Embracing the village : micro-scale urban renewal in Shenzhen’s urban villages

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Embracing the village: Micro-scale urban renewal in

Shenzhen’s urban villages

Luke Bates

11775017

lbates@tcd.ie

Co-Supervisors: Prof. Marco Bontje & ChingWen Yang

Second Reader: Sara Özogul

MSc. Urban and Regional Planning

Graduate School of Social Sciences, University of Amsterdam

Submission date: 6

th

July 2018

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ABSTRACT

Urban villages, a product of Shenzhen’s rapid urbanisation face the constant threat of urban renewal. Current research is primarily concerned with how these informal slum-like settlements are typically renewed under a demolition-reconstruction model resulting in the widespread displacement of their inhabitants. However, more recently smaller-scale interventions in the form of the renovation and the protection of urban village environments have emerged. This research labels these interventions as ‘micro-renewal’.

This thesis provides an in-depth analysis of micro-renewal by answering the research question: ‘What are the aims and effects of micro-scale urban renewal projects in the urban villages of Shenzhen?’ Data was collected through interviews and document-based analysis in three case studies: Gangxia, Xinweizai and Nantou urban villages. Four types of micro-renewal were identified: landlord-developer initiated, developer initiated, govern– ment initiated and not-for-profit initiated. The aims of the first three micro-renewal types are to generate financial profits through the renovation of the housing stock, provision of services and the use of culture as an economic development tool. The main effect of this is the displacement of existing residential and business tenants. The aim of not-for-profit initiated projects is to include residents in a public participation process in the provision of new public spaces. This has resulted in residents becoming an active interest group in micro-renewal projects with varying degrees of success.

Keywords: China, Shenzhen, urban renewal, micro-renewal, urban villages, displacement

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ACKNOWLEDGEMENTS

I would like to thank the Shenzhen ‘squad’ Bert, Bryony, Denise, Feija and Xiaoli for making the China experience such a fun and memorable one. There was never a dull moment and they were always on hand for support during the research.

I also wish to thank Miranda and Jeff for their invaluable translation during interviews and Sheila and Vincent for introducing us to Shenzhen’s karaoke scene!

I also want to express my gratitude to all the respondents for taking the time to speak to me. This thesis could not have come to fruition without their knowledge.

Finally, I would like to thank my thesis supervisors Marco and Chingwen for organising the introduction week and helping to guide this research from start to finish. It truly was an incredible learning experience and an enjoyable year of study.

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FIGURES

Figure 2.1 Location of Shenzhen. 6

Figure 2.2 Administrative districts of Shenzhen. 6

Figure 2.3 Residential 'handshake' buildings in Baishizhou with commercial units on the

ground floor. 9

Figure 2.4 Narrow streets in Hubei. 9

Figure 2.5 Conceptual model. 16

Figure 3.1 Research sites 23

Figure 3.2 Boundaries of Gangxia West (already redeveloped) and Gangxia East (research

site) 24

Figure 3.3 Xinweizai research site. 24

Figure 3.4 Nantou research site. 25

Figure 4.1 Exterior images of Loft 1980 31

Figure 4.2 A bedroom in Loft 1980 32

Figure 4.3 Images of the rainwater harvesting device at Loft 1980 32

Figure 4.4 Exterior images of Port Apartment 33

Figure 4.5 Interior images of Port Apartment 33

Figure 4.6 Map of Nantou. The green areas represent public spaces and the purple areas

represent historical buildings. 35

Figure 4.7 Baode Plaza before renovation 36

Figure 4.8 Baode Plaza after renovation and construction of B3 and B4 36 Figure 4.9 The renovated factory buildings and workers dormitories 36

Figure 4.10 The historic East Gate 37

Figure 4.11 Examples of street art installed in Nantou for the UABB 37 Figure 4.12 The four modular units installed by SCD. The bottom right image shows the

remaining unit 39

Figure 4.13 Map of Shenzhen. The red dots represent current Vanke projects. The orange

dots represent urban villages in Shenzhen. 43

Figure 5.1 Revised conceptual scheme 58

TABLES

Table 3.1 List of Interviews 27

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CHAPTER 1: INTRODUCTION

We will formulate an overall plan for renovating villages in urban areas as well as supporting policies for categorising their renewal or renovation. We will put great effort towards rectifying the problem of dirty, disorderly and dilapidated urban areas.

Thus creating new villages that are safe, clean, orderly and harmonious.

(Excerpts from Chen Rugui, 2018) In 2018, mayor of Shenzhen Chen Rugui reiterated the stance of the government towards urban villages, characterising them as an urban tumour that must be removed. Shenzhen, the poster child of China’s economic success has grappled with the problem of urban villages since their emergence following the Reform and Opening in 1979. Shenzhen, the first of seven initial Special Economic Zones grew at an incredible pace from an influx of capital and labour. Over the course of forty years, Shenzhen has evolved from an agricultural and fishing based region of 300,000 inhabitants to a “factory of the world” and subsequently, into a high-tech global metropolis with 20 million residents. However, alongside the growth of the planned city unplanned and chaotic urban environments grew in parallel. These are known as urban villages, villages-in-the-city or chengzhongcun. Urban villages are informal urban developments, constructed by Shenzhen’s indigenous villagers outside of the planning regulatory apparatus of the state. They are typified by their appearance –– dense clusters of poor quality buildings (containing housing, factories and commercial units) and a degraded environment. Since their development they have served as low-cost housing for migrant labour. They are spread across the city with some occupying high land value sites in central locations and are estimated to house half of Shenzhen’s population (O’Donnell, 2017). Since 2004, these slum-like environments have felt the brunt of the government's desire to rid the city of perceived physical, social and environmental ills in order to create a ‘world class city’ (Bach, 2017). A demolition and reconstruction model of urban renewal has been prescribed by the government and the market to remove these problems and rebuild the villages as part of the formal city. Many of the centrally located urban villages have been removed already, influenced by the large rent gaps between an urban village and formal development.

