Managing China's urban spread
Winston Mok says rather than trying to curb the growth of China's megacities, a better solution would be to encourage the expansion of areas around them, in turn spurring development of smaller cities close by
In Wen Jiabao's final speech as premier, he reaffirmed the government's intention to control the growth of large cities while saying they should also play a role in driving the development of surrounding areas. While I agree with the second part of his statement, increasing the size of metropolitan areas anchored by large cities may be the most effective way to develop midsize and small cities in China, as it has been elsewhere.
At the beginning of its term a decade ago, Wen's government set the goal of developing small and midsize cities. The rapid transformation of China's smaller cities has been impressive, and they should form an integral part of the nation's long-term urbanisation plans.
From urban planning and social management perspectives, China has good reason to favour its smaller cities that lie close to existing rural populations. However, the thrust of China's urbanisation has been driven by its large cities and mega- cities; people are drawn to the economic opportunities there.
The urban landscape is dominated by key metropolitan areas around large cities. There are more than 70 million people in the four megacities of Shanghai, Beijing, Shenzhen and Guangzhou. Such concentrations form self-reinforcing cycles that ensure megacities will continue to grow in size and importance. This is inevitable, shaped by economies of scale - as has happened elsewhere.
Within two decades, more than half of China's urban population will be congregating in the main urban regions. However, Beijing and Shanghai are hardly the solution for farmers. Urban infrastructure and social services are already bursting at the seams in many large cities.
China achieved an urbanisation rate of 51 per cent in 2011, and it is continuing to grow. Within two decades, more than 70 per cent of the population are expected to live in cities - with 250 million new urban residents added in that period. So where will these 250 million people, equivalent to 50 Singapores, be accommodated?
There are estimated to be about 160 cities in China with a population of more than one million, and this figure will grow to more than 220 within two decades. It may not be very efficient to build 250 new cities that can each accommodate a million people - or 500 new cities for 500,000 - to cater for the growth in urban residents. As Professor Li Yining, a leading economist in China, has warned, indiscriminate investment in urbanisation may pose significant fiscal risks and have adverse implications for China's financial sector.
