China has a historically complex relationship with its cities. While the country now has the largest number of urban dwellers in the world, surpassing the United States in the 1970s, the national government has by no means always recognised the importance of cities in driving economic growth.
Early industrialisation and urbanisation
After the establishment of the People’s Republic of China, in 1949, government policy was biased towards transforming cities into industrial bases. While industrial development in cities was an important focus of various national government led programmes, there was still an unquestionable emphasis on the importance of rural development, most notably during the Great Leap Forward Campaign (1958-1960).
Industrialisation led to the inevitable influx of vast numbers of the rural labour force migrating to cities, putting pressure on service delivery and infrastructure. In response, the Chinese government began to limit the volume of rural-to-urban migration that was permitted, through the passage of a 1958 law which assigns an agricultural or non-agricultural residency designation at birth, based on that held by parents. This residency registration (hukou) is essentially permanent and continues to affect urban development in China to this day, precluding access by agricultural-registered citizens to subsidised healthcare, unemployment insurance, guaranteed minimum incomes and basic welfare support which are only available in cities.
The growing pace of urbanisation, during the 1960s, was curbed by restrictive government policy, as well as the impacts of the economic downturn.
The rural experiment
The national government’s anti-urban policy, beginning in 1962, started to reverse the statutory designation of cities back to counties, as well as the wide scale conversion of residents with non-agricultural hukou to agricultural status.
By 1964, the country had launched a “third line” programme, which enforced the relocation of the country’s industries from vulnerable coastal and central cities to western regions. The programme, which only came to an end in the late 1970s, saw large numbers of factories, workers and their families forcibly moved into China’s largely mountainous western region. Running alongside the “third line” policy, the government also attempted to ease the concerns associated with population density in China’s cities through the large scale relocation of urban youth to rural areas.
A vast number of the industries that were re-located to western china later became bankrupt and a majority were forcibly closed by the government in the late 1980s.
Interested in real estate investment in China?
Opening the door
1978 marked a watershed in China’s history. The country began to implement a series of wide ranging economic reforms and opened its door to the world. The opening up of China’s economy resulted in a shift towards a more urban-focused policy, releasing a substantial amount of labour from farming and allowing the dispersed urban youth to return to their cities of origin, albeit cities whose infrastructure had been neglected for decades and struggled to cope with the influx of population.
The country’s national urbanisation policy, eventually adopted in the form of the 1989 National Urban Planning Law, evolved into three pillars: 1) controlling the big cities, 2) moderating development of medium-sized cities, and 3) encouraging growth of small cities.
The policy reforms of the late 1980s also gave added impetus to municipalities. In 1988, the current system of leasing long-term rights for the use of state-owned land was introduced; a move which allowed most revenues to be retained by municipalities. This extra source of off-budget income facilitated the wide-scale redevelopment of inner-city neighbourhoods, as well as the construction of industrial park developments in outer urban and suburban areas. It is the subsequent influx of foreign direct investment, from the 1990s onwards, that has been a driver of China’s economic growth over the last decade or more.
Cities as economic drivers
Given the Chinese Government’s propensity for anti-urban public policy, it came as no surprise that they chose to deal with the rural-urban migration “problem” in a profoundly conservative way. Indeed, the national Eighth Five Year Plan (1991-1995) was the first to explicitly address the concept of urbanisation. The Plan, however, merely reiterated much of the rhetoric of the 1989 National Urban Planning Law. This approach continued throughout much of the 1990s and it wasn’t until the Tenth Five Year Plan (2001-2005) that city and town-based urbanisation was highlighted as one of the main policy foci, largely as a result of central government’s acknowledgment that there were widening regional and rural-urban disparities, as well as the fact that country was too heavily reliant on exports and investment for economic growth.
A new start
The Tenth Five Year Plan outlined three primary policy measures to promote towns-based urbanisation: 1) rural residents permanently relocating to towns within their counties were given permission to convert their hukou from agricultural to non-agricultural status; 2) land reforms allowed farmers to permanently sell off their land rights to other farmers, to encourage economies of scale; and 3) industrialisation was promoted in towns, with implied approval for the conversion of agricultural land to town construction land.
In theory, the policy marked the Chinese government’s first explicit attempt to promote town-based urbanisation. The reality, however, was that these policy measures had only limited effect with regards to stimulating the desired urbanisation.
The rise of metropolitan regions
After decades of neglect, the Chinese Government now appears to have recognised the importance of its cities and metropolitan regions. In the Eleventh Five Year Plan (2006-2010), the government placed a much stronger emphasis on harnessing the potential of metropolitan regions as a means of driving national economic performance. The Plan focused on achieving urbanisation through the “balanced development” of cities and towns, as well as including measures to integrate strategic towns into metropolitan economies.
