Land-Use Politics Amid Land-Use Constraints: The Spatial Informality of Small Suburban Leisure Enterprises in Rural China

Abstract

This article examines the land-use politics of recreation development in rural China. Extending the lens of spatial informality, it analyzes how the appropriation and acquisition of space by small suburban leisure enterprises have constituted a de facto vehicle for rural spatial reconfiguration amidst land-use constraints. Drawing on ethnographic fieldwork and case studies, we illuminate emerging scenarios in which inbound businesses burgeoned through the production of informal spaces, which were subsequently formalized or tolerated by local governments geared towards social economic growth. More so, we reveal the potential and limitations of such an informal-to-formal approach for rural spatial reconfiguration by showing how its sustainability and survival depend upon the enterprises’ ability to enter into a tacit alliance of interests with local authorities. This article casts new light on emerging bottom-up processes of spatial reconfiguration, alongside its repercussions for local suburbs, in the development of rural tourism and suburban leisure. It further suggests that, as an analytical approach, a nuanced understanding of rural restructuring under the recent national rural revitalization strategy can benefit from moving beyond the sole emphasis on formal institutions to analyze the role played by ordinary market actors and their spatial practices that shape rural territories and spatial relationships.

1. Introduction

Land-use constraints in rural China, caused by the integrated effects of the persistent land management deadlock, have affected many suburbs, leading to a series of related developmental issues. While China’s central government has made rural revitalization one of its key national development strategies since 2017, a territorial dilemma, whereby villages have considerable unused and enclosed construction land while there is a serious shortage of quotas for using the land resources, has posed challenges to the (re)allocation of rural land and property to inbound enterprises for use [1,2]. However, despite the unresolved territorial dilemma of formal institutions, some small suburban leisure enterprises have managed to appropriate constrained rural land resources by using spatial informality as an entrepreneurial development strategy while steering the growth of the social economy in multifaceted relationships with the discretion of local cadres [3,4]. An analytical focus on these rural enterprises sheds light on their recent spatial practices and draws attention to the agency of ordinary market actors in rural spatial reconfiguration.

Indeed, the dominant representation of the territorial dilemma in rural China and its resolutions as a matter of the state and/or its agents at multiple levels postulates a monocentric discourse of rural restructuring that must be implemented by formal institutions, pending a new land policy and a more comprehensive reform of the system. Yet, rural informality and its repercussions have emerged in many rural areas, notably due to the long-awaited (re)construction of a reasonable rural territorial system by formal institutions “to shift arable land resources to(ward) land capitalization” [5] (p. 9). Given the recent development of informality in rural villages, there is a need to move beyond the conventional emphasis on the “top-down approach to rural restructuring” [6] (p. 11) and examine emerging alternative approaches to rural spatial reconfiguration. Such a perspective will enable us to analyze the transformation of land and property use from the perspective of informality while orienting our attention towards what can be called the land-use politics amidst land-use constraints.

This article extends the theoretical lens of spatial informality to highlight the role played by small inbound enterprises in such land-use politics in which formal and informal forces interact to shape China’s rural landscapes and livelihoods. The notion of spatial informality draws our attention to the local actors involved in spatial transformation and their influence on the social economy by examining how they implement “informality as an ordinary mode of the production of space (…) entangled with formality” [7] (p. 1). This article sets out to analyze how the appropriation and acquisition of rural spaces by small suburban leisure enterprises have constituted a de facto vehicle for rural restructuring by transforming rural territories and spatial relationships vis-à-vis land-use constraints. Its objectives are to investigate (1) how the ordinary market actors have developed informal spatial practices for entrepreneurial development in the face of the persistent deadlock of land management, (2) how these practices and their resulting land-use changes have shaped the growth of local social economy, and (3) the sustainability of such alternative development approaches in interactions with formal institutions. Drawing on ethnographic fieldwork and case studies, we illuminate emerging scenarios in which the inbound businesses, despite their limited economic capital and local entitlement of land use, took shape and burgeoned through the production of informal spaces, which were subsequently formalized or tolerated by formal institutions geared towards social economic growth. More so, we reveal the potential and limitations of such an informal-to-formal approach for rural spatial reconfiguration by showing how its survival depends upon the enterprises’ ability to enter into a tacit alliance of interests with local authorities. In doing so, this article advances our understanding of the underexplored nexus of spatial informality and rural restructuring while illuminating the agency of ordinary market actors in the post-socialist context.

In the following sections, relevant studies on the role of ordinary market actors in the land-use politics amidst land-use constraints and its oversights are discussed. Next, the theoretical lens of spatial informality and its analytical insights are foregrounded. After introducing the case areas and the methods used, the results are presented, illustrating the conditions under which small suburban leisure enterprises have managed to circumvent land use while delineating the bottom-up approach to rural spatial reconfiguration, alongside the repercussions for local suburbs.

2. Literature Review

2.1. The Land-Use Politics Amidst Land-Use Constraints in Rural China

China’s central government put forward its national rural revitalization strategy in 2017 to promote rural development nationwide. While the government has played a more proactive role in the early stages by formulating policies and financial support, inbound businesses and private enterprises are expected to continue the development in anticipation of rural employment restructuring and broader social transformation, joined by indigenous villagers and local communities [8]. However, the territorial dilemma of land-use constraints has posed multifaceted challenges to rural revitalization, as evidenced by “old” and “new” problems [2], ranging from (sub)hollowed villages to collectively operated construction land (COCL) without quota and the abandonment of cultivated land unavailable for alternative land uses or other development purposes.

