The Institutional Structure of a Property Market in Inland China: Chongqing

Abstract

This paper contributes to the understanding of China's urban development by examining the institutional structure of a property market in an inland city: Chongqing. Data were collected from three recent projects through field reconnaissance and interviews. A framework of institutional analysis was used in discussing and interpreting the data. Our analyses revealed an emerging property market with dynamic and evolving new institutions in inland China. In this new market, a variety of actors with different roles and interests in the property development process had come into play. Formal and informal rules governing the development process had been evolving. Although with a time-lag, the rapid formation of Chongqing's property market was similar to that in the coastal cities. Nevertheless, in contrast to the coastal cities, this time-lag led to a property market which was more dependent on state involvement. Chongqing's property market was dominated by government not only because the government formulated development directions and set up rules and regulations, but also due to the practice that government participated in development projects as a party. Irregularities in land allocation, price setting and development control created a keen desire among developers to forge a close relationship with the government. It remained a challenge to the government to set up a complete, transparent and enforceable set of rules in order to guide the newly emerging property market towards maturity.