"Although China has appeared as a globalizing force in every sense, many observers feel that its development might come to a grinding halt or even collapse, because of its lack of political reforms, rising inequality, and rampant corruption. Contradictorily, since the start of the reforms China has exhibited relatively high socio-economic and political stability.The proposed ERC project seeks to go beyond widely accepted dichotomous views on China’s development – be they on an impending ""collapse"" or on its booming future. Instead, it will attempt to explain China’s paradoxical development. To meaningfully study the multi-layered, contradictory dimensions of Chinese development, the project makes 2 choices: to study development around one of the means of production – land, and to do so by zooming in on its governing institutional architecture.Unlike the other means of production, capital and labor, which have been largely privatized, land is one of the last vestiges of Chinese communism. As such, it is central to the Chinese leadership’s decisions about the nation’s future. This study will delve into the major issues that affect it – the bubble in urban real estate; landlessness; urban sprawl; rent-seeking; evictions; and ethnic conflict. It is hypothesized that China can maintain overall stability despite the rising conflict and inequality, due to the credibility of its institutions.Credibility was coined in economics and political science, yet, in general has been little researched, let alone, in the case of land-based institutional change. It is exactly for this reason that the ERC project has been proposed. As argued elsewhere, when it comes down to successful institutions it is the level of credibility that matters, not the extent of formality, security or privatization. Credibility is thus the pivotal notion that is closely intertwined with the dynamics of dichotomous development. This ERC project will demonstrate that China is a case in point."