In effect, rural decline has led to worsening rural hollowing due to an increase in “unused and abandoned rural residential land” [1] (p. 8). Specifically, with 2.8 million rural migrants seeking work in cities and 100 million rural people becoming urban residents, 5.86% of cultivated land has been abandoned [2]. On the other hand, a mismatch has emerged between inefficient land use and increased demand for land resources. As rural residential land and COCL cannot freely enter the market for trading because of the rural–urban dual land system [1,2,5], peasants who leave the village collective cannot liquidate their land, while investments by urban–rural investors do not benefit from any legal protection regarding rural land use. While “(t)he shortage of fund(s) has long been the bottleneck afflicting China’s rural development” [9] (p. 404), more than 60% of inbound enterprises consider the lack of legal construction land and land property rights to be the biggest barrier to doing business [10]. This results in a “structural imbalance of capital allocation owing to rural-urban dual system” [9] (p. 405). As a consequence, while “the Chinese government argued that industrial and commercial capital should be invested in rural China to develop the planting and breeding of industries in an entrepreneurial manner” [9] (p. 408), the strict regulations and intense inspections of rural land use have further impeded rural development because they adversely affect the incentives and operations of inbound enterprises [11,12]. Together, the persistent land management deadlock has (re)produced land-use constraints (Figure 1), while creating barriers to new business development in rural areas.

In analyzing contradictions between land-use constraints and rural restructuring in contemporary China, scholars have tended to focus on the role of the state and its agents at multi-levels and their limitations, leaving non-state actors relatively unexamined (Figure 1). A prominent strand of the extant literature has focused on recent rural land system reforms led by the central government as an instrument to resolve the contradictions between land-use constraints and rural development. First, land expropriation, referred to as the legal act that the state transforms the collectively owned land of peasants into state-owned land while providing compensation and proper resettlement to the expropriated rural collective economic organizations and peasants, has been examined as a major pathway to state-led rural restructuring [13]. This reform is anticipated to help bolster the multi-functional utilization capacities of rural space by establishing a more “rational, standardized and pluralistic safeguard mechanism” of land use [14]. Second, in recent years, the central government has allowed some areas to carry out pilot exploration of the trading of the collective operational construction land (COCL), which had previously been under strict control. Through this reform, the use right of rural construction land in China can be sold, leased, or traded for stock shares at the same price and under the same conditions as state-owned construction land, thus breaking the dual land management system between urban and rural areas [2]. Third, with an aim to revitalize rural idle land resources, the reform of homestead system, which assigns residential land to farmers adhered to the principle of “one household, one house” for ensuring social stability [5], has been proposed by the central government. Recent studies have visioned this reform to liberalize the renting and selling of rural homestead while reforming the way to protect and obtain the rights and interests of the local farmers [2].

Correspondingly, another strand of recent studies has examined the mechanisms and modes of state-led land consolidation initiatives, particularly under the national agenda of rural revitalization. Defined as a planned readjustment and rearrangement of land plot to resolve land fragmentation, land consolidation is considered by some scholars to be a systematic solution to the territorial dilemmas in rural China by better coordinating the scale operation of rural space to improve living conditions and local employment [15,16]. Specifically, from the perspective of multifunctional land use, it is argued that by adjusting the type and intensity of rural space, land consolidation may revitalize rural spatial functions, such as production, living, ecology, and culture, in coordination with each other [9,17]. It is also contended that, through promoting multifunctional land use, land consolidation may stimulate rural development by meeting multiple needs and taking diversified engineering measures, thus addressing the issues caused by the mismatch between the supply and demand of land-use functions [18]. Other studies have explored how local governments promote rural land restructuring through land consolidation in collaboration with inbound enterprises by motivating farming households to resettle within a centralized community and transfer contracted farmland for the establishment of factories and tourism facilities [19,20]. In this view, land consolidation constitutes a new “government + enterprise + farmer + village collective” [16] (p. 8) model of rural restructuring.

Research on the state-led land-use reforms and land consolidation initiatives has thus constituted a predominant framework that guides most studies of how “administrative factor instead of market factor plays a decisive role” [9] (p. 394) in rural restructuring amidst land-use constraints. From this perspective, development challenges related to idle rural homesteads, the allocation of rural construction land, and the abandonment of farmland have been theorized as a matter of “restructur(ing) the contours of state intervention” [9] (p. 407) and are expected to be resolved through “future land development by land engineering and land consolidation” [5] (p. 5). Over the years, however, although state policy initiatives seek to relieve the shortage of urban land supply and better use vacant built land in villages, there remains a large number of inefficiently used rural building plots and idle farmhouses in China [1,9]. As an indicator, although more than 90,000 mu of the COCL has been put into the market in 33 pilot counties between 2014 and 2018 [14], the entry of the COCL into market is still facing considerable obstacles due to unclear ownership of land, planning, and use control [2]. As admitted and acknowledged by some of the aforementioned studies, while being “restricted by many factors such as the underdeveloped non-agricultural industry and land fragmentation, the situation of land transfer allows of no optimism” [9] (p. 405), and “there is still a long way to go for China’s land system reform” [2] (p. 1).

