Urban entrepreneurialism and the commodification of heritage in China

Introduction

Since the 1970s, urban authorities in various countries have endeavoured to package local heritage resources to heighten a city’s competitiveness in the global leisure and tourism industry. The main strategies include urban regeneration, waterfront rejuvenation and urban redevelopment (Chang and Teo, 2009; Graham and Howard, 2008). The sum of these strategies reflects what Hewison (1987) calls the ‘heritage industry’ whose primary aim is to help cities effectively handle the economic transition from manufacturing to service-oriented sectors. This selling of heritage to the global tourism industry is understood as urban entrepreneurialism, that is, the pursuit of innovative economic and political strategies intended to ‘maintain or enhance [a city’s] economic competitiveness vis-à-vis other cities and economic spaces’ (Jessop and Sum, 2000: 2289). In this paper, I seek to extend existing understandings of urban entrepreneurialism by exploring the relationship between heritage, commodification and power.

Of particular relevance to this paper is the literature which examines selling heritage as an effective economic policy to help cities succeed in territorial competition and economic restructuring (Britton, 1991). This policy has become a worldwide strategy of place making and economic development in many cities, such as Coventry and Plymouth (While, 2006), Johannesburg in South Africa (Bremner, 2000) and Budapest (Kovács et al., 2013). These efforts in selling heritage reflect and reinforce the ubiquitous presence of global capitalism in contemporary cities. To city authorities, the promotion of urban heritage can secure ‘place-specific locational advantages’ in relation to other cities (Brenner, 1999: 440). As a result, cities undertake a transformation into ‘spectacular cities of and for consumption, populated by a harmonious and cosmopolitan citizenry’ (Hall and Hubbard, 1998: 8). As Harvey states, this transformation runs parallel with a shift from managerialism to entrepreneurialism, and throughout this shift ‘traditional local boosterism is integrated with the use of local government powers to try and attract external sources of funding, new direct investments or new employed sources’ (Harvey, 1989: 7).

Since Harvey (1989) proposed urban entrepreneurialism as an emerging mode of political economy to promote and govern urban (re)development, scholars have examined the changing political economy of urban entrepreneurialism in various cases (Butler, 2007). A common and often explicit presumption in the literature on urban entrepreneurialism is that urban landscapes should be commodified to cater to multiple types of consumers. Nevertheless, the literature rarely interrogates how profit is made through commodification when urban landscapes become the locus of entrepreneurialism. Writing about China’s emerging neoliberal urbanism, for instance, He and Wu (2009: 285) argue that ‘commodification and privatization … have key roles in creating a new mode of regulation within the process of neoliberal urbanization’. Their specific focus on land and housing in Chinese cities generates a rich theoretical resource for analysing urban entrepreneurialism in China, but says little about the logic of commodification in the market. Yet the logic may have significant implications for understanding why certain landscapes are chosen, how profit is extracted from these landscapes and who really benefits, as local governments in Chinese cities constantly go beyond the housing market to promote commodification and make profit.

In light of these considerations, this paper analyses urban entrepreneurialism in relation to the commodification of urban heritage in the context of China. The case study is Lijiang Old Town in Yunnan province. Lijiang is chosen because it has achieved great success in selling heritage in the tourism industry ever since it was designated a World Heritage site in 1997. Lijiang has been highly regarded by the Chinese state as a benchmark for urban development within the places where heritage resources are rich. As Zhang Xiqin, vice-Chair of the Chinese National Tourism Administration, described, Lijiang is a good role model for other places in western China (Xinhua News Agency, 2006). Furthermore, the Lijiang experiment demonstrates that consumption, rather than production, is a driving force to promote economy and urbanisation in some Chinese cities. This experiment resonates with the process of economic restructuring from Fordism to post-Fordism in which many Western cities have sought to improve their competitive position with respect to ‘the spatial division of consumption’ (Harvey, 1989: 9). This resonance allows me to apply the writings in urban entrepreneurialism to the case study of Lijiang. In this paper, I ask the following questions: What kind of policy speculations does Lijiang’s local government undertake to enhance the city’s competitiveness? What are the specific practices of commodification in Lijiang? What are the economic and social outcomes of urban entrepreneurialism in Lijiang? How does this form of selling heritage fit the general patterns of urban entrepreneurialism in China?

