Reuters reports that the Chinese government has added details to its urbanization plan:
The government hopes 60 percent of China’s population of almost 1.4 billion will be urban residents by 2020 as the country’s new leaders seek to sustain growth that last year slowed to a 13-year low of 7.8 percent.
However, the leadership is struggling to balance multiple, occasionally conflicting goals such as encouraging the migration of millions of former farmers into cities without creating the slums and unemployment problems that have occurred in other countries experiencing similar migration.
Restrictions on migration, which have created a de-facto illegal immigrant population in many Chinese cities, composed of Chinese citizens who have migrated without permission, have proven a significant source of social instability and have highlighted the uneven distribution of the fruits of China’s economic growth. [Source]
The plan, announced following an urbanization work conference held by the CCP Central Committee, will focus on small and mid-level cities. From the state-run Global Times:
This differs from a report released by the State Council in June, which stated there would be a gradual loosening of conditions for settling in big cities, and these conditions would be reasonable.
“This means small and mid-sized cities have become the main focus of the country’s new urbanization drive,” Zhang Zhanbin, director of the Economics Department at China’s National School of Administration told the Global Times on Sunday.
These cities will perform a more significant role in the country’s urban development, as more quality resources will be injected by the government in the future, he said. [Source]
While experts agree that urbanization can fuel economic change by boosting consumption as rural migrants flock to urban centers, The Wall Street Journal reports that the plan carries risks:
Some critics of the policy say that trying to channel residents into smaller cities leads to wasteful spending and empty housing projects as migrants head to the larger cities anyway in search of jobs.Many smaller Chinese cities are already ringed by empty industrial parks and vacant housing projects—so-called ghost cities—which have been financed by a surge in debt that economists say is a major financial vulnerability.
[…] “If you’re restraining the expansion of large cities, what’s the meaning of urbanization,” said He Fan, a senior economist at the Chinese Academy of Social Sciences. Many economists argue that China’s largest cities aren’t as densely populated as areas like downtown Tokyo or New York, reducing the incentive to build mass transportation and relocate polluting factories.
Mr. He attributed the small-city-first policy to opposition from Beijing, Guangzhou, Shanghai and other major population centers, which would have to pay the tab for schools, hospitals and other social-welfare outlays for rural migrants. [Source]
See also recent CDT coverage of urbanization in China.