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Overview urbanization in China
2.1 Development and characteristics
Urbanization in China already started centuries ago. During the Southern Song
dynasties (202 BC-AD220), 10-13 percent of the Chinese population lived in cities
and that times capital, Kaifeng, almost counted one million inhabitants. The
following few hundred years, the urbanization rate remained stable. By the end of
the 19
th
century, China's urban population had fallen to 6.0-7.5 percent.
3
That time,
a lot of countries in Europe already had been industrializing countries and reached
an urbanization rate of 29 percent for Europe as a whole.
In 1949, when the People's Republic of China had been founded and the communist
regime took hold of the reins of government, the gap between the urbanization rate
of China and Europe had even become wider. After establishing the People's
Republic of China, the country's national strategy focused on intensive
industrialization, oriented on the former UDSSR and therefore allowed the cities to
grow. The focus on intensive industrialization required a huge amount of workers
moving from the agricultural sector into the cities. The intersectoral movement of
people needed to be regulated and therefore the so called hukou system had been
implemented in the 1950s as the main instrument for regulating the migration. The
hukou system is a household registration system which assigns to every Chinese
person a residence in a specific locality.
4
Residents with an urban hukou enjoy far
more benefits than residents with a rural hukou. The hukou not only decides
whether residents can settle in a city, also residents without an urban hukou are
deprived of most of the basic welfare programs and government services, for
example being able to enroll one's children in public schools in cities where the
parents work.
5
Besides the hukou system, the Chinese government in the 1970s also
3
C.f. Yusuf, Saich (2008): China Urbanizes: Consquences, Strategies, and Policies. Washington:
World Bank Publications: p.4.
4
C.f. Yusuf, Saich (2008): China Urbanizes: Consquences, Strategies, and Policies. Washington:
World Bank Publications: p.5.
5
C.f. Yang (2011): The Impact of Hukou Reform on the Rural and Urban Income Gap. San Diego:
UC San Diego School of International Relations & Pacific Studies: p.2.
4
implemented the one-child policy to control the fertility rates. After implementing
the one child-policy, the fertility sank down from 5.9 in 1970 to 2.9 in 1979. The
effect of these two policies was, that the increase of the urbanization rate slowed
down until the middle of the 1980s.
6
It was quite hard to change one's hukou or
obtain an urban hukou and so the system reduced the migration between the sectors.
With the Reform and Opening Policy and the associated trade and industrial
reforms, the new urban enterprises required a large number of workers, drawing
migrants to cities. But the municipal governments still resisted to relax the hukou
rules and as a consequence industry in small towns and villages in rural areas
widened and was responsible for 17 percent of China's exports of manufacturers.
7
In the middle of the 1980s, authorities began to change their view towards
urbanization and regarded cities as a key for economic growth. To meet the
requirements of construction and to further develop the industrialization process,
more migrants needed to move into cities and the hukou system was relaxed to some
extent.
Furthermore, during that time the process of the so called in situ urbanization
emerged in the rural areas of the country. Usually, urbanization is a city-based
process mainly caused by rural-urban migration. In contrast, "in situ urbanization
implies that rural settlements and their populations become urban or quasi-urban
populations without any significant geographical relocation of their residents".
8
This process had changed the structures in a lot of rural areas. From then on, a lot
of small towns which had become substantial urban centers and important for
industrial growth were classified as cities.
In 1988 the government added an amendment to the Constitution of the People's
Republic of China which made it possible to lease long-term rights for the use of
state-owned land. Most of the revenues of this system retained by municipalities
and soon became one of the principle sources of main off-budget revenues what led
to a huge amount of new residential and industrial parks. Furthermore, town
6
C.f. Yusuf, Saich (2008): China Urbanizes: Consquences, Strategies, and Policies. Washington:
World Bank Publications: p.5.
7
C.f. Yusuf, Saich (2008): China Urbanizes: Consquences, Strategies, and Policies. Washington:
World Bank Publications: p.5.
8
De Sherbinin, Rahman, Barbieri, Fotso, Zhu (2009): Urban Population-Environment Dynamics
in the Developing world: case studies and lessons learned. Paris: Committee for International
Cooperation in National Research in Demography: p. 214-215.
5
governments acquired farm land from farmers with little compensation and sold it
to real estate developers. Nevertheless the land completely remained owned by the
government. Since the Chinese urbanization process is also a result of an increase
of the number of cities, this is an important institutional feature of the Chinese
system.
