From entrepreneurial to managerial statecraft: New trends of urban governance transformation in post-pandemic China

What defines China’s urban governance today? With tightened state control in economic, spatial, and social management and a decline in the real estate sector, is China reverting to pre-reform state socialism? Or has it shifted to urban governance under ‘state capitalism’? Our answer is neither. In this article, we engage remotely with Wu’s (2002) observation at the turn of the millennium: China witnessed private entrepreneurship, economic devolution, and housing commodification after the economic reform. They have been portrayed as urban or state entrepreneurialism (Wu, 2018). In the bigger picture, they echoed neoliberalism at the time in the world. We ask what has changed today after more than two decades.

We summarise new trends of urban governance transformation in China as ‘managerial statecraft.’ Managerial statecraft is the Chinese party statecraft of financialised governance, recentralised spatial governance, and social co-governance. The transformation occurred after the 2008 Global Financial Crisis and has been exacerbated by pandemic urgency, post-pandemic economic downturn, and greater geopolitical tension.

The statecraft of financialised governance has seen state actors from different levels deploying new financial techniques to fund urban development. The methods are moving away from conventional land finance. The state credit is replacing land credit. Two pivotal financing methods are Local Government Bonds (LGBs) and ultra-long-term special state bonds, reflecting the central state’s tightened and direct regulation of local state borrowings. Regarding new agents, central state-owned enterprises (SOEs) become business partners to the local state in urban development projects. State ownership replaces local and private entrepreneurship.

The statecraft of recentralised spatial governance aims at strategic intentions prioritising territorial logic over capital-driven objectives. New practices, including Territorial Spatial Planning, new city-regional plans, National New Areas, and institutional reconfigurations, reflect a transformation from bottom-up entrepreneurial city-regionalism to top-level design. These efforts are needed for ‘dual circulations’—domestic and international—to secure supply chains and enlarge domestic markets amid growing geopolitical tensions.

The statecraft of social co-governance replaces the old ‘social management’ model by proactively mobilising community participation and funding co-governance experiments. State initiatives include building grassroots party organisations, supporting community planners, and institutionalising participatory activities. Despite the lack of democratic participation tradition, the party-state now seeks collaboration with society and cultivates citizens with a collectivist mentality. The transformation differs from the trend of capital dominance in financial austerity or the societal changes seen in radical municipalism.

These new trends in China broadly echo changing capital-state-society relationships in the world today. Our main contribution is empirical and theoretical. Reflecting on the emerging managerial statecraft of financialised, spatial, and social governance, we argue that entrepreneurialism is too restrictive a term for a more visible state in governance. Rethinking entrepreneurialism beyond economic dimensions, we highlight its multiple roles in state financing innovation, spatial territorial regulation, public management, and social governance. Entrepreneurialism has evolved into new managerialism as a form of statecraft – the art of governance and state survival. As such, governance transformations highlight persistent tensions between capitalist and territorial logic (Wu et al., 2024).

References

Wu F (2002) China’s changing urban governance in the transition towards a more market-oriented economy. Urban Studies 39(7): 1071–1093.

Wu F (2018) Planning centrality, market instruments: Governing Chinese urban transformation under state entrepreneurialism. Urban Studies 55(7): 1383–1399.

Wu F, Deng H, Feng Y, et al. (2024) Statecraft at the frontier of capitalism: A grounded view from China. Progress in Human Geography 48(6): 779–804.

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