China’s central government has been issuing national policies since 2012 to promote urban redevelopment to improve land use efficiency and sustainability. These national policies aimed to contain urban expansion, which had been leading to adverse social and ecological effects. As a response, Shanghai, one of China’s largest cities, issued development control policies in 2014 and 2015 to introduce a new user-led redevelopment mode to encourage redevelopment and restructure the urban land use. Unlike the regular redevelopment mode, where it is required for the local government to reacquire the land use right and reconvey it to the new developer, the user-led redevelopment mode allows the current land use right owner to redevelop the land by paying a supplementary land conveyance fee.

This shift in urban development governance in Shanghai offers an opportunity for this thesis to 1) qualitatively examine the making and implementation of new development control policies in urban China, through desk-based document analysis, in-depth interviews, and investigation of individual redevelopment projects; 2) conceptualise institutional change and its underlying logic in China’s recent development governance; and 3) understand the nature of development control within China’s distinct land property rights regime and broader logic of governance. This research uses historical institutionalism and transaction cost theory to build the theoretical framework as the institutional theories enable the consideration of two key elements central to development control in urban China: land property rights and the distribution of power.

The research shows that high-quality urban redevelopment encouraged by the municipal government is financially unattractive to district governments and market entities. Pro-growth development governance maintains strong inertia since it has been embedded in both formal and informal interlocking institutional arrangements. The effectiveness of the new policies in encouraging redevelopment was thus limited. Nevertheless, a small range of industrial and commercial land redevelopment projects were implemented through campaign-style political mobilisation of the state-owned enterprises’ financial resources and the local cadre’s attention. As a distinct policy implementation mechanism in China’s decentralised authoritarian bureaucracy, political campaigns temporarily changed the power distribution among different levels of government and state-owned enterprises, which cultivated incremental layering of new rules alongside existing rules. The thesis argues that development control in urban China is guided by multiple inconsistent goals, including boosting the local economy, providing public facilities, and promoting ecological sustainability. The local governments make constant adjustments to reconcile these objectives. Therefore, the transformation of China’s land development governance is an inherently arduous process, characterised by constant rescaling of the distribution of power to respond to incongruous pressures from different levels of government and maintain the legitimacy of the state apparatus. This research contributes to the literature on development governance in urban China by adding rich empirical evidence and conceptually demonstrating the fundamental bureaucratic logic behind development control practice and its transition through the lens of institutionalism.