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The Economic Side of China’s Eco-Cities

Urbanization is an economic movement, and in an age where development is being chastised as a prime source of pollution in China, eco-cities seem to be the answer to keep the money flowing.

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“Eco-cities are not a new kind of architecture or construction, or a new way of making money — although many people seem to think that way,” spoke Eero Paloheimo, the founder of the Finnish Green Party and the visionary behind Beijing’s currently defunct Mentougou eco-village.

At root, urbanization is an economic movement, and all parties up and down the chain — from local governments to developers to architects to real estate agents to home buyers — aim for the same target: making a profit. So there is a very good reason for China’s proposed 200 new eco-cities beyond their assumed ecological benefits: they make money.

“If a place has eco elements the price [of real estate] is bumped up,” Marco Zhou from Colliers, a global real estate services company, said.

China is trying to drive environmental consciousness by making it profitable. This is encouraged from the top down by China’s central government, which is currently pumping massive amounts of subsidies into developments, buildings, and technologies which carry the “green” label.

“Being an eco-city makes it easier to get funds from the central government,” said Daan Roggeveen, the founder of the Shanghai based MORE Architecture, “which is important, since many cities do not have the funds to improve their livability.”

Add to this the fact that supporting eco-labeled development initiatives and improving environmental conditions are now part of the criteria for the promotion of officials within the Communist Party and the impetus to ‘build green’ is greater than ever.

Eco-cities ultimately allow China to put off the social and political pressures resulting from environmental concerns while keeping the wheels of urbanization spinning. Urbanization in China has taken on the properties of a runaway train, as real estate is responsible for 16 to 25 percent of the country’s total GDP, 33 percent of fixed asset investment, 10 percent of urban employment, and fuels 40 other industries. What’s more is that, according to the World Bank, municipalities in China must fund 80 percent of their expenses while only receiving 40 percent of the country’s tax revenue. A deficient that is in largely made up for with land sales to developers. So building new districts and cities is essential to the solvency of China’s municipalities — something which the brakes cannot just be slammed down on. So eco-cities are in many ways a compromise: a way for China to have its new cities and be environmentally conscious too.

China building new cities in the name of environmentalism is like Coca-Cola creating the Beverage Institute for Health & Wellness — a marketing exercise that takes something that is well-known to be detrimental and trying to spin it in a positive light. If China’s sole intention was to mitigate the environmental impact of its cities, then mundane policies like adding insulation and double glazed windows to buildings in existing, conventional cities would have a much greater impact than razing hundreds of kilometers of agricultural land, demolishing countless virtually self-sufficient villages, and forcibly relocating thousands of peasants to build brand new eco-cities. Ironically, it often doesn’t get more ‘ecological’ than the places that China’s eco-cities destroy.

Read more about this topic at Eco-cities in China.

A version of this article was originally published on Reuters at China’s eco-cites are often neither ecologically friendly, nor functional cities.


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Filed under: China, Environment, New Cities, Urbanization

About the Author:

I am the founder and editor of Vagabond Journey. I’ve been traveling the world since 1999, through 91 countries. I am the author of the book, Ghost Cities of China and have written for The Guardian, Forbes, Bloomberg, The Diplomat, the South China Morning Post, and other publications. has written 3717 posts on Vagabond Journey. Contact the author.

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