Industrial policy and spatial arrangement of land leasing in China: A case of Jiangsu Province

The governments play an important role in allocation of land resources In China. However, few studies have focused on the local governments' spatial arrangement of land supply within their jurisdictions. Using the Jiangsu Province as a study area, this paper reveals the Chinese local governments' spatial response of land leasing to the industrial policy. Competition between localities for relative economic performance forces local governments to implement two spatial strategies in land leasing, maximizing economic performance and beggar thy neighbor. Rational prefectural governments are inspired to place policy-favored industries in municipal district or location closer to prefectural city center. First, allocating policy-favored industries the land adjacent to the city center or in municipal district will help to attract industrial investment. Second, assigning policy-favored industries far from the administrative boundary contributes to reduce the positive spatial spillovers to the neighboring juris-dictions. However, local governments may also adopt inter-regional cooperation strategy of not intervening in the location of land leasing for the industries closely linked to the advantageous industries of neighboring regions.