“By 2030, when China’s urban population is projected to swell to one billion, its cities will be home to one in every eight people on earth. How China’s urban billion live will shape the future of the world.”
In its Position Paper 2012/2013 the European Chamber recognises that China’s massive process of urbanisation will bring many opportunities, as well as challenges. It goes on to note that although European industry is well placed to support China in terms of knowledge, experience and technology, at present there are restrictions on “the access required to help tackle the real issues that China faces across various urbanisation-related fields, including energy, utilities, transport and construction.”
Two of China’s key urbanisation challenges—addressed by the Construction Working Group in ‘Section Four: Trade in Services’ of the Position Paper—are maintaining sustainable urban development, and ensuring that new infrastructure meets the necessary standards of quality. In his book, China’s Urban Billion: The Story Behind the Biggest Migration in Human History, Tom Miller examines these issues and explains how China must follow a responsible and sustainable path to urbanisation and address social reforms for urban migrants, or risk facing a human catastrophe.
For 30 years, China has pursued an exploitative model of urbanisation that allowed it to industrialise on the cheap. But that model has run its course. As China’s cities grow, their biggest challenge is to find a healthier path to urban development. This book aims to show why this must happen and to explain how it can be achieved. First, it describes the process by which hundreds of millions of people will move off the land and into the city. And second, it suggests how China can begin to create liveable cities that fully capture the economic benefits of urbanisation.
Nowhere is China’s urban miracle more obvious than in Chongqing municipality. Often wrongly called the world’s largest city, it is actually a mostly rural city-province a little larger than Scotland, with a resident population of 28 million. Around one quarter of these people live in the city proper, which is rapidly expanding to accommodate an enormous influx of new urban residents. By 2020, planners expect the city’s population to top 12 million.
Chongqing’s leaders want many more rural people to migrate to the city and other towns within the municipality. They believe that faster urbanisation will unlock economic growth and boost rural incomes. Their ambitious goal is to double the municipality’s urban hukou population from 10 million in 2010 to 20 million by 2020.
Even without explicit central-government support, China is already urbanising faster than expected. In 2011, the country passed a development milestone: for the first time, more than half its citizens lived in towns or cities. The number of people in urban areas jumped to 691 million, taking China’s urbanisation ratio past 51 per cent. In 1980, fewer than 200 million people lived in towns and cities. Over the next 30 years, China’s cities expanded by nearly 500 million—the equivalent of adding the combined populations of the US, the UK, France and Italy.
The primary driving force behind urbanisation is economic. Migrant workers earn far more than those who stay on the farm. And the productivity gains from the twin processes of urbanisation and industrialisation are vital for the national economy: moving hundreds of millions of people out of economically insignificant jobs on the land and into factories and onto building sites in the city produces enormous economic growth. Mass migration to the cities makes sense both for individual farmers and for the country as a whole. For this reason, nothing is likely to halt the huge migration from farm to city—bar economic collapse, political turmoil, or some other cataclysmic event. Historical experience, economic logic and government policy all point to the same conclusion: by 2030, 1 billion Chinese will live in cities.
If China’s leaders get urbanisation right, they may succeed in tilting the world’s second-largest economy away from its reliance on investment and manufacturing towards greater consumption of goods and services. City folk are richer and consume far more than their country cousins. If rural migrants can become genuine consumers, they will rebalance China’s economy and put future growth on a more sustainable footing. But if China’s leaders get urbanisation wrong, the country could spend the next 20 years languishing in middle-income torpor, its cities pockmarked by giant slums. Nearly one in three urban residents do not currently receive urban social benefits, and this figure could climb to nearer one in two if reforms are not made.
Above all, the central government must take some of the financial pressure off local governments by shouldering more of the fiscal burden of reform. How the process of urbanisation is financed could decide whether China’s current economic model continues, stalls or blows up in its leaders’ faces. If China gets urbanisation right, it will surpass the United States and cement its position as the world’s largest economy. But if it turns sour, the world’s most populous country could easily become home to the world’s largest urban underclass. That would be a disaster.