SOME COMMENTS ON REBUILDING SHANGHAI’S OLD URBAN AREAS1
JANUARY 18–FEBRUARY 26, 1991
In rebuilding Shanghai’s old urban areas, we should follow five basic guidelines: break with the past approach of demolishing and rebuilding in situ, aim for population dispersal along with design and industrial integration, speed up housing and infrastructure construction, address systemic problems, and accumulate capital.
1. Break with the Past Approach
Instead of demolishing and rebuilding in situ, we should adopt the strategic concept of “going to the front lines and advancing on the Dabie Mountains.”2 We came to this conclusion after investigating firsthand the nature and degree of the hardships of Shanghai’s shantytown residents in five of its districts. If this problem isn’t resolved, it will have a serious effect on the morale of the people. When central government leaders visited Shanghai during the Spring Festival this year, they urged us to do better, faster, and bolder work in this regard. Which aspect of the work can we do better and faster? I think that would be housing construction. At present, food and clothing are not an issue for the people of Shanghai—housing is the problem.
How can we solve the housing problem of shantytown residents more quickly? After research, we formulated the strategic concept of “going to the front lines and advancing on the Dabie Mountains.” Only by implementing this concept can we fundamentally alter the appearance of Shanghai’s old urban areas; it is also the fastest, the best, and the most effective way to resolve their difficulties.
Our “Dabie Mountains” are the areas located on both sides of the inner ring road, particularly those in the Pudong New Area. All districts must concentrate their forces to develop their own new areas well. For example, both the Nanshi and Yangpu districts have [jurisdiction over] considerable plots of land in Pudong. They should concentrate their efforts on building swathes of housing in Pudong; once a batch of transitional housing has been completed, move the shantytown residents there all at the same time. We don’t have to worry about their being unwilling to move. The new housing areas in the plan are all immediately adjacent to both sides of the high-speed elevated inner ring road that is about to be built, and in the future, we’ll also build an outer ring road. The residential areas will all be located between these ring roads, so transportation will be very convenient and residents will be willing to move there.
Build Commercial Facilities. In principle, we will not move people back to the areas they left, nor will we build ordinary housing there. After the shantytowns are demolished, the first thing to build is commercial facilities. Nanshi, for instance, is a district with highly developed commerce. We can make a lot of money there from differential land rents—this money should go into the housing construction fund, and in this way a virtuous cycle will be formed. But we can’t promote commerce the way we used to, having the state cover all costs. Individual operators should raise the money for commercial facilities, and these should be built to a high standard. Also, many industries belonging to the districts are in great difficulties. They can be adapted to engage in commerce. Every district should have its own distinctive commercial features and scenic spots, so that Shanghai becomes a place where all types of commerce come together.
Lease Out Land. Lease out land and let the foreigners come build houses, garden villas, and high-rises. After Hong Kong reverted in 1997, many people there started thinking about returning to their roots on the mainland, as did many people in Taiwan. That’s why even if land prices are a bit high, people will still want it—after all, it’ll still be much cheaper than land in Hong Kong or Taiwan. We’re preparing to adopt a policy that would send half the income from land leases to the city government and half to the district. In fact, the money we’ll make is the money from land, and this is the best way to accumulate capital for building housing.
Build High-End Residences. The third thing we can build is a small number of high-end residences to be sold—there are some high earners who can afford to buy these, and if any of the people originally living there have the money, they could also buy these.
Use the Acquired Land for Greenery. By focusing on greenery as well as the other things just mentioned, we will be able to make full use of the land in the urban districts, maximize the benefits they can yield, and create a virtuous cycle of capital. This is the best way to rebuild the old urban areas. All district leaders should properly study how to plan and how to arrange commercial facilities. The city’s Office of Finance and Trade must also do citywide planning and develop distinctive commercial facilities. In this way, after rebuilding swathe by swathe for 8 or 10 years, the appearance of Shanghai will be greatly altered.
2. Strive to Disperse the Population and Integrate Design and Industry
In rebuilding old urban areas, we must first and foremost focus on altering the city’s appearance, with special attention to integrating with several of the most important “windows” for overhauling Shanghai. As we rebuild swathe by swathe, we should start with the most prosperous and most visible places, the places with the greatest economic and social benefits, such as commercial areas, main traffic arteries, and stations. Next, rebuilding must be integrated with the creation of a distinctive commercial street in each district—this should be studied as a special topic. Third, rebuilding must be integrated with industrial relocation and pollution treatment. Industrial renovation and pollution treatment should give priority to factories in locations where the entire area is to be rebuilt. They should be included in plans for technological upgrading, and some will need support in the form of interest-free loans.
3. Speed Up Housing and Infrastructure Construction
The central task in speeding up housing construction is expropriation of land ahead of schedule to create bases for home construction and to accelerate infrastructure construction. These bases must be decided on scientifically, and locations found both in Puxi and in Pudong. They’re a bit easier to find in Pudong, but they also exist in Puxi. In Puxi, they should be in areas that will be subject to few relocations, are close to existing urban facilities, and will be very convenient to transportation as laid out in our plans. We will have to expropriate 12,000–15,000 mu3 of land if we are to realize our goal of completing 7 million to 8 million square meters of housing by 1993. Unless we build on such a scale, we won’t be able to create a crescendo of home construction over the next two to three years, and then what confidence would the people have in the Party and government and in housing reform?
Fewer people live in the urban area of Beijing than in Shanghai, yet they completed 10 million square meters of housing in a year. That’s why it’s possible for Shanghai to complete 8 million square meters a year—the key is for our ideas and understanding to catch up with our concrete work. When we see how difficult life is for people living in shanties, when we see how eager they are for relief, how can we still take our time and do things by the book? As leading officials, everything we do should be something that gives people confidence in the Party and government.
