China Urbanisation Needs Rural Focus Not Just Mega-City Migration

22/07/2015

Related: Sustainable Approaches to Rural Development

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Currently, just over 50% of the total population in China live in urban areas. The urban population is however forecast at 76% by 2050 [1] bringing it closer to level of developed nations. It is estimated that 300 million Chinese living in rural areas in 2010 will have moved into cities by 2025 [2], equivalent to more than one half of the current rural population.  

Where will all these people go? Rather than swell the populace of an already unprecedented number of Chinese mega-cities, could an alternative strategy be successful that focuses on urbanising rural townships and encouraging “urbanisation in place”.

Urban and rural population of the world, 1950 - 2050 Image: www.un.org

By 2025, China will have 221 cities with one million plus inhabitants compared with 35 cities of this size in Europe today. 23 cities will have more than five million people.[3] Officials of China‘s National Development and Reform Commission (NDRC) have stated that urban planning at multi-city level is now being prepared nationally.  More than 20 urban agglomerations around the country have been classified. 

Absolute and relative gap of China's urban and rural residents' per capita income, 2000 - 2012

This follows the thinking of a 2009 Report; Preparing for China's Urban Billion, a 540 page document prepared by McKinsey Global Institute which suggested that China should tailor policies toward a more concentrated form of urbanization, producing super-cities with average populations of 25 million people and the development of city clusters each with strong economic networks and combined populations of 60-plus million. Their research suggested that concentrated urban growth scenarios could produce 20% higher per capita GDP than that yielded by dispersed growth scenarios. They would unfortunately have higher energy consumption but also higher energy efficiency and would restrict the loss of arable land. The Report also outlined that concentrating urbanization would have the advantage of clustering the most skilled workers in urban centres that would be engines of economic growth, enabling China to move more rapidly to higher-value-added activities.

Proportion of the urban population in different city sizes

Whilst extremely detailed (the Report is unashamedly economically focussed), it is based on standard economic approaches and was not able to incorporate the impacts of the global financial meltdown, the shadow of the slowdown in economic growth in China, nor reform in land policy. The recent incredible pace of change of technology, ease of communication and sharing along with a greater importance placed on quality of life issues mean that predicting the future on past economic models has become increasingly abstract.  Social issues in China will increasingly shape decision making; the need to keep the family together, reduce stress, maintain healthy lifestyles, enjoy more living space and retain and pass on traditional culture and values.

Population trend of the top five most populous cities in China

Research done by Yaohui Zhao at Beijing University[5] indicates that while economic theory demonstrates labour migration to the big cities increases efficiency due to allocation of labour where it is most needed, the social cost of migration itself actually outweighs those gains economically. Migration is not a default situation. In generally people would rather stay where they are than uproot themselves with the inherent insecurity that entails. There are both push and pull factors. Younger migrants are more influenced by “pull” factors, such as "expected earning opportunities", "personal development aspirations" and "urban lifestyle". Older migrants are more driven by “push” factors including labour surplus or "difficult living conditions"[6]

More than 20 urban agglomerations around the country will be classified in order to provide strategic level guidance on development goals, infrastructure construction and function orientation. Image: Baidu

High levels of urbanization, at or above 75%, characterize developed nations in Europe and North America. However a big difference is that the percentage of big cities in these nations is relatively low compared to China. Close to half of urban dwellers are content to reside in relatively small settlements of less than 500,000 inhabitants, while only around one in eight live in mega-cities with more than 10 million inhabitants. The fastest growing urban agglomerations are medium-sized cities and cities with less than 1 million inhabitants. In recent years, a growing number of countries have been favouring strategies for rural development, such as allocating land rights, actively managing land use and land redistribution, creating regional development zones and promoting economic diversification and competitiveness in rural areas through the mobilization of investment and the improvement of rural livelihoods.[7]  Such initiatives can actively assist to maintain healthy rural economies in reducing push and pull factors.

China's urban system: definition and structure

China's government influences the pattern of urbanization through the Hukou permanent residence registration system, land-sale policies, infrastructure investment and the incentives offered to local government officials. Most influential of these, the unique Hukou system distinguishes Chinese internal migration from migration in other developing countries. Urban – rural class inequality is commonly reflected in income differentials, additionally migrant workers in China are generally excluded from basic social services including housing, social security and education for their children.

The Chinese government has already committed to eliminating discrimination against rural workers through the Hukou. Huang Ming, vice-minister of public security, stated that reform would be completed by 2020, extending the system to cover pensions, education and health care services. The objective of the reform is to merge urban and rural Hukou systems into one in which migrant workers can have equal access to public resources as urban residents do. This opens the door for rural urbanisation where urban benefits can be adopted in rural towns. 

Human development index in Chinese provinces in 2010

So could small Chinese cities, urban in status but rurally located provide other sufficient attractions to outweigh the push and pull factors of big city migration? Could the 300 million projected migrants currently headed to 20 new mega agglomerations be encouraged to urbanise into say 300 rural cities of under 1 million people, or even into 1000 expanded towns of 300,000 people? Could the city size balance exhibited by developed nations be appropriate to China? What does a town of this size look like and what might be the sustainable opportunities?