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2 The demolition-reconstruction model has faced criticism for causing the displacement of residents, the loss of employment and the destruction of historical buildings (O’Donnell, 2017). It is also viewed as a time-consuming and costly endeavour (due to negotiations with building owners around compensation) from the perspective of the government and real-estate developers (Lin et al. 2015). In light of this new approaches to urban renewal are emerging that focus on the renovation and preservation of the fabric of urban villages. This research labels these approaches as micro-renewal.

The objective of this research is to critically assesses these new micro-renewal approaches and examine to what extent they offer a more appropriate alternative to the demolition-reconstruction model. The research is guided by the question:

What are the aims and effects of micro-scale urban renewal projects in the urban villages of Shenzhen?

In order to answer the question, this thesis takes a multi-case study approach and explores micro renewal projects in three urban villages in Shenzhen: Gangxia, Xinweizai and Nantou Old Town. Data was collected during fieldwork in March and April 2018 in the form of interviews and document analysis. The research describes the projects and explores the motivations of the stakeholders in opting for micro-renewal. It then draws on urban renewal literature and assesses the projects based on their physical, economic, social and environmental effects. Based on this, the research then attempts to identify the main beneficiaries of micro-renewal as well as those that are disadvantaged by it.

This thesis has an academic relevance as few English language studies have been enacted on the subject of micro-renewal projects and their aims and effects. Much of the current literature is concerned with the development of urban villages (see Chung, 2009; Wang et al. 2010 and Zhan, 2018), the housing conditions of the residents (see Wu, 2016), the governance of urban renewal (see Lin et al, 2015), and the consequences of the demolition-reconstruction model of urban renewal (see Liu Y., 2017). Qianyun Lui (2017) researched the preservation of traditional villages by examining the perspective of the “third sector communities.” These are non-governmental groups that are pushing for alternatives to the demolition-reconstruction model and promoting the preservation of cultural heritage. Rather than focusing on the resistance to demolition, this thesis focuses on actual micro-renewal projects that have been implemented. As such, it addresses the dearth of knowledge on micro-renewal in Shenzhen’s urban villages.

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3 By shedding light on the possibilities of micro-renewal schemes in urban villages this research has a social relevance. Urban villages do have problems that need addressing and the default demolition-reconstruction solution is not always suitable and often leads to more problems stemming from the widespread displacement of residents. Micro-renewal may be a more appropriate tool in certain contexts to bring about a lasting improvement to the physical environment and lives of the residents. This research may encourage policymakers and stakeholders to re-assess their redevelopment plans and bring micro-renewal strategies to the decision-making table.

This thesis is structured as follows: Chapter two elucidates the theoretical backdrop to this research and draws on the literature fields of Chinese urbanisation, special economic zones and, urban renewal as well as introducing micro-renewal in the context of Shenzhen. Chapter three explains the research questions, then describes and justifies the research design. Chapter four presents the results of this research. Chapter five discusses the results in relation to the theoretical framework. Chapter six concludes the research by answering the research question, offering policy and research recommendations and reflects on the research process.

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CHAPTER 2: THEORETICAL FRAMEWORK

The life course of urban villages

2.1 Urbanisation (1949 – 1979)

In order to understand the effects of micro-renewal projects in urban villages, it is necessary to understand their development through the lens of urbanisation. Urbanisation is the process through which rural communities become urban. Globally, the distribution of people living in towns and cities is rising compared to their rural counterparts. In China, over 500 million people have decamped from the countryside to cities over the past 40 years (Roxburgh, 2017). This rapid rate of migration has transformed the landscape of China. The story of modern Chinese urbanisation can be explained in two phases. The first is the communist period under Chairman Mao (1949–1979) when the growth of cities was heavily restricted by the government. The second is the era following the Reform and Opening of the Chinese economy in 1979. This established a number of coastal free trade zones including the Shenzhen Special Economic Zone. This spurred an incredible growth in cities never before witnessed in Chinese history. Urban villages are a feature of this period of unrelenting urbanisation.

The newly formed People’s Republic of China in 1949 took a different approach to cities than previous administrations. Chairman Mao conceived cities as spaces of excessive consumption and revered the rural way of life. For this reason, the size of cities was tightly controlled and they were re-conceptualised as spaces of industrial production (Chung, 2009). Wu (2015: 39) argues that at this time urban planning was not a regulatory tool to minimise ‘the negative externalities of land use in the market economy or balance conflicting interests’ like it was in the West. Instead, it was solely geared towards supporting industrial production and providing housing to the workers in the cities (ibid.). Attention was focused on developing industrial bases in the cities of the interior while coastal cities were largely ignored (Wu and Gaubatz, 2013). Rural areas became centres of food production to support the industrial bases (Wang, et al. 2009).

The focus on industrial cities spurred an initial growth in urbanisation rates –– the percentage of the population living in cities doubled between 1949 and 1960 (Wu, 2015). However, after 1960 urbanisation rates levelled off for the following two decades. This is attributed to the failure of the Great Leap Forward (1958–1960) and the Cultural Revolution (1966–1976). The former was an attempt at rapid industrialisation and the

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5 collectivisation of rural communes while the latter saw an estimated 14 to 17 million urban youth moved to the countryside to be re-educated with rural ideals (Wu and Gaubatz, 2013). By 1980, the urban share of the population stood at 20% (ibid.). Since 1980, urbanisation has grown at a phenomenal rate and as of 2016, 57.4% of the population reside in urban areas as a result of China’s Reform and Opening (Wenyu, 2017).

2.2 Shenzhen Special Economic Zone

The Shenzhen Special Economic Zone (SEZ) was established in 1979 and marked China’s first step into the opening of the economy (see figure 2.1). The SEZ covered an area of 392 square kilometres comprised of the four districts of Yantian, Luohu, Futian and Nanshan (see figure 2.2). Shenzhen was selected to be a ‘window’ to the outside world and was designated as an experimental site for free trade policies alongside the importation of foreign capital, expertise, science and technology (Ng and Tan, 2004). Shenzhen was chosen in order to take advantage of its links to Hong Kong in hopes of attracting overseas investment. It was a green field site with only two urban settlements of note; Luohu, which was a border town and a customs checkpoint for Hong Kong, and Shenzhen Old Town (ibid.). As well as this, there was a string of small towns and villages serving the predominantly rural population.

