China’s urban development paradigm is shifting from scale-driven expansion to a more human-centered orientation, with residents’ well-being emerging as the core benchmark for high-quality development. At the same time, cities characterized by resource depletion, single-industry dependence, or geographic isolation are confronting compounded pressures from population outflow and spatial decline—what can be described as a form of “dual contraction.” Addressing these challenges requires a transition in governance models—from rigid planning, reactive responses, and growth-centered thinking toward flexible adaptation, proactive adjustment, and people-centered governance.

Challenges to traditional governance models

The fiscal, spatial, and social difficulties faced by shrinking cities stem from a structural mismatch between existing governance models and the realities of urban contraction, resulting in a clear pattern of systemic maladaptation.

First, fiscal growth remains weak. Systems built on expectations of continuous expansion are increasingly at odds with the realities of urban contraction. The steady outflow of working-age populations erodes the tax base, while infrastructure, new districts, and large-scale projects developed during earlier phases of indiscriminate expansion remain as sunk costs requiring sustained maintenance, increasingly exacerbating fiscal burdens.

Second, resource underutilization is widespread in urban spaces. The disparity between ongoing physical expansion and declining population has produced large numbers of vacant residential units, commercial complexes, and industrial sites dispersed across urban areas. This not only wastes land resources but also creates safety risks and governance challenges, while dragging down surrounding environmental quality and asset values through negative externalities.

Finally, governance itself faces an “adaptive efficiency crisis.” Traditional assessment mechanisms centered on GDP growth and population expansion, along with scale-based resource allocation and expansion-oriented administrative processes, exhibit strong path dependence under conditions of urban contraction. The immediate consequence is a form of “diseconomy of scale” in public service provision: Per capita costs rise rapidly even as efficiency and quality decline, creating a negative cycle in which deteriorating services drive population outflow, erode the tax base, and in turn further weaken service provision—ultimately undermining the long-term sustainability of urban development.

Advancing well-being through adaptive governance

Addressing these challenges requires reconceptualizing governance paradigms. Adaptive governance provides a valuable approach, placing the enhancement of residents’ well-being at its core by focusing on three key dimensions: accessibility, a sense of belonging, and dignity.

Accessibility emphasizes both spatial equity and social inclusion in public service provision. Beyond ensuring service quality, it requires compact spatial planning, digital empowerment, and age-friendly adaptations so that vulnerable groups—such as left-behind elderly residents and children—can access services conveniently and with dignity, addressing the problem of rising service costs and declining coverage efficiency. Priority should be given to expanding equal access to basic public services and to innovating delivery mechanisms—including mobile service units and community-level service points—to address gaps in coverage.

A sense of belonging arises from strong social ties and shared cultural identity. By enriching community life, reinforcing neighborhood mutual aid, energizing primary-level organizations, and preserving local cultural heritage, cities can cultivate emotional bonds that enhance social resilience and build community consensus. Efforts should focus on protecting historical memory and encouraging community-based cultural initiatives to strengthen residents’ identification with and emotional attachment to place.

Dignity concerns both the realization of individual rights and the affirmation of personal value. Stable employment, adequate social protection, accessible channels for expressing interests, and meaningful participation in community affairs can transform residents from passive recipients of development to active participants. Strengthening occupational training and entrepreneurship support, improving social security systems, and establishing more effective mechanisms for public participation are all essential to ensuring that residents can exercise a real voice in governance processes.

Xu Zhenming is a research fellow and deputy director of the Institute of Sociology and Law at the Gansu Academy of Social Sciences.