Understanding urbanisation in China

UNDERSTANDING CHINA’S URBANISATION DRIVE AND ITS NEW MEGA-CITIES – THE POWERHOUSES OF CONSUMPTION, BUSINESS AND SOCIETAL CHANGE – IS A CHALLENGE FOR ALL BUSINESSES. A NEW BOOK EXPLORES THE TOPIC.

Providing some great perspectives on the process of urbanisation in China is?China Urbanising: Impacts and Transitions?(University of Pennsylvania Press), edited by Weiping Wu and Qin Gao, both professors at Columbia University.

The book gathers an interdisciplinary group of scholars to capture the phenomenon of urbanisation in its historical and regional variations, and explores its impact on China’s socioeconomic welfare, environment and resources, urban form and lifestyle, and population and health. It also provides new ways to understand the transitions underway and the gravity of the progress, particularly in the context of demographic shifts and climate change. Paul French caught up with editor Weiping Wu to dig a little deeper into their findings.

Where is urbanisation at right now in China in percentage terms? You speak of ‘maturity’ and even the prospect of ‘contraction’ in the introduction to the essays in the collection; do you think the urbanisation rate has peaked or will cities still continue to grow?

Over 700 million people live in cities now in China – about 65% of the country’s population – with another 200-300 million more expected to urbanise in the next decade or so. According to China’s National Bureau of Statistics, the number of cities increased from 213 in 1979 to 685 in 2020. With economic growth slowing down after the 2008-2009 global recession and during the?Covid-19 pandemic , the urban sector is showing signs of maturity and, in some cases, contraction, with mounting building vacancies in interior cities and local debts across the regions. Compounding this new economic and fiscal geography is the?demographic transition ?already underway. Before China gets rich, it is getting old, with an unprecedentedly ageing population, particularly in cities where the country’s prior one-child policy was enforced most effectively.

Nonetheless, there is still room for continued urbanisation. Historically, the rate of urbanisation begins to level off at around 75-80% among many industrialised countries. While migration has been the key driving force so far in China, and its magnitude has stabilised during the recent decade, in-situ urbanisation – i.e., places transitioning from rural to urban conditions – will likely push up the urbanisation rate.

Does the demographic shift we’re seeing in China mean cities will be increasingly older spaces that are less focused on the young and their needs and more on the elderly and their requirements?

The rapidly ageing population presents a major challenge for urban China. One in every four Chinese people will be aged above 65 by 2050, according to official projections. Large cities like Shanghai are about 20 years ahead of the national ageing trend, witnessing a phenomenon similar to that in countries with substantially higher income levels. Smaller urban family sizes, less-flexible housing, and increased numbers of women in the workplace means that the family can no longer be relied upon as the primary safety net for the elderly in urban China. A growing number of retirees demand a better pension system as well as housing and medical benefits (Wu and Gaubatz 2020).

Cities are experimenting with new ways of accommodating and caring for the older population in residential settings. There has been a significant expansion in nursing homes, with about 22 times more nursing homes today than there were in 1978. Three new institutions – “eldercare institutions”, which provide residential care outside the family; “institutions for paying respect to older adults” and “institutions for providing care for older adults” – have been designed for low-income older residents as a form of social welfare. Two other institutional types – “senior apartments” and “nursing homes” – target wealthier elderly. While institutionalisation is a continued priority as a main mechanism for accommodating older residents, some local governments have begun to focus on ageing-in-place options.

You also speak of the ‘incomplete path to urbanisation’ – mass migration from the countryside to cities but not always with full rights and access for migrants. This has clearly created a layer of urban poor – what is their current situation, and do you see it improving?

Migrant workers are highly desired for the full functioning of the urban economy, but their presence in cities is generally unwanted. This ambiguous position has been constructed not only through exclusionary institutions (especially the household registration, or?hukou,?system) but also through the volatile and circulatory nature of migratory flows in China. The resulting “incomplete urbanisation” restrains economic growth as much as it enables it by keeping migrants intentionally disengaged from much of the formal urban economy. The volatility of export manufacturing contributes to the temporary presence of rural migrants and the incomplete integration of this population into cities more broadly. Therefore swings in the global economy directly affect the livelihood of migrants. While the role of the?hukou?has diminished in small cities and towns, it continues to restrict rural migrants from accessing state-provided social housing, state employment, public education, and other services in large cities.?Hukou-based exclusion has fuelled the proliferation of secondary, and most often informal, housing and service markets of considerable size.