Specifically, this paper has three objectives. First, it examines the power structure that underpins the selling of urban heritage in Lijiang, adding substance to an understanding of the power of the Chinese state in converting political authority into economic benefits. Second, the paper attempts to understand the practices of commodification through which economic values are extracted from urban heritage. I propose three markets: the tourist market, the real estate market and the capital market. These markets, ranging from simple to complex, reflect the Lijiang local government’s innovative efforts to deepen the commodification of urban heritage. The final objective is to explore the quotidian experience of life and to analyse demographic change in the town. This analysis addresses the concern proposed by Raco and Gilliam (2012) that the literature on urban entrepreneurialism leaves little room for localised political and social relations, but rather renders these relations secondary in shaping contemporary urban life. The danger of politicoeconomic readings in the literature is to conceptualise local social relations subordinated to a global neoliberal logic of urban entrepreneurialism and to treat locals as passive recipients of this logic (see Hall and Hubbard, 1998). This danger is particularly true regarding literature on urban entrepreneurialism in China, as scholars overwhelmingly focus on the role of local city governments and the changing patterns of land policies. The tensions, if even mentioned, come from conflicting interests between the central government in Beijing and local authorities (He and Wu, 2009), or between local political leaders and outside investors (Qian, 2012). This paper sheds light on how ordinary people compromise with and resist against the practices of urban entrepreneurialism.

Urban entrepreneurialism with Chinese characteristics

In this section, I examine the nature of urban entrepreneurialism in China to build a conceptual base for empirical analysis. Following Harvey’s (2005) take on ‘neoliberalism with Chinese characteristics’, I address urban entrepreneurialism in China and how the Chinese case reflects back to the forms of entrepreneurial governance in the advanced capitalist countries. To Harvey (2005: 120), China has constructed ‘a particular kind of market economy that increasingly incorporates neoliberal elements interdigitaged with authoritarian centralized control’ in order to promote economic development. This sort of market economy is state-manipulated to such an extent that the Chinese state pays more attention to profit-making than to providing services, giving rise to ‘the growing integration of party and business elites in ways that are all too common in the U.S.’ (Harvey, 2005: 150). The interplay between inherited institutional infrastructures and the capitalist logic of urban management generates a hybrid of urban economy addressing local, national and even global competitiveness. If neoliberalism with Chinese characteristics crystallises ideas about state-managed market economy, then urban entrepreneurialism represents an institutional arrangement responsive to and constitutive of urbanisation processes related to the entrenchment of market economy and the emergence of localised urban development.

The local city government in China attempts to enhance place-specific socioeconomic assets to promote territorial development and win the competition for capital investment and the central state’s preferential policies. The turning point occurred in 1994 when the central government in Beijing launched a tax reform to address the budget crisis triggered by fiscal decentralisation which began in 1978. The tax reform aimed to build a tax-sharing system between the central government and subnational governments in order to reduce fiscal pressure on the central government (Wu, 2002; Zhang, 1999). Key components of the reform include three divisions between the central and local governments: spending responsibility, tax revenue sharing and administration over the collection of central and local taxes (Zhang, 1999). With these divisions, subnational governments become ‘the tax collectors for the center’ (Zhang, 1999: 141) and acquire considerable autonomy to promote economic growth and increase local fiscal revenues. Consequently, local governments have been described as ‘industrial firms’ (Walder, 1995), economic interest groups with their own policy agenda (Zhu, 2004), or market builders (Wu, 2008). As Zhu (2004: 424) aptly argues, subnational governments are empowered to carry out economic development by means of ‘a realignment of revenue distribution between the central coffers and localities, leading to autonomous local governments that are highly motivated to maximize revenues in order to support local growth’.

