Whose village? Stakeholder interests in the urban renewal of Hubei old village in Shenzhen

Land Use Policy 91 (2020) 104411

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Land Use Policy journal homepage: www.elsevier.com/locate/landusepol

Whose village? Stakeholder interests in the urban renewal of Hubei old village in Shenzhen

T

Yanpeng Jianga,*, Nalini Mohabirb, Renfeng Mac, Lichao Wud, Mingxing Chene,f a

The Institute for Global Innovation and Development, The Center for Modern Chinese City Studies, School of Urban and Regional Science, East China Normal University, China b The Department of Geography, Planning and Environment, Concordia University, Canada c Department of Geography and Spatial Information Technology, Ningbo University, China d Department of International Trade and Economics, School of Economics, Xiamen University, China e Key Laboratory of Regional Sustainable Development Modeling, Institute of Geographical Sciences and Natural Resources Research, CAS, Beijing, 100101, China f University of Chinese Academy of Sciences, Beijing, 100049, China

A R T I C LE I N FO

A B S T R A C T

Keywords: Urban village Urban regeneration Shared interest Stakeholders Hubei Shenzhen

This article examines the urban regeneration process of Hubei old village in Shenzen, and focuses on interest sharing among stakeholders. Urban regeneration processes are driven by the decreasing availability of construction land in Shenzhen’s city centre due to rapid urbanization and an unplanned, overcrowded urban core. The solution accepted by most stakeholders, i.e., local government, private developers, and urban villagers, is to generate land revenue through the demolition of urban villages like Hubei old village, thus clearing way for Shenzen’s urban development and transformation. However, tenants and small business operators do not benefit from the rising land and property value, and thus do not share the interests of other stakeholders. A further complication to Shenzen’s urban regeneration process is added by those who do not live in Hubei old village but have vocally fought to preserve its architectural heritage. By examining the urban regeneration process of Hubei old village in Shenzhen, this article provides a case study of the complex dynamics of the Hubei urban regeneration program and participatory planning process, taking as a starting point a question posed by an urban villager during an interview: “whose village?”, i.e., who has the right to make decisions on behalf of the urban village?

1. Introduction China has experienced a rapid pace of urbanization unlike any other country. However, China’s urbanization process has occurred at different scales and pace depending on the location and ranking of its cities (both in terms of China’s urban hierarchy, as well as the city’s place within the global economy). The remarkable urban growth in China is often attributed to the role played by the developmental state, as well as entrepreneurial, neoliberal and speculative urbanism (Harvey, 2007; He and Wu, 2009; Wu, 2010; Li et al., 2014; Shin and Kim, 2016; Chung, 2009; Enserink and Koppenjan, 2007; Mohabir et al., 2017; Laurence and Wu, 2005). A common example of these dynamics in China, is found in the mega-urban project of university towns, which is also driven by land based speculative urbanism, to generate land-related profit (Li et al., 2014). In turn, these profits can be applied to transform older areas such as urban villages and industrial

parks in the city centre. In general, most Chinese cities are experiencing expansion at their urban edges and regeneration of their “urban villages” (rural villages encircled by an expanding city) in their downtown core. When it comes to the new-type urbanization and rural revitalization strategy, the questions of how to enhance land use productivity and achieve more sustainable development in cities and rural villages are raised (Liu, 2018; Liu and Li, 2017). Land use issue is at the heart of urban development. Urban sprawl and expansion has been governed through the allocation of land quota by central government (Shen et al., 2019; Wang et al., 2014; You, 2016; Yang et al., 2018). There have been extensive studies on rural migration and urban villages within the field of urban geography in the past decades (Fan, 1996, 2001; Solinger, 1999; Tian, 2008; Liu et al., 2018; Wu et al., 2013; Zheng et al., 2009; Li et al., 2014; Zhou, 2014; Mohabir et al., 2017). The emergence of the urban village is the result of rapid urbanization and the dual hukou and administrative system that

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Corresponding author. E-mail addresses: [email protected] (Y. Jiang), [email protected] (N. Mohabir), [email protected] (R. Ma), [email protected] (L. Wu), [email protected] (M. Chen). https://doi.org/10.1016/j.landusepol.2019.104411 Received 4 March 2019; Received in revised form 3 November 2019; Accepted 3 December 2019 0264-8377/ © 2019 Elsevier Ltd. All rights reserved.

