China
Why China’s growing cities do not threaten farmland
Author: John Gibson, University of Waikato
China recently announced strict controls to stop big cities expanding on to neighbouring farmland. The Minister for Land and Resources Jiang Daming justified these controls by claiming that good farmland has been ‘eaten by steel and cement’. To safeguard food security, land on the outskirts of cities will be classified as ‘permanent basic farmland’ that can be used only for cultivation.
These controls are to apply first to big cities like Beijing, Shanghai and Guangzhou. Attempts to restrict the growth of big cities are long-standing features of China’s urban policy.
Yet these restrictions likely will do more harm than good.
Housing prices in China’s biggest cities are extremely high relative to incomes, and restricting land supply will drive them even higher. For example, the price per square metre of apartments in Beijing is more than four times that of Chongqing, and the price-to-income ratio is over twice as high. It is variation in land prices, rather than construction costs, that accounts for these differences in house prices.
High house prices, and other distortions due to a restricted land supply, may choke off the expected benefits from allowing big cities to expand. China has more to gain from concentrating economic activity than is the case for developed countries. A legacy of China’s history of central planning and migration controls is that it has too many small cities.
It is also unclear whether or not China has a shortage of farmland.
China is increasingly open to importing land-intensive products, as shown by its recent free trade agreements with food exporters like Australia and New Zealand. Even ignoring trade, studies based on satellite remote sensing show that China’s cultivated land area in fact increased (by 2 per cent) in the two decades prior to 2000. These same methods also show that urban area expands by only 3 per cent for every 10 per cent increase in city GDP. This ratio is much less than it is elsewhere, indicating the dense nature of China’s cities.
Much of this evidence is ignored in policy discussions that suggest urbanisation in China relies excessively on land conversion, which is causing inefficient urban sprawl.
My recent paper, co-authored with Chao Li and Geua Boe-Gibson, estimates rates of area expansion for an almost national sample of 225 urban agglomerations in China from 1993 to 2012.
City area in China is measured in three ways. The first is to use administrative data on the built-up urban districts (shiqu) of prefectural cities reported in City Statistical Yearbooks. Such estimates may be too low since local level governments may undertake land conversions to help finance their budget but not report this to higher levels of government who may be setting limits on land conversion.
The other two methods use satellite-detected night time lights, with different thresholds of brightness (in percentiles of the maximum light detected) to distinguish urban from non-urban areas. Compared to other remote sensing data, night time lights tend to make cities look too large, especially if a low brightness threshold is used, but the relative error is small for large cities.
Over the two decades from 1993 to 2012 the average annual rate of expansion in land area of these agglomerations was 8 per cent according to night lights, implying a doubling time of nine years. In contrast, expansion rates appear to be just 5 per cent (15 year doubling time) if data from City Yearbooks is used. The gap in expansion rates between the administrative data and the remote sensing estimates is even larger once city GDP and registered population are factored in.
A clear pattern emerges of a slowdown in the rate of expansion of these agglomerations. The second decade from 2003–2012 has annual expansion rates that are from 6–8 percentage points lower than the first decade. If local GDP and population are factored in, the annual expansion rates are even lower — by between 6–10 percentage points. Even the built-up area estimates from the City Yearbook data show a significant slowing in expansion rates.
When city GDP and registered population is taken into account, it seems that — as previous studies have found — a 10 per cent rise in city GDP is associated with a 3 per cent increase in city area, and local population growth has no significant effect. There is no evidence to suggest there is a shift over time in the driving forces of urban expansion that causes an inefficient sprawl beyond what is driven by economic growth.
The increasing land area of the agglomerations reflects China’s urban population’s demand for living space, along with the land needed for commercial and industrial development. Since the rate of urban area expansion appears to be already slowing down, artificial restrictions that prevent big cities from expanding on to nearby farmland are neither necessary nor desirable.
John Gibson is Professor of Economics at the Waikato School of Management, University of Waikato.
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Why China’s growing cities do not threaten farmland
Business
Wegovy: The Popular Weight-Loss Drug Now Available in China
Novo Nordisk launched Wegovy in China after approval, competing with Eli Lilly’s upcoming weight-loss drug. The treatment, costing 1,400 yuan, targets obesity but has potential side effects and isn’t covered by healthcare.
Wegovy Launch in China
Novo Nordisk recently launched its weight-loss drug, Wegovy, in China after obtaining approval from local health authorities in June. The introduction of Wegovy is expected to increase competition with Eli Lilly, which has also received approval for its weight-loss treatment, although it has not yet been released in China’s significant pharmaceutical market.
