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Urbanization With Chinese Characteristics

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China Power

Urbanization With Chinese Characteristics

Beijing is seeking to encourage a “new type” of urbanization.

Urbanization With Chinese Characteristics
Credit: Kunming suburbs image via Barnaby Chambers /

As part of China’s larger-reaching economic reforms, the government hopes to achieve a 60 percent urbanization rate by 2020. On Tuesday, President Xi Jinping expounded on the right way – and the wrong way – to go about achieving this goal during a meeting of an economic work group.

Speaking to the Central Leading Group on Financial and Economic Affairs on February 10, Xi “demanded stable urbanization,” according to Xinhua. Xi’s conception of urbanization involved attracting “suitable people” to live in urban areas. “Suitable people,” apparently, are those who are both “capable of maintaining steady jobs and comfortable in cities.”

It sounds odd to suggest that China has a problem attracting people to make the move from rural areas to the cities. That process has been underway for decades now; according to data from the World Bank, China has gone from a 30 percent urbanization rate in 1994 to 53 percent in 2014. That means nearly a quarter of China’s population – roughly 300 million people – made the move from countryside to city in the past 20 years.

Enticing rural migrants to cities is not a problem for China. In fact, China has had serious difficulties figuring out how to handle the migration that is already happening. The hukou system, which links receipt of social services (from healthcare to education) to a residence permit, has made many rural migrants second-class citizens in their new urban homes. Viewed in this way, Xi’s comments on attracting “suitable people” are telling. The problem lies not in the “attraction” factor of cities, but in making sure the migrants that do arrive in urban areas are “suitable.”

So what China wants is not urbanization per se (that process is already underway), but a different kind of urbanization – “new-type urbanization,” according to a planning document released by China’s State Council in March 2014. That plan involves, in part, legitimizing the migrants that have already made their homes in China’s cities. The State Council plan is supposed to help 100 million permanent urban residents obtain an urban hukou.

Last December, the State Council’s Legal Affairs Office released a draft law regarding hukou reform that will allow migrants to obtain access to social services – up to a point. Migrants must meet certain criteria to be eligible, including employment, housing, and length of stay. And these criteria will be strictest in the cities that are most attractive to migrants: mega-cities like Beijing, Shanghai, and Guangzhou. On Friday a suburb of Beijing became part of a pilot system to test the new hukou distribution system, joining similar test efforts underway in Shanghai, Guangzhou, and Tianjin.

Meanwhile, China’s smaller cities would eliminate the hukou system entirely. The hope is that by reducing barriers to entry in smaller cities and towns, those locales will become more attractive to migrants. However, as Adam Tyner noted in an analysis for The Diplomat last year, migrants have never had much of a problem getting hukou in smaller (and poorer) towns, but there’s little desire to do so. These smaller cities “lack both the employment opportunities and the quality social services of the metropolises that might actually attract migrants.”

China’s small cities actually do have the attraction problem that Xi mentioned in his remarks. For some Chinese officials, the solution has been to simply relocate entire villages into ready-built cities, something the central government frowns upon. “’New-type urbanization’ focuses on making migrants into genuine urban citizens, not just building more, bigger cities and forcing people to live there,” Xinhua emphasized in a recent piece.

But if China is not going to forcibly relocated rural residents to small cities, how is it going to make this specific type of urban area more attractive? Subsidized housing? More attractive social services? Subsidies for businesses to set up shop, providing an employment draw? That is exactly the puzzle Beijing will have to solve if urbanization with Chinese characteristics is to succeed.