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necessary to understand this city. In 1980, Shenzhen was still predominantly an agricultural economy (mostly fishing and farming); now it is a city with a modern market economy and manufacturing base rivalling that of Hong Kong. Within three decades, Shenzhen grew from a small place of 310,000 residents to a megacity of approximately 14 million residents (Hao et al., 2011). In the process of this rapid urban expansion, the city enveloped rural villages resulting in the creation of 320 well-known urban villages in the city (Hao et al., 2011, 2013). Urban villages account for more than half of Shenzhen’s land (Lai and Tang, 2016). Urban villages are vital to Shenzhen’s economy; the city’s transformation would not have been possible without those residing in urban villages. Rural migrants whose cheap labour represent the backbone of the city’s economy form the majority of residents living in urban villages. Rural migrants are often young, single people who move to the city in search of work. Due to their lack of urban hukou (or official status as a resident of the city), they are viewed by municipal authorities as temporary migrants or a “floating population”. But as Roy (2011) points out, Shenzhen represents much more than an assembly line of rurally-placed urban working bodies, the city also produces urban socio-spatialities, that is, agricultural fields (rural space) are transformed into globally competitive skyscrapers or shopping malls (‘modern’ urban space). This is not all celebratory ‘developmental’ progress. Roy (2011) warns that the process of becoming a world city requires certain spatial identifications (e.g. luxury high-rises) and disavowal of others, namely the housing needs of the provincial migrant laborers. To paraphrase Roy (2011), how can the aspirations of laboring bodies and spaces be reconciled with the “high speed future that is Shenzhen?” (p. 318). Urban villages arise when cities rapidly expand. As Pu Hao (2012) explains, in post-socialist China (i.e., following economic reforms in 1978), cities have been driven by market forces to expand. This rapid expansion often leads to rural villages being encompassed by the new and growing city, forming in effect a village in a city. As a result of the loss of farming land due to urbanization, urban villagers can no longer rely on agriculture to earn a living, and have to seek alternative livelihoods based on existing assets, such as building extensions to their housing and renting out rooms to migrant laborers [Insert Fig. 1]. Without urban hukou (and compounded by the obstacle of high rental costs), migrant laborers cannot rent in the formal urban housing market, thus the only alternative for affordable shelter is found within an urban village. As Hao (2012) sums up, “the government neglects the livelihood of the two most vulnerable groups – the landless peasants and the rural migrant workers” (p. 3)and therefore through a mutual balancing act in tandem with each other, one has found the solution to unemployment, and the other a solution to accommodation. Under Chinese law, there is a clear distinction between urban and rural land ownership. Formally designated urban lands are state owned, whereas rural land is under the ownership of village collectives and therefore outside of urban administration. A rural designation means that urban villages fall outside of municipal government service provisions (such as water, electricity, or sewage). While villagers collectively own the land and are expected to rely on the land to derive their income, village collectives have no formal right to redevelop their land, nor are they legally permitted to engage in private real estate transactions (i.e., sell their land for urban use) (Lai and Tang, 2016). Therefore, the question of “whose land” is not a simple one. Village collectives do have some property rights; even though only the government has the legal right to acquire rural land for urban use, the state cannot simply expropriate land or demolish housing to convert it from rural to urban land use (Lai and Tang, 2016). Thus, the consequence of a dual urbanrural land system is that any government acquisition of village land for urban redevelopment must be negotiated with the collective of owners, with compensation and relocation provided (i.e., compensating villagers for their loss of control over the land, as well as moving them off the land) which can be a costly process. Annexation or enclosure of an urban village (chengzhongcun) frequently results when city governments