The archetypal narrative of Shenzhen is that of a cluster of sleepy fishing villages that were transformed into a global metropolis. The SEZ spurred an expeditious growth in the manufacturing industry as it was an export-led economy. This earned Shenzhen the moniker “factory of the world.” In 1993, the outer districts of Bao’an and Longgang were brought under the municipality of Shenzhen. The rapid growth in industries and construction required an influx of workers to sustain it. The population grew from 300,000 in 1980 to its official population of 15 million today. In 2016, the government recognised the actual population of the Shenzhen administrative region to be around 20 million (O’Donnell, 2017). The workers pouring into the city needed access to cheap housing but the dual land system and Hukou acted as barriers to them entering the formal housing market.

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6 Figure 2.1 Location of Shenzhen (Source: by author)

Figure 2.2 Administrative districts of Shenzhen. The red districts represent the original SEZ. (Source: adapted from O'Donnell, 2013)

2.3 The Role of the dual land system and Hukou

China’s dual land system and the Hukou are two institutions that are closely intertwined with the development of urban villages. After the establishment of the People’s Republic of China in 1949, land was nationalised. Urban land was held in the possession of the state and rural land ownership was passed to collectives (Liu, Y., 2017). This prohibited the selling, leasing or transferring of land within the market and created a rural-urban land dichotomy. Subsequently, the Hukou (or household registration system) was implemented

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7 in 1958 and was designed to restrict internal population movement (Wu and Gaubatz, 2013). The Hukou issues two forms of citizenship according to an individual’s birthplace, either rural or urban. A rural Hukou allocates the ownership of agricultural land to a collective of rural citizens. These rural citizens are responsible for their own welfare, housing and employment (ibid.). Under an urban Hukou, a citizen has no rights to the land but instead can access social welfare programmes available in the city, such as local schools and public housing (Liu, Y., 2017).

These institutions allowed the indigenous villagers of Shenzhen to retain their full rights of land ownership. As a result, the only way for rural land to be transformed into urban land was through the state acquiring rural land from the village collective. Typically, the government requisitioned farmland from the villagers through financial compensation. The government did not seek to obtain the existing buildings of the villages as it would entail higher rates of compensation and the need to relocate the villagers (Hao et al, 2012). As well as this, Wu (2018) contends that there was a common practice of leaving a small amount of farmland to the village collective as part of their compensation. The newly established Shenzhen government was financially weak at the time and lacked the capacity to provide employment to the mostly uneducated villagers (Wang et al, 2009). Due to the loss of farmland, villagers were losing their livelihood, so they took advantage of their rural

Hukou and land ownership rights. They quickly transformed their existing buildings and

remaining farmland into residential developments consisting of densely constructed apartment blocks. The villagers became landlords and in doing so found a new source of income.

The Hukou status of incoming rural migrants to Shenzhen denied them access to the formal housing market. In the 1980s, restrictions on rural-urban migration were relaxed allowing migrants to flood into Shenzhen to provide cheap manpower for the flourishing new industries (Liu, Y., 2017). Urban villages served as an accessible low cost housing supply for the migrants. Over time, these migrants were described as part of a ‘floating population’ as they were not registered as resident in Shenzhen (Bach, 2017).

2.4 The Urban Village

The Shenzhen Special Economic Zone, the dual land system and the Hukou paved the way for the development of what we now understand as chengzhongcun, villages-in-the-city or urban villages. The construction of urban villages existed outside the formal planning structures of the state. Wang et al. (2009) provide an in-depth overview of the repeated

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8 failures of the regulatory apparatus of the government to control urban village development since the 1980s. Typically, new regulations on building heights and plot size had the opposite effect, increasing the speed and scale of development rather than controlling and limiting it. The villagers both individually and collectively through village committees continued to build taller and denser buildings as the potential rental income streams far outweighed the financial penalties (ibid.). In 1992, the village committees were disbanded and formed into shareholding companies. In doing this, the government took control of the remaining undeveloped land and in return, the village landlords were bestowed with an urban Hukou (ibid.). Urban villages are often described as a ‘third space’ in China’s dual land ownership system (Yan, 2018). They are neither fully village nor city –– they maintain their rural organisation but are woven into the fabric of the city.

The absence of planning controls and the villagers’ desire to maximise profits has led to the unique physical character of both the buildings and streetscape of urban villages. They are dense clusters of poor quality buildings typically ranging from five to ten stories in height. The bottom floors often contain commercial spaces while the upper floors are in residential use (see figure 2.3). The exceptionally narrow spaces between the buildings have given rise to the labels ‘handshake buildings’ and ‘kissing buildings’ (see figure 2.4). Apartments are typically small, cramped, in a bad condition and lack elevator access and separate kitchens. Nonetheless, apartments do also have some high level facilities such as air conditioning and internet access (Wu, 2016). The environment is also chaotic –– electrical wires criss-cross each other above the narrow passageways between buildings, fire safety and prevention is scant, drainage is inadequate and waste disposal facilities are sorely lacking. The physical composition of urban villages makes them easily distinguishable from the formal development of Shenzhen.

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9 Figure 2.3 Residential 'handshake' buildings in Baishizhou with commercial units on the

ground floor (Source: by author)

Figure 2.4 Narrow streets in Hubei (Source: by author)

The rapid urbanisation of Shenzhen has created over 300 urban villages and is estimated to house half the city’s population (around eight million people) (Lin et al, 2015). In terms of population composition, urban villages are home to migrant labour and a smaller population of indigenous villagers. Many migrants from the same rural regions cluster together in the same urban villages and maintain links to their hometowns (Wu, 2018). Initially, migrants were primarily employed in construction and in the newly developing factories of the city but over time the migrant labour group has become increasingly diverse. Today, urban villages house low income groups, graduates and high tech and

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10 creative workers (Bontje, 2016). The urban villages also provide dense social networks which are a valuable resource in obtaining employment (Wu, 2018).

