“If the per capita land use is 100 square meters, the actual urban space can accommodate more than 80% of the population… This is when the unhealthy competition between urban stock space and land value begins to appear.”

On December 12, at the China Urban 100 Forum 2023 Winter Forum with the theme of “Chinese-style Modernization and Urban Development”, Wu Chen, Professor of the University of Chinese Academy of Sciences, Dean of the School of Human Settlement Science, Chief architect and chief planner of Beijing Institute of Architectural Design, gave a keynote speech entitled “Some Challenges and Reflections on Today’s Urban Development”. It also shared the challenges and reflections of urban development in China today.

In his view, the consumption-oriented and production-oriented industrial path, that is, the “three two one” trend has begun to solidified and become the mainstream of social development, at the same time, the lack of urban development power and the decline in talent attraction superposition, these are the uncertainties of current urban development. To find new city value increment from the following four aspects –

The driving role of the secondary industry to the city, the international manufacturing industry has appeared the trend of backflow; The return of technology to cities, not science parks; The influx of young workers into food delivery, express delivery, online car hailing and other industries has potential risks; To realize smart growth of urban management, we must enter the era of urban operation from the era of land finance.

“Although the service sector in the United States accounts for 80%, 70% of the 80% is producer services, which are directly related to manufacturing.” In our service industry, the life service industry far exceeds the production service industry, about 20% higher. This is our gap, what we have to chase, what we have to diagnose.” ‘he said.

The following is the transcript of Wu Chen’s live speech, the content has been deleted:

New challenge: The model centered on land finance has come to an end

At the end of last year, the urbanization rate was 65.22%, and the scale of built-up areas seems to exceed 65.22%, because if we calculate the per capita land use of 100 square meters, the actual urban space can accommodate more than 80% of the population.

Internationally, the urbanization rate has reached 70% to 80%, which is called urbanization in Europe and the United States, and we call it the turning point of urbanization. After that, there will be a plateau of urbanization and a slowdown in urbanization. Have we reached a plateau ahead of schedule, or are we going to have very optimistic urbanization growth? This is something worth thinking about.

At this time, the non-benign competition between urban stock space and land value began to appear. Over the past 40 years, rapid urbanization – 1.5 percent per year, from 17 percent to 65.22 percent, largely through land sales, has driven infrastructure construction and massive investment.

We now look at the development model with land finance as the core seems to have reached a bottleneck or an end, and we have different arguments.

There is a word called “faith in China’s property market”, where is it? It’s Shanghai. Shanghai’s school district housing and Shanghai’s real estate bubble are being squeezed like crazy. The overall price of the Shenzhen property market has returned to 2018, and this situation will also occur in other cities, including Kunming (the average price of residential transactions) has been a new low for two years, and the land is all the reserve price transactions.

Just said that the transaction is more based on residential, in fact, office buildings also appear such a situation. In the second quarter, the absorption volume of Beijing Grade A office buildings was negative, and the financial Street, CBD, Zhongguancun and so on were negative. In Beijing, according to statistics, except for Lize (financial and business district), the rest of the basic decline.

The same is true in Shanghai. Shanghai in the second quarter of the absorption of 150,000 square meters, its current absorption is basically stable state, it is predicted that 2023-2024, due to the new supply into the market, its vacancy rate and rent are beginning to enter a downward channel. So, let’s keep an eye on some economic data.

The US economic data for the third quarter of this year is out, and the US GDP growth rate is 5.2%. Is the United States alone? Looking at the United States office vacancy rate is also around 19%, which does not understand why the United States economic aggregate in such a rapid growth of the (office) vacancy rate is so high?

We may not be looking at the economy itself, but it may be due to technology, the mode of living and the mode of working that have caused this situation.