As the effectiveness of system reform has reached “the institution(al) bottleneck” [9] (p. 394) and has lagged behind local rural development needs, some ordinary market actors have emerged and continued to transform rural space and land use to address their own needs of entrepreneurial development vis-à-vis the unresolved territorial dilemma of land-use constraints. An emerging strand of studies has begun to investigate the informal land uses by inbound enterprises (Figure 1). For instance, Tang and Zhu [3] have examined whether e-commerce-induced informality can promote sustainable rural development by using vacant residential spaces provided by local farmers for establishing small enterprises, such as shoemaking workshops and Taobao online shops. Albeit from a different perspective, Yin et al. [4] have looked at how locals have transformed their residential areas into family workshops and factories to produce furniture, resulting in the informality in land use and land circulation. Moving beyond the scholarly dominant, dual emphasis on the (local) state and state-led rural spatial reconfiguration in China, this article illuminates how the articulation of spatial informality by small inbound enterprises represents a new alternative approach to rural spatial reconfiguration while critically assessing its potentials and limitations. Applying an analytical lens that encompasses the bottom-up dynamics of rural space and land use, this article thus draws attention to largely overlooked ordinary market actors and their impacts on the local suburbs.

2.2. Spatial Informality and the Informal-to-Formal Approach to Rural Restructuring

Spatial informality is conventionally defined as informal settlements with incomplete property rights or land use without formal approval, primarily driven by metropolitan expansion [21,22]. Located at the rural–urban interface or on the metropolitan fringe, these informal settlements constitute the homes and livelihoods of marginalized people or rural–urban migrants. In the context of post-socialist China, the main empirical focus has been on “chengzhongcun(s)”, literally meaning villages encircled by a city or urban villages, where additional houses or compartments have been constructed without authorization, presenting a more flexible and autonomous mode of land development than that planned. Studies have documented the state’s attempts to formalize the informality of chengzhongcuns [23], how informality can emerge through state involvement in the transformation of urban villages [24], the role of informal institutions in the dispossession and expropriation in urban villages [25], and how these informal settlements affect the urban landscape and livelihoods in urban villages [26].

However, while the literature has largely focused on urban villages targeting “the effects of rapid urbanization on rural transformation” [9] (p. 393), the emergence of spatial informality in remote villages has been overlooked. Specifically, urban villages are often examined in relation to “the general and abstract forces such as rapid urbanization, global capitalist development and neoliberalism” [7] (p. 2) that convert dormant and defective assets into liquid capital to free up new space for capital accumulation [27]. The specific micro-geographic activities of small inbound “enterprises (aimed at) improving farmers” income and promoting local economic development’ [9] (p. 409) remain largely unexplored.

Moving “beyond the urban centered analysis of socio-spatial transform” [28] (p. 213), this article investigates the spatial informality of small inbound enterprises in rural restructuring and its impacts on local suburbs far from major cities. Drawing on Roy [22,29], Chiodelli and Tzfadia [7], and Roded et al. [30], it conceptualizes the spatial informality of rural villages as an integral part of de facto rural development. Spatial informality emerges when ordinary actors (re)appropriate space by adopting or inventing “spatial tactics” [31] that subvert dominant spatial rules as coping strategies. As “an organizing logic” or “mode” of development [22] (p. 148), it can contribute to local development by (re)creating new spaces and connecting different local economies in ways that not only challenge formal regulations of space but also align in situ with indigenous interests [32].

From this perspective, spatial informality should not be treated as a static fact of physical space that takes place outside of formal policy and planning but rather as a procedural category creating a continuum of informal–formal relationships and reciprocal dynamics involving the state and various stakeholders. Although, by definition, spatial informality violates the spatial rules set by local authorities, it “takes into consideration” these spatial rules while “acting in light of (the) rules” [7] (p. 6), which shape its contours and forms. In the case of rural Xi’an, small inbound enterprises continually adapt to the prescribed yet unfolding land-use constraints while constantly changing their coping strategies in the production of informal spaces. Rather than a pure “vacuum of governmental regulation” [33] (p. 143), spatial informality is thus both an agential and dialectical process that responds acutely and quickly to new opportunities emerging from the evolution of formal institutions or to the vulnerabilities of existing systems.

Notably, the emergence of spatial informality may, in turn, influence the decisions and actions of formal institutions. Rather than random, unregulated activities without the involvement of formal institutions, the benefits of producing informal spaces can be reaped by local authorities, selectively legitimizing and recognizing the de facto rights of certain informal actors beyond the limits of official policies [4]. Particularly in the case of rural China, where a “keen power struggle between rural local governments and the forces of central regulation” [34] (p. 24) persists, local officials and power holders work in a complex geopolitical environment to achieve a balance between the growth of the social economy and the implementation of national policy. Local governments, which came under pressure to fulfill the responsibility assigned to them by the central government to promote rural revitalization [3], may be willing to provide administrative and other incentives for the transfer of rural land property rights and rural development programs [19]. For example, they may enable the establishment of new “formal zones” in informal settlements by approving the de facto land tenure of informality to satisfy the demand of markets and social management as part of the in situ formalization of informal settlements [24]. During this process, (part of) spatial informality is left intact and (selectively) formalized to create an efficient mechanism that can benefit local development.

This renewed conception of spatial informality thus provides a useful analytical framework for investigating the informal-to-formal approach to spatial reconfiguration in rural China, particularly against the backdrop of the integrated effects of the persistent deadlock of land management. Initially created by ordinary market actors, then formalized or tolerated by formal institutions, spatial informality may promote business opportunities and further local development. Rural restructuring may thus take place at the local level when small inbound enterprises and local government agents join forces, albeit sometimes transitorily, to develop and implement a more efficient allocation or use of land resources.

