Achieving sustainable urban development and optimizing the urban scale structure are central priorities in global governance. However, the relentless population agglomeration in Chinese megacities, despite astronomical living costs, presents a prominent “China Paradox” that seemingly defies classical spatial equilibrium theories. This study decodes this paradox by endogenizing the strategic land supply behaviors of local governments. Utilizing a comprehensive panel dataset of 287 Chinese prefecture-level cities from 2006 to 2020, we construct a multi-dimensional mediation framework and a panel threshold model to investigate how the structural misallocation of land—specifically, the pro-industrial and anti-residential bias—reshapes urban migration dynamics. Empirical results reveal that this land allocation bias acts as the fundamental institutional engine driving urban polarization. Analysis of the transmission pathways reveals a complex push–pull dynamic at the core of this paradox. The artificial restriction of residential land drives up housing prices, generating a profound centrifugal “push” force. However, this dispersion effect is entirely neutralized by two formidable centripetal “pull” forces: industrial co-agglomeration fueled by subsidized manufacturing land, and premium public service capitalization financed through lucrative land revenues. Furthermore, this demographic pull effect exhibits a pronounced inverted U-shaped dynamic, peaking during the rapid growth phase but diminishing precipitously once cities cross the threshold into highly developed megacities (LnGDP > 11.525). These findings highlight the ultimate unsustainability of the land-driven urbanization model. We propose a paradigm shift towards sustainable urban governance, advocating for stage-specific land supply reforms and the transition from monopolistic land finance to a sustainable property tax system to foster a spatially just and resilient urban hierarchy.
Yu et al. (Sun,) studied this question.
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