shenzhen
Experimental School, so we rented out our
house for the same price as we rented a
school-house here, and there is an
elevator to facilitate the elderly. The child
will soon go to high school and will re-
select the place of residence, where the
environment is good, quiet, sunny, and
close to the subway.
253
Appendix 04: Summary of interview finding: small-profit housing
time location type condition description and comments
1987
Shekou
Huaguoshan
community
Three
bedrooms
Multi-story building, it
was a good house at that
time but it is old now.
There is insufficient
parking lots. Now all
the street sides are full of
cars
China Merchants Shekou Industrial Park
encouraged its employees to buy a house
and we did. My dad was very advanced.
At that time, the house was only tens of
thousand yuan. It is in the catchment of
Yucai Primary School and Middle School,
so it is very valuable.
1990
Luohu
government
dormitory
Three
bedrooms
Multi-story building, the
area is 107m2. I
transformed it into a
four-bedroom house in
the second decoration.
I was assigned the house as a family
dormitory in 1986, and I bought it in 1990.
The building is just getting old and does
not have an elevator. But the location is
particularly good, daily life is very
convenient.
1992
Gangxia
Village
Three
bedrooms
Multi-story building, the
area is 110m2. There
were shops in the
village. Daily life was
convenient
Several years later, the multi-story
building was demolished and built as
high-rise housing. I got the same area in
the new one. But as the shared public
areas were much bigger than the
previous, the actual carpeted area was
smaller. The floor layout was better that
there was an ensuite bedroom. It was
very noisy near the road and there was no
good school nearby. So, we moved to
another house when we had a child.
1993
Shekou
Rose
Garden
Two
bedrooms
Multi-story building, the
area is 76m2.
It was Shekou Industrial Park's welfare
house, and it cost tens of thousands of
yuan. Couples worked in the Park were
qualified to buy. The school and hospitals
built by the Park were perfect. Later, in the
cadre housing reform, I transferred to the
Cuizhu Garden and got a four-bedroom
house with the area of 110m2, which was
allocated according to the length of
service and the position level.
1995 LianHua
Village
Two
bedrooms
Multi-story building,
small house
The house was only two bedrooms and
smaller than my previous house. but it
had good facilities surrounding the
community, especially good primary
school and junior middle school. We
decided to live there for the child's
education.
254
1999
Taohua
Garden
Phase I
small
three bed
high-rise building with
elevator, 90 square
meters
Those couples who all worked in Shekou
Industrial Park, could allpy for the small-
profit house, which was scored according
to the professional title, service period,
cadre or worker position. 80 square
meters, was the purchase standard. The
excessive area needed to be paid in
accordance with the commercial housing
price. It was the first community that had
elevators in Shekou. So, the price and the
property management cost were higher
than those multi-story buildings. At the
beginning, everyone did not accept it.
Now I am getting older, I finally found
elevator is very important. And the
housing price increased faster than those
without an elevator.
1999
Yitian Village
small
three
bedrooms
High-rise building, area
of 80m2. good facilities
and good middle school
in the community
The down payment was 110,000 yuan,
that was all I got at that time. I could
choose a house with area of more than
100m2, but it was not affordable for me.
As a Shenzhen registered resident,
people could apply for small-profit house,
people would stay in the city only after
they settled down.
2002 Army
residence
three
bedrooms
28-story high-rise
building, welfare
housing for the troops.
The house area was
97m2. there were good
facilities in the
surrounding areas.
In 2000, I got married and was allocated
a military family dormitory, four-story old
building, two bedrooms and one
livingroom around 70m2. In 2003, It was
demolished and rebuilt as high-rise
buildings. My level can only get a small-
profit house around 80m2. So, I paid
some extra money to get one with area of
97m2. I will not buy another house in
ShenZhen as the price is not affordable.
255
2008 Sanhuan
Village
three
bedroom
89.7m2
High-rise building, area
of 89.7m2.
