Since the founding of the People’s Republic of China, the four major adjustments of urban spatial pattern in China are closely related to the national strategic objectives. For quite a long time to come, the excessive concentration of industry and population, the intensification of climate change and the production transformation caused by informationization are the security challenges that China’s spatial pattern optimisation must face directly. As a guide to the optimisation of national urban pattern, “National Spatial Planning Theory” has also expanded from emphasizing ecological priority to paying attention to safety issues. In order to better realize economic security, by constructing the “Four Forces (PSVC)” economic potential evaluation model, cities with economic development potential are identified as the strategic “fulcrum” for the country to build a “double cycle” of economy. In order to better ensure ecological security, on the basis of accurate analysis of China’s land space resources, the national land space is divided into six first-class divisions, and differentiated guidance is given to key urbanization areas. Climate change will bring different levels of security risks to key urbanization areas, so differentiated urban construction modes and adaptive security resilience construction technologies should be adopted.

This paper raises a key question which has long been neglected by the urban planning profession: should urban planning take into consideration of municipal finance capacity? This paper elaborates a simple theoretical framework for the linkages among urban planning, municipal financing, and borrowing, and illustrates these linkages with relevant international experiences. Then the paper discusses the causes and consequences of weak linkages between the practices of urban planning and municipal financing in the Chinese municipalities. Finally, in the context of high-quality urban development, the paper makes several recommendations for strengthening the working linkages between urban planning and municipal financing. These include orienting the urban planning perspectives to more fiscal realism, adopting a mid-term construction and financial planning practice and an urban infrastructure asset management system, continuing the property tax and land concession reform, and strengthening the teaching of municipal finance in the urban planning education programs.

China’s urban renewal is carried out in the context of rapid urbanization. In order to expose the financial mechanism behind urban renewal, we divide the process of urban growth into two stages: investment and operation. With the use of the financial statements of a developer, we could see the underlying logic of urban renewal in the two-stage model. The investment stage is actually the process of building balance sheet. The operation stage is the process of maintaining the income statement. The main driver of China’s urban investment stage has been a special mechanism landbased financing. Once the urban transformation enters into the operation stage, financing from new land in the investment stage will hit a capital ceiling. Whether urban renewal can be completed or not will determine the rise and fall of a city. Chinese cities therefore will also see a second “great divergence”since the reform and opening up.

Cities rely on rational planning strategies to develop over time. A rational urban planning must not only meet the needs of manufacturing and daily lives, but also depend on sufficient financial support to implement it. In the process of rapid urbanization in China, the public finance system at the level of urbanized areas has been absent. There is a certain degree of disconnection between urban finance and urban planning. Some irrational phenomena such as “finance for planning” and “planning for finance”have emerged. The former leads to the increased financial pressure on local governments and the tendency of excessive borrowing. The latter would increase land finance revenues for local governments, but might cause waste of resources and a large number of “unfinished” projects due to the repetitive planning and inefficient urban expansion. To address the above issues, it is necessary for urban finance and urban planning to coordinate with each other. Urban planners should take financial affordability into consideration when proposing urban planning strategies. Meanwhile, urban finance policies are expected to be continuously optimized to provide sustainable financial support for the future urban planning.

Rapid urbanization creates an enormous pressure on urban public infrastructure. On the one hand, cities need to invest heavily in new infrastructure; on the other hand, existing infrastructure needs to be maintained and renovated. Financing urban infrastructure in a sustainable manner is a major challenge for city governments around the world, and land value capture has proven to be an important financing tool. Implemented in coordination with laws, urban planning, and fiscal tools, land value capture enables urban governments and communities to capture the portion of land value increase that is caused by public investment and other government actions. The additional revenue can then be reinvested in the community, forming a virtuous circle between land value and public expenditure, thereby making municipal finance more sustainable. In this paper, we first review key concepts and literatures around land value capture. Then we categorize and analyze various land value capture tools around the world. Finally, we suggest ways in which China could adapt land value capture to its urban development context.