It is an oversimplification to describe urban villages as serving a purely residential function. Hao, et al (2012) challenged the notion of urban villages as ‘migrant enclaves’ in their study of land-use diversity. Residential land use does dominate urban villages but they also encompass a range of other functions including industrial (more common in outer districts), commercial and public services (ibid.). In many villages, the village collectives built factory buildings to be leased out to manufacturing companies. Many of the migrants have also found employment by establishing their own businesses within urban villages (Zhan, 2018). Schools, supermarkets, restaurants, hair salons, medical services and temples line the streets of urban villages.

2.5 Understanding urban renewal

Urban renewal is used as vehicle to remedy the physical, social, economic and environmental issues of urban areas. It has its origins in the late nineteenth century when the idea of regulating capitalist cities took hold in North America and Europe (Hall, 2006). It was a government intervention designed to alleviate the problems of crime, dereliction, and poor health quality (stemming from disease and the lack of a clean water supply) perceived to be festering within working class slums. The response took a physical form through slum clearance and the provision of new higher quality housing. Since Victorian times, the remit of urban renewal has widened and it has become a core part of urban policy across the globe.

Defining urban renewal is challenging as it is a broad and ambiguous term that encompasses a range of theoretical perspectives and urban policies. It is further complicated by the fact the terms renewal, redevelopment, regeneration and revitalisation are both used interchangeably by academics, policymakers and practitioners and at other times, seen as separate concepts that share the common goal of making an improvement in an urban area. This thesis sits in the former camp and sees the terms as synonymous with each other. The definition of Roberts (2016: 18) has been appropriated for this thesis, outlining urban renewal as a:

comprehensive and integrated vision and action which seeks to resolve urban problems and bring about a lasting improvement in the economic, physical, social and environmental conditions of an area that has been subject to change or offers opportunities for improvement.

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11 In this definition urban renewal is seen as both a reactive and proactive mechanism for urban change. It can be reactive by responding to problems such as building decay, crime, unemployment and social disadvantage. It can also pre-empt problems before they occur, for instance by anticipating a decline in an industry in an urban area and offsetting this by improving the area’s prospects by attracting private investment. Urban renewal may be specific to one location or connected to a wider city plan to attract new businesses and private investment. Roberts (2016) stresses how the causes of urban problems are often multifaceted and states that it can be difficult for policymakers to draw out a single causal problem.

There are two notable omissions in this definition. The first is that urban renewal responses and policies can also be based on perception rather than reality. Hall (2006: 60) recognises that policymakers or practitioners will act on what they ‘think, or want to believe, is causing the problems they observe’ and not necessarily on the actual issues. Secondly, Hall (2006) contends urban renewal is strongly tied to local geographical, historical and ideological circumstances. The geographical context refers to the specific urban area and its characteristics. The historical context reflects the past developments and urban renewal policies. The ideological context is related to the wider political environment, for instance whether the urban renewal should be enacted by the state or left to private developers or non-governmental organisations.

Urban renewal by its very nature is an interventionist activity. Traditionally, the interventions into the market were state-led and from a top-down perspective. The government acted as the key decision maker. Nowadays, it is typical for urban renewal projects to be managed by both the public and private sectors. Harvey (1989) contends that, since the 1970s, urban renewal has become less state-led as funding to local governments has reduced. As a consequence, urban governance is now more entrepreneurial –– the public and private sectors enter into partnerships with the private sector providing much of the funding. Urban renewal can also take a bottom-up perspective. Community organisations and grassroots initiatives have been used to improve the situation for residents.

2.6 Urban village renewal

In China, urban renewal is concentrated on San jiu meaning the ‘three olds’ (Liu Y., 2017). The three olds refers to three types of urban land: old factory areas, old inner city areas and

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12 urban villages (ibid.). Urban renewal is a reactive intervention for both the real and perceived problems that exist in urban villages.

The process of renewal is complex and encompasses a web of different stakeholders who each have their own interests. The three main stakeholders are the government, developers and the villagers (the landlords). Zhou et al. (2017) place the government as the key decision maker for urban renewal projects in China. The role of the government is to set the agenda through decision-making, site selection and choosing how urban renewal will be implemented. Real estate developers then implement the project based on this governmental framework. Conversely, Yi et al. (2017) maintain that the developers are the main decision makers. In their scenario, governments merely act as an ‘instigator’ while developers propose the plans, provide the bulk of funding and seek to maximise financial profits. O’Donnell (2016) importantly notes that the ideological position of the government towards urban renewal tends to be deliberately vague and open to interpretation, allowing urban renewal to be co-opted by the interests of the market. Furthermore, in a Chinese context the boundaries between the government and developers are blurred. Many real estate developers are state-owned or the government is the largest shareholder in the company. For instance, the majority shareholder of China Vanke, one of China’s largest developers is the state owned Shenzhen Metro Corporation (Vanke, n.d). It is also common for members of the Communist Party to sit on the boards of many Chinese companies. This blurring of public and private sectors make it difficult to delineate the differing views of the market and state.

While the government and developers can be argued to take the same viewpoint towards urban renewal, the villagers as property owners also have considerable influence in the decision-making process. Villagers individually or within the village shareholding companies own the rights to the buildings. Renewal projects must compensate this group. The residents (who are primarily migrants) have little influence in the process. Many tenancy contracts are verbal allowing them to be easily evicted (Wu, 2016). Liu. Y (2017) labels tenants as an ‘invisible’ group in the eyes of the government, developers and landlords.

Since 2004, urban renewal has become a dominant policy in Shenzhen and has been of a top-down nature. The primary model of urban renewal is demolition-reconstruction. In this framework, urban villages are demolished and subsequently reconstructed into new districts comprising luxury housing, shopping malls and offices that blend into the formally

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13 constructed city. Over 90% of completed urban renewal projects are estimated to have been undertaken in this fashion (Liu, et al. 2017). This is done to take advantage of the rent gap between the existing land values of urban villages and their potential following redevelopment (O’Donnell, 2017). This is most pronounced in central districts. The consequence of this is the displacement of the residents as they are priced out of the new developments. This process can be situated within the discourse of gentrification (see Liu., Y, 2017). This is due to low income residents being evicted to make way for new middle and higher income-residents. Hao et al. (2012) argue that urban villages become more mono-functional following demolition-reconstruction as they lose their industrial functions and low cost services.