3. Materials and Methods

To examine the appropriation and acquisition of space by small suburban leisure enterprises, defined as businesses having fewer than 50 employees and annual revenues below RMB 5 million [35], and its resulting consequences for rural spatial reconfiguration and local social economy in the context of land-use constraints, this study draws on a range of ethnographic methods, namely, in-person and participant observations, informal conversations and semi-structured interviews, document analysis, and (social) media observation. The research of the present study took place in X village and Y village located in rural Shaanxi (Figure 2). They are both medium-sized villages with between 700 and 1000 residents. These two villages were selected for this study for their relevant development trajectories amidst territorial dilemmas.

Specifically, both X village and Y village faced the same type of territorial dilemma arising from stricter land-use policies that resulted in land-use constraints for rural development. Since the urban expansion of Xi’an and its surrounding suburban areas in the 2000s, the two villages’ construction land quotas have been plundered by county governments following the promulgation of the “Increasing vs. Decreasing Balance” land-use policy [6] for the development of real estate and sustainable industries. However, without maintaining a balance between each area, the state-led land-use transformation turned into land-use bias in rural development. Between 2012 and 2022, the county governments took over 519 mu (34.6 acres) rural construction land quotas of villages and redistributed these quotas to the surrounding urban fringe areas. Despite the physical existence of these limited rural land and idle land resources, they do not possess the required construction land quota for future development.

Meanwhile, the two villages built their tourism images around a picturesque lifestyle and rural culture with the arrival of suburban leisure businesses, and they have become famous rural tourism destinations of Xi’an. These inbound enterprises are typically small, ranging from coffee shops to restaurants and guesthouses. Another entrepreneurial activity is the agritainment park, which is medium-sized and not managed by a large company or franchise. The development of the two villages have thus been benefited from the arrival of the small- and medium-scaled inbound enterprises, whose speculative and transgressive land use was then tolerated or selectively formalized by local authorities.

This research is based on a multiple-case study, and its goal is to contribute to theoretical transferability rather than statistical generalizability [36]. With an aim to arrive at a “thick description” [37] of the “how” and “why” [38] regarding the underexplored nexus between ordinary market actors and rural spatial reconfiguration, a multiple-case study using ethnographic methods is ideal for gaining a rich understanding of a binding issue of selected cases [39]. Although the informal-to-formal processes of rural spatial configuration described in the analysis may be specific to the research sites in the two villages in rural Shaanxi, they offer theoretical insight into the mechanisms underlying the spatial formation in many rural areas, particularly those in the same region, facing the same or similar territorial dilemma of land-use constraints in post-socialist China.

Between September 2020 and June 2025, we made five trips to each village, with each fieldwork trip lasting between 5 and 6 days. During these trips, we observed random events and participated in village and tourist events, such as the Spring Tourism Festival, and the Opening Ceremony of T Coffee. We also had informal conversations with the managers and service staff of inbound businesses, village committee leaders, and indigenous villagers to understand the (trans)formation of spatial informality and its consequences on rural life, the landscape, and development in the research sites. Semi-structured interviews were also conducted in the two villages with relevant stakeholders, including local government staff, entrepreneurs of inbound businesses, and village committee leaders. Specifically, we conducted 11 and 9 semi-structured interviews with the selected informants in X village and Y village, respectively, while four follow-up interviews were conducted by phone. All observations and interviews were supplemented by analysis of news archives and open-access government documents relevant to spatial transformation and entrepreneurial development in the research sites. Additionally, we conducted online observations of blogs and social media posts regarding the emergence, spread, and impact of small suburban leisure enterprises for secondary data analysis.

In addition, field surveys based on on-site observations were carried out to identify and interpret the spatial and functional changes resulting from the transformations during the fieldwork trips in X village and Y village. The surveys collected land-use and housing information, such as the year of construction, the size and usage/function of lands and buildings, and the spatial arrangements of production activities, covering 117,830 square meters of land plot in the two villages. In accordance with data obtained from the interviews and archival research that recalled and reconstructed the development processes in the villages, the surveys recovered the processes of spatial transformation and to delineate the consequences on the land-use changes on the local suburbs. To protect the privacy and anonymity of all informants, given the sensitivity of spatial informality and the potential risks involved, the names of the informants, the inbound enterprises, and the two villages are not mentioned, and pseudonyms are used when presenting our findings.

4. Results

In this section, we present scenarios in which small suburban leisure enterprises have managed to acquire constrained rural space for entrepreneurial development through the production of informal spaces amidst land-use constraints. The cases broadly follow an informal-to-formal approach to spatial transformation. At the initial stage, the inbound businesses quietly acquired constrained rural space for entrepreneurial development without formal approval for land use. They were subsequently supported by local government agents through selective legitimization and formalization, such that their spatial informality contributed continuously to the growth of the local social economy.