An integration of this new urbanisation policy with a new rural development strategy, the government hopes, will address China’s growing rural-urban disparities. By building strong connections with strategic towns, cities, such as Shanghai and Beijing, are beginning to foster the concept of strong metropolitan regions. Movements such as these are indicative of central government’s desire to embrace metropolitan regional scale development as a means of furthering the economic growth of the nation. Rather than merely focusing on rural or urban development, there now appears to be a much greater focus, at all levels of government, on planning at a scale which takes both into consideration.
Regional policy
Two scales of functional regions are beginning to emerge in China: metropolitan regions, anchored by a core city; and larger Regional Urban Systems at the sub-provincial scale, anchored by
Source: NDRC
metropolitan regions, but also encompassing a far reaching network of cities, towns, and villages. At the regional scale, the Chinese Government has very discrete policy plans for each geographic region.
Eastern China
In coastal, Eastern China, there is a definitive focus on the quality, rather than speed, of the urbanisation which is taking place. The government identified in its Eleventh Five Year Plan that the three areas which require focused attention, in order to drive national economic growth, are Beijing-Tianjin-Hebei, the Yangtze Delta, and the Pearl River Delta agglomeration. Plans are in place to turn Beijing and its environs into a modern international city by 2020, and a world city by 2050, as well as turning Shanghai and the Yangtze Delta, and Hong Kong and the Pearl Delta, into international financial, trade, manufacturing and shipping centres.
In addition to supporting the growth of these economic clusters, the government is also focusing on building an urban network, instead of an urban hierarchy, through the dissemination of industries to small and medium cities, while simultaneously upgrading and regenerating the larger cities of the East.
By building a liveable city, rather than a manufacturing base, the government also intends to utilise low carbon technology in urban development, rehabilitate the ecology of the region, and ensure that urban life is affordable and inclusive for all, including migrants.
Central China
In Central China, the focus is more geared towards capacity building. By developing Provincial capitals, city clusters, regional centres, county seats and rural towns, the government hopes to enhance the strength of the location, as well as promoting balanced migration.
In addition to concentrating on the urban aspects of development, there is also a keen focus on promoting agricultural productivity as a means of ensuring national food security. This is largely taking the form of the preservation of arable land, as well as the development of green industries.
Furthermore, the government recognises that both the urban and rural targets cannot be achieved without an improvement in infrastructure, including improving regional communications and conserving water.
Western China
Western China’s concentrated polarisation strategy focuses on the development of the central city-region concept. The region’s development strategy incorporates the emergence of a new energy town, a frontier city and the revitalisation of a mine city.
Through the redistribution of industries and rural populations, Western China intends to encourage settlements of a desired density, conserve the ecology of the region, and build a resilient city.
North-Eastern China
In North-Eastern China, we are seeing an emphasis on the regeneration of the old industrial cities, the upgrading of infrastructure and services, as well as a great deal of economic restructuring. Improving cross boarder communications and the establishment of a regional urban system are both key features of the growth of frontier cities within the region.
Again, we are seeing emphasis placed on ecological rehabilitation, the construction of regional facilities, as well as development in rural centres.
China’s urban future
After several decades of slow urbanisation, China’s urbanisation rate in continuing apace. By 2020, it is estimated that over 50% of the country’s population will live in cities, translating to in excess of 700 million people. The countries national economy is already dependent on cities, almost 65% of China’s GDP is now produced in its 53 metropolitan regions, but this dependence is projected to continue to grow.
Urban populations, 1950 – 2030
Source: UN World Urbanization Prospects- The 2007 Revision
Spatial strategic planning at national and regional levels has proven a huge success during the Chinese urbanisation experience. It is important, however, that China continues to place emphasis on developing its major urban centres as a means of enhancing the nation’s international competitiveness in the future.
Urbanisation is placing considerable pressure on existing sub-national systems of governance. It is creating a vast swath of new functional responsibilities for local governments, increasing the scale of existing responsibilities, placing huge pressure on municipal public finance, as well as creating dilemmas regarding the re-allocation of some responsibilities between governments.
Efforts are already underway in some Chinese cities to rationalise the system of local governance and to recognise more fully both the complexity and importance of the metropolitan region. Only through developing the right strategies and plans for the delivery of regional public services, will metropolitan regions succeed in driving the Chinese economy forward, while simultaneously negating some of negatives associated with rapid urbanisation, such as pollution (China is the second largest contributor to global warming) and water shortages.
Top image credit: Photobank gallery