It is a very big small-profit community built
by government. The community has very
good public facilities, including
kindergartens, primary school, junior high
school, shopping mall, swimming pool,
basketball court, tennis court,
workstation, table tennis room. The
residents were mainly civil servants, who
all stayed for a long time. The
neighborhoods knew each other well so
they felt secured. The property
management fee (about 2 yuan per
square meter) and parking fee (on ground
110 yuan per month, underground 250
yuan per month) are in accordance with
the government guidance price and are
cheaper than that of commercial housing.
256
Appendix 05: Summary of interview finding: commercial housing
time location type condition description and comments
1996
Jinxiang City
Garden
Multi-story building,
large community,
insufficient parking
space
Quiet, suitable for retirement
1997
Futian
Greenview
Garden
Multi-story building
6000 yuan per square meter, my
company provided 250,000 interest-
free loans so I bought it, I did not move
to there as we still lived in the factory
dorm as I got assigned a suite-house as
dormitory in the factory zone after I got
married.
1997 Yingshui
Shanzhuang
three
bedrooms
Multi-story building, the
area 91.5m2
Large community, insufficient parking
lots. Good location for rent out, so, we
rented this out and rented a house near
the kid's school
1999 Yitian Village
small
three
bedrooms
High-rise building, large
government welfare
housing community, the
supporting facilities
were well developed
The welfare housing, that was not
allocated, was taken to the market by a
related agent, and the price was
increased by 35,000 per house. In fact,
the small-profit house was around
4,000 yuan per square meters, which
was 800-1000 yuan lower than the price
of near commercial housing. My
purchase of my first home entirely
determined by economic factor.
1999 Liantang
Pengxing
small
three
bedrooms
multi-story building,
with a good school in
the community
For the convenience of my schooling
and my parents bought this house. I
have lived in many districts in
Shenzhen, and Luohu is the most lively
and humane area.
257
2000 Vanke
Wonderland
Three
bedrooms Multi-story building
a super-large community, the external
environment was not good, but the
environment inside the community was
very good, Vanke's design and
management details were very good,
and often organized activities, because
of the child, I knew many neighbors,
Vanke provided shuttle buses, but the
school is not good. I didn’t have any
experience in buying my first home. I
just was attracted by the beautiful and
decorated house in the Wonderland,
and also the price was affordable. Now
I will consider the location before buying
a house, still I will consider Vanke's
products.
2000 XiaMeiLin Three
bedrooms
high-rise building. It was
a house built by Meilin
Street Office
cooperated with other
developer. It was
cheaper than the
commercial house in
the market, only 3,000
yuan per square meter
The advantage of being real estate
agency is that I got many information. I
was not stressful when buying a house.
The houses I bought later were all for
investment. I have always lived in the
first house I bought, the surrounding
facilities are mature, and the child 's
school is nearby. There are many
families that have lived here for a long
time. The neighborhood is particularly
nice, and like my family members. I feel
very secure. I will have difficulties to
adapt to another community.
Shenzhen’s neighborhood relationship
was built by the elderly and children.
2002
Near the
bonded area
Three
bedrooms
High-rise building, large
house with convenient
living facilities, but there
is no good school
I bought the house because I had a
baby. I wanted my parents or hired a
babysitter to help me out. I just thought
I need to buy a big house for housing
more people in my limited budget. The
location didn't matter. I didn’t consider
the school-housing issue. Thus, I had to
move later for my child's education.
258
2004 Nanyou Zone B one
bedroom
Multi-story building,
area of 42m2, very
convenient for a single
life, good facilities
around, convenient
transportation
Although I was a Shenzhen registered
residence and worked for a state-
owned enterprise, but I was not eligible
to apply for a small-profit house as I was
single. So, I had to buy a commercia
house. I regret not buying a bigger one
as I did not expect the housing prices
increased so fast.
2006 Baihua
Apartment
small
three
bedrooms
high-rise building. The
house was old and
small. The layout was
learned from Hong
Kong's small-sized
housing. There are
many strange spaces in
the house, but the
surrounding facilities
are good and
transportation are very
convenient
It is a school-housing in the catchment
of Shenzhen Experimental School. The
child is going to enter high school and
we do not need for a school-housing
any more. We plan to change a house
to improve the living environment. The
location and environment will be
considered in the first place. But
Shenzhen is too crowded in
everywhere.
