URBANIZATION is an important indicator for measuring the degree of development and modernization of a country or region. China’s urbanization is an epitome of the country’s development as a whole. It is a process of both unremitting explorations and institutional and model innovations based on local realities. Over the vicissitudes of 70 years since the People’s Republic of China was founded in 1949, urbanization has transformed a “rural China” into an “urban China.” Having avoided serious social problems experienced by developed countries and many developing countries, China has explored a new approach to urbanization with Chinese characteristics.
First 30 Years: Twists and Turns of Exploring
When the People’s Republic of China was founded in 1949, the urbanization rate was only 10.6 percent. After decades of armed conflicts, Chinese war-torn cities needed to be rebuilt, mostly from scratch. The Chinese government has long recognized the importance of urban areas in reviving the national economy and quickly shifted its focus to the city.
A farmer working in front of high-rise buildings in a new rural community in Huaxian County, Henan Province.
At the Second Plenary Session of the Seventh Central Committee of the Communist Party of China (CPC) held before the founding of the People’s Republic of China, Chairman Mao Zedong pointed out that the government must shift priority from rural areas to urban areas. He called for great efforts in learning how to manage and build cities. His speech became the guiding principle for urbanization in the early years of the new China.
Most of the Chinese cities built and developed during feudal society were consumption-driven cities. They had no production capacity, nor did they have the ability to lead the development in vast rural areas. These cities were also relatively underdeveloped in terms of infrastructure, industries, and architectural styles.
After the PRC was founded, two main aspects of work were carried out. The first was to strengthen urban construction, especially infrastructure, such as roads, water supply, and housing. The second was to resume production, and change cities from being driven by consumption to be fueled by production. Revolving around the industrialization initiative, and combining major projects during the first Five-Year Plan period (1953-1957), a number of industrial cities were built.
The initial industrialization efforts resulted in the absorption of a large number of rural residents into cities. In 1960, the urban population of China was 2.3 times that of 1949, with an average annual increase of more than 6.6 million. The rapid growth of urban population brought about a series of problems like limited food supply. In order to alleviate the burden, China tightened policies to control population inflow to cities from 1960 to 1963. It was not until 1965 that the urban population returned to the level of 1960. The adjustment made through these unconventional measures, under the historical conditions at that time, provided an effective guarantee to stable urban development.
From 1966 to 1978, due to the influence of the “cultural revolution,” China’s urbanization basically came to a standstill, and the urbanization rate merely increased from 17.86 percent to 17.92 percent. During this period, destructed national economy and stagnant industrial development stopped urbanization from expanding. As urban planning, construction and management government departments were dissolved, cities went to chaos.
Recent 40 Years: Rapid Urbanization amidst Reform
After the introduction of the reform and opening-up policy in 1978, China has been experiencing the largest urbanization process in human history. The urbanization rate has increased from 17.92 percent to 59.58 percent in 2018, increasing by an average of more than one percentage point annually.
New residential quarters in Hai’an City, Jiangsu Province.
In the initial stages of reform and opening-up, reform measures like fixing farm output quotas for each household greatly improved the productivity in rural areas. As a result, a large number of laborers were freed from farming and went to work in non-agricultural industries. The increasingly sufficient supply of food, the rapid growth of demand for labor forces in urban areas, and the outflow of workers from the agricultural sector in combination caused the relaxation of China’s household registration system in the mid-1980s. In 1984, farmers were allowed to work in cities.
In the spring of 1992, Deng Xiaoping made the history-changing southern tour speeches, accelerating the pace of transformation from a planned economy to a market-oriented system. By the mid-1990s, the institutional barriers that had restricted people’s mobility had all been discarded.
In the late 1990s, China implemented several key reform measures in the areas of housing, education, medical care, and taxation, which further promoted urbanization and development in urban areas.
Among the reforms, one important policy was that local governments were allowed to transfer the right to use state-owned land. In the early stage of reform and opening-up, land for urban development was allocated by the Chinese government for free. A urban state-owned land-use right transfer system was tentatively established in 1990, and was improved in 1992, 1995, 1998, and 2004. A basic urban land system with Chinese characteristics, which specifies land classification, ways of use, use right transfer price, contracting duration, and land acquisition, was put in place.
Another boost to urbanization was the housing system reform. With a booming real estate market, housing expense and investment occupied a considerable proportion in the national economy. It not only supported the rapid growth of China’s economy, but also led to an institutional system with the realization of land value at the heart. Cities capitalized on the land for fiscal revenue and financial support much needed in building infrastructure, public utilities and other areas of urban development.
To understand China’s urbanization, you cannot ignore the factors of economic globalization. Since the 1990s, economic globalization has become an increasingly important driving force for China’s urbanization. Due to the free flow of capital, technology, and industry across borders, many multinational companies scrambled to invest in the construction of modern factories on the Chinese mainland. By the beginning of the 21st century, China had rapidly developed into a manufacturing powerhouse in the world and won the reputation of “world factory.” While promoting China’s industrialization, globalization has also accelerated China’s urbanization process. In particular, Chinese coastal cities, such as Shanghai, Guangzhou and Shenzhen, opened their doors wider. Relying on China’s vast market, these cities witnessed exponential growth of industries like aviation, shipping, finance, and information technology. As a result, this has continued to attract multinational enterprises to set up headquarters or regional headquarters in the region, making Chinese cities an important part of the global urban network.
The impact of economic globalization on China’s urbanization was even more pronounced after China joined the World Trade Organization in 2001. From 2001 to 2011, China’s urbanization rate increased by an average of 1.9 percentage points each year, making it the fastest decade of urbanization. Many cities have experienced explosive growth, doubling their urban area and population. Such cities as Suzhou, Dongguan, Wuxi, and Foshan, became the star cities during this period due to their rapid development in the manufacturing sector.