differentiates between rural and urban areas (Zhang and Song, 2003, 2012). Despite its striking spatiality (a rural village encircled by urban space), literature on the redevelopment of urban villages has recently appeared (Li et al., 2014; Lin et al., 2011, 2012; Lin et al., 2015; Laurence and Wu, 2005). Furthermore, studies concerning stakeholders’ input into urban village transformation are scarce. Researchers have focused primarily on the formation of urban villages and the role of urban villages in providing accommodation for migrant laborers, as well as encroachment of urban villages by government policy, and the transformation of urban villages through market interests (Zhang et al., 2003; Yeh., 2005; Lin, 2006; Wu, 2007; Tian, 2008; Wang et al., 2009). Research into China’s urban villages have evolved over the last ten years to document reasons for urban village formations including migrant accommodation and the social segregation of urban villages (Tian, 2008; Wang et al., 2009; Liu et al., 2018; Wu et al., 2013; Zheng et al., 2009; Li et al., 2014; Zhou, 2014; Huang et al., 2017; Ling et al., 2014), which provide valuable insights into urban transformation. However, after ten years of transformation, urban villages have been further encroached by industrial, commercial, and residential areas, and are facing gentrification and demolition rather than formation, and thus questions of compensation, and belonging, become increasingly important. When it comes to projects of urban village transformation, apart from the main stakeholders of local government, local villagers are most deeply affected by the process of negotiation, demolition, displacement and compensation, although more and more external forces (e.g., scholars, social media and public society) are becoming actively involved in urban transformation as we witness in Hubei old village. ‘Expert views’ have permeated into discussions over many aspects of stakeholder concerns, especially through local officials, planners, village committees, and public scholars. Earlier studies of urban villages largely focused on institutional frameworks for urban village regeneration, mostly from the perspective of collective, state, and private property developers (Lin et al., 2012) and towards collaborative approaches such as the model applied in urban village regeneration in Guangzhou (Zhou, 2014). However, the unique situation of urban village redevelopment in Hubei offers an opportunity to consider the public as a stakeholder. The purpose of this paper, therefore, is to account for a plethora of factors, interests and mechanisms that explain which stakeholders benefited from Hubei old village urban regeneration, and who were marginalized in the process, thus raising the question of “whose urban village is this?” We are interested in exploring the decision-making processes around urban renewal in Hubei old village. This article proceeds by exploring the transformation of Hubei old urban village in the Shenzhen city center, stressing the mechanisms and arguments behind the urban regeneration process among key stakeholders. Firstly, we provide a brief review of relevant literature, then explain the methods used to collect empirical data, followed by a description of Hubei old village. A case study approach to the findings reveals rich details of the public participation process and allows a closer look at the contestations over Hubei urban village’s regeneration. The article concludes with a discussion of why public participation is necessary to further the interests of all stakeholders, including migrant workers. The article thus contributes to broader literature on the transformation of urban villages and more specifically to stakeholder interests in urban regeneration within China. 2. The formation and transformation of urban village Shenzhen began as an urban experiment. Due to its ideal location across from Hong Kong, it was chosen as the site for China’s first Special Economic Zone in 1980, pressing “a provincial hinterland’[into the service of] Hong Kong with cheap-labor factories and mistress villages” (Roy, 2011., p317) creating one of the earliest industrialized cities in China. As Ananya Roy (2011) has argued, both time (sped up) and place (the transformation from a point on a map to a desirable location) is 2

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Fig. 1. Aerial view Hubei village in Shenzhen. Source: provided by Shenzhen Planning Institution.

general assumption that they are breeding grounds for criminality. Overall, collectively owned lands are in need of redevelopment, particularly relative to the quality of life in urban lands (Lai et al., 2017). Some scholars such as Wu et al. (2013) have explored whether the situation of China’s urban villages is comparable to slums in other parts of the world; they draw a crucial distinction between legal ownership and legal land development and suggest that the security of (partially) legal land development differentiates China’s urban villages from slums in other parts of the world. However urban villages share something in common with other slum areas around the world, that is, informal housing meets a need not addressed in the formal market (Wu et al., 2013). While urban renewal represents an important means for a city government to attract new investors and revenue sources, researchers question whether a regulatory framework would improve housing conditions in urban villages (Lai et al., 2017). On one hand, Wu et al. (2013) suggest that regulation is not a quick fix, because it could further shrink the supply of low-cost housing. On the other hand, informal lowcost housing allow migrant labourers to exist on miserly wages and therefore sustain economic growth through low productions costs for industries reliant on their cheap labour (Wu et al., 2013). The question of de facto property rights – who has a say over the land and who benefits from the land and Shenzen’s modernity – remains a complicated one. To accommodate both housing needs and sustained economic growth, it is important examine stakeholders in the urban development process, to ask who stands to gain, and whether gains are equitably distributed. In essence, this complex “interplay between the state, the market, and society” (Lin et al., 2015, p1777) can be explored through an examination of public, collective, state, and private interests. Most urban regeneration projects in China are conceptualized as neoliberal projects, oriented towards (hyper-)economic growth and consumer practices. However, neoliberal urban projects often suggest a decentralization, with decision making power shifting away from central government to municipal authorities, but not downwards to the level of public participation in urban planning (Guo et al., 2017). We are concerned with the interests of various stakeholder groups (urban villagers, residents in high-rises surrounding the urban village, migrant labourers, scholars and professionals, property developers, government officials), taking note of how their interests separate or converge, and influence the urban regeneration process in Hubei old village. We argue that there is an urgent need to better understand the drivers and characteristics of urban transformation in Shenzhen’s urban villages where the urban village has become a space of shared interests (albeit unequally weighed). In particular, Shenzhen provides an interesting case study since its government led planning framework does not rule