4.1. Quiet Encroachment of Idle Buildings on Agricultural Land

Despite China’s unfavorable dual land system, small suburban leisure enterprises settling in X village managed to create spatial informality for entrepreneurial development. They used speculative modifications of idle buildings on agricultural land to transform idle land resources into commercial space for suburban leisure. Despite the lack of legal operating rights granted by the H County government for any type of industrial or commercial use in the local suburb, inbound businesses “quietly encroached” [21] on idle buildings to establish their new businesses. A notable example is the creation of a famous rural gastro café by an inbound enterprise in 2018, without formal authorization due to the lack of construction land quotas in the village. From the outset, a series of spatial transformation activities were implemented for quiet encroachment. For example, discreet renovations of idle buildings were implemented to avoid inspections. As the land-use satellite inspection system works based on the floor plans and outlooks of buildings, the renovation work on the café preserved the basis and appearance of the buildings in terms of the original colors and construction materials to maintain the dimensions and outlooks of their roofs (Figure 3 and Figure 4).

To reduce the risks of remote sensing satellite inspections, only limited parts of the exteriors were renovated with the same materials. As many parts of the buildings’ exteriors could not be altered, the entrepreneurs concentrated on renovating the interiors and façades of the idle warehouses to transform them into real business areas, making it more difficult for law enforcement to detect whether they are used for commercial purposes other than those authorized. As a result of these speculative modifications of former rural dwellings, a “mismatch” between the gastro café’s country-style exterior and its petit-bourgeois interior created new “cultural memory symbols” [9] (p. 393) of suburban leisure favored and frequently visited by young people from nearby cities. The café attracted more than 100,000 tourists in its first year of operation while becoming the top attraction on the online platform Dazhong Dianping, which collects and links ratings of entertainment destinations with numerous social media check-ins by digital natives.

Thanks to the initial success of speculative use in concealing informal economic activities in idle buildings, the second phase of the construction of T Coffee was undertaken in November 2022 by adding a Teahouse and Motorcycle exhibition hall to another idle building next to the café. As the building was constructed over 25 years ago, and much of it needed to be rebuilt for the extension project, a more deceptive strategy was used to quietly encroach on the building. While the support frame columns were reconstructed to support the roof of the original building to avoid satellite inspections, the rest of the building was demolished and rebuilt in imitation of the original building. Ultimately, a brand-new building was constructed under the eyes of satellite inspections, with only the roof remaining intact. The construction process was stealthy but quick. According to our interview with the owner of the café, the construction period was requested to last no more than 2 weeks and was carried out only during the interval between remote sensing satellite inspections.

A different quiet encroachment approach to spatial informality in idle buildings on agricultural land was used by another café. Unlike exterior vertical development, where a layer is added to the top of the building, interior vertical development took place at Z Tea House, initiated by another inbound suburban leisure enterprise. Interior partitions and stairs were installed in a single-story idle warehouse with a height of 6 m, transforming it into a two-story building with a height of 3 m. The indoor space was, therefore, enlarged from the original single floor of 120 square meters to two floors of 220 square meters. Thanks to these two inbound enterprises, X village shows signs of (micro-)revitalization. According to the village leader interviewed, they “turn the village into a destination for social media check-ins with a great vibe that attracts over 300,000 visitors and brings over RMB 2,000,000 in income to the village collective every year”.

The spatial informality of suburban leisure in X village facilitated the diversification of its previously homogeneous social economy. The subsequent growth of the social economy changed the mentality of local authorities and communities that were previously hostile and skeptical about the speculative use of idle buildings in the village. In fact, during the second phase of construction of T Coffee, the VCC contributed to the construction process by investing 10% of its shares in the project. In return, the villagers would receive RMB 20,000 in dividends on the rental of idle rural spaces, and the VCC would collect 10% of all operating fees each year for daily management, with the villagers and the VCC becoming part of the “rentier class”. In addition, in 2022, the local government invested RMB 7 million and RMB 200,000 in the second phase of construction of T coffee and surrounding public facilities, respectively, to develop the tourism brand of X village. Between late 2018 and early 2025, 21 similar projects of suburban leisure tourism were undertaken, using the same speculative strategy for the production of spatial informality and encroaching on over 26,000 square meters of rural space for recreation development (

Table 1. Spatial functional changes resulting from speculative land uses for recreation development.

Project ID	Types of Land (Before)	Spatial Functions (After)	Site Area (m2)	Implementation Year
1	Rural construction land	Catering	1000	2022
2	Agriculture land	Pet park	600	2024
3	Rural construction land	Catering	1000	2023
4	Homestead	Catering	300	2025
5	Homestead	Catering	400	2024
6	Rural construction land	Catering	2000	2024
7	Homestead	Catering	200	2020
8	Homestead	Catering	200	2020
9	Homestead	Retail	160	2025
10	Homestead	guesthouse	300	2024
11	Homestead	Retail	100	2024
12	Agriculture land	Ecotourism	16,650	2018
13	Homestead	Guesthouse	130	2024
14	Homestead	Guesthouse	260	2022
15	Rural construction land	Recreation center	600	2023
16	Homestead	Recreation center	200	2024
17	Homestead	Recreation center	600	2025
18	Homestead	Guesthouse	300	2023
19	Rural construction land	Catering	300	2025
20	Rural construction land	Museum and artist studio	200	2025
21	Agriculture land	Parking	1500	2023
		Total	26,700

).