Despite the dominance of the demolition-reconstruction model of renewal, many proposed projects are never realised. It is estimated that only a third of proposed projects are ever completed, illustrating a significant mismatch between plans and reality (Liu, et al. 2017). One reason for this is the high transaction costs involved in development. Identifying building owners, negotiating, and subsequently issuing compensation is an expensive and time-consuming process (see Lin, et al. 2015 and Liu et al. 2017). For instance, the completion of the demolition-reconstruction of the urban village of Gangxia West took over 10 years from the date the plans were announced (Village share-holding company interview, 2018). Liu et al. (2017) label the remaining 10% of urban renewal projects as both ‘comprehensive renovation’ and ‘functional retrofit.’ In this case, buildings are kept; they are renovated to a higher quality and the functions of the buildings may be upgraded. These projects come under the framework of micro-renewal.

2.7 Micro-renewal in Shenzhen

Micro-renewal is the term applied by this research to urban village renewal projects that encompass the renovation of existing buildings (which may change the function of the building e.g. from residential to commercial), the preservation of building styles, street layouts and historical structures and improvements to public spaces and streets. Demolition-reconstruction is understood to be a large-scale intervention as a significant portion or an entire urban village may be levelled in a single project. Micro-renewal is a smaller-scale intervention that can be limited to a single building, street or public space. As a result of this small scale, demolition is either not used or its use is severely restricted. Micro-renewal also allows building owners to maintain their rights to their buildings as they are not demolished.

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14 Micro-renewal as a viable alternative intervention for the problems in urban villages has gained traction partly as a result of the greater public awareness of the effects of demolition-reconstruction, notably residential displacement and the loss of Shenzhen’s historical fabric. A growing movement to protect and preserve urban villages has stemmed from what Q. Liu (2017) labels as ‘third sector communities.’ In Hubei urban village, demolition plans prompted a protest from architects, artists, urban planners and other social activists. Their rationale was to protect the historical three by eight street layout which dates back over 500 years (ibid.). The government has also recognised that there should be some preservation of the historical aspects of urban villages to a certain extent and renovation may be a suitable tool (O’Donnell, 2016). This is partly connected to the idea of developing cultural industries and tourism to renew urban villages. An example of this is the Dafen oil painting village which has been redeveloped and branded as a painting production and trading space. The government has been successful in developing a cultural cluster and attracting tourism but it has led to a substantial increase in rent which has priced out some former residents from the village and forced remaining workers to work long hours to afford their rental costs (see Li et al. 2014). Culture is also used as a urban development tool through Shenzhen’s Urban/Architecture Bi-City Biennale (UABB). This exhibition, which is typically held in former factory buildings is deemed by van Dulm (2017) to be a catalyst to regenerate former industrial areas. The 2017 UABB on the theme of ‘Cities grow in difference’ was held in an urban village for the first time. It explored the importance of unplanned urban spaces in Shenzhen’s development, further indicating an intent to avoid their demolition.

2.8 Conclusion

The theoretical framework outlined the history of Shenzhen’s urban villages and exposed the objectives, stakeholder relationships and impacts of urban village renewal. The current situation of urban villages warrants an intervention but the downsides of the prevailing demolition-reconstruction model are well documented. Micro-renewal is presented as an alternative way of intervening in urban villages but there is a lack of scientific understanding of the purpose, aims and consequences of this approach. Protests by third sector communities, the desire exploit heritage to develop cultural industries and the high costs of compensation are suggested as motivating factors for micro-renewal. Nevertheless, the roles and motivations of the government, developers and villagers are ill-defined in a micro-renewal framework.

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15 This research will address the knowledge gap on renewal by examining micro-renewal projects in practice. Demolition-reconstruction is regarded by the literature to have one major consequence: displacement. However, as micro-renewal is a broad theory it may produce different results depending on the stakeholder governing the project. This research will assess the aims of micro-renewal and identify the stakeholders implementing the projects. It will unpack why stakeholders are enacting micro-renewal. The impacts of micro-renewal will be appraised via Roberts (2016) definition of urban renewal by examining the physical, economic, social and environmental impacts.

2.9 Conceptual Scheme

(a) The model

Based on the theoretical framework a conceptual scheme has been developed to help guide this research. This scheme illustrates the current knowledge of micro-renewal in urban villages based on existing literature.

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Figure 2.5 Conceptual model.

Economic effects Social effects

Environmental effects Physical effects

Micro-renewal

Large-scale demolition and reconstruction Public Space enhancement Residential Renovation Commercial Renovation Historic Preservation Large-scale demolition & reconstruction Developer, Landlord, government, not-for-profit agency, village shareholding company Developer, landlord, government, not-for-profit agency, village shareholding company Developer, landlord, business owners, government, not-for-profit agency, village shareholding company Government, developer, landlord, not-for-profit agency, village shareholding company

Urban Renewal Pressures

1. Land shortage 2. Building Quality 3. Rent Gap

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17 (b) Explanation of the concepts

Urban renewal

The central concept in this research is urban renewal. This is an ambiguous term that can be broadly defined as a vision and an action to address and resolve urban problems at a specific moment in time and in a particular urban area through physical, social, economic and environmental improvements (Roberts, 2016).

Urban renewal pressures

This concept explains pressures that are influencing decision-makers to carry out urban renewal in urban villages. The pressures include but are not limited to:

1. Land shortage

Due to geography there is lack of developable land in Shenzhen so the city needs to redevelop brownfield and under-developed sites in order to accommodate both a growth in the population and the economy.

2. Poor building and environmental quality

The residential buildings are typically poorly constructed, have inadequate ventilation and lack sunlight and adequate fire safety. The environment can also be chaotic due to the tight spaces between buildings which make access for emergency services (notably fire engines) difficult and, there is also a lack of open public spaces and a lack of waste disposal facilities. This helps to create a negative image of urban villages.