Since population mobility first increased in the early 1980s, the migrant population and their outcomes have become more diverse. Some have gained access to limited benefits in the city by signing employment contracts with urban enterprises. Others with capital and skills have found better-paid employment and prospered. Those making the gains tend to be urban-urban migrants, who are better educated and affiliated with state-owned enterprises. The more positive change is that it has become much easier to stay and work in urban areas for an extended time, while in general,?policy responses ?toward rural migrants have slowly moved in a more humane direction. As a result, their experience in the urban labour markets – the subject of study in the chapter by Li and Wu in this edited volume – improved: more choices in urban employment, more opportunities to enter high-end service industries, and more potential to choose white-collar occupations. Their wages increased rapidly as well, although the wage growth of well-educated rural migrant workers or higher-income groups exceeded that of less-educated ones or lower-income groups.

Is the current level of urbanisation in any way sustainable in a world that cares about climate change? Are China’s cities hopelessly contributing to the problem or potentially a solution?

Although considerably smaller and less modern, the Chinese city under state socialism (1949-1979) was, in many ways, more socially and environmentally sustainable than today. By comparison, reform-era urban residents’ residential and transportation choices are vastly more energy intensive. Aside from the effect of rising income and increasing mobility, the urban landscape is moving away from the compact and pedestrian-oriented cities of the Mao era. This retreat from sustainable forms of urbanism presents a paradoxically regressive circumstance of urbanisation, further aggravated by a new type of privatised urban development known as?superblocks?in which massive plots of urban or peri-urban land are developed by a single private developer. There is evidence that residents living in a superblock consume more transportation energy, travel greater distances, and have higher rates of private car ownership.

On a more positive note, China’s rising role in the global discourse on?climate change ?has generated marked progress in how cities interact with the environment and planet. Cities, as places with concentrated environmental impacts, are a primary focus of environmental planning in China. Just as establishing Special Economic Zones in the 1980s led to the near-ubiquity of development zones in cities, the hope is that an ever-widening set of ecological demonstration projects, from targeted regulatory practices to the construction of completely new cities, will normalise sustainable urbanism. Today, over 80% of prefecture-level cities have some form of eco-city project underway.

Are there any viable alternatives to mass urbanisation in China? For example, are satellite towns and garden suburbs being trialled or thought about at all?

History, location, economies of scale and policy preferences have contributed to the relative success of large cities in China. A network of urban areas surrounding a central large city reinforces agglomeration economies, as in the case of the Lower Yangtze River Delta and?Pearl River Delta ?regions. Together, these regions command the lion’s share of China’s urban economy. Additional in-situ urbanisation, particularly from the integration of peri-urban and satellite towns into metropolitan economies, offers further scope for increased urbanisation. However, cities also do not achieve full agglomeration economies; in fact, a majority of Chinese cities have decreasing levels of population density. There is considerable opportunity for increased efficiency and scope in cities in both coastal and interior regions. With an already intense population-to-land ratio, following the path of urban sprawl, as seen in some industrialised countries, really is not an option for China’s cities.

Could you perhaps speculate on a few future trends we may see emerging in China’s urbanisation phenomenon?

First, while Chinese cities are undergoing an economic, social, and spatial transformation resembling what we have seen elsewhere, parts of their trajectory clearly push the limits of contemporary urban theories and experience. Certain characteristics of China’s urban transformation have produced conditions contradictory to progress, such as increasing inequality, socio-spatial stratification, and environmental degradation. Global South countries at similar stages of urbanisation face some of the same urban challenges, aside from the fact that major urban conditions worldwide are increasingly converging and pointing to shared catalysts (e.g., rural-urban migration) and globally linked processes (e.g., climate change and trade-induced growth). China’s experience can be instructive. As urbanisation transitions from a land-based approach to a more human-based one, challenges abound on both fronts.

Urbanisation in contemporary China has moved towards a Western model of urban form, characterised by significant socio-spatial segregation. Many Chinese cities have begun to exhibit the spatial grouping of residents, often leading to concentrations of?affluence and deprivation , a pattern that existed before 1949. This condition manifests growing income inequality, which has risen consistently during the reform era. As the urban population becomes increasingly differentiated, spaces of exclusivity that insulate privileged groups and prohibit others will continue to define the urban landscape of China. At the same time, a new social class has arisen: the urban poor, who have come to live in cities and who are usually engaged in the lowest paying and least desirable urban employment. Rural migrants make up the bulk of the urban poor and are often among the poorest and most disenfranchised inhabitants of the contemporary Chinese city.

There is pressure on cities to find sustained sources of income to finance urban infrastructure and development. The mismatch between revenue and expenditure responsibilities at the local level is a fundamental conundrum. Correcting this requires national tax and fiscal system changes, but drastic revamping seems unlikely. The realignment of central-local fiscal relations also may help reduce local reliance on land financing, serving as a perverse incentive for land-based growth. The so-called “land-infrastructure-leverage” has provided financing for urbanisation but also resulted in the mounting local debt that lays behind urban China’s physical transformation. In addition, the increasing tension between the loss of arable land and cities’ dependence on land leasing for revenue represents a significant challenge to the already fragile human-environment relationship aggravated by rapid urbanisation.