Informal Economy Serves as Feedback to Urban Space

Abstract

In the process of China’s rapid urbanization, the informal economy has long played the role of an “invisible engine,” supporting employment absorption, consumption supplementation, and urban space utilization. However, existing studies have predominantly focused on the governance of the informal economy, with relatively little attention paid to how it conversely nourishes urban space. Sanxia Square, as a traditional core commercial district in Chongqing, provides a typical sample for observing informal urbanization through its distinctive street-vendor ecosystem. This study aims to reveal the spatial mechanisms, economic resilience, and development pathways of street-vendor economies within modern commercial systems by integrating macro-level theory, statistical modeling, and micro-level fieldwork. Employing informal employment estimation formulas, panel data regression models, and coupling coordination degree models, combined with long-term observations of Sanxia Square and census data, the analysis is conducted across micro-, meso-, and macro-levels. The findings indicate that the street-vendor economy is not a “low-end remnant” of modern cities, but rather a functional and structural force of informal urbanization within the urbanization process, constituting an important component of sustainable urban spatial growth.