We’ve learned from past experience that the first step in establishing a base for home construction is to build good infrastructure. Home building can then proceed much more quickly in the subsequent two years. This year and next, we must first complete the infrastructure at the bases where home construction will start in 1993 and where 8 million square meters will be completed. To do so, we will convert several city-level housing development companies into infrastructure building companies. We will expect them to finish the infrastructure at these locations by the end of next year. Then in 1993 the construction teams will be able to start large-scale home construction. This will enable us to greatly speed up construction.
4. Solve Systemic Problems
Housing construction won’t speed up unless we attend to several systemic problems.
Need for a Clear Division of City and District Labor. City and district labor must each have its own focus. Henceforth city-level construction capacities will gradually shift to building infrastructure, while district-level capacities will gradually shift to building housing. The city’s Construction Commission will focus on overall planning and on supporting infrastructure construction. When it assigns land to districts for home building, it must consider how major urban utilities will keep up. Therefore district planning agencies must do good planning and work closely with the city’s Bureau of Public Works so that everyone’s work meshes well.
The leaders of every district must personally look into issues of planning and design in the building of residential areas. We should learn from the method used by Qizhong Village in Maqiao Township, Shanghai County: for every residential building area, they first made mockups of various designs; then they organized the people to look at the designs and choose from among them; only at that point did they start building.
Inspecting the Sujiaxiang shantytown in Zhabei District, Shanghai, January 18, 1991. (Photograph by Zhang Weifei)
Vertical and Horizontal Jurisdictions Must Be Integrated. As vertical and horizontal jurisdictions4 become more integrated, the horizontal component should be gradually increased. In the case of housing construction, relying mainly on horizontal jurisdictions makes sense and is quite scientific, but in reality, the money is in the hands of the vertical jurisdictions, and they have a more complete range of homebuilding agencies. Therefore we must use some methods that follow the laws of economics to attract vertical jurisdictions to cooperate with horizontal ones and fully motivate both. The Municipal Construction Commission can consider using some macroeconomic measures such as allocating less land and fewer loans for homebuilding working capital to vertical jurisdictions and allocating a bit more to the districts. Then, after the districts finish building housing, we could encourage enterprises to buy housing from them. Of course the districts mustn’t try to squeeze money out of the vertical jurisdictions. If the districts can build housing that is of good quality but is less expensive than what vertical jurisdictions can build for themselves, the latter will concentrate their homebuilding in the districts.
The Need to Simplify Review and Approval Procedures. One important reason why it used to take so long to build housing was that review and approval procedures were too cumbersome, and the “tyranny of the verticals” was excessive. Actually, some verticals aren’t capable of doing important things, so why must they control minor things so tightly? We must put an end to the 98 chops. From now on, Wu Xiangming,5 Shen Guanjun,6 and Sang Ronglin7 will work jointly on-site. They will approve on the spot, and I will sign off. We have to use sweeping gestures to do away with those cumbersome procedures and chops, and use revolutionary methods to speed up housing construction.
Need for Strong Party Discipline. We must select a group of people with strong Party discipline to do this work. They must work single-mindedly for the people’s interests and for the good of future generations, and they may not take this opportunity to use their powers for personal gain, or even to do things that are harmful and immoral. Such things have occurred in some districts in the past—we must learn our lessons and nip anything of this sort in the bud.
5. Capital Is the Key to Speeding Up Housing Construction
We must be fully cognizant of the urgency surrounding shantytown housing problems and must accurately assess how much of the load their residents can carry in solving them. Judging from on-site investigations in the five districts, the capacity of these residents is much greater than what was assumed in the housing reform program—they are indeed willing to raise money on their own to build housing. We must carefully review the experiences of these districts in mobilizing residents to jointly build housing and improve on their methods. In particular, we must focus on the laws and regulations regarding shantytown relocations. In this way, besides our housing reform fund, we will have an additional sum raised by shantytown residents.
In order to accumulate more capital, district governments should grow their economies and create a virtuous cycle for investments. Under a suggested “three-points” fundraising method, the district government, the enterprise, and the individual would each contribute something. I think we can add a fourth point: the city government can also contribute something, mainly by paying the interest on loans. So we now have a “four-points” method. From now on, the responsibility of the city government in this area will be to provide interest-free loans to support and motivate all the districts.
This year, the municipal finance agencies will deposit RMB 250 million in the Construction Bank. Using a 1:2 ratio, the bank will offer RMB 500 million in interest-free loans to serve as working and construction capital for housing construction and land expropriation. The city will carry out centralized balancing of these interest-free loans for housing construction, with the emphasis on the resolution of difficulties. In rebuilding old urban areas, we must make maximum use of differential land rents and try to balance our capital.
1. On January 18 and 24, and February 1, 12, and 26, 1991, Zhu Rongji led officials in charge of the departments concerned to Zhabei, Nanshi, Putuo, Yangpu, and Hongkou districts for in-depth studies on rebuilding shantytowns. They visited residential housing estates as well as shantytowns with poor living conditions and listened to reports by leading officials in these districts. These are the main points Zhu Rongji raised during the period in question.
2. Translator’s note: the battle of the Dabie Mountains took place in central China in 1947 and was the turning point of the third Chinese domestic revolutionary war (also known as the 1945–49 War of Liberation conducted by the People’s Liberation Army under the leadership of the Chinese Communist Party, which overthrew the Nationalist regime and liberated all of China). It is used here as a metaphor for taking the initiative rather than reacting passively.
3. One mu is equal to 666.7 square meters.
5. Wu Xiangming was then acting chairperson of the Shanghai Construction Commission.
6. Shen Guanjun was then deputy secretary-general of the Shanghai Construction Commission.
7. Sang Ronglin was then director of the Shanghai Bureau of Real Estate Management.