3. Rent gap

There is a considerable rent gap between existing rents and what could potentially be earned in a new development (O’Donnell, 2017). This is at its most extreme in urban villages in central locations such as those found in Futian and Nanshan and less pronounced in more peripheral districts.

Demolition vs. micro-renewal

The urban renewal pressures lead to decision-makers then deciding how to renew an urban village. This intervention typically takes the form of either large-scale demolition-reconstruction or micro-renewal. These are two sub-concepts of urban renewal. It is important to note that these two methods of urban renewal are not mutually exclusive. Redevelopment projects can combine the full or partial demolition of structures as well as

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18 the preservation and renovation of existing structures (the latter falling under the micro-renewal umbrella).

1. Large -scale demolition-reconstruction

In this method of urban renewal an urban village is levelled, the residents are displaced and a new community is built from the ground up.

2. Micro-renewal

This term encompasses the planning strategies that minimise the role of demolition in the redevelopment of urban villages. There is a focus on protecting and renovating the existing built structures (including historic buildings), preserving the layout of urban villages and improving public spaces. Building functions may change and building owners may keep their rights to the building.

Public space enhancement & beautification

This concept covers changes made to the public areas of urban villages to make a more pleasant environment. This includes the repaving of streets, the removal of waste and old or damaged street furniture from streets and squares, the instalment of new street furniture and waste disposal facilities, the creation of new public areas for recreation, the repainting of public areas and the installation of street art and flowers.

Residential renovation

This concept focuses on the renovation of existing apartment buildings in urban villages. It involves the updating of a building’s façade, fire safety, facilities and internal layout. The internal layout may be altered to increase or decrease the size of apartments and rooms. New windows may be installed to increase daylight. The total number of apartments may stay the same, increase or decrease depending on the changes made. The renovation may involve the displacement of the previous tenants and their replacement with new tenants.

Commercial renovation

This concept is concerned with the renovation of commercial premises. This involves the installation of new shop-fronts, improved facilities and fire safety. It also may involve upgrading or changing the building function. For instance, a low-cost convenience store may be upgraded to a restaurant.

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19 Historic preservation

This involves the preservation and restoration of historical structures in urban villages. Historical structures are defined as temples, city walls, archaeological sites or buildings that have some sort of cultural value. They are significant for exemplifying the history of the Shenzhen region.

Stakeholders

These are the actors that in some way influence urban renewal and urban policy. They decide where urban renewal is implemented (often based on the pressures), they design the renewal plans (choosing to what extent it will involve demolition or micro-renewal) and finance their implementation. The stakeholders can be part of the government (e.g. national and municipal governments, and state-owned institutions/companies), private sector (e.g. real estate developers, urban planning firms, landlords and the village shareholding company) or not-for-profit organisations. This research does not use the term non-governmental organisations as this a problematic term in China, as many not-for-profit companies are owned by or linked to the government in some capacity. Local residents may also have a stake if they are consulted during the development of renewal plans.

Physical effects

These are the changes to the built environment (buildings, public spaces and historic structures) of an urban village as a result of a micro-renewal project.

Economic effects

These are the changes related to rental prices (for residential and commercial tenants) and the closing down and opening of new businesses in an area.

Social effects

These are changes related to the residents of the urban villages. This includes whether residents are displaced and examines if new inhabitants differ from past tenants in terms of profession and income level.

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20 Environmental effects

These are the changes related to improving the sustainability of an urban village. This includes any projects that seek to minimise pollution and the production of waste. It also encompasses efforts to increase recycling and the energy efficiency of building

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21

CHAPTER 3: RESEARCH QUESTIONS, DESIGN AND

METHODOLOGY

3.1 Research Questions

What are the aims and effects of micro-scale urban renewal projects in the urban villages of Shenzhen?

In order to answer this question, the following sub-questions are used to help guide this research.

Sub-questions:

1. What types of micro-renewal projects can be identified in urban villages in Shenzhen? This question intends to explore the different approaches to micro-renewal projects by examining the key stakeholders involved and the aims of their projects.

2. What are the value orientations of the stakeholders implementing micro-renewal

projects in urban villages in Shenzhen?

This question aims to identify the core values or principles behind the plans of the key stakeholders. It will analyse the intentions of the main stakeholders and determine whether micro-renewal is primarily motivated by new business opportunities, by the protection and preservation of the historic fabric of urban villages or by a concern to improve the lives of urban village residents.

3. To what extent have changes in government policy influenced the development of

micro-renewal projects?

This question will examine if changes in government policy towards the property market and urban renewal have promoted micro-renewal in urban villages.

4. What changes can be observed from micro-renewal projects in urban villages in

Shenzhen?

The purpose of this question is to analyse the effects of micro-renewal in urban villages. In order to do this it will analyse the physical, economic, social and environmental changes or improvements made to an urban village as a result of a micro-renewal project.

5. Who benefits and who is disadvantaged by micro-renewal projects in urban villages in

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22 The rationale behind this question is to uncover which stakeholders or actors gain the most from a micro-renewal project. This could potentially be in the form of new income streams for landlords or developers or improved housing quality for residents. The question will also examine if there are stakeholders or actors that lose out from a micro-renewal project. This could potentially be in the form of residents or store owners being displaced.

3.2

Research Design: Case Studies

This is a qualitative and descriptive research study that intends to explain the aims and effects of micro-scale urban renewal projects through an empirical study of urban villages in Shenzhen. In order to answer the research question, three case studies were selected. The cases are the urban villages of Gangxia, Nantou Old Town and Xinweizai. The unit of analysis in this research are the micro-renewal projects found within the geographical boundaries of each of the three urban villages. There were two core reasons for the selection of the cases. Firstly, from a methodological standpoint both Bryman (2012) and Yin (2014) note the benefit of examining multiple cases over a single case is to substantiate a stronger theory. The comparison of three urban villages thus helps with generalising the theoretical opportunities for micro-renewal projects in Shenzhen in the future. The cases selected were each in a different district of Shenzhen and the projects were being realised by different constellations of actors with differing visions. A further benefit of comparing these projects is to determine whether the location (i.e. central or more peripheral) or the involvement of particular actors have an impact on the aims and effects of the micro-renewal project. The second rationale for the selection of these cases was based on the resources available and the accessibility to the research sites upon arrival in Shenzhen. The initial awareness of projects and access points to respondents emerged from the introduction week in Shenzhen organised by the University of Amsterdam. We visited the urban villages of Nantou Old Town and Xinweizai which offered some initial contacts. I became aware of the project in Gangxia through a contact provided during this same week. Furthermore, in the case of Nantou, the Shenzhen Centre for Design (SCD) was involved in a micro-renewal project there. As the SCD provided a workplace for this thesis project, it therefore offered an entry point for potential respondents. Multiple case studies are more time-consuming than single case studies (Yin, 2014) so it was important to build on these initial contacts as the fieldwork period was just six weeks during March/April 2018. In terms of location accessibility, Gangxia was within walking distance of my accommodation in Shenzhen and