This argument leads to the first observation that local state corporatism is an essential feature of urban entrepreneurialism in China (Oi, 1992). The local government in China can ‘replace and monopolise the market to enhance its capacity and secure its objectives’ (Xu and Yeh, 2009: 567), while the urban growth machine in advanced capitalist countries relies on the public–private partnership to unify state functions with a network of actors to pursue growth. Rather than keeping the market at an arm’s distance, as in the case of Western cities, the local government in China is ‘a market actor’ which has its own corporate interest and mobilises political and economic resources that simply are not available to other actors in order to fulfil its interest (Zhu, 2004). However, this state-led regime of accumulation is not completely built upon neoliberal dictums such as privatisation and deregulation, as city governments in China constantly intervene in the property market and play a more proactive role in urban growth than their counterparts in advanced capitalist countries.

The second observation is related to the meaning of urban landscapes as a strategic site of capital accumulation in China. In other words, the city is not for people, but for profit, or for a selected group of consumers. Like their Western counterparts, city governments in China implement commodification as an entrepreneurial strategy to manage urban space, where the aim is to ‘foster and encourage local development and employment growth’ (Harvey, 1989: 3). Particularly in China, commodification and marketisation of land has fostered a speculative marketplace for urban physical development (He and Wu, 2009; Zhu, 2004). To maximise political and economic returns from the real estate market, city governments often acquiesce in the overexploitation of land resources and even help private developers to evade regulations (Xu and Yeh, 2009). Chinese cities have become sites of massive redevelopment and relentless expansion, with bulldozers tearing down old buildings and inexpensive constructions, and giant tower cranes popping up to construct an artificial forest of new urban construction. In Kunming, the capital of Yunnan Province, for instance, old city neighbourhoods in the view of local city government become ‘a physical as well as a symbolic obstacle to development and progress’ (Zhang, 2006: 466). Hence, Zukin (2009: 1) suggests that many Chinese cities are demolishing the narrow, rundown alleys in old neighbourhoods, displacing long-time residents to the distant edges and replacing small, old houses with expensive high-rise apartments and office towers of spectacular design. Fuelled by exploitation and coercion, urban entrepreneurialism aims to shape cities for capital accumulation through what Harvey (1989: 13) calls ‘the production and consumption of spectacles, the promotion of ephemeral events within a given locale’, regardless of its geographical context.

Another key agenda is the transformation of everyday life under the guise of urban entrepreneurialism, and the response of ordinary people to the ubiquitous logic of commodification. Urban transformation in China, planned by state authority in partnership with private developers, involves warlike levels of physical violence and spatial annihilation. Disenfranchised people have been driven away by skyrocketing housing prices and increasing rental prices; in some cases, their properties and homes were destroyed to accelerate their evictions. Resistance against local city governments in land acquisition has been documented in newspapers and captured by He and Wu (2009) and Zhu (2004). When local city governments are not obliged to maximise the social wellbeing of their constituencies, but rather pursue their own corporate interest, urban entrepreneurialism in China will transcend what Harvey (1989) calls the public–private partnership and foster a widespread official–businessperson collusion with a sole focus on profit. If, as He and Wu (2009: 302) argue, local city governments in China work as ‘the most active and efficient agent for neoliberal urbanization’, what happens when practices of entrepreneurialism incorporate urban landscapes into the orbit of endless capital accumulation? In the remaining sections, I use Lijiang Old Town as a case study to analyse the implementation of urban entrepreneurialism. This analysis responds to Wu’s (2002) calls for microscopic investigations of local territories, organisations, and structures in order to understand China’s changing urban governance. Yet, it is emphasised that this microanalysis of the Lijiang case resonates with larger questions of urban entrepreneurialism in China and elsewhere.

Policy speculations and heritage zoning

This section examines how Lijiang is zoned for tourism development under the guise of urban conservation, and the power structure that underpins this zoning process. Having been the home of the Naxi minority group for over 800 years, Lijiang Old Town manages to retain its own coherence and rootedness that makes it different from many other Chinese cities. Because of its unique urban form and authentic lived culture, Lijiang was placed on the World Heritage List by the United Nations Educational, Scientific and Cultural Organization (UNESCO) in 1997. For Lijiang, this status has become a powerful brand to repackage local attractions to cater to a global tourism market, although UNESCO’s intent was to help Lijiang to withstand modernising forces.

