South China Morning Post’s Tom Holland suggests that Beijing’s faith in urbanization as an economic engine may be misplaced:
Urbanisation is not just the centrepiece of new Premier Li Keqiang’s economic policies. According to enthusiasts, it is the engine that will power China’s future development, justifying sky-high investment levels, and even propelling a long-sought switch to a more sustainable consumption-driven growth model.
[…] That, at least, is the idea. Unfortunately, however, there are signs China’s urbanisation is not the economic cure-all its proponents expect.
For one thing, urbanisation doesn’t necessarily involve mass migration. In fact, it needn’t even require much new building. In many cases, urbanisation will simply involve the reclassification of areas that have already been developed but that are still designated as rural. That might help officials meet their targets, but by itself it will do nothing to boost the economy.
Of course, urbanisation frequently does involve construction, for example when farmers are moved off their land and into apartments in newly built tower blocks. But the economic benefits are dubious. Often the urbanisation process is simply an excuse to enable officials to seize village land, which they can then sell on at a handsome profit. [Source]
Isabel Hilton described a range of resulting problems at The Guardian last month. At The China Story, meanwhile, Carolyn Cartier gives a technical description of this urbanization with Chinese characteristics:
One of the most remarkable changes in China since the 1980s is the establishment of hundreds of new cities. From just under 100 in the late 1970s, the number of officially designated cities has increased to over 650. The largest new city established since the start of the reform period is Chongqing in central-western China. In 1997, the central government separated the historical city of Chongqing and surrounding areas from Sichuan province. From the perspective of land area fundamentals, Chongqing is actually a large agricultural and semi-rural region with an urban core. At 82,401 sq km, Chongqing, a provincial-level city (or zhixia shi), is over twice the size of the island province of Hainan (34,000 sq km), and over twice the size of the island of Taiwan (35,581 sq km). Unlike the three other provincial-level cities, Beijing (16,801 sq km), Shanghai (6,340 sq km), and Tianjin (11,760 sq km), Chongqing is an unprecedentedly large-scale administrative-territorial project. It is not a city in any conventional sense. Rather, it is an economic region with the governing rationale of organising and promoting new development for central and western areas of China.
The establishment of hundreds of new cities has had its most significant impact at the level of the county or xian 县. The county has endured as a territorial governing unit in China since it was first established in the Qin dynasty (221–206 BCE): scholars have portrayed the county as the most stable government institution in the history of the Chinese state. Yet since the 1980s, the county has been at the geographical centre of sweeping urban change. A large number of counties have been transformed into county-level cities, to facilitate real estate development (this is because only urban land can be legally leased for development) while many others have been merged into or ‘reterritorialised’ as districts of existing cities. In 1979 there were 2009 counties. By 2012, the number had been reduced to 1464. [Source]