China enjoys advantages of being a latecomer in urbanization. Its rapid urbanization and the development of high-speed railway and new technologies reinforce each other, leading to unique characteristics in the expansion of Chinese cities.
In 2018, the mileage of China’s high-speed rail reached 24,000 kilometers, ranking it first in the world. The high-speed rail not only changed the pattern of China’s cities and towns, but also changed the relationships between them. The high-speed rail made the traveling between cities more rapid, convenient, and time-saving, and the urban agglomeration became the main form of urbanization. Urban mass transit has also been developing. Nearly 40 cities built rail transit by the end of 2018. Cities with populations exceeding two million have all made plans to develop public rail transit systems.
In the big cities and surrounding areas, new technologies are more likely to be born. The economic factors in the marginal areas tend to gather in large cities. Spatial forms for a variety of economic forms, such as industrial parks, hi-tech zones, science cities, venues for entrepreneurship and innovation and business incubators, appear simultaneously in Chinese cities, profoundly changing the urban spatial structure.
Urbanization Tailored to Chinese Needs
China’s urbanization process is different from that of Europe, North America, Latin America and East Asia. The Chinese government has grasped the relationship between the government and the market, as well as the central government and the local government. It has gradually formed urbanization policies that are tailored to Chinese needs in terms of top-level design, household registration system, land reform and space management.
Importance of Top-level Designs and Planning
The Chinese central authorities held two Central City Work Conferences in 1953 and 1963. Then, after the 18th CPC National Congress, the Central Urbanization Work Conference and the Central City Work Conference were held successively to formulate clear policies and guidelines of urbanization and urban development at a high level. The conferences put forward requirements and objectives to coordinate and further support reforms, and encourage localities to adapt to local conditions and make bold innovations.
Making Five-year Plans is considered to be an important experience China gained in exploring approaches to development and macroeconomic regulation and control. Urbanization has been regarded as an important part in formulating Five-year Plans. The 10th Five-year Plan (2001-2005) proposed to implement the urbanization strategy. The following plan further required the development of urban agglomeration. In 2014, a national plan for a new type of urbanization was unveiled, marking the establishment of an inter-ministerial joint conference system for promoting urbanization. Under the leadership of the State Council, it aims to implement the national new urbanization plan and policy formulation, coordinate and solve major problems, and propose annual key work arrangements and task division.
Progressive Household Registration and Population Policies
Relaxing policies on household registration and restrictions on the free flow of people is an important experience in the process of urbanization in China. If there were no population mobility from rural to urban areas, there would be no subsequent innovations in the city regarding household registration or land and housing, and there would be no increase in productivity or growth in the urban economy.
However, the approach that China has chosen for loosening household registration has been carried out gradually, making the population flow to urban areas in a very orderly manner. Unlike countries like Brazil, Mexico, and India, there has been no large number of rural people flooding into the cities in China over a short period of time. If that happened, and enough jobs were not provided to them, they would have gathered in slums and created mounting challenges to urban governance.
Instead of providing migrant workers and their children equal access to urban medical services, social security, education and pension benefits, the Chinese government adopted a progressive approach to ensuring their access to public services by introducing a permit residence system. It helped alleviate the government’s burden and gave it time to improve services and governance.
A Unique Land System
China’s urbanization process has been accompanied by the continuous establishment and improvement of the urban land system. It is not a result of a top-down design, but a gradual perfecting of the system through exploration. Residential and industrial land classification and other land-related institutional arrangements make it possible to capitalize on land for government revenue and financial support to urban development, being a driving force of urbanization. Local governments improve the infrastructure conditions through investment, increase the value of urban land, and accumulate funds for the next urban development through transferring the right of land use. The system also partly explains the “China speed” in urban construction.
Highlighting Regulation of Urban Spatial Development
Influenced by traditional mindsets, China’s urban construction pays much attention to the regulations of city scape and space development. In the mid- to late 1990s, China’s urbanization entered a period of rapid development. The country had already formed relatively complete compiling methods of urban master plans and urban regulatory plans. Meanwhile, systematic national standards had been formulated in urban transportation infrastructure, public facilities, and park green spaces, which did much to ensure the orderly development of urban construction.
The process of China’s rapid urban growth has its own characteristics. The space unit has played a very important role. China has “space units” that match the historical condition of the time they were in like independent industrial and mining areas during the early years of the PRC, township industrial complexes in the late 1980s and early 1990s, development zones at the beginning of the new century, new towns and districts after 2007, and small towns with local characteristics after 2016.
On the macro scale, China has established the urban agglomeration as the main form, and understands the evolution rule of the urban space development, which is conducive to the role of the urban agglomeration in the convergence and allocation of high-end elements. Besides, it also supports the improvement of production efficiency and industrial transformation and upgrading. Last year, the Chinese government introduced policies to cultivate modern metropolitan areas, placing priorities on fostering metropolitan areas surrounding super-mega cities, which can be reached from the downtown region within one-hour commute.
Urbanization is a very comprehensive economic and social process. It is an inevitable course to achieve modernization. Looking back at China’s path to urbanization, it has learned from the relevant experiences of the former Soviet Union, Hong Kong, Singapore, Japan, the U.S., and the UK in different historical periods, but it does not emphasize one thing at the expense of another. During recent years, China has been paying more attention to local realities, adapting to its own economy, society, historical, cultural, and natural endowments, and actively exploring the formation of urban construction and urbanization development experience with Chinese characteristics.
LIU BAOKUI is an associate research fellow at the Institute of Spatial Planning and Regional Economy of National Development and Reform Commission under the State Council.