Urban conservation in Lijiang commenced in the early 1990s. In 1992, the People’s Congress of Lijiang Prefecture formally sanctioned the Conservation Plan for Lijiang Old Town. The Plan demarcated the boundary of Lijiang Old Town. The core area, with strict conservation, accounted for 51.7 ha; the buffer zone consisted of 70.1 ha to retain the town’s continuation as a historical site and withstand the intrusion of Lijiang’s new city (Lijiang County Government, 1992). The most recent plan was completed by Lijiang’s heritage authority, with the support from the Global Heritage Fund in 2012. Through conservation, Lijiang Ancient Town became a place to display what Naxi people’s lifestyle is like and what a repository of Naxi culture should be.

If conservation plans have aimed at technical protection, a series of laws and regulations have attempted to offer extra legitimate safeguards. Enacted by legal authorities ranging from national to local, around ten laws and regulations are often cited to manage the town. In 2005, the People’s Congress of Yunnan Province approved the Protection Statute of Lijiang Ancient Town. With this statute, Lijiang’s heritage authority formulates a range of regulations unique to its urban conservation. In 2009, Lijiang’s heritage authority published its Brochure of Protection and Management of World Cultural Heritage Old Town of Lijiang and widely circulated the brochure among residents, tourists, and businesspersons in the town. The primary goal of urban conservation, according to the brochure, is to ‘build a harmonious, peaceful, healthy and happy Old Town of Lijiang’. This goal dovetails with then Chinese President Hu Jintao’s call for building a harmonious society. A harmonious town, however, can be made only through regulations and orders. Such legislative arrangements and legal stipulations allow local governments to claim their power in urban conservation while excluding other groups such as professionals, local residents and tourism workers from decision-making. Moreover, surveillance strategies are implemented to secure the town. By 2012, Lijiang’s heritage authority had invested more than 630 million yuan to establish a townwide surveillance system consisting of 90 CCTV cameras. As a result, Lijiang is more like a large Panopticon designed to maintain security, watch any uncivilised behaviours and turn the town into a ‘harmonious’ place for consumption.

Of all the state agencies related to the town, the Authority for Conserving Lijiang Old Town (ACLOT), an authority under the leadership of Lijiang City Government, holds exclusive responsibility for conserving and managing Lijiang Old Town. Founded in 2004, ACLOT is a governmental statutory unit endowed with administrative jurisdiction to punish any individual or organisation that disobeys the Protection Statute of Lijiang Ancient Town and its own regulations. In 2005, ACLOT established a fully affiliated corporation, Lijiang Old Town Management Co., Ltd. Headed by one ACLOT vice-director, the corporation has two main functions: managing the economic issues of urban conservation and exclusively running the town as a tourist product. ACLOT gave the corporation a monopoly privilege to run tourism businesses and to supervise other business activities in the town. This government–corporation entanglement is one among various policy attempts to synthesise authoritarian control and profit-making into the management of Lijiang Old Town.

Zoning Lijiang Old Town reflects the efforts to mobilise place-specific forms of intervention to enhance Lijiang’s territorial competitiveness in relation to other Chinese cities, and to lure more tourists for visits. Tourism has become the single most important industry in Lijiang. In 2010, tourist revenues totalled 11.2 billion Chinese yuan, and tourist arrivals reached 9.09 million, while Lijiang’s GDP finished at 14.4 billion Chinese yuan. ¹ Selling heritage in Lijiang has become an urban locational policy to promote ‘territorial competitiveness by maintaining and continually expanding the capacities for profit-making and economic growth’ (Brenner, 2004: 207). In his analysis of China’s changing urban governance, Wu (2002: 1090) argues that the market economy allows the state ‘to innovate within its system and consequently to solve institutional constraints’. Wu (2002) further notes that the institutional innovation, mainly focused on localised governance, can enable the state to take advantage of market opportunities and strengthen its control over society. The case of Lijiang testifies to Wu’s argument, as shown by the local government’s efforts to build a pseudo public–private alliance in urban conservation. This partnership is pseudo because it exemplifies alliance on the surface between ACLOT as a government agency and its subsidiary corporation as an economic organisation. Beneath the partnership is the local government’s elaborate scheme to bypass laws for its entrepreneurial projects in selling urban heritage. Echoing Swyngedouw (2000: 70) who argues that the rescaling of institutional forms results in ‘more autocratic, undemocratic, and authoritarian (quasi-)state apparatuses’ in advanced capitalist countries, my analysis of Lijiang’s policy speculation shows that Lijiang’s local government establishes a mode of authoritarian governance to convert Lijiang’s uniqueness into a monopoly rent through which it can integrate urban heritage into a growth machine and reap economic returns. Monopoly rent arises when social actors achieve an enhanced revenue stream by virtue of their exclusive control over tradable items that are unique and non-replicable in some respects (Harvey, 2002). The next section will analyse how this monopoly rent is credited in different markets.