2006 Yuanling
High-rise building, a
school-housing for the
child's education
The child went abroad to study in high
school. I still live here. I already got
used to living here Everything is very
convenient. The high-level view is good.
I don’t have to drive to work. An ideal
home for me should be good location,
good environment, and good neighbors.
2006
Longhua
Minzhi, Four
Seasons
Spring City
Three
bedrooms
11-story low high-rise,
the space between is
relatively large, so, the
view is good. It was an
old community with
poor property
management.
6700 yuan per square. I originally
wanted to buy a house in Nanshan. The
price was only 8000 yuan per square
meter at first. When I decided to buy it,
it had already increased to 12,000 yuan,
I had to buy outside the Second Line.
When buying a house, I considered the
space between buildings, good views,
quiet community. I did not even
consider the schooling for children as I
did not have any sense about a school-
housing.
259
2007 Nantian
Garden
Three
bedrooms
Multi-story building,
area of 100m2, a
school-housing
The previous homeowner bought it for
around 700,000 a year ago, and I
bought it for 1.4 million, after a few
months, the price rose to 1.8 million,
and soon the house price fell to 1.2
million in 2008 because of the global
economic crisis, but soon it did not fall,
the school-housing is very resilient.
2008 Luohu Binfen
Shidai
two
bedrooms
high-rise building, area
of 70m2, relatively small
total 900,000 yuan. it was close to my
workplace and with good public
facilities. The price was affordable. At
that time, I did not have a baby, so, I did
not consider about child's schooling at
all, I just thought about it a transit-
house. Now I knew it was in the
catchment of the Luoling Primary
School.
2010
Greenview
South Bay
Peninsula
small two
bedrooms
high-rise building. The
area was small, and it
was bought only for
myself
My first home. It cost around 10,000 per
square meters, which was much more
expensive than the price outside the
Second Line. I bought it Just because of
the sea view. there were urban village
surrounding and there was no good
school. After I got married and had a
baby, I found that it was too small to live,
let alone the bad surrounding
environment and bad school. I began to
worry about the issue of school-
housing.
2012 LongHua
LaiMeng
three
bedrooms
area of 120m2, when
adding the gift area, it
reached 140-150m2.
The same money could only buy 90m2
in Shekou, and this house offered a lot
of gift area. It turns out that Longhua
developed very fast. My house is a very
good purchase. at the time I bought it,
the area was still immature. but now the
facilities and school are very good. The
public transportation is also perfect,
very close to the subway station, and
one stop from the high-speed rail
station. I think that the Shenzhen house
prices will still rise. No more rising
would prove that the city is not attractive
any more. Now young people are not so
keen on buying a house, they like
260
renting house comfortably and
conveniently.
2013
Near Longgang
Central City
Three
bedrooms
High-rise building, the
second last station of
the subway
ShuangLong Line,
relatively rural area
The house is quite off central, but the
price was what I could afford.
Fortunately, it is still near the subway. It
is good to rent out. It’s too far away to
be convenient for my son going to
school and I going to work. I rented a
house close to my son’s school and my
workplace.
2015 Sea World
ShuangXi
four
bedrooms
High-rise building, area
of 208 m2, after filling
the void part of the
living-room, the actual
area is 320m2, luxury
sea view residence
We chose Shekou because the house
layout is good, and fully decorated,
using German imported kitchen and
bathroom facilities. The actual usable
area is large after filling the void. There
are good schools around. And there are
many large companies, so the
population quality of this area is high.
2015
Henggang
Xinyi Real
Estate
Three
bedrooms
High-rise building, area
of 114m2, gift area of
30m2. decorated
house. near subway
station.
After having a child, we only wanted to
buy a big house. there is a subway
which is convenient. And the house was
with full decoration. that everything fell
perfect in line. We enclosed the balcony
to gain an extra 30 m2. We already own
two houses, so we do not have a quota
to buy the third house.
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