choose to build around villages to avoid complex or costly compensation to residents for land (Lai and Tang, 2016). There is a growing scholarship that examines the impacts of urban village formation, its causes as well as its contributions to informal housing (Tian, 2008; Chung, 2009; Hao et al., 2011, 2013; Wu et al., 2013; Lai and Tang, 2016; Lai et al., 2017). The creation of an informal urban village housing market is a consequence of the complex negotiations required to convert rural land to urban use (since urban development can only occur legally on state-owned land) (Lai and Tang, 2016). However, villagers have the legal right to build housing on their urban village land due to their rural hukou status, unlike urban residents (especially floating workers). Construction is approved by the village authorities, and not constrained by building permits or inspections (Hao et al., 2013). This places urban villages outside of urban planning systems and regulations, allows villagers to modify and expand their housing to create rental spaces (Hao et al., 2011). These rental spaces provide an important source of income for villagers who are often left out of the urban economy. Since urban villages are surrounded by the city, any housing expansion in urban villages is essentially vertical, created by high-density multi-storey housing which is at least partially illegal (Webster et al., 2016). Insecure property rights (or technically, as Webster et al. points out – air rights) in urban villages means that these structures are often seen by villagers as short-term solutions rather than long-term investments therefore the structures might not be maintained, and upgrades are rare (Webster et al., 2016). However, renovations and expansion makes the land more valuable, and therefore can be an important leverage component in compensation negotiations with municipal authorities. Weak government oversight in urban villages and a consequent lack of renting regulations created low-rent spaces for migrant labourers (Hao et al., 2011). The affordable housing market is not of interest to real estate developers who are more concerned with commercial developments or high-rise condominium buildings which will yield high profits (Wang & Lok., 2017). This vacuum in affordable housing has created a high demand as well as a reliable income source for villagers, and in turn provides a solution to migrant workers who require housing close to their employment or at least close to transportation. Thus, it is commonly acknowledged that “the government turned a blind eye” to this new housing market on village land (Hao et al., 2011). As a consequence of the lack of regulatory oversight (since this is not stateowned land), fire safety or public health concerns such as poor ventilation can pose problems. Hence, urban villages have become associated with overcrowding and decay, or social ills such as criminal activities and slum-like conditions (Wang et al., 2009). Even if there are not social problems within urban villages, they are stigmatized by the 3

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Fig. 2. The development process of Hubei village. Source: compiled by authors.

4. The development of Hubei old village: a slum impeding luxury buildings in Shenzhen?

out community participation (Chung., 2009). The case study will map out the points of mutual benefits/conflicts within the project and explain the reasons behind the delayed urban transformation of Hubei old village.

Hubei old village is considered the birthplace of Shenzhen (interview with local residents and planner on 18 December 2016). It is located in the heart of Luohu district in the north of the East Gate Business Hub Hubei Road, south of Zhongxing Road, west of Luohu Cultural Park. Hubei is among the last twenty urban villages remaining in Shenzhen. One of Shenzen’s city planners estimates that one thousand villages have disappeared in the past two decades with an ancient village disappearing every week in Shenzhen (Interview with local planners and villagers on 22 February 2017). Hubei old village encapsulates the problem of stigmatized urban villages in Shenzhen which are seen as overcrowded, and requiring renewal (Fig. 1). Thus, the transformation project of Hubei has attracted considerable attention and concern from local residents, planners, media and scholars, as well as the general public. The Hubei village covers an area of 78,000 square meters, and a total construction area of 300,000 square meters with 986 original old houses in the village, in which the village self-construction area is about 250,000 square meters. The Hubei Industrial Company, a collective company established by Hubei village committee in 1992, built about 50,000 square meters of buildings to rent and operate businesses, in an area which is surrounded by luxury high rises. Hubei has a population of more than 20,000 people; migrant laborers account for 95 % of its population (interview with local Hubei Industrial Company, village committee and local official on 18 December 2016 and 23 February 2017). In 1992, in order to speed up the development of the Shenzhen Special Economic District, the Shenzhen Municipal Government proposed a strategy for rural urbanization and transformed the rural areas of the Shenzhen Special Economic District into joint-stock companies and village committees (Fig. 2). As a result, in December 1992, Shenzhen Hubei Industrial Co. Ltd and Hubei village committee were established to promote the development of a collective urban village economy. Shenzhen Hubei Industrial Co. Ltd is a collective enterprise owned by 1600 shareholders, comprised of 500 households and led by the Hubei village committee. Shenzhen Hubei Industrial Co. Ltd constructed the Huangguang hotel, Hubei Hotel, Huxi Hotel (all village collective owned companies), and built the East Gate Market and Hurun building (also owned by villagers) to capitalize on the village’s collectively owned land (interview on 28 December 2016 and18 May 2018). Shenzhen Hubei Industrial Co. Ltd employs 400 staff; its registered capital was 98 million yuan in 2016, and the company's main economic pillar is property leasing.