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23 Nantou was easily accessible via metro. Xinweizai necessitated a longer journey as it is positioned in the outer districts of the city. The research sites are shown in figure 3.1.

Figure 3.1 Research sites (Source: by author) (a) Gangxia

Gangxia is an urban village in Futian, the central business district of Shenzhen. Gangxia is split into two sub-villages: Gangxia East (Heyuan area) and Gangxia West (Louyuan area). Gangxia West has already experienced the demolition-reconstruction model of urban renewal and is now lined with hotels, offices and luxury apartments. The focus of this research is on what remains of the Gangxia urban village –– Gangxia East (see figure 3.1). The private developer Glocal Republic has completed a single micro-renewal project here labelled “Loft 1980” which was analysed for this research.

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24 Figure 3.2 Boundaries of Gangxia West (already redeveloped) and Gangxia East (research site)

(Source: by author) (b) Xinweizai

Xinweizai is located in the Longgang district and is outside the original SEZ. It is referred to as an “IT village” as many of the workers of the neighbouring technology firms Huawei and Foxconn reside here. The real-estate developer China Vanke is currently involved in a renewal project to upgrade the housing stock and improve the public spaces.

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25 (c) Nantou Old Town

Nantou Old Town, a former walled city is an urban village in Nanshan. The history of Nantou dates back nearly 1800 years as it once served as the administrative and economic centre for the historic Xin’an County. In the 20th_{century, the opening of the Kowloon–}

Canton railway and the transfer of the county seat to Caiwuwei village in Luohu meant Nantou lost its role as a political and economic centre (O’Donnell, 2017). As a result of the Shenzhen SEZ, Nantou was transformed into an urban village and many of its historic buildings and structures were torn down in the process.

Today Nantou has 30,000 inhabitants and was the main exhibition site for the 2017 Shenzhen Urbanism/Architecture Bi-City Biennale (UABB). The theme of the exhibition was “Cities grow in difference” which celebrated urban villages as an integral part of the functioning of Shenzhen. As a result of the UABB, there have been a number of micro-renewal projects enacted in Nantou directly by the Nanshan District Government, UABB and developers in order to make it capable of hosting the exhibition. The exhibition has also attracted other actors seeking to use Nantou as an experimental ground for their own micro-renewal projects.

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26

3.3 Research Methods

(a) Interviews

The primary data collection method was in-depth and semi-structured interviews. Interviews were selected as the availability of English language documents, both primary and secondary, on micro-renewal projects in China is scarce. The strength of interviews is they can have a narrow focus and be guided by the interviewer to glean relevant information on the research topic (Bryman, 2012). As I do not speak Mandarin it meant an interpreter was necessary to conduct most interviews. Nonetheless, where possible, when the respondent spoke English the interview was conducted in English. Most of the interviews were conducted at the research sites and some also involved a guided tour. The interviews varied in length. In total 10 long interviews and 24 short interviews were conducted for this research. Long interviews typically lasted between forty-five and ninety minutes. Respondents for long interviews were selected if they were a direct stakeholder in the micro-renewal projects or an expert on matters related to urban villages and urban renewal in the context of the three case studies. One general interview was conducted on urban renewal trends across Shenzhen while the other interviews were specific to the research sites. Some of these interviews were scheduled in advance through the messaging platform WeChat while other interviews transpired by visiting the research sites and accessing the respondents that were available to be interviewed on that day.

The short interviews generally took between five and fifteen minutes and were held with local residents, residents of the renovated buildings, local store owners and local landlords in order to investigate their perspective on micro-renewal the effects they have experienced or witnessed. In Gangxia local residents were approached in the space outside the Wen Temple, where many of respected members of the community and landlords socialise. In Xinweizai interviews were held with the residents of the renovated Port Apartment by waiting in the seating area in the lobby of the building and approaching the residents as they socialised here in the evenings after work. A conversation was also had with the owner of a neighbouring store and a street cleaner outside the building. Interviews were mainly held with store workers and owners in Nantou by purchasing something as a form of exchange or by waiting for a quiet moment so the respondent could be interviewed. The displaced traders were accessed through Fish, one of the key respondents. The list of interviews is presented in table 3.1. See appendix 1 for interview guides.

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27 Table 3.1 List of Interviews.

General

Name Role Organisation Interview type

Huang Weiwen Urban renewal expert

Institute of Building Research

Long

Gangxia

Randal Xie Co-founder and marketing director

Glocal Republic Long and guided tour

Anonymous

********

Gangxia

shareholding company

Long

Local landlords x3

********

Short

Local residents x3

********

Short

Xinweizai

Name

Role

Organisation

Interview type

Hong Kao Xinewiezai project director

Vanke Group interview and

guided tour 2nd_{follow up long}

interview

Anonymous

********

Vanke Long

Port Apartment Residents x6

********

Short

Local business

owner x1

********

Short

Local resident x1

********

Short

Nantou

Wanting Employee Shenzhen Centre for

Design

Long

Carrie Former UABB

employee & Co-founder

UABB and Nantou

Living Room Long and guided tour

Vonnie Researcher **** Long and guided

tour

Fish Researcher Institute of Building

Research Long and guided tour Local business

owners x5 **** These business were established prior to renovation

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28

Displaced traders x2 **** **** Short

New business

employees x3 **** New businesses opened as a result of renovation

Short

(b) Documents

An analysis of documents was also conducted as part of this research. Using multiple research methods helps to strengthen the construct validity of the results of research as it gathers more sources of evidence (Yin, 2014). In order to help answer the third research question that examines if changes in China’s national government policy or in Shenzhen’s government policy have promoted micro-renewal, and to acquire a better understanding of Shenzhen’s property market, a review of English language news articles and opinion pieces was undertaken. As the majority of policy documentation is in Chinese there was a reliance on these English language secondary sources. They were accessed through the search engine Google using keywords such as ‘Shenzhen property market controls’, ‘China rental market’, ‘Shenzhen house prices’ and ‘Shenzhen property restrictions.’ See appendix 2 for the list of documents and news articles analysed.

