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China’s Path to Urbanization

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China Power

China’s Path to Urbanization

Will it be a path brought by the pull of opportunity or the push of desperation and the loss of land?

As more than 200 million people board buses, trains, and planes for lunar New Year celebrations in their ancestral homes across China, it is worth pausing to consider what this—the largest annual migration of people on the planet—says about the uneasy co-existence of China’s two worlds: the wealthy cities and the poor countryside.

Although in many Western minds China is a rich economic rival, the nation’s wealth remains concentrated in cities. An estimated 394 million Chinese—nearly all rural—still subsist on less than $2 a day. Country dwellers lag behind their urban cousins on almost every socio-economic indicator from income to life expectancy.

With such disparities, it is little wonder that each year an estimated 10 million poor rural residents put down their hoes and head for the city lights.

Thus far, most migrants have been “pulled” to the cities—attracted chiefly by greater economic opportunities.

But an increasing number are being “pushed” from their rural home into the city, often triggered by loss of their land. According to our 2011 nationwide survey of more than 1,700 farmers, one out of seven villages experienced government takings of at least some of their farmland in 2010 alone. In many of these cases farmers are neither consulted nor compensated.

And land-hungry cities, like Tianjin, Chongqing, and Wuxi, under the banner of “increasing rural and urban integration,” have launched urbanization campaigns. They promise but, according to our survey, often fail to deliver urban social security, access to urban schools, and coveted urban residency permits (hukou) to farmers in exchange for their land.

Urbanization should not be a new fast-tracked Great Leap Forward, but rather a natural process that pulls redundant, willing rural labor to the cities, assimilates new recruits, and promotes the general social welfare, narrowing the rural-urban gap. Rural land rights are a critical component: without secure land rights, farmers are more likely to flood the cities and create a destabilizing underclass of city dwellers often excluded from services and opportunity.

Desperate families pushed into the cities by poverty and landlessness have characterized urbanization in countries such as Brazil, Pakistan, and South Africa and created vast urban slums. By contrast, urbanization in Japan, Taiwan, and South Korea has seen land-owning farmers (the beneficiaries of successful post-war land reforms) gradually shift to the urban sector, drawn by opportunity, with their land—or the resources gained from a market transfer of that land—as a source of income to ease their transition.

Thus far, the majority of China’s migrants still have land and children back in their home villages (UNICEF reports that in 2008 an estimated 55 million Chinese children were left in the care of relatives or neighbors by their migrating parents).

A trio of historic legislative reforms between 1998 and 2007 were important steps in attempting to give China’s farmers long-term tenure security so crucial in facilitating an optimal urbanization process. Those laws provided farmers with renewable 30-year rights to use their farmland and the ability to lease out their land should they want to migrate to the city or start a business. These well-crafted reforms were intended to allow farmers to think and plan long-term—invest in the land, increase their harvest and save (for college, retirement, or migration).

Implementation, however, is lacking. Only 37 percent of farmers have received the important legal documents that formally reflect their land rights, leaving them little defense against the increasing pressure for land. Women are even more vulnerable, because the land documents that have been issued usually don’t include women’s names—a serious oversight.

This comes at a time when the balance in China has tipped. The country will this year become a majority urban, and Li Keqiang, China’s new premier who takes office next month, has identified urbanization as one of his top priorities.

There are indeed, benefits to urbanization—from increasing domestic consumption to labor productivity. Likewise, there are serious and irreversible consequences when the pace and nature of urbanization are disregarded.

The China’s State Council took some steps in the right direction late last year, with a proposed amendment to the Land Management Law aimed at increasing compensation for farmers whose land is seized. And just last week the Central Committee of China’s Communist Party called for a dramatic acceleration in the effort to legally document and register farmers’ land rights.

But the stakes are high, and much more can be done to ensure that China’s ongoing urbanization process is driven more by the “pull” of opportunity and less by the “push” of desperation and landlessness, including: providing legal land documents to all Chinese farmers—men and women; increasing farmers’ awareness of their rights and how to exercise those rights; further reforming the law on land takings to improve not only compensation but also due process; providing farmers with still-longer rights to their farmland; and insisting that any relocation include an urban hukou, as well as full compensation. All of this would need close monitoring of local compliance (think both surveys and hotlines).

Such reforms would bring a happy and prosperous New Year to all of China, urban and rural alike.

Tim Hanstad is president and chief executive officer of Landesa, a global development non-profit that works to secure land rights for the world’s poor. The following piece originally appeared on Asia Unbound: A blog from the Council on Foreign Relations.