The study of the urbanization process has been carried out from many theoretical perspectives including the theory of rural-urban differences, economic development theory and theories of urban behavior that have been primarily formulated out of the study of urbanization in developed Western countries.2 But from our perspective, these theories while offering insights into the urbanization process are inadequate because the historical, ecological and political-economic contexts of China are so different from the Western experience. Central to this assertion is the fact that China’s situation as a former socialist state engaged in a process of opening-up its economy to market conditions and international transfers of capital and technology is not yet exhibiting all the features of a developed market economy such as the United States. At this point China seems embarked upon a developmental process that is proceeding in an incremental manner designed to avoid the rapid institutional change that occurred in other socialist countries such as the former Soviet Union. For example, as we illustrate in this chapter, land markets in China are operating in a very different manner from those of market societies in the early phases of the urban transition and this has an important influence on the growth of urban activities in Chinese space. We therefore suggest that the theoretical approaches that emphasize the role of institutions in social, economic and political change within a broader framework of political-economy theory offer the most valuable theoretical insights. In this approach we draw heavily on the ideas of theorists such as Victor Nee (1991, 1992), Nee and Cao (2000), Nee and Swedburg (2005), Henri Lefebvre (1991), David Harvey (1982) and the more recent approaches of “critical economic geography.”3 In this respect the studies in the sociology and economy of the post-Mao China have undergone similar theoretical shifts.4 We also recognize that there are different approaches to China

practiced by scholars from “inside” and “outside” China. In this book we try to blend the insights of China specialists with the broader theories of societal change in the comparative global context. The case for this approach has been made by Yeung and Lin (2003) who have persuasively argued that the study of China’s institutional and economic change offers the opportunity to revise the ideas about industrialization and economic change that have grown out of the Western experience.5 These arguments echo earlier efforts to formulate such positions by McGee (1991a and 1991b), Zhou (1991), Lin (1994 and 1997), Wang (1998), and Marton (2000).6