Extracting value from heritage

Commodification presumes ‘the existence of property rights over processes, things, and social relations, that a price can be put on them’ for sale in the market (Harvey, 2005). According to Britton (1991), the commodification of place can take two generic forms. First, the legal recognition or transfer of commercial property rights involves ownership or lease of the site itself; second, the tourist experience is included or the site is attributed to a saleable commodity (a tour, souvenirs or symbolic image) if the site cannot be privately used directly. In Lijiang, extracting profit from the real estate market verifies the first generic form, while the tourism market demonstrates the second. Nevertheless, I will expand Britton’s analysis by showing a third generic form – the conversion of place-bound assets into new investment products in the capital market (Weber, 2010). Together, these generic forms demonstrate how entrepreneurial cities endeavour to find new sources of funds to ‘enhance competitive advantages’ (Jessop and Sum, 2000: 2290). While Jessop and Sum mainly focus on new methods of space production, this section expands their focus by discussing what happens to these new sources of funds, or, how these economic returns extracted from urban heritage are distributed in the case of Lijiang, in order to explore who benefits from urban entrepreneurialism.

Demographic replacement in Lijiang

As urban heritage undergoes a radical shift in its function from previous manufacturing or residency to cultural artefact, the key question, according to Zukin (1982: 192), is ‘who … will be left in the city to enjoy it and how much will we have to pay’. There is a need to delve into the delicate power relations that entail compromise and resistance among various social forces. Until the explosion of tourism development in the late 1990s, Lijiang was a comfortable town serving peasants in the vicinity and accommodating a small number of residents. Ironically, only since the designation of Lijiang as a World Heritage site in 1997, through the actual process of making Lijiang into a tourist destination, has Lijiang developed heritage problems rife with rapid commodification, demographic displacement of town residents by migrant businesspersons, proliferation of souvenir shops and tourist service facilities, increased house rents, strict heritage preservation, and tightened security measures against social misconduct.

The phenomenal growth of Lijiang’s tourism industry has led to the arrival of many outside businesspersons. As the local government eagerly promoted tourism development and took steps to increase the town’s carrying capacity to accommodate more tourist flows, tourism businesses gradually spread into every corner of the town. According to two long-term residents:

Wang (a retired scholar in his 60s): There are fewer and fewer acquaintances. They all move out and I don’t know where they move. We don’t have connections any more. Living in a very noisy environment is not good. It is not my life. Well, our local officials reiterate that Lijiang provides the best living condition on the earth. Do you think a noisy town is suitable for people to live? We have lived in this building for generations. I really hope I don’t leave it to migrants, though many other buildings in this neighborhood have been rented out. I know some house owners felt reluctant to leave. But we have no choice. It is too noisy. Loudspeakers in nightclubs blast out pop music deep in the night, which drives us crazy.

Li (a retired cadre in his 60s): Most of the indigenous residents have moved to the new city. In my neighborhood, indigenous residents account for less than 30 percent of the population. Some other neighborhoods are completely vacated for migrants. … The Old Town is a good tourist attraction, but the government ruins the attraction. In the town, indigenous residents are all gone. In the town’s vicinity, there were massive pieces of rural land. So you could get embedded in the natural environment when you stepped out of the town. Now the natural environment is occupied by concrete buildings – hotels, shopping malls, and commercial housing. Previously the town was built in a rural setting with rustic charm; now it is permeated with and surrounded by shops. It becomes a huge supermarket with all sorts of tourist services and souvenir shops.

