The City’s New “Trinity” in Contemporary Shanghai:
A Case Study of the Residential Housing Market *
WANG Xiaoming
Translated by Tyler Rooker
*The writing of this paper financially supported by the project titled The Transformation of The Civil Cultural Situation in Today’s China, which was one of the 211 projects in Shanghai University.
This chapter argues that since the end of the 1980s the city in China has been restructured through three mutually constitutive dimensions: a new valorization of the visual cultures of the urban, emergent new spaces, and a new structure of urban power. I will take the Shanghai residential housing market and its creation through the forces of advertising as a case study to explain the interrelationships of the three.
In 1949 the People’s Liberation Army occupied Shanghai. A new “Land Law” was issued by the central government in 1950, declaring that all urban land was now state-owned. Within ten years, the Shanghai residential real estate market meet a similar fate to those in all other China cities—it was completely eliminated.
But, in the mid-1980s, the paramount leader of the time, Deng Xiaoping, proposed that the Chinese government make significant efforts to re-establish the residential real estate market.
Why? There were two main reasons:
1. A famine (1959-1961) and the “Cultural Revolution” (1966-1976) had seriously damaged the legitimacy of the Communist Party’s political authority. The only solution was to increase the quality of people’s lives, and a shortage of housing was one of the most urgent issues for urban residents;
2. In order to develop the economy, the government needed a large amount of funds. And the largest resource that could be translated into capital was land.
The reestablishment and expansion of the residential real estate market from top to bottom was very rapid. In Shanghai, in less than 20 years the new market became one of the “pillar” [Pillar industries are those deemed strategic to the economy in terms of defense, job creation, technology, or competitiveness – trans.] industries of the local economy. By 2009, the real estate market was a leading driver of economic recovery in the post credit crunch period, pulling the entire Chinese economy out of stagnation. The total amount of wealth that it created measured by currency was even more remarkable.
This meant that land rapidly changed from an immobile “resource” to a “capital” with a price at which it could be bought and sold. Like the old American movie [“The Million Pound Note”, U.K. – trans.]: a “million-pound bill” has fallen from the sky. Therefore the main commodity in the reestablished residential real estate market is “land” not “apartments”.
But the central position of land revealed the “Chinese characteristics” of the Shanghai (and national) residential real estate market:
Without the 1950 land law that transformed it from a “commodity” into a “resource” without compensation, land today could not have been transformed back into a “commodity”. This was precisely the motivation and interest of the government in reestablishing the real estate market in the 1980s. The re-marketing of the 1980s was based on a 40-year non-market system, and was a re-release of the energy of the system not, as is usually imagined, the destruction or elimination of the communist system itself.
Because re-marketing brings about “profit without capital”, how land was to be “sold” was completely decided by the government. In Shanghai, the first 50-year use rights for a parcel of hand (in the Hongqiao area) was sold in 1988 to a Japan real estate company. The price was set very high: calculating based on the area of housing subsequently built upon it, the land cost 3,500 yuan per square meter, while, at the time, the average monthly salary for Shanghai residents was less than 300 yuan.
In the passage of twenty years, the government has pushed through residential commodification to the degree that the current rate of private ownership of residential housing by Shanghai residents is much higher than Hong Kong, Tokyo, and London. Meanwhile, the average price of Shanghai housing has rapidly approached that of Hong Kong, Tokyo, and London (in August, 2009, the average price of newly built residences surpassed 20,000 yuan per square meter [at 2009 rates there is approximately 11 yuan to the pound sterling – trans.]). And the income of the average resident is only a fifth or less of that for residents in Hong Kong, Tokyo, and London.
The market is harsh to consumers but massively profitable for governments and development companies (of which a large proportion are state-run companies).
Land in the city that can be used to construct residences was limited; a large majority of residents had to purchase or rent housing from the real estate market; the “low-rent housing” and “affordable housing” planned by the government never materialized; the economy continued to develop, bringing increased pressure from inflation… the convergence of these various factors made the residential real estate market in Shanghai very much like the stock market: despite dysfunction of the system and operations, it drew stampedes of individuals and groups.
Hence, this market gradually revealed its capacity to transform/reorganize society.
First, it increased the speed of differentiation between different income levels (jieceng). In Shanghai, the people who were allocated relatively large residences by the government (often they were officials or others from high levels of society) before 1990 have benefitted much more from the market than those who bought their own residences in or after 1990. Among those who used their own money to buy residences, those who could afford to buy two obtained more profits than those who could only buy one, and those who could buy three, obtained more profits than those who could only buy two. As for those investment groups (banks, large companies, funds), their large amount of capital meant that they could buy apartments by the building and then sell them by the unit, earning profits even further beyond the dreams of individual investors.
