Impersonal Exchange Among Elites? the Case of China's Urban Land Market

Abstract: This paper intends to explain why some Chinese dominant coalitions may let go the economic privileges of the elites in the urban land market in recent years. By studying 316 Chinese cities from 2000 to 2007 on the fixed effect panel model, empirical results show that the proportion of land sale by public auction has positive effect on local GDP growth. The implication is that local officials who choose sale venues choose on the basis of their economic performance. If they have been growing relatively well, they choose more sales through nontransparent negotiations. If they are doing relatively badly, they choose more public auctions because auctions are more conducive to economic growth which enhances the promotion probabilities of local officials. To conclude, it is the incentive of climbing further up the career ladder that drives local officials to give up some of their rent-seeking privileges in China's urban land market.