9
In the 1990's, the country still retained the hukou system, but the inevitability of
rising urbanization was widely accepted and especially small and medium sized
cities welcomed migrant flow from the rural sector because the fiscal revenue could
be used to build urban infrastructure and the migrants helped to expand their
industrial bases. As a consequence they absorbed a large number of temporary
migrants. When talking about urban population and migration in China, it is
important to mention that official statistics only measure migration with transfer of
the hukou. Besides the migration with transfer of hukou, there is still a large number
of migrants without transfer of hukou, the so called "floating population",
10
which
does not appear in official statistics and does not benefit from most of the
government and public services because of the hukou system. The floating
population is supposed to account for almost one third of the actual population.
11
Because of these masses of not included temporarily rural migrants, China's
urbanization policy is also called "incomplete urbanization approach"
12
.
Today, according to official statistics urban population amounts for 52.72 percent
of the total population compared to 13.26 percent in 1953. There are 289 cities in
China, of which 14 have four million or more inhabitants and 82 have 1-2 million
inhabitants.
13
In 2014, China's policy makers issued the so called "National Plan
on New Urbanization" which "should closely center around improving the quality
of urbanization to accelerate the transformation of urbanization development that
will see people-oriented urbanization as an essential value, and city clusters as a
9
C.f. Huang (2010): Urbanization, Hukou System and Government Land Ownership: Effects on
Rural Migrant Works and Rural and Urban Hukou Residents. Paris: OECD Development Centre:
p.13.
10
C.f. Chen, Guo, Wu (2010): One decade of urban housing reform in China: Urban housing price
dynamics and the role of migration and urbanization. Vancouver: Habitat international: p.3.
11
C.f. Fischer, Lackner (2007): Länderbericht China. Bonn: Bundeszentrale für politische Bildung:
p.68.
12
C.f. Wallace (2014): Cities and Stability: Urbanization, Redistribution, and Regime Survival in
China. Oxford: Oxford University Press: p.103.
13
C.f. China statistical yearbook 2013 (
http://www.stats.gov.cn/tjsj/ndsj/2013/indexeh.htm
,
16.03.2015)
6
major form of urbanization, which will be supported by comprehensive
accommodating capacity and safeguarded by institutional innovation"
14
.
2.2 Prospect
Demographers project an increase of the urbanization rate for China up to 65
percent in 2030 and up to 75 percent in 2050. The population is supposed to reach
1.07 billion people in 2050.
15
It is assumed that of the entire population in 2025,
almost one billion people will live in urban centers and China will have 221 cities
with more than one million inhabitants. For comparison: Europe today has 35 cities
with more than one million inhabitants. This increase of the urban population ratio
accordingly means that over 350 million people will be added to Chinas urban
population during the next decade what is more than the population of the United
States of America today. 240 million of them are supposed to be migrants.
Furthermore, it is supposed that the ratio of the urban economy on the total GDP in
China will exceed 90 percent.
16
It is obvious, that China in the near future won't be
any more the agrarian state it used to be, but more and more an urban country with
all consequences.
3
Impact on the environment
With the ongoing process of urbanization and industrialization China faces
especially for its urban centers huge issues. Affected is not only the health of its
population, but also the environment and thereby the land use, energy and resources.
Many of the industries which are highly important for the expansion of China's
cities are at the same time sources of pollution and unsustainable development.
Obviously especially the construction related industries are high consumers of
energy and thereby a source of negative externalities in form of pollution.
Simultaneously, with the increase of affluence of China's households, the
challenges for China's environment also increases, for example because of a larger
14
Transcript of the press conference for the National New Urbanization Plan
(
http://china.org.cn/china/2014-03/19/content_31836248.htm
, (16.03.2015))
15
C.f. Fischer, Lackner (2007): Länderbericht China. Bonn: Bundeszentrale für politische Bildung:
p.68.
16
C.f. McKinsey Global Institute (2009): Preparing for China's urban billion. Washington:
McKinsey Global Institute: p.13.
7
number of private vehicles. The major fields of challenges for China are discussed
in this part of the paper.
3.1 Energy and resources
China's urbanization is based on high consumption of energy and resources.
Additionally, energy intensity (consumption of energy per unit of GDP) is 3.5 times
that of the United States and 7 times that of Japan,
17
what means that the value for
money is very low. During 2001 and 2010, China's urban population in average
increased 3.7 percent per anno, simultaneously, the annual consumption of coal, oil
and gas rose in average 8.1, 6.7 and 16.1 percent.
18
The energy consumption of
urban residents is far above the consumption of rural residents. In 2005, urban
households consumed 3.63 times more commercial energy than the rural
households.
