Independent Think Tank - China Market Reform Initiative

Unirule Highlights
About Us
Biweekly Symposium
Support Us
Contact Us

You are here:Home>Consulting

Research on Implementing Policies and Measurements for Coordinated Development of Land and Transport
Time:2008-09-15 14:12:53   Clicks:

To describe the coordinated relationship between land development and transportation by economic term, we use the word, equilibrium. Incoordination means the equilibrium is broken.
The heavy traffic congestion in Mono-centre metropolis is the most serious, complex problem of uncoordinated developments of land and transportation in Beijing.
The total loss in time and oil almost 70 billion RMB due to traffic congestion in 2004,which is equal to 16.3% of GDP in Beijing.
The costs of traffic congestion could be acceptable as long as there are enough market benefits. Therefore, it´s difficult to generate a new city center naturally in Beijing for alleviating congestion because of the gigantic scale of the city which bring about enormous economies of scale and market benefits. So market itself cannot resolve the problem of traffic congestion.
There is “congestion externality” because we cannot charge from every vehicle for traffic congestion, so actual vehicle flow rate is higher than that of optimum equilibrium and traffic congestion cannot be solved by market. That is a kind of market failure too.
There is government failure while market failure. Real estate is a private goods with clear property rights, but traffic facilities is a public goods without clear property rights. So enterprises invest to real estate more than traffic facilities. Government can not increase investment in transportation due to fiscal restriction. The growth rate of investment in transportation lags behind that of real estate 5.5% per year.
The difference of incentives between real estate development and transportation construction may affect among governmental agencies. Some effects are legal and some of them are illegal.
The most important method to resolve discordance between land exploitation and transportation is to build satellite towns. The precondition to arrive the critical scale of a satellite town is to construct infrastructure including rail transit.
Implementing policies and measurements for coordinating developments of land and transportation in Beijing should be based on market mechanism. With market information, we may judge whether coordination between land and transportation is arrived or not. And we should recognize the problem of market failure clearly.
A "expanded firm" means an enterprise that produce private goods and also expand its producing fields to that of public goods, which can  "combine sales" both private and public goods.  The business model of "rail transit plus land "is a profitable method that could  internalize the land value- added caused by rail transit to its investor, which can radically solve the insufficient investment in rail transit.
Applying the means of planning, policies and regulations properly to remedy market failure, and provide the environment of laws, policies and regulations for model of "track plus land" in order to internalize the external income from rail transit, namely the land value- added along rail transit.

Totally 5 Pages,Now on the 1  Page   1  2  3  4  5  

Upcoming Events
Unirule and Fairbank Cent...  
A Seminar on “Tax Burden...  
An Urbanization Salon Hel...  
The Sixth Session of the ...  
Seminar on “Theoretical ...  
The Sixth Session of West...  
The Third Session of Haye...  
The New Economy Salon Ses...  
        Unirule Institute of Economics
        Floor 6, Zhengren Building, No. 9, Chong Wen Men Wai Street, Dongcheng District, Beijing, 100062, China
        Tel: 8610-52988127 Fax: 8610-52988127