Since the end of the 1980s, there has been a re-differentiation of social strata in China. The new levels that previously occupied various dominant positions gained more and more overpowering advantages relative to the weaker levels below them. Hence, the massive wealth created by 30 years of economic growth was allocated among the various levels according to a pattern of “winner takes all” (yingjia tongchi). The re-establishing and expansion of the residential real estate market was gradually ushered in by this “allocation”. Eventually, the entire market became one of the important paths for this “allocation”.
Second, it changed the composition of authority groups. Taking Shanghai as an example, in this city, the largest portion of an average person’s private wealth is their residence. Today, the number and quality of residences held by almost all mid-level and above party and government officials is greater and better than any other stratum (with the exception of a few capitalists). In other words, the expansion of the residential real estate market has rapidly changed these party and government officials into wealthy people. The process of “changing” them into wealthy people often involves the buying and selling of residences, and inevitably involves variations of “trading money for power”. Hence, those cadres who before the 1990s stood at arms’ length from capitalists and submitted (even if often only passively) to the political situation, rapidly disappeared.
The more that officials become wealthy people, the more personal benefits become entangled with local economic affairs, and the more local bureaucrats and new capitalist groups (including local representatives of international capital) had to create fastidious unions that sought profits for groups/localities/individuals. Over the last ten years in Shanghai, this type of union has been involved in increasingly serious clashes with upper-level and even central government authorities. In 2009, the fact that residential prices rose despite the economic downturn is an outstanding example. That is, the bubble in residential market was large, and even the central government wanted to reign in prices, but the power of forces that extract profits from high prices was too strong, and they pushed the price of Shanghai housing even higher!
The profile of the residential real estate market clearly drove and realized major changes in the structure of social power/allocation in the city, not only in terms of economic structure, but also in terms of political structure. Looking at its form, it seemed that the city was still governed by the original communist party municipal committee and the city government. But a careful analysis reveals that the political logic and social foundation of this governance has changed over the last 20 years. The combination of a highly autocratic market, an ambiguous but also dominant mainstream ideology, politics, economics and high culture have almost completely merged with consumption in daily life. Now it is because of these factors that the governance described above has become more crucial.
People often say that in mainland China today, Shanghai is the place that most preserves the characteristics of socialism and communist political authority. But from the above analysis, this is a misconception.
With the expansion of the residential real estate market, there was a new differentiation in urban space.
In Shanghai before the late 1980s, there was general coexistence and overlap between six types of space: first, public political space, for example squares where large-scale meetings took place, work locations for the communist party and government organs, and halls spread throughout various state-operated work units (factories, campuses, hospitals, etc.); second, industrial production space, including a portion that is extended to workers as residential space (workers’ new villages); third, commercial space; fourth, the living space left over after residential space is detached from associated work units; fifth, transportation and other social service space, for example streets, hospitals, campuses, libraries, movie theatres, etc.; sixth, public socializing space, for example parks, small roads sometimes named as secondary access roads (because vehicle traffic is very low, this type of small road often—especially in summer—becomes a place for city residents to eat, chat, and even sleep), and chatting areas centered on small groceries or at lane entrances.
From the 1950s-1980s, the proportions of these six spaces changed continually, and the directions of change varied. But there was one overarching trend. That was that is that the first two types of space went through significant expansion: a large number of meeting places were constructed; and a large number of small-scale enterprises were driven into small lanes and apartment buildings creating a situation where residence, workplace, and warehouses were jumbled together.
And today? After twenty years of “reform”, Shanghai’s public political space has shrank noticeably. This shrinkage was not only physical, as in large-scale squares and meeting-places being made into commercial space; it was also abstract, as when the office/leisure areas of government organs expanded to constitute the majority of “public political space”, making this a space without any “public” significance, instead becoming a “government affairs space”.
Industrial production space was reduced to an even greater degree. Almost all the various factories spread throughout the city center were closed; various industrial spaces in lanes and residential buildings were completely moved out; and even the large factories on the edge of the city center now are almost completely dismantled.
Public socializing space also shrank considerably: the area of parks were encroached by the expansion of roads; small roads were enlarged and pervaded by automobile exhaust fumes; small groceries almost completely disappeared, and lane entranceways were replaced bit by bit with gates to residential apartment complexes such that, apart from the guards, no residents assembled there to chat.