Two documents were also provided by interview respondents. The first was from the SCD about Nantou: Curating in Nantou: A case study of village/city co-existence and regeneration by Meng Yan, the curator of the UABB. Randal of Glocal Republic, in Gangxia provided a vision document about the company’s aims. It is in Chinese but was translated with the help of an interpreter.

3.4 Data Analysis

In order to analyse the data, recorded interviews were transcribed. When handwritten notes were taken, the notes were typed out and summarised. This process happened directly after the interview was completed to maintain validity. The data collected from documents was also summarised. Following this, the data was coded. Codes were assigned to issues, opinions and topics in the data that related to the research questions. This was as Bryman (2012) asserts a continuous process of assigning and redefining codes to the data. This continued until I reached what Hennick et al. (2011) term the point of “saturation” where no more codes could be generated to satisfy the research questions. Subsequently, through thematic analysis the codes were grouped into themes. The themes of this research

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29 included: stakeholder motivations, future plans, physical effect, economic effect, social effect, environmental effect, and government policy.

3.5 Limitations

There are a number of limitations in the methodology adopted for this research. These are linked to the selection of case studies and the use of interviews. From the outset there is a bias in the selection of case studies. The case selection was based on the resources at my disposal upon arrival in Shenzhen.

There were four limitations in the use of interviews. Firstly, there was an inherent bias in the selection of interviews respondents. Respondents that were interviewed were those that were most accessible at the time of research. Secondly, due to the short time period of fieldwork, the number of long interviews is limited. Thirdly, not all relevant stakeholders were interviewed. Government officials were a particularly inaccessible group and the perspective of both the city government and district government is missing from this research. To overcome this, the government perspective is inferred based on the data collected from other respondents and the documents analysed. As well as the absence of government interviews, no interviews were conducted with the residents or the landlord of Loft 1980 due to time constraints. This was addressed by gathering this data from the interview with Glocal Republic. A final limitation is found in the interviews conducted through an interpreter. The research may be subject to errors in translation which means there may be some validity issues with the data collected.

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CHAPTER 4: RESULTS

This chapter will answer each of the sub-questions of this research. It begins by examining the types of micro-renewal identified by this research. Then the values of the stakeholders are reviewed before the changes in the government perspective towards urban renewal and urban villages are subsequently discussed. The effects of micro-renewal are presented in table 4.1. This chapter culminates by mapping out the actors that have benefitted and those that have been impoverished by micro-renewal.

4.1 Types of micro-renewal in Shenzhen’s urban villages

The types of micro-renewal identified by this research have been defined according to the main stakeholder that instigated the project. There are four types of micro-renewal projects: (a) landlord-developer initiated, (b) developer initiated, (c) government initiated and (d) not-for-profit initiated found within the three research sites.

(a) Landlord-Developer initiated in Gangxia

“Loft 1980” is a single apartment building renovation project in Gangxia lead by the private developer Glocal Republic. This is one of seventeen ongoing and completed renovation projects by Glocal Republic in urban villages across Shenzhen and Guangzhou. Each of their projects has a theme and Loft 1980 is designed around a “sharing concept”. The interior design and layout of the building is inspired by the Japanese film Midnight Canteen, which follows characters enjoying a “sharing lifestyle”. Each tenant has a single bedroom and bathroom facilities and then there are four common areas shared amongst all tenants: kitchen, dining room, living areas, rooftop and laundry facilities. The sharing concept allowed the building to maintain the same number of rental units as prior to renovation. It also ensures rental costs are lower for tenants than if each of these services were provided individually and it is marketed as a way to encourage socialising amongst neighbours.

The renovation has introduced a range of physical and environmental changes to the building. The fire safety, building façade and physical quality have all been improved. More windows have also been installed to increase sunlight and to allow passers-by to peer in and ‘see what we are doing here’ (Randal, interview). The most novel feature of the renovation is a rainwater harvesting system that has been installed on the building rooftop. It is connected to Shenzhen’s ‘sponge city’ initiative as tool to capture rainwater and combat flooding. It was developed by Glocal Republic in conjunction with the American environmental NGO The Nature Conservancy.

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31 Loft 1980 is classified as a landlord-developer initiated project due to the relationship of the two stakeholders –– GR and the landlord of the building. GR is a private real-estate developer that was established by a group of second generation Shenzhen citizens. The parents of the management team are all landlords; they are the villagers that built the handshake buildings following the designation of the Shenzhen SEZ. GR’s management team have now inherited the landlord duties and ownership of these properties from their parents. This has provided them with a business opportunity in renovation. In the case of Loft 1980, the GR management team do not own the building but they do have familial ties to the landlord.1_{The landlord, interested in renovating one of their properties, approached}

GR due to the familial connection and the fact they had heard about their other projects. The landlord has leased the management of Loft 1980 to GR on a ten year contract to carry out renovations and rent out the property. The previous tenants were evicted and a higher rent is now charged to attract higher income tenants. This rewards the landlord with a higher income as well as no longer having to deal with tenant issues. GR guarantees rent to the landlord regardless of whether the property is at full occupancy or not. A condition of this contract is that the landlord cannot enter negotiations regarding demolition during this timeframe.

Figure 4.1 Exterior images of Loft 1980 (Source: by author)

Embracing the village : micro-scale urban renewal in Shenzhen’s urban villages