Due to the social and economic effects of such a pragmatic form of spatial appropriation, in 2022, X village was granted the honorary title of Demonstration Village of Tourism Destination in Shaanxi Province, a great honor for both the local government and the village itself. Given the political leverage and favorable results, the local government changed its attitudes towards spatial informality and began to strategically use the “state of exception” [22] to strengthen local resilience in this rural area. In the same year, the Department of Industry and Commerce of H County and the VCC helped the small suburban leisure enterprises involved obtain legal business licenses for their businesses. However, although formal licenses for previously informal economic activities provide a legal basis for these businesses, their speculative land use is still considered informal. Recently, the Department of Land and Natural Resources of H County initiated the “return” of construction land quotas for regional planning to the village to retrospectively legalize some of the informal spaces created by small suburban leisure enterprises. Although still a work in progress, the plan covering 13,000 square meters of rural construction land quotas has been submitted to the planning department.

4.2. Re-Spatializing Informal Space in the Changing Context of Local Deregulation

The governance gap between formal spatial planning and grassroots innovation for local development sometimes results in “gray spatialization” [40], through which spatial informality can be incorporated into formal planning because of its de facto efficiency for the local community [30]. During this process, grassroots participants may re-spatialize their survival tactics and social identities into formal institutions for self-empowerment. In the case of rural Xi’an, such re-spatialization of informal space in the changing context of local deregulation was observed in Y village, where the H County government initiated the “Artists Home” project. The project aimed to invite external artists and cultural entrepreneurs to develop the village’s cultural and creative industries and build an idyllic image of cultural tourism by providing them with renovated idle buildings on rural homesteads for cultural creation. However, although the project enabled spatial reconfiguration to some extent, it was subsequently appropriated by inbound enterprises, escaping the original initiatives of the local government. This resulted in a shift in land use from the formal use of rural space for the creation of cultural and creative industries to the informal use of space for highly commercialized suburban leisure businesses.

Although the “Artist’s Home” project was based on idle buildings located on rural homesteads suitable for construction, their renovations had to strictly follow the existing land-use policies, which prohibit land-use changes beyond institutional planning records. However, since 2021, speculative transitions of idle buildings have taken place, with some artists and cultural entrepreneurs leasing these properties to other enterprises for short-term profits in the form of rental income. Others have used the “Artist’s Home” project for purposes other than artistic and cultural creation, for instance, by transforming idle buildings into bed and breakfasts and rural gourmet restaurants (Figure 5). While the project was initially funded and guided by the H County government with formal deliberation procedures for land-use changes, the idle buildings involved were subsequently encroached on by inbound enterprises beyond the government’s originally planned land use.

While rural land resources are owned by the rural collective and cannot be officially sold or reclassified for other land-use purposes, a change in de facto land use, in which “the actual use of land (…) differs from that shown in official records” [4] (p. 2), occurred in Xi’an. This was followed by a new wave of (micro-)investments by enterprises with formal business licenses but without land-use permission. Between late 2022 and early 2025, they have encroached on about 14,000 square meters of nearby rural residential lots and rural construction land to establish and operate new suburban leisure businesses, ranging from catering businesses, guesthouses, artist studios, and handicraft businesses to recreation centers and village museums (

Table 2. Spatial functional changes with the inbound of new suburban leisure businesses.

Project ID	Types of Land (Before)	Spatial Functions (After)	Site Area (m2)	Implementation Year
1	Rural construction land	Museum	5346	2023
2	Homestead	Retail	80	2022
3	Homestead	Catering	455	2025
4	Homestead	Catering	80	2024
5	Homestead	Guesthouse	843	2022–2023
6	Homestead	Catering	523	2022–2023
7	Homestead	Book store	651	2022–2023
8	Homestead	Catering	387	2022–2023
9	Homestead	Catering	417	2022–2023
10	Homestead	Catering	1502	2025
11	Homestead	Catering	332	2023
12	Homestead	Retail	132	2023
13	Homestead	Catering	455	2023
14	Homestead	Guesthouse	350	2024
15	Homestead	Catering	262	2023
16	Homestead	Recreation center	270	2023
17	Homestead	Catering	376	2023
18	Homestead	Catering	735	2023
19	Homestead	Catering	150	2023
20	Rural construction land	Parking	650	2023
		Total	13,996

). As a result, although these land resources remained for rural residential and construction purposes in official records, their informal uses for business and commercial purposes gave rise to the informal suburban leisure economy in the region. Today, Y village and its surrounding villages have become famous gentrified villages due to their unique aesthetic country-scape and celebrity effect for rural art festivals and rural gastronomy.

The social and economic benefits brought by small suburban leisure enterprises in turn encouraged local authorities to undertake grey spatialization in the two villages. Later, the inbound businesses were granted tacit approval or implicit consensus to continue operating their businesses with a change in de facto land use as the H County government sought to strike a balance between top-down legal requirements and the growth of the local social economy. While modifications to the roofs of rural homesteads were prohibited due to periodic remote-sensing satellite inspections to detect illegal construction, other modifications to idle buildings, rural homesteads, and their uses were neither restrict(ed) nor encourage(ed). Meanwhile, the local government has facilitated public access to the locations of inbound businesses. For example, in 2022, the H County government invested RMB 4.3 million in local infrastructure around Y village to upgrade 20 miles of village roads and build 2000 square meters of open spaces and other public facilities such as water, electricity, and gas.