What space expanded? One was commercial space, with large and small retail shops spreading throughout the city. Their appearance, sales method, and even products for sale were more and more standardized: big-box retailers replaced small- and medium-scale department stores, shopping centers replaced large-scale department stores, and convenience store chains replaced small groceries.
The largest expansion was in residential space. Almost all of the residential areas that used to be attached to danwei state-run work units (for example workers’ new villages) were privatized to become ordinary residential areas. Even more impressive was a new combined space that was centered on residences; it often had a large area (some large-scale combined spaces have a land area that is larger than one square kilometer), was centered on a number of residential buildings, and gathered together shopping centers, restaurants, schools, banks, fitness centers, pet hospitals. Additionally, according to individual needs, roads were paved, post offices were established, bus stops were erected and even subway stops were installed.
In this situation, the expansion of commercial space gradually became dependent on this new combined space, moving in directions dictated by it, and even taking shape in the space that it enclosed. Not only the distribution of commercial space, but that of transportation arteries (for instance subways and elevated roads) and other spaces (e.g. universities and banks) increasingly deferred and followed in the footsteps of this new space. In the last twenty years, this new combined space became the most important determinant of the change in Shanghai’s urban space.
It goes without saying that this new space was the result of the rapid expansion of the residential real estate market, and that real estate development companies were an important proponent. Along with the step by step encroachment by this space on other spaces (many of these residential areas are built on land of closed factories), real estate developments determine the public service space, for example the planning and construction of transportation, medical, educational and cultural infrastructure of the city. Effectively, the main planners of urban space are now real estate development companies, the refashioning of the city is in the image of plans made by such companies.
Shanghai has become a peculiar form of “residential/consumer” city: residences and their complementary buildings that are increasingly tied to a consumer logic have become the main spatial form of the city. Urban space with this singular form has never appeared before in Shanghai. Before the 1950-1970 era, the 1910-1930 era involved foreign concessions that structured the spaces of the city; the Jiangwan New City area, and the two banks of the Suzhou River under China’s jurisdiction. In all these areas, there were multiple forms of space coexisting, each not only with its own function, but with its own logic. Now, although in reality the majority of Shanghai residents spend most of their non-sleeping time not in their homes but in various office buildings, campuses, shops or even in factories in the outskirts, they are forcefully disciplined by the spatial form of the city: residences are the center life space of Shanghai and Shanghai people.
The re-partition of space in this way corresponded with a change of lifestyle for the entire city: Shanghai today is not a place where demonstrations are held, where the government organizes the public in mass meetings, where everyone chants support; it is a place that urges urban citizens only to be concerned with their own immediate interests, and not to think too much about other public affairs, a place that encourages everyone to idle away their after-hours time in front of the television, at the majiang [mahjong] table, and in shopping centers. Of course, today’s Shanghai is also a place where all employed people have become solitary individuals facing their bosses, worried that they will be replaced by others at any moment, where they can sleep soundly at night only once the front door is locked tightly, and where a happy and interesting life can be achieved only with shopping and travel. Individualization and spatial restructuring go hand in hand.
Over the past twenty years, this city has profoundly changed the lifestyle of residents, including their life aspirations, social ideals and political attitude. Today’s Shanghai people, compared to those from twenty years ago, are universally listless and at a loss. Although they are uneasy, and even full of dissatisfaction, they feel unable to do anything about it. They return home and put on their slippers, in order to somewhat reduce the pressure of their lives. In the process of shaping the weak and tolerant ethos of urban citizens, the massive changes in urban constructed space have played an extraordinary role.
The transformation of urban space is manifested not only in a flood of new construction, but also in the dominant cultural production mechanism of the city, which also creates a new universe of visual representation in constructed space. The “visual” and the “real” are consequently mutually constituted.
Take residential real estate advertising in Shanghai as an example. In the last 15 years, this type of advertising has always been Shanghai’s—and also other medium and large cities’—most eye-catching type of visual advertising (the second is automobile advertising). No matter where it appeared: on the street, on both sides of highways, on television screens, in newspapers and magazines, or even on the back of passenger seats in taxis and on the backs of airline boarding passes, the city makes sense of itself through the lexicon and grammar of a visual culture of real estate imagery.