It will be essential to develop facilities, currently missing in rural areas, appropriate to a desirable development level in terms of transport, health, education, leisure and culture. A city of 1 million people must in particular focus on providing a full range of education opportunities, especially in the tertiary sector to avoid brain-drain. Rural City colleges and universities could be locally focussed in terms of preparing specialised training and re-training directed at local economies. Trends indicate businesses are increasingly moving towards apprentices, internships and part time training. New education opportunities exist in collaborative, technical, flexible learning areas. Youth with potential, needs to see that high quality personal and economic growth opportunities are available locally not just in the mega cities.

Create bottom up wealth through power production to the grid and reduce costs of agricultural production. Source: smartaganalytics.com

Solar panels built in Ningxia and Xinjiang Province, supported by UNDP and Zhenfa New Energy, to provide electricity access for people in rural areas, promote the development of new energy, and protect the environment. Image / UNDP

As suggested earlier this year, whilst China is the world’s leader in renewable energy production being the largest manufacturer and user of both wind turbines and solar panels, it is the production models adopted by countries such as Denmark, through use of individual and community co-operative energy generation, that offers wonderful opportunities to invigorate rural Chinese communities being left behind in the race to urbanisation.[10] Local development banks that support local farmers and businesses with financing could facilitate the de-centralisation of power production to local micro-production (solar / wind / tidal). Creation of bottom up wealth through local renewable power production and onward sales to the grid could significantly reduce costs of agricultural mechanisation and boost rural economies at all scales. Energy and food can be exported to the mega-cities whilst the benefits of the new rural cities can attract labour to remain at home. Information Communication Technology (ICT) is rapidly fostering economies of footloose, independent business. Rural urbanisation can be further boosted through connectivity with Chinas impressive new high speed rail network, which means that all rural towns and cities can be quickly and efficiently connected. 

Rural new towns and small cities should have a sustainable vision of economic self containment. Generated through energy export, this can be enhanced with attractive social and environmental life quality benefits brought about through the IT revolution. Bottom-up wealth creating opportunities, particularly through power production, modernised agriculture and cultural tourism provide huge opportunities for small rural cities, especially when supported by investment structures that promote sustainable local industry, targeted education and cultural quality.  This is a real alternative to the identified concerns associated with endless urban migration and city agglomeration. 

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In 2011 a total of 252.78 million migrant workers existed in China. Out of these, migrant workers who left their hometown and worked in other provinces accounted for 158.63 million and migrant workers who worked within their home provinces reached 94.15 million.[4]

The Chinese urban population will be close to nearly 1 billion people by 2015. Rural migrants might represent nearly 40%, a number which is almost three times the current level. Whilst it can be difficult to collect up to date accurate statistics on migrant floating populations, the number of migrants is undoubtedly quite large. “In China’s largest cities, for instance, it is often quoted that at least one out of every five persons is a migrant.”[8]

“ urban resident annual earnings are 1.3 times larger than long-term rural migrant earnings” [9] 

As of 2008, twelve provinces had abolished the dual urban-rural hukou system but problems persist. 

1 million
population


“City”
 
REGIONAL CENTRE

Specialised Local University

City Trade & Industry Association

Local Development Bank

High Grade Hospital 

National Level Sports Facilities

Local Media Broadcaster

Cultural Heritage Body

Regional Level Entertainments and Attractions

Each city network should be able to develop by self supporting its economy in balance with social and environmental provisions.

300,000 
population


“Town”


LOCAL CENTRE

Sustainable energy production

Tertiary education choices

Retraining opportunities

Trade & Industry Associations

Local Development Bank

Reference:

[1] United Nations, Department of Economic and Social Affairs, Population Division (2014). World Urbanization Prospects: The 2014 Revision, Highlights (ST/ESA/SER.A/352).

[2] Ministry of Housing and Urban-Rural Development 

[3] McKinsey Global Institute Preparing for China's urban billion, February 2009 | by Jonathan Woetzel, Lenny Mendonca, Janamitra Devan, Stefano Negri, Yangmel Hu, Luke Jordan, Xiujun Li, Alexander Maasry, Geoff Tsen, Flora Yu, et al.

[4] National Bureau of Statistics of China (2012): "Statistical Communiqué on the 2011 National Economic and Social Development", 

[5] Zhao, Yaohui (July 1999). "Labor Migration and Earnings Differences: The Case of Rural China". Economic Development and Cultural Change 47 (4): 767–782. doi:10.1086/452431. ISSN 0013-0079. Retrieved 2013-09-25.

[6] Hao, Yan (2005). "Rural Youth Migration and its Implication for Family Planning and Reproductive Health in China". International Population Conference held in Tours, France: 3

[7] United Nations (2008) World Population Monitoring, focusing on population distribution, urbanization, internal migration and development. Report of the Secretary-General to the forty-first session of the Commission on Population and Development, E/CN.9/2008/3 

[8] Wang, Feng; Xuejin Zuo (May 1999). "Inside China's Cities: Institutional Barriers and Opportunities for Urban Migrants". The American Economic Review 89 (2): 276–280. doi:10.1257/aer.89.2.276.

[9] Démurger, Sylvie; Marc Gurgand; Shi Li; Ximing Yue (December 2009). "Migrants as second-class workers in urban China? A decomposition analysis". Journal of Comparative Economics 37 (4): 610–628.

[10] http://www.initiatives.com.hk/renewable-energy