The change in de facto land use, enacted and supported by spatial informality, also resulted in new village identities that further strengthened the entitlement of small suburban leisure enterprises to rural land use. Indeed, the (re)construction of place identity can be vital for (re)defining people’s spatial rights by expressing and asserting their relationship to a particular place [41,42]. Given the increasingly important role they came to play in local development, some of the inbound entrepreneurs were granted approval by the VCCs and local government to become so-called village CEOs, and/or “new villagers”, without the formal indigenous identity, or hukou, of the village. Traditionally, in rural China, the government implements grassroot self-governance represented by the VCC in which only indigenous villagers can join and vote. However, as their social identities evolved from urban–rural migrants to semi-formal villagers and local managers, the inbound entrepreneurs involved were granted the same power as indigenous villagers to participate in rural governance and development strategy deliberations while furthering their business interests in the villages by aligning rural cultural activities and suburban leisure development.

4.3. Transgressive Use of Idle Farmland

Agritainment as a form of suburban leisure has gained popularity, especially among city dwellers who yearn for a taste of the rural landscape and agricultural experience amidst the hectic life and routines of the city by visiting local suburbs. However, commercial use of farmland for non-agricultural purposes is prohibited in many rural areas, given rural land-use restrictions. Yet, in X village, a series of stealthy spatial transformation practices were undertaken by inbound enterprises, ultimately transforming idle agricultural land into an agritainment park. To cope with satellite inspections while meeting market needs, they ingeniously produced ad hoc trans-functional spaces used transiently for agritainment without permanently transforming the original farmland.

The establishment of the agritainment park in X village primarily involved the transgressive use of idle agricultural land. In the cases discussed above, spatial informality was concealed because the development was indoors, whereas the service facilities of the agritainment park were built outdoors and were mobile. By adopting the spatial tactic of “hide and seek,” the agritainment park is exposed to visitors and operates only during urban–rural tourist visits to mitigate the risk of inspections. To this end, major service facilities were built on a plot, supposedly solely for agricultural activities but with movable parts materials that can be quickly restorable. For instance, sand and gravel were used to pave the roads for transportation and logistics to operate the agritainment park. Temporary tents to accommodate tourists can be set up when needed and quickly removed afterwards. In addition, small train carriages were installed to serve as student dormitories for summer camps. The moveable trains can easily be removed during inspections, and their roofs are covered in greenery to conceal them (Figure 6). The exteriors of other service facilities, such as restaurants and rest areas, are also disguised to look like a greenhouse or temporary camp with plants growing inside. Thanks to the ad hoc trans-functional spaces produced, the before- and after-scenes do not arouse suspicion, which enabled the small suburban leisure enterprise to transgress the use of idle agricultural land for commercial purposes.

Notably, the spatial informality of the agritainment park was implemented by alternating the land use between genuine agriculture and suburban leisure. In practice, although orchards and cereals still grow in the agritainment park, mainly for disguise purposes, the spatial function of the original farmland has shifted from agricultural production to agritainment for rural tourism during weekends and for agri-education occasionally on weekdays for school visits; it is quickly restored after tours and visits. This involved the transformation of 46,000 square meters of arable land, 15,000 square meters of forest and flood land, 5000 square meters of residential homestead, and 3300 square meters of abandoned rural land. As shown in

Table 3. Spatial functional changes implemented for the operation of the agritainment park.

Types of Land (Before)	Spatial Functions (After)	Site Area (m2)
Arable land	Agri-education and U-pick farms	46,000
Forest and flood land	Ecotourism, rural retreat, and outdoor adventure camps	15,000
Residential homesteads	Rural e-commerce and real-time monitoring of orchards	5000
Abandoned rural land	Parking lot	3300

, the spatial functions of these rural lands and buildings were changed from agriculture and living to agri-education, leisure tourism, rural e-commerce, and tourism logistics for the operations of the agritainment park. In the meantime, more than 30 local peasants and villagers were hired by the park owners when they were not busy with farming. They took on new, transitory roles as agri-education instructors for visiting students and as maintenance staff for the daily operation of the agritainment park, “tending the farmland” in front of visitors and students in a performance blurring the boundary between farmers and staff. In doing so, they helped connect customers to commodified farmland by engaging in “genuine” indigenous activities while benefiting from the social and economic benefits brought by transgressive land use, thereby increasing their own resilience through additional income and work.

The flexibility afforded by the mobile and transient nature of its spatial transgression enabled the agritainment park to create a network of informal alliances with the formal education system. Notably, it received the title of “Practical Education Base” from the Shaanxi Education Bureau to provide practical agri-education courses to local schools in line with the practical course requirements of the curriculum set by the local education department. Between 2019 and 2022, the park collaborated with several formal education institutions to provide agri-education training to 3000 students through practical courses at the park. In 2020–2021, the local government also invested half a million RMB in infrastructure construction to facilitate access to the agritainment park in an attempt to promote the park as a local brand for further local development.

However, recently, enhanced satellite inspections have raised eyebrows over transgressive land use in the park. Although the park’s facilities were specifically designed for trans-functions and mostly disguised, they were not concealed indoors and were eventually exposed by the inspection. In addition, following the “2022 Comprehensive Plan”, the idle agricultural land encroached by the park was planned for reuse and can no longer be occupied according to the overall land-use plan. Thus, the local government abruptly changed its previously tolerant attitude towards the agritainment park and strictly enforced the law following the new rural planning. Since spring 2023, the agritainment park has received seven citations to demolish all service facilities within a required period and without reimbursement from the Department of Land and Natural Resources of H County.