The following is an introduction to a few of the common advertising schemas, where the larger the scale of advertising, the more the schema follows these types:
Schema one. The framing is selected very carefully, with attention paid to balance of the segments and matching of colors. Residences (usually their exteriors) are often put in one corner of the picture. Although it is eye-catching, other parts are even more prominent: foreign country (Europe or America) emotional appeal, complete community infrastructure, family life with beautiful wife and children, green environment.
Schema two. The residential building is located in the center of the frame, while in the four surrounding directions are malls, offices, subway stations, parks, churches. Or, conversely, the residential area is the background, and different shops, city gardens, cafés, walkers, and even churches are included, almost as if the entire city has moved into the residential area.
Schema three. The picture is like a window frame, making viewers feel as if they are in the living room, looking out the window at the exterior: riverbanks, gardens, serene woods, brilliantly illuminated commercial areas. These are all the same as photographs framed on the wall, becoming part of the residence itself.
Schema four. The residence is half-hidden or even invisible and the picture only includes the rural imagery of forests, blue skies, grasslands or ponds.
All these schemas work culturally through making equivalences: buying apartments is the same as buying wealth, safety, foreign country sentiments, a beautiful family, a bustling city, beautiful scenes outside the window, a life with distinction, a successful life. Even though it may be an advertisement for residences, what is revealed is not the residence itself but instead its “goodness” (meihao) with larger scope and more abstraction through equivalence.
It is certainly not only Shanghai’s residential advertisements that are making these equivalences. A famous advertisement in Beijing put it in even starker terms: it asserted “I am not selling an apartment, I am selling a life, and the apartment is complimentary.” In a sense, just as real estate developers have become the primary planners of the city, residential advertisers also act as the primary priests of the city’s residents: what they paint is not only an image of residences, but an image of lives and lifestyles for those who reside. The cartography of the advertisement provides not only a partial map but also a complete rendering of these lifestyles.
Shanghai today first emerges in the composite and allegorical fashion described above for residential advertising. It is echoed in other advertising (interior decoration, home furnishings, cosmetics), television sitcoms, commercial show windows, and even in many online games. Many of the basic composite strategies used in residence advertising are deployed by other advertisements, of which a familiar example is automobile advertisements which stress outdoor scenery reflected in rearview and side-view mirrors.
Broadly speaking, these advertisements, each selling different commodities, all do the same thing:
1. Reduce the number of solitary images of streets, plazas, factories, fields, villages;
2. Paint many partial pictures of a life world that is centered on residences and focused on interiors;
3. Continue to induce a visual connection that makes equivalences between concrete products (cosmetics, furniture, cars) and the good life.
These methods, of course, arise from an autocratic market logic with Chinese characteristics. That is, the higher the price of residences, the more the real estate market (or the automobile market for that matter) needs to popularize the following type of life consciousness: families and residences are the center of people’s lives, and they are most connected to individual happiness. Those who make apartments the primary affair of their lives—no matter the motivation, whether “to live in a big house” or “only houses keep their value”—are the consumers most needed by the market.
And yet in the process of extending this market logic, in the process of spreading throughout the city a life image that makes residences central and far beyond their actual scope, a visual pattern that takes residences as fundamental viewpoints, a life world that is known through residences, and even a habit of perception that takes residences as life-worlds have been born.
The vast changes in the urban space of Shanghai today have been “represented” mainly through this method of imaging. This representation is profoundly significant (and its limited content makes it highly focused) so that it is extremely clear. But precisely for this reason, in an era of dominated by momentary fast-food culture, it has become a powerful allegory for the change in urban space, continuing to discipline Shanghai’s urban citizens—especially the young—in terms of the perception of changes in space and how to understand new space.
This is the “discipline of visual perception” mentioned at the start of this chapter. It goes without saying, this directly participated in the formation and strengthening of generally pessimistic perspectives of residents in post-1990s Shanghai—and of course, not only in Shanghai. The more that an individual feels reality is huge, and that “I” am very small, and hence “I” cannot grasp its own fate, but can only strive to adapt to reality, the more the above disciplining of visual perception can be felt at the most basic levels, making one feel that life has always been this way, and if only one has a happy small nest, life will be satisfying.
Of course, for all of the above these changes constitute one another: change in the construction and production of space, the cultural representation of this space, and the entering of this representation into urban citizens’ minds. All are produced simultaneously with the structure of social space and allocation where “winners take all”. They are the basic conditions for the operation of this structure, or to put it another way, they are a part of this structure.
September, 2009 Shanghai