Learning from Chengdu
Chapter 10: Chengdu experience’s value for China and the challenges for its wider application
Chengdu’s innovations are of historical significance for China because Chengdu has pioneered a model to solve the most severe problem China faces in its current stage of development: how to reduce the gap between urban and rural development. Chengdu’s model not only follows the historical trend of economic and social development that other countries have passed through in their development, but applies to China’s specific current situation. Chengdu has created a set of structures and mechanisms to apply markets to allocate resources efficiently to equalize urban and rural incomes and services. Chengdu’s model has activated capital of ordinary people, especially by the policies of returning ownership of use rights in rural land to individual peasant households and legalizing free transfer of these land-use rights. This has breathed life into what Peruvian economist Hernando DeSoto calls dead capital in rural land, providing access to wealth and development for millions of rural residents (DeSoto, 2000). While what Chengdu has done is similar to Hernando DeSoto’s ideas about creating private land markets in developing countries in order to unlock dead capital, Chengdu’s model has protection against the greatest risks and dangers of what DeSoto proposes.
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