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Last updated by fabiowzgogo at 2016/11/27

Chinese urbanization is happening at a scorching pace. In fact, the speed of China urbanization is so rapid that it is being hailed as the single, most significant phenomenon that will impact the development of the world as we know it.

Consider these facts: today (at the end of 2011), there are more Chinese living in urban areas (690.79 million) than those living in rural areas (656.56 million). This means that as a result of rapid Chinese urbanization about 51.3% of China’s population now lives in urban areas, as compared to 26% about 20 years ago (in 1990). The total number of people living in China cities and towns is more than double of the population of the United States of America!

The story doesn’t end there. It is estimated that by the year 2035, a full 70% of the Chinese population will live in urban areas. By that time (in about 20 years) as a result of China urbanization, an estimated 20,000 to 50,000 new high-rise buildings will have to be built, and mass transit systems will have to be established in an excess of 170 cities to house and meet the transportation needs of this burgeoning population.

Historical Perspective Of The Chinese Urbanization Story

But it wasn’t always like this. During the 15 years between 1950 to 1965, growth recorded in the urban population was a more sedantry 3% to 4%. A spurt in the growth of Chinese urbanization occurred briefly during the 1958-61 period, as a consequence of the industrialization initiative, but then actually dropped during 1965-75 when there was a movement to send urban youth to rural areas to learn from the farmers – under a program called “rustication”.

The dramatic changes in China urbanization began to really happen after 1978, when economic reforms were launched. As a result of the vast inflow of foreign direct investment into China, employment opportunities began to open up, and urban growth again grew. However, because of the restructuring of the state owned enterprises in the 1990s, urban growth again slowed down.

Urbanization More Pronounced In The East

Because of the difficult terrain and the less favorable weather that prevails in the southwest and northwest regions of China, it is the eastern parts that are witnessing rapid Chinese urbanization. This, despite the fact that the other areas are more mineral rich and agriculturally fertile. The urban and industrial corridor has thus developed in a wide swathe from the northeast, Harbin, passing through Beijing and moving on south to what is now Chinas largest metropolitan complex, Shanghai.

It is for the first time in the country’s history that the urban population has outstripped the rural population. This has happened after three decades of economic development that encouraged farmers to seek better standards of living in towns and cities. It is estimated that the capitalist reforms have lifted more than 200 million people out of poverty, and has made China the world’s second largest economy, having become its biggest consumer of steel, copper and coal. It is also the considered opinion of experts that China urbanization has several decades to go, and will continue at a rapid pace for the foreseeable future – at least for another 20 years. This will result in the dilution of the agrarian economy, and urbanization will be the fundamental driver behind Chinas economic growth.

Effect Of Chinese Urbanization On World Economy

Economists have surmised that the two most important factors that will shape the economy of the world in the 21st century will be the technology developments in the US, and the urbanization of China. This is because China urbanization will require upgradation, both for its infrastructure and for its industrialization, China still needs massive doses of investment. Thus, urbanization will lend fundamental support for investment growth and housing demand.

At the present time, urban incomes are almost thrice that of rural incomes. This has created an income gap, which is growing. The other challenge that China faces is to gear up to provide jobs, welfare and other social services to city dwellers.

Estimates have projected that given its present rate of growth, China will have 221 cities with million-plus inhabitants by 2025. Europe has 35 cities of this size today. In addition, China will have 23 cities with populations more than five million. Global think-tanks have recommended that China shift focus from solely driving GDP growth to a regime that will result in an enhancement of urban productivity – which means that China will have to focus on using fewer resources to achieve the same or better economic results.

Large Investments Required in Development

All this translates into a humungous amount of developmental activity, as a direct result of Chinese urbanization. China will need to build power generating capacity of between 700 – 900 Gigawatts by 2025. The greatest boom in mass-transit construction history will be required to set up mass transit facilities in 170 Chinese cities, more than twice the prevailing number in Europe at this time. An estimated five billion square meters of road will require to be built, and some 28,000 kilometers of metro rail. Over the next 20 years, China will require to build 40 billion square meters of floor space, constructing an equivalent of ten New York cities in terms of skyscrapers (buildings above 30 floors).

Skewed Division Of The Fruits Of Development

Some researchers are concerned that, unlike the predictions made in some quarters, rising Chinese affluence will not necessarily result in Western-style relatively well-off consumers. In other words, China’s middle class may not emerge as envisaged to propel the economic success of China further.

This is because some experts are of the opinion that the prosperity spurred by the urban growth is not reaching the vast majority of this urban population, due largely to a Mao-era rule that strictly distinguishes people from rural areas, and those from urban areas. Hukou, a system established in 1958, divides the population into rural and urban citizens. All urban citizens are eligible for affordable accommodation, welfare programs, social services, and public education, while rural citizens do not enjoy these privileges. What is more, this status is hereditary, which means that once a family falls within the definition of a rural family, it will always remain in that tier. This issue becomes complex when rural inhabitants come to the cities to earn higher wages working on construction projects, leaving their agricultural life-styles behind – but have to contend to live in conditions that are slum-like, and are prevented from becoming upwardly mobile socially and economically. This creates a labor force of about 150 million “super-exploitable” young migrant workers, who are powering Chinas economic explosion, but are themselves barred from participating in the benefits it throws up. A case in point is Shenzhen, where only about 25% of the population has urban hukou classification. The migrant labor is allowed to work here during their young years, and can stay in the dormitories, but will find it difficult to raise families here. For this they will have to move back to their rural roots.

The Modern Chinese City-scape

Other large cities in China which also face this kind of problem to a greater or lesser degree include: Guangzhou, Shanghai, Beijing, Shantou, Shenzhen, Tianjin, Dongguan, Hangzhou, Hong Kong, Wuhan, Nanjing, Shenyang, Chengdu, Xi’an and Harbin.

The Chinese government is working to restrict growth in its present urban areas by limiting the size of the existing big cities (defined as those with populations in excess of 500,000), developing the existing medium sized cities (with populations between 200,000 to 500,000) and encouraging the growth of small cities (population 100,000 to 200,000). Small market and commune centers are also being developed, with the hope that they will be transformed into towns and small centers. All this is being done with a view to take the pressure off the large urban mega-centers.