VOL.29NO.4APR.200556PlanningStudiesECONOMICMECHANISMFORURBANSPA-TIALEXPANSIONDINGChengriEnormoussuccessinChineseeconomyresultsinrapidurbandevelopment.Urbangrowth,whichismanifestedinbothpopulationaswellasbuilt-upareas,contributesincreasingurbanproblemssuchastrafficcongestion,environmentpollutionandhous-ingcrowdedness.Thereisincreasingvoicethatadvo-catesdiffusionofurbanpopulationandeconomicfunc-tionsfromcentralcityintooutskirtsinordertomiti-gatetheseurbanproblems.Thispaper,basedonurbantheory,arguesthaturbanspatialexpansionisinevitableifmarketforcesareallowedtoallocateresourcesinordertoachieveeconomicefficiency.Itisalsorecog-nizedthaturbanspatiallycontinuousexpansioncanbearrangedinwaysinwhichthesenegativeaspectscanbeminimizedandpositiveaspectscanbepreserved.urbanspatialmorphology;urbantransactioncost;urbanredevelopment;urbanspatialexpansion57VOL.29NO.4APR.200558PlanningStudies59VOL.29NO.4APR.200560PlanningStudies