The effect of industrial relocations to central and Western China on urban construction land expansion

ABSTRACT Undertaking industrial transfers from the eastern region in China and other developed countries leads to the growth of urban construction in central and western China. This can result in serious problems, such as the reduction of the amount of cultivated land, thus endangering Chinese food security. This paper utilizes a system generalized method of moments (SYS-GMM) estimator and data from 2008 to 2015 for 17 provinces in central and western regions using a dynamic panel model to explore the effects of both domestic and foreign investments on urban construction land. The results show that both domestic and foreign investment have significant positive effects statistically and causally, although they can also have a complementary effect that lessens the positive effect. The impact of domestic investment is weaker than that of foreign investment. We propose land management suggestions with the aim of reducing the tension between industrial relocations and urban construction land.