Collusion of Interests Led By Developer: A Case Study of Rural Urbanization in China

The urbanization process in contemporary China is largely characterized by the development of rural land on the periphery of cities. As rural land in China is ‘collective-owned’, it must be expropriated by the state for urban development, so that the ‘land use right’ can be sold to developers. This process yields huge ‘land revenue’ for the government, and therefore is widely recognized to be driven by it, with developers acting as participant or colluder.

This study examines the development in Chenjiapu, a mountainous village on the northwest border of Beijing. The Great Wall nearby and its proximity to Beijing makes it a potential site for residential tourism. The case reveals that contrary to prevalent belief, the developer's role in the development process may be dominant, rather than secondary. Through investment in local welfare and gestures of good will, the developer ‘hijacks’ the township government and village committee, who become active supporters of the project; the village committee negotiate with villagers on behalf of the developer, crediting themselves with the aforementioned welfare, thus sustaining the trust and support of villagers; and the economic boost brought by the project is crucial to the promotion of township government bureaucrats. This three-way power game results in a mutually-beneficial collusion with the developer in lead, who smoothly obtains a larger profit with lower management costs. The villagers are excluded from the development process for lack of power and resources, and their interest are impaired by the conscious or unconscious collusion.