19
For 2030, Chinese cities are expected to account for 83 percent of the
total national energy consumption. China's per capita total primary energy supply
had grown from 0.87 tonnes of oil equivalent in 2000 to 1.70 in 2009.
20
As a
conclusion, it seems logical that with an increase of the urbanization rate also the
commercial energy use per capita rises significantly. Motorization, space cooling
and heating as well as the proliferation of energy-using appliances also contribute
to the energy intensity of urban households. Since all of them are supposed to have
high-income elasticities, the demand for them will also push up energy
consumption with growing affluence of urban households. Since the possession of
private vehicles in China rose from 284.900 in 1985 to 88.386.000 in 2012,
21
the
share of the transport on the energy consumption will also rise during the next years.
In many rich cities, the car ownership reached in 2010 already 100 cars per 1000
inhabitants.
22
Energy consumption obviously creates negative externalities,
17
C.f.
http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/0,,contentM
DK:21812803~pagePK:64165401~piPK:64165026~theSitePK:469382,00.html
(16.3.2015)
18
C.f. German Industry & Commerce Greater China (2013): Urbanisierung in China:Erfolge und
Herausforderungen. In: EconetMonitor Green Markets and Climate Challenge, 2013/11. Beijing:
German Industry & Commerce Greater China: p.6.
19
C.f. Yusuf, Saich (2008): China Urbanizes: Consquences, Strategies, and Policies. Washington:
World Bank Publications: p.10.
20
C.f. OECD (2013): "Urbanisation and Green Growth in China". In: OECD Regional Development
Working Papers, 2013/07. Paris: OECD Publishing: p.8.
21
C.f. China statistical yearbook 2013 (
http://www.stats.gov.cn/tjsj/ndsj/2013/indexeh.htm
,
(16.03.2015))
22
C.f. OECD (2013), "Urbanisation and Green Growth in China", OECD Regional Development
Working Papers, 2013/07. Paris: OECD Publishing: p.8.
8
especially because coal accounts for around 76 percent of China's total production
of energy. Other sources are oil with 8.9 percent, gas with 4.3 percent and hydro-
power, nuclear power and wind power with together 10.3 percent.
23
Coal is on the
one hand very cheap, but on the other hand extremely dirty. The negative
externalities appear in the form of carbon dioxide pollutants as well as acid rain.
3.2 Pollution
Air pollution in China is serious. In 2006, China became with 6.2 billion tons the
world's leading emitter of carbon dioxide. The United States of America only
emitted 5.8 billion tons. 16 of the 20 worst air polluted cities are in China.
24
Regarding the PM2.5 index, an index measuring particular matter with a diameter
of 2.5 micrometers, the World Health Organization (WHO) recommends a daily
level of no more than 20, above 300 it is regarded as hazardous.
25
In China, levels
of 300 or even above are on an almost daily basis. The city of Harbin even had to
shut down schools, public transport and the airport in 2013. It can be concluded that
with an increase of energy consumption, air pollution in Chinese cities could
become even worse. The concentration of the most damaging fine particles for
human health, the sulfates, are highest in urban areas and industrial centers.
26
Also affected is water. Today, China's water consumption accounts for 13 percent
of the whole world's freshwater consumption and thus, China is the world's biggest
water user. Especially cities have a very high water consumption and on a large
scale it is used for industrial manufacturing or household plumbing. Half of China's
cities is experiencing water shortages.
27
There are two reasons for these water
shortages: First, China's water resources are distributed uneven. Second, many of
the water resources are polluted. It is estimated that "a full 70 percent of China's
rivers and lakes are currently contaminated, half of China's cities have groundwater
23
C.f. China statistical yearbook 2013 (
http://www.stats.gov.cn/tjsj/ndsj/2013/indexeh.htm
,
(16.03.2015))
24
C.f. Yusuf, Saich (2008): China Urbanizes: Consquences, Strategies, and Policies. Washington:
World Bank Publications: p.11.
25
C.f. WHO (2007): WHO Air quality guidelines for particulate matter, ozone, nitrogen dioxide and
sulfur dioxide. Genf: World Health Organization: p.11.
26
C.f. Peng, Wu, Liu (2004): Urbanization and the impact on health and the environment: a tale of
two cities. In: Urbanization and social welfare in China. Burlington: Ashgate Pub Ltd: p.291.
27
C.f. Sekiguchi (2006): Water issues in China. In: 10,000 Shovels: China's Urbanization and
Economic Development. Stanford: SPICE: p.25.
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- , 2015, The urbanization process in China and its impacts on the environment, Hamburg, Bedey Media GmbH, https://www.anchor-publishing.com/document/310934
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