For both of these residents, tourism development and widespread commercial transactions in the town result in the corruption of pre-existing social ties and heritage value. While Wang draws upon his personal experience of living in noisy surroundings to express a mixed sentiment of resentment and powerlessness, Li focuses more on the rapid pace of urbanisation in and around the town. In doing so, both portray an explicit (and alarming) link between demographic displacement and tourism development. Like many other residents, Wang and Li have established a proprietary sense of ownership over and belonging to the town, but this sense of ownership and belonging is facing huge challenges.

This sentiment of displacement goes beyond these two examples. For instance, a young Naxi woodcarver talks about Lijiang’s transformation: ‘The town has changed. It is not a place by and for locals. It is owned by migrants and tourists. Lijiang is no longer a place for local people. I rarely enter into the town. There is no such need’. More and more town residents inevitably choose to move out of the town and leave their own houses to migrants and tourists (Su, 2012). In August 2012, town residents became even rarer as some of the neighbourhoods far from the town’s centre, which were usually free from tourists’ harassment, witnessed a steady outflow of residents.

By 2013, Lijiang had fully morphed into a tourist town with numerous shops, cafes and restaurants. Su (2012: 43) details Lijiang’s social and spatial transformation in relation to tourism development, pointing out that ‘while town residents’ struggles against dispossession can foster a seedbed of discontent for further conflicts, more and more residents choose to leave their property to migrant businesspersons and to monetise their property through rent’. This process of demographic replacement is similar to what Gotham (2005) describes in the case of New Orleans’ Vieux Carre. According to Gotham (2005), entertainment and tourism have brought a more upscale and affluent population to the neighbourhood, have improved property values for homeowners, and have pushed the poor working class out. Gotham calls this process ‘tourism gentrification’, a process driven by powerful private investors and political elites who are primarily interested in ‘producing the built environment from which they can extract the highest profit’ (Gotham, 2005: 1114). The process of demographic replacement in Lijiang attunes to gentrification, but the word is too narrow to describe the profound demographic transformation that has happened in Lijiang. In-movement by Han businesspersons and domestic tourists, coupled with town residents’ out-movement, generates a process of cultural replacement. Small groceries catering to town residents have been forced to close; long-time residents have rented their residential houses to migrant businesspersons and moved out to the new city. The town is not a place for living, but a ‘harmonious’ zone for consumption and profit-making.

While this paper does not cling to the ideal of a timeless city that ceases to change, it criticises a popular trend in Lijiang and other Chinese cities, a trend heralding that the city is made for profit, not for people. One consequence of this trend is that the space of solidarity and intimacy in cities erodes and wanes, generating ‘immense, architect-designed, non-place spaces, from airports and subways to luxury hotels, office towers and suburban malls’ (Friedmann, 2005: 277). In these non-place spaces, commercial forces and political elites entrench technical progress and rational calculation to establish spatial modernity and to discipline individuals’ everyday life. A sense of place established through community ties and daily routine has yielded to the state-driven fever of reconstructing urban landscapes – zoning heritage for profit in Lijiang.

Conclusion

This paper has focused on the commodification of urban heritage in Lijiang. In particular, I have discussed three generic forms of commodification through which economic returns are extracted from urban heritage. In bringing this focus to bear on another major phenomenon, that of urban entrepreneurialism, I have shown how local authorities deploy commodification as an urban locational policy to facilitate economic restructuring and enhance localised competitiveness. Urban heritage is not simply a frozen medium of the past, but can be a major selling point to attract consumers and to promote urban economy. The work of Harvey (1989) would suggest that we need to unravel the complex logic of urban entrepreneurialism and explore how this logic is implemented through the production and consumption of new urban spaces. Furthermore, the analysis offered by Britton (1991) is a stark reminder of how urban heritage is integrated into territorial competition. In translating these theoretical tenets into the sphere of urban heritage in China, my basic questions have been: How are urban landscapes commodified, and what is the inevitable consequence?