5. Discussion

Based on our case studies in the rural villages in Shaanxi, this article illuminates the underexplored nexus between ordinary market actors and rural spatial reconfiguration in the post-socialist context of rural China. In analyzing the relationships between land-use constraints and rural restructuring in China, existing studies have focused exclusively on the policy processes of resource allocation and land consolidation initiated by the state under the jurisdiction of the national or regional authority. However, this monocentric view tends to obscure the micro-geographic activities undertaken by non-formal actors in the transformation of rural space and land use. In contrast, this article shows that rural spatial reconfiguration is not always the direct result of formal planning or state intervention. As the case of rural Xi’an revealed, while inbound businesses implemented spatial informality in an attempt to appropriate constrained rural land and idle land resources, local authorities at the county level sought to expand beyond the slow evolution of land reform. Whereas the spatial informality created by these small suburban leisure enterprises was, to a large extent, the result of the absence of an adequate system of land circulation that simultaneously conditioned rural development in local suburbs, it initiated a tacit alliance of interests with local authorities geared towards social economic growth for local rural development.

However, even if spatial informality can constitute a de facto vehicle of rural structuring from below, it will only benefit from local connivance if it continues to align with the interests of local communities and authorities. Indeed, the attitudes and responses of VCCs and local governments to small inbound enterprises often “juggle between formal and informal performance” [7] (p. 7). They tend towards spatial informality when the provisions of formal institutions prevent the realization of their local interests and act formally when these provisions serve their interests. It remains to be seen whether this kind of ad hoc alliance between small inbound enterprises and the local state can be effective and/or sustainable. Conversely, the short lifespan of spatial informality can have adverse effects on local suburbs. In the case of the agritainment park, for instance, the end of tolerance towards spatial informality led to a series of social and economic dilemmas in X village. While local peasants who have abandoned agricultural production to work in the park experience unemployment, the rural collective must return the collected land rents to the enterprise and recultivate the original agricultural land.

Moreover, even in cases of more “sustainable” informality that survives the growing periodic strengthening of land-use policy, questions arise as to how this may alter the balance of power and decision-making in villages and its impact on rural (self-)governance and long-term development. In the case of T coffee in X village and the “Artist’s Home” project in Y village, inbound enterprises were granted new place-based roles and social identities in the villages, such as “village CEO”, as part of the selective formalization of spatial informality. However, this may run counter to the interests of indigenous villages and the provision of public goods over time [43,44] as these market actors obtained the capacity to exercise control over and manage rural territories to further their own business interests. Indeed, recent research has debated whether rural informality has affected the revitalization of rural areas and reduced the rural–urban gap. Some studies have shown that the entry of inbound enterprises has had a negative impact on rural governance and the potential for sustainable growth in rural areas as entrepreneurs’ pursuit of low-cost spaces and profit-seeking activities aggravates the scarcity of production resources and internal competitions in villages [3]. Further research could examine whether and how spatial informality operates with formal-to-informal empowerment and/or entitlement vis-à-vis the power and resistance of indigenous villagers and other local actors in rural China.

6. Conclusions

Extending the lens of spatial informality, this article has investigated the appropriation and acquisition of rural space by inbound enterprises in the context of recreation development as well as their consequences for local development, particularly against the backdrop of the unresolved and unfolding territorial dilemmas in China. The findings are as follows: (1) in the face of the integrated effects of the persistent deadlock of land management, small suburban leisure enterprises produced informal spaces by developing various spatial tactics to circumvent the limits of official policies and to adapt to existing land-use regulations for addressing the needs of entrepreneurial development. (2) During this process, further spatial transformation took place as local government agents selectively formalized and/or legitimized these speculative and transgressive land uses by invoking particular regulatory logics to create an efficient mechanism that can benefit local development. (3) While the emergence of spatial informality may influence the decisions and actions of formal institutions resulting in a change in de facto land use, the effectiveness and sustainability of such a new development pathway are not guaranteed and are contingent upon shifting land policies and local politics, as discussed. These findings thus cast new light on how rural spatial reconfiguration may occur through informal-to-formal mechanisms, alongside its repercussions for local suburbs, in the course of the development of rural tourism and suburban leisure. Based on these findings, this article concludes that the spatial informality initiated by small suburban leisure enterprises has constituted an alternative approach to rural spatial reconfiguration amidst land-use constraints, albeit not without limitations and caveats. It further suggests that, as an analytical approach, a nuanced understanding of rural restructuring under the recent national rural revitalization strategy can benefit from moving beyond the sole emphasis on formal institutions to analyze the role played by ordinary market actors and their spatial practices that shape rural territories and spatial relationships.

The current study has several limitations that warrant further investigation. This study used a multiple-case-study approach, and the generalization of the results and conclusions may be limited. In particular, using two cases in the same region, X village and Y village located in rural Shaanxi, may limit the generalizability of the findings to other contexts and regions. Future research may conduct more case studies, especially those in other regions, and comparative analyses across regions to gain a deeper understanding of latest contours of spatial informality and their consequences on rural restructuring in China. Future research may also employ and integrate more quantitative measures to assess the long-term impacts of the speculative and transgressive land uses by inbound enterprises and validate the applicability of the informal-to-formal approach to spatial transformation in diverse settings. In addition, future research may investigate whether and how the conceptual framework deriving from the context of recreation development can be modified for application in other rural areas characterized by spatial informality. Comparative studies with other types of spatial informality could help identify transferable risk management strategies across contexts for sustainable development and provide actionable insights for practitioners aiming to replicate these initiatives in other rural areas.