When Relational Property Rights Meet Creative Destruction: Assessing Collective Property Rights Reform in Shanghai and Shenzhen

Yunhan Wen, Princeton University

Property rights in China remain insecure, but scholars predict a virtuous cycle where growth spurs further liberalization. However, liberalization can clash with structural transformation made easier by illiberal rules. Rural economy exemplifies the tension: early liberalization spurred growth but left inefficient land use, whose rectification clashes with Xi’s collective property rights reform (CPRR) that strengthens peasants’ property rights. To examine how local governments resolve this tension, I advance a relational approach that treats claims over rural assets as negotiated through ties among villagers, village elites, and local governments, and compare CPRR implementation in Shenzhen and Shanghai. In Shenzhen, CPRR curbs elite capture but weakens brokerage, enabling more direct state intervention. In Shanghai, CPRR fails to empower villagers against traditionally-paternalistic local governments but induces risk-averse noncompliance that weakens state-led allocation tools. The contrast shows that partial liberalization is not a transitional defect but a planning instrument, facilitated by relational property rights.

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 Presented in Session 204. Property Rights, Land Markets, and Cultural Industries