3. Method This paper is based on 32 interviews conducted in 2016 and 2017 (with two supplementary interview sessions in 2018) as part of a larger research project on the nature and impact of urban village regeneration, and particularly public participation and its place within the broader canon of urbanization and urban renewal in China. The research project involved two substantial periods in the field (in 2016–2017 and again in 2018). The first field visit began with an academic conference tour organized by the Geography Alternative conference in 2016, followed by many shorter visits. Eight project officials were interviewed, all of them on a repeat basis. One was an official from Luohu district government who was responsible for the coordination between the district government and property developers (namely, China Resources Land Shenzhen Company). Four interviewees were officials in charge of the urban renewal project in Hubei; one of these was a senior department head in charge of development and urban regeneration of the Hubei area from 2009 to 2016, and three were senior officials in charge of the operation of the project. Two interviewees were senior officials of China Resources Land Shenzhen Company, the state-owned company involved in planning, construction, and urban renewal of Hubei village; they were responsible for land development and planning; three others were senior officials in charge of major aspects of the project. To provide background and context to the negotiation process, key stakeholders not directly involved in the project were approached for their views; key stakeholders directly involved in the urban regeneration of Hubei old village include district officials, planners, design and planning consultants, scholars, academics, architects, planners and other professionals, village leaders, tenants, local villagers, citizens and small business owners. Documentary and online materials were also reviewed including planning and policy documents, media reports, and the urban regeneration proposal for Hubei. Lastly, interviews and focus group discussions were undertaken with 26 interviewees consisting of local residents, tenants, and small business owners who will be relocated as a result of the project. As is customary in a research paper of this nature, the names and exact positions held by the interviewees have been withheld to protect their anonymity.

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Fig. 3. Small business in Hubei village. Source: photo taken by authors.

of the greatest benefits villagers received from the renovation and transformation plan of the old village). The government’s transformation plan also brought meaningful economic benefits for villagers (landowners) in Hubei old village: property rental rates increased and local villagers were able to move out of their houses because they could now afford a decent apartment in the city. As a result, the local people's deputies submitted a proposal (2006, and 2009) to open a firefighting system in Hubei Old Village to ensure the safety of life and property for tenants who remain in Hubei village. Once again, Luohu District Government paid attention to the transformation of Hubei old village. In the "Luohu District National Economic and Social Eleventh Five-Year Plan" (2006–2010), where Luohu district government put forward the goal of "transformation of Hubei old village and promotion of the Dongmen shopping area” (p. 35), the determination of Luohu district government to reconstruct the area of Hubei village was solidified. Luohu District Government and the stateowned company of China Resources Land property company signed a strategic cooperation framework agreement in February 2011: China Resources Land property company would not only undertake the urban renewal project of Hubei village area but also participate in other urban renewal projects within Luohu district. After signing the agreement, Luohu District Party Secretary Liu Xueqiang reported that over the next five years, Luohu government will rebuild 9.3 million square meters of industrial space through urban renewal (Fig. 4). The transformation of the Hubei area has become a new bright spot in the international consumer centre planned by the Luohu district government. The international consumer centre represents a proposal to rebuild surrounding areas into more than 1.98 million square meters of industrial space for the construction of shopping centres, a conference centre and exhibition space, five-star hotels, parks, apartments and other modern business elements comprising a large-scale integrated commercial centre, named the "Vientiane City” with a total investment of over 30 billion yuan. Luohu district government aimed to construct a new landmark whereby Luohu District will become Shenzen’s business centre, fashion hall, and tourist destination (Luohu District Committee Office, 2006). In 2013, Hubei old village was included in the international consumer centre plan of the government, which became a 40‐hectare renewal coordination area (Fig. 4) . As the last ancient village retained in its most complete form in the relatively young city of Shenzhen, Hubei old urban village transformation has not been without contestation from the public. Members of the public have spearheaded a preservation campaign, arguing that the city would lose its cultural heritage if the old village was demolished in the name of development. This group of academics, architects, planners

