Local government has always had a tight relationship with property development the world over: Rates are the primary source of independent funding, the rest being tied central government grants.
Most infrastructure that local government has to build is cheaper in economy of scale: sending a sewage pipe to ten houses is less renumerative than sending it to 100, same hole gets dug, same labour, (mostly) for a bigger pipe and more pedastals to base the charge off. Its simply more profitable to encourage development.
That they wound up in bed with developers and now fate-share isn't surprising. What will be interesting (to me) is how many of the developments get knocked down, and how many get occupied: I have gone by train from Shanghai to Beijing and it's truly amazing to be in deep rural communityland, low rise, and suddenly go past 5 50 storey towers in a cluster, surrounded by fields. My chinese colleagues tell me most of them remain empty, the belief is they drop in future value if ever lived in.
Most infrastructure that local government has to build is cheaper in economy of scale: sending a sewage pipe to ten houses is less renumerative than sending it to 100, same hole gets dug, same labour, (mostly) for a bigger pipe and more pedastals to base the charge off. Its simply more profitable to encourage development.
That they wound up in bed with developers and now fate-share isn't surprising. What will be interesting (to me) is how many of the developments get knocked down, and how many get occupied: I have gone by train from Shanghai to Beijing and it's truly amazing to be in deep rural communityland, low rise, and suddenly go past 5 50 storey towers in a cluster, surrounded by fields. My chinese colleagues tell me most of them remain empty, the belief is they drop in future value if ever lived in.