The empirical work has formulated some of the answers to these questions in the case of Lijiang. In Lijiang, the heritage symbols transfigured Naxi culture into a highly attractive experience of tradition and ethnicity, masking social and economic conflicts in the process. The Lijiang example provides a rich case study of a fit between heritage commodification and territorial competition. Lijiang is not only a good example of consumption-driven development in China, but also a showcase to demonstrate how state power and capital forces coalesce into the process of territorial competition. My analysis of this process demonstrates how Chinese cities, including those in the peripheral regions, are shaped by a tight coupling mechanism between the practices of global consumerism and the local neoliberal logic of entrepreneurialism, energised by the Chinese national state’s spatial policies of regional development on the basis of place-specific assets. This analysis concurs with Wu’s (2008) argument that commodification has become ruthless and pervasive throughout China.

Furthermore, urban heritage is contested when cities simulate the past and invent tradition in order to sell the cities, while simultaneously creating a break with previous socioeconomic relations. Urban heritage is implicated in the complex choices made by ordinary individuals in the face of political control and capital accumulation. Compromise with and resistance against the commodification of urban heritage transcend the specific context of place making in Lijiang to raise questions about the nature of urban space, commodification and social life in contemporary China. In the conditions of urban entrepreneurialism, urban heritage – far from being a connotation of cultural tradition and historical elements – is a site where the issues of social justice and commodification are particularly poignant when Chinese cities are submerged by the hegemonic ideology of economic development that has been prevalent in China for three decades. My analysis of how town residents and business owners respond to the policies of urban entrepreneurialism reveals that individuals are not simply subservient to a global logic of commodification, but actually engage in the everyday practice of power relations for their own benefit.

How does the Lijiang case inform us about urban entrepreneurialism in China? Today, urban built heritage becomes an important resource for Chinese cities to enhance uniqueness in the global tourism market and to assert economic and political control over space. In Shanghai, for instance, heritage preservation is attempting to construct a new global city (Abbas, 2000). Old Shanghai becomes the city’s ‘symbolic capital’ (Abbas, 2000: 781) or ‘a marketing strategy of reglobalizing city’ (Krupar, 2008: 317). Therefore, slogans such as ‘urban conservation’ and ‘cultural preservation’ in China do not function as brakes against development, but rather accelerate the pace of development and succeed in ‘territorial competition and economic restructuring’ (Britton, 1991: 469). Urban space is mobilised to absorb surplus capital when ‘the city is commoditized in all facets from its hard to its soft assets: branding and selling the city is a tactic’ (Wu, 2008: 1094–1095). Although Wu and other scholars focus on land and housing in Chinese cities, this paper provides new insights into how urban heritage contributes to the selling and branding of a city, with a particular emphasis on the synthesis of tourist market, land market and financial market in the process of capital accumulation. In this process, local authorities in China have transformed into an entrepreneurial ensemble with power to accumulate capital and increase revenues. These economic resources in turn strengthen local authorities’ ability to intervene in socioeconomic activities (such as urban conservation) and to strengthen their control over society.

Furthermore, the case of Lijiang raises critical concerns in relation to the ultimate goal of economic development in China. The story of Lijiang is a common story of Chinese cities opened up to the global network of production and consumption, under the auspices of state subsidies building infrastructure to ameliorate the distance between China and the heart of global capitalism, without caring much about ordinary people’s social welfare and place attachment. This story demonstrates how in the past three decades, sociospatial relations have been reconfigured and reshaped as everyone seems to be dragged into a whirlpool of change. If the construction of socialist cities during Mao’s regime was a utopian farce, then the urban transformation in the reform era is a lurid melodrama in which urban political elites and private developers restlessly engage in commodification and profit-making. The fulfilment of the Chinese dream, as Chinese President Xi Jinping endeavours to promote, should be embedded in the making of people-friendly, rather than capital-driven, urban places. There is a need to underscore the urgent political priority of constructing Chinese cities that correspond to ‘human social needs rather than to the capitalist imperative of profitmaking’ (Brenner et al., 2009: 176).