Hubei village is a compact but affordable space. Its dynamic, and to some extent chaotic, street life provides consumer opportunities for local Shenzhen residents and migrants. Hubei village has multiple functions, but is most well-known for its lively markets. In the early morning, it is a seafood wholesale market, a vegetable market during the daytime, and a night market for socializing in the evening. The East Gate market was once among the ten largest vegetable and meat markets in China (Interview with planner on 18 December 2016). By 2010, the East gate market had 5000–6000 workers in the wholesale fish market (Interview with local official on 22 December 2016). The Hubei village serves not only migrants but also local residents who reside in the luxury properties surrounding Hubei and also shop for fresh produce in the market. Local residents and officials proudly depict Hubei village as “the place which never sleeps; it’s full of people all day long, full of life (Fig. 3). Particularly for migrants, Hubei provides a convenient place for their livelihood and sense of home” (Interview with local officials and villagers on 6 May 2017). Hubei old village was included in the scope of urban renovation and regeneration of the old village by Luohu district government in 1992. Lacking funding and facing opposition from villagers, the renovation plans for Hubei old village were postponed until 2011. To avoid farmers expanding their own homes, which would increase costs for the government acquiring land, Luohu district government issued a planning policy in March 1999 stating that villagers were not allowed to build any constructions in Hubei old village, unless approved by the government (Interview with local officials, 22 March 2017). However, villagers continued to expand their houses without planning or design. Most expansion has not been authorized by the local government, which has resulted in a series of problems including crowded, disorganized roads without a sewer system, and what many consider a garbage-strewn village. Luohu government felt that Hubei’s unkempt appearance had a negative effect on the urban image of Luohu district. Therefore, Luohu district government listed Hubei old village as a demonstration project for renovation and transformation, in July 2003. Underground pipe and power supply networks were laid, TV, telephone and cable lines were grounded and connected to villagers’ homes, relying on local government’s subsidies of 3 million Yuan and villagers' self-financing of 10 million yuan (Interview with local district official on 25 March 2017). In addition, the “wearing clothing and a cap” project was instituted by the Luhuo dsitrict government to repair and repaint exterior walls and roofs in order to beautify the city (穿衣戴帽工 程) (Luohu District Committee Office, 2006). After the transformation and renovation project, all so-called illegal buildings without planning permission in Hubei village have become de facto legal buildings (one 5

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Fig. 4. Planning scheme for transformation of Hubei village by different planning institution. Source: local Planning Institution.

Fig. 5. An eye-catching planning scheme by property developer. Source: local Planning Institution.

renewal unit is divided into 63 land plots, belonging to more than 50 units or individuals. As many as 4000 small business owners are involved in the demolition negotiations. Yet the Shenzhen city government and the local district government shifted the task of negotiation to property developers by signing a “strategic cooperation framework agreement”. Property developers are in charge of planning and project construction, as well as negotiations with local villagers for land compensation. The city and district government reserve the right to approve planning of the proposed urban renewal area and monitor the progress of the project. Shenzhen compensation standards for the relocation of villagers was decided largely by the market rather than local government (interview with official from local district government on 28 December 2016). The compensation was calculated based on land and property value around the Hubei area. The compensation standard for relocation of an urban villager was largely based on the location of the urban village, the

and other professionals argued that the newly released promotional film (sponsored by Luohu district government) indicated that Hubei old Village did not have the protection of a cultural heritage designation. As a result, the group co-sponsored "Hubei ancient village 120 city public plan” as a participatory planning exercise, and recommended changes to the existing plan for renewal of Hubei old village to protect the old buildings. However, few if any stakeholders (including academics) have publicly expressed concern over the loss of low-income housing that will impact the migrant laborers, or how the loss of market space will affect migrant laborers’ livelihoods (Fig. 5). 5. Decision making among stakeholders in Hubei old village As one of the oldest “old villages” in Shenzhen, Hubei old village attracts much attention because of its East Gate business circle in the city centre, which sits on highly valued land. The Hubei old village 6