Cost and Accessibility
In China, a set of four Wegovy injections will be priced at 1,400 yuan (approximately $194), significantly lower than the drug’s U.S. price. However, patients will need to pay the full amount out of pocket since Wegovy is not yet covered by the national healthcare insurance plan.
Benefits and Side Effects
Research indicates that Wegovy can help users lose over 10% of their body weight. The drug contains semaglutide, which assists with appetite control and satiety. While Wegovy has been gaining traction globally, it may cause side effects like nausea. Concerns have emerged about its misuse among individuals who are not obese, prompting medical professionals to remain vigilant.
Source : Popular weight-loss drug Wegovy goes on sale in China
China
China Implements New Measures to Increase Foreign Investment in A-Share Market
China’s 2024 updates to strategic investment rules simplify A-share market access for foreign investors by lowering shareholding thresholds, reducing lock-up periods, and increasing investment options, reflecting a commitment to greater market openness and participation in economic reform.
The 2024 updates to China’s strategic investment rules simplify entry for foreign investors in the A-share market by lowering shareholding thresholds, reducing lock-up periods, and expanding investment options, signaling a commitment to increased market openness and flexibility through these new measures.
China’s capital markets are undergoing a significant transformation as part of the nation’s ongoing commitment to economic reform and openness. The recent update to the Administrative Measures for Strategic Investment in Listed Companies by Foreign Investors (hereinafter, the “new measures”) reflects this commitment, targeting an increase in foreign investor participation in China’s A-share market. For nearly two decades, China’s “strategic investment” pathway provided foreign investors with access to shares in A-share listed companies, but strict requirements—such as high minimum investment thresholds and prolonged lock-up periods—made it accessible only to select large investors.
The new measures, effective December 2, 2024, relax many of these restrictions to attract a broader and more diverse range of foreign investors. Key changes include lowering the minimum shareholding threshold from 10 percent to 5 percent, reducing the asset requirements from US$100 million to US$50 million in assets, and shortening the lock-up period from three years to one. Additionally, foreign investors can now use equity from unlisted overseas companies as consideration, while new investment routes, like tender offers, enhance flexibility.
In 2005, China introduced the Strategic Investment Regime as part of its broader efforts to open up its financial markets to foreign capital while retaining a level of control over sensitive industries. This framework allowed qualified foreign investors to acquire strategic stakes in Chinese A-share listed companies, aiming to promote foreign participation in the domestic market.
However, the stringent requirements—such as high minimum investment thresholds and extended lock-up periods—restricted this pathway to a limited pool of large, multinational investors. The regime reflected China’s cautious approach at the time, seeking to balance openness with economic stability and control over critical sectors.
A decade later, in 2015, China implemented its first significant revisions to the Strategic Investment Regime. These amendments sought to make the investment process more accessible by easing certain restrictions, aiming to encourage foreign capital inflow as China continued its gradual integration into global markets.
While some requirements were relaxed, the fundamental limitations—such as high entry thresholds and complex approval processes—remained in place, meaning that access to China’s A-share market was still primarily confined to major institutional investors with substantial capital.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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China
Less is More: Rethinking Indonesia’s Tariffs on China
Rising concerns over China’s industrial overcapacity have led countries to impose higher tariffs, including Indonesia’s planned 200% tariffs on Chinese goods, risking Indonesia’s competitiveness and economic security.
Tariffs Escalate Amid Concerns of Overcapacity
Concerns regarding China’s industrial overcapacity have prompted countries to increase tariffs on Chinese goods. Indonesia, following the U.S. example, plans to impose tariffs as high as 200 percent on various Chinese imports, including textiles and ceramics. This response aims to safeguard local jobs from the influx of inexpensive Chinese products.
Economic Impact of Tariffs
These tariffs are designed as safeguards and anti-dumping measures against potential job losses in Indonesia. However, the ongoing investigations have not definitively shown that China’s practices are the root cause of these issues. The political appeal of broad tariffs might lead to unintended consequences, such as reducing the overall competitiveness of Indonesian exports and risking retaliatory measures from affected countries.
Dependency on Chinese Goods
Indonesia heavily relies on Chinese manufacturing inputs, which constituted over 26 percent of its intermediary goods imports in 2021. With competitive pricing, these inputs have enhanced Indonesia’s export capabilities, particularly to markets like the U.S., where the trade surplus increased from $8.58 billion in 2019 to $11.96 billion in 2023. Reducing trade openness may ultimately undermine the Indonesian economy’s resilience against geopolitical challenges.
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