The long shadow of the state: financializing the Chinese city

Despite controversy over the meaning of financialization, there are two major dimensions to understanding whether the city is financialized. This paper explores these dimensions in China, namely whether the Chinese city (increasingly) uses financial instruments to carry out its urban development tasks and whether the utilization of financial instruments imposes a financial logic on urban governance. Financing the Chinese city involves creating land collateral and financial vehicles, extending shadow banking, formalizing and securitizing local government debts, and “deleveraging” developers’ debts through urban redevelopment. Applying land instruments leads to financial securitization, showing a financial logic in operation. However, financializing the Chinese city is engineered by the state through its credit expansion to cope with the Global Financial Crisis and the ramifications of the entrepreneurial model of the “export-oriented world factory.” It is a state-led financial turn, in which the financial logic is imperative but may not occupy a central position.