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Shenzhen company has offered to compromise, stating that the project will preserve 16000–18000 square metres of old village building to maintain the vibrancy of local life, however other stakeholders (local government, property developer, villagers) have not reached a final agreement to put forward on the transformation project. Local villagers state that the best chance for the demolition and renovation project of Hubei old village was missed. House prices have reached a historical high in 2016 in Shenzhen, but the real estate market is now in a state of stagnation and decline. Local government and property developers also lost their original momentum and motivation. In particular, the property developers are reluctant to be involved in a renovation project of Hubei village due to declining profits. A quasi-alliance was formed by multiple stakeholders including the Shenzhen city government, Luohu district government, property developers and banks, as well as residents living surrounding area. The leverage behind the Hubei project is that all stakeholders (tenants and small businesses owners are excluded) will benefit from rising land value and property prices generated from investment in public and private sectors of urban transformation. The China Resources Land property developer planned to invest 30 billion Yuan in Hubei project to finish infrastructure facilities and construction of office towers, luxury properties squares, and hotel buildings. After compensation and land taxes, all rural land will be transformed to urban land, the property developer will own the most expensive land plots in the city centre, the location of the latest flagship project in Shenzhen. The Luo district government, as the main champion of the project, will benefit from land tax and income tax revenue (interview with local official on 19 December 2016); the Hubei project will add more than 1.8–2.4 billion fiscal revenue and 50000 jobs for the local government. As the case of the Hubei old village suggests, the Shenzhen city government initiatives aimed at creating and enhancing a new city image through a ‘spatial fix’ – by demolishing the old village to form a new urban image and generating land revenue by transforming rural land into commercial and property land – requires a process of interest sharing across heritage concerns and property appreciation. Banks can also benefit from the interests stemming from bank loans, as government-led transformation projects have been seen as the safest and most profitable form of commercial property development project. Banks are willing to invest in the Hubei old village renovation project due to long-term sustained loan income. Moreover, the local urban villagers, are waiting for the government to launch the transformation project, so they may benefit from compensation. As a result, the expanded multi-storey rural home will be legalized and compensated through the project of transformation. The compensated commercial property units can be traded at a high price due to their attractive location on the property market. Farmhouses in Hubei old village built on collective land cannot be traded on the property market, so urban villagers have been keen to support the renovation of Hubei village. Small business owners and the actual occupants Hubei village (tenants), have been marginalized in the process of negotiation and compensation in the project. Even with economic difficulties, transformation projects will continue to be property-led, government-led and corporate-led because local government and property developers both benefit from the transformation project: local government officials gain economic and political achievement by the transformation of the city image while property developers benefit from rising land value and property prices. Small business owners and the real occupants of the urban village do not benefit (Fig. 6), “we have been ignored in the process of negotiation, consultation and further planning of this place, as we are just tenants, even the whole business we run and whole communities we lived here. We don’t have any right to say in this project, we are the largest affected group as our future life and business have never been considered. It is unfair for us even we don’t have local hukou and ownership of those houses” (Interview with business owners and tenants on 22 December 2017).

property prices of surrounding areas, the annual income of urban villagers through renting and the willingness of local villagers to submit to demolition, rather than relying on a demolition compensation standard issued by the local government. A majority of urban villagers (97 %) voted for this project, but the project still stagnated due to external pressures. The Implementation Rules for the Urban Renewal Measures applied in 2010 stipulate that 100 % of owners need to agree to the relocation compensation and resettlement agreement before demolition could begin. After 2012, China Resources Land property company repeatedly stated in public that the overall renovation project of Hubei Village is one of the company’s important projects in Shenzhen, yet its progress has been delayed. Market participants interviewed revealed that the compensation price for the demolition of housing near East Gate Seafood Wholesale Market, offered by the China Resources Land property company was 35,000 yuan / square meter, a compensation ratio of 1: 1.3. However, as property prices in Luohu are on the rise since 2012, most homeowners' expectations increased. Luohu old village transformation will be the starting point for urban renewal in Luohu district, therefore negotiating a start date for construction is an urgent task for the local government. Over the past few years, Luohu old village reconstruction project has proven difficult to promote, mainly because developers and the original owners did not share the same interests before 2012. Based on property price data, the average property price in Luohu district in 2013 was about 30,000 yuan/ square metre, by the end of 2015 it reached higher than 57,000 yuan/ square metre. The soaring expectation of local villagers in terms of a compensation standard is hard for property developers as it cuts into their profit margins. As a result, the Shenzhen city government has started to explore new ways to balance the interests of developers and property owners in urban villages (Interview with planners in Shenzhen planning department 28 February 2017). Shenzhen city government and Luohu district government attempted to transform the Hubei old village into an international commercial centre and new urban flagship project, without taking into consideration the balance between regeneration and protection of the old village. Old Hubei village was treated as an investment to drive economic development. The property developer planned to build a large modern urban complex by demolishing the entire old village and building a high-rise property community, new luxury hotel and office tower to make a profit. Local villagers attempted to “get rich quick” from the demolition compensation due to high property prices. However, industries including retail, textile, hotels, office buildings and markets also exist in Hubei old village. The implementation of the urban renewal project impacts a large number of employees in these industries. Additionally, tenants and small businesses also wish to keep the old village, but their voices are not heard in the process of decisionmaking because they are not considered true stakeholders. However, the public voice emanating from scholars, planners, professors and local residents have been heeded by local government, even if they do not live in Hubei old village; their influential opposition has hindered the transformation project. Shenzhen Hubei Industrial Co. Ltd. conducted the first shareholders' meeting on 23 September 2012 as the Urban Renewal Voting Assembly for Hubei old village. More than 1000 shareholders and owners of Shenzhen Hubei Industrial Co. Ltd. attended the meeting. The demolition and renovation project was passed with 97.07 % of the votes, an extraordinarily high rate of approval by local villagers. The China Resources Land property developer was chosen as the main developer by all shareholders. However, the public, consisting of a group of academics, architects, planners and other professionals, became an active participant in discussions around the Hubei regeneration project, even though 97 % of local villagers agreed to the transformation of the old village. Consultant teams have vetoed the proposal designed by planners and property developers and wrote statements to the government to advocate a stoppage of the project until the question of heritage could be settled. The China Resources Land Property 7

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Fig. 6. The benefit relationship among stakeholders in Hubei village. Source: compiled by authors.

6. Conclusion and discussion

actively involved in the project. Hence, the question can be raised that who can have a final say in the process when local government and local villagers agree to the project with different interests and motivation. The renovation of urban villages and old residential communities in the city center is an urgent problem for all cities, but particularly in larger cities like Shanghai, Beijing, Guangzhou and Shenzhen, as the old residential area and urban villages lacking residential facilities have become undesirable areas of the city center affecting the lives of local residents and the city’s image, which in turn reflects on the political performance of local government officials. So the transformation of urban villages and old residential communities in the city center rather than urban expansion in suburbs will be of growing importance to governments at various levels. The project of Hubei project could become a benchmark project for the transformation of Chinese urban villages or residential communities in the city centre of Shenzhen, and provide replicable experiences and solutions for other cities in terms of urban transformation. The stagnation of the Hubei project is largely due to the uneven distribution of benefits from rising land value and property prices generated from public infrastructure investment. Local government, local villagers and property developers shared common interests but, the tenants and small business owners in Hubei village – the most affected group – are excluded from compensation, negotiation and distribution of benefits. A truly public voice cannot be heard in the transformation of the city center despite a public participatory process. The establishment of an interesting-sharing model among all stakeholders in the renovation of urban villages and old residential communities in the city center is the key to project execution. In addition, land is at the heart of urban transformation, land use policies need be reformed, particularly, industrial land and collective land should be encouraged to transform to commercial and residential land in cities by planning departments, which will address the shortage of land use in city centre. Compensation for land use in urban villages should be reformed as well, compensation standards should be jointly negotiated by main stakeholders of local government, property developers, local residents and migrant laborers, small businesses through market mechanism which are conducive to the implementation of urban transformation in urban village and can be applied to future urban transformation projects in China.

This paper argues that the transformation of Hubei old village in Shenzhen contests the view that both the village owners and tenants of Hubei village have lost a right to have a say in urban regeneration after local government and property developers and the public joined the participatory urban planning process. This paper has shown that the initial project of transformation of Hubei old village is deeply entangled in the rising value of land and property generated from speculative urbanism in China. The sustainability of speculative urbanism is an expectation of main stakeholders interested in the profiting from the real estate boom of rising property values. Instead of resistance from relocated villagers, the planning of Hubei old village transformation project is almost fully supported by local urban villagers even though this project has been characterized by demolition of the slum in the urban village to make way for luxurious new-build housing property, a high-end office tower, and five star hotel catering for political and economic elites in city. However, the process of negotiation for compensation and planning was heavily influenced and interrupted by interventions from the general public, particularly, scholars, surrounding urban residents, some planners, and intellectuals outside of Guangdong province, which slowed progress on the project. The data discussed earlier in this paper suggests that the local Luohu district government, property developers, and local villagers who own the houses and small shops but do not live in Hubei have formed an alliance to benefit from the rising land and property prices through urban restructuring of the urban village. However, the stalled project of Hubei old village has demonstrated that despite alliances, the project stagnated due to several factors such as a slowed down economy and the active public involvement of planners, academic and public media under the umbrella of historical heritage protection and urban justice, which reflects the seemingly competing goals of the government’s mission of to be a modern global city while the mission of the public is to keep historical buildings and memory. Hubei’s experience in the process of planning and negotiation allows us to expand the urban renewal debate and the role of main stakeholders in urban regeneration and transformation of China’s urban village in the context of speculative urbanism in China. Particularly, the transformation and gentrification of the urban village is challenging for local government, since it was more focused on local urban villagers with local hukou rather than tenants and main internal stakeholders 8

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