Denser Cities Drive China's Development Plan

An analysis by Michael Lelyveld
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china-shanghai-view-april-2014.jpg A night view of skyscrapers in Shanghai, April 5, 2014.

Nearly a month after China unveiled its ambitious urbanization program, questions persist about the impact of moving more than 100 million rural residents to cities in the next seven years.

On March 16, the government announced its "national new-type urbanization plan," which has been years in the making.

The initiative would raise China's share of city dwellers from 53.7 percent to 60 percent by 2020, relying on major social and economic reforms for a population that reached 1.361 billion last year, according to National Bureau of Statistics (NBS) data.

In addition to making room for some 15 million new entrants annually, the government would grant urban residency status, or hukou, to migrants, raising the proportion of citizens with access to health care and education benefits from 35.7 percent to 45 percent.

The effort is part of a grand strategy to narrow the gap between affluent city residents and the rural poor while promoting more sustainable development and the transition to a consumption-driven economy.

But the environmental strains of enlarging already smog-clogged cities has raised questions about the benefits that new urban residents can expect to share.

Many may be drawn to cities already bursting at the seams with haphazard housing projects, traffic-tangled highways, and pollution-producing cars.

Guiding the flow

China's leaders hope to manage the process by channeling migrants and new economic activity into cities at different levels rather than freeing them completely by ending all hukou limits at once.

"The country should guide the reasonable flow of the population, help rural residents become urban citizens in an orderly manner and make basic public services available to all permanent urban residents," said the plan, as cited by the official Xinhua news agency last month.

In a report released by the Development Research Center (DRC) of the State Council, or cabinet, and the World Bank, as well as in a document from last year's ruling Chinese Communist Party Third Plenary Session, the government makes clear that it wants a tiered approach to urban development.

"The country will relax overall control of farmers settling in towns and small cities, and relax restrictions on settling in medium-sized cities in an orderly manner," the Third Party Plenum said in November.

"China should set reasonable requirements for rural residents to obtain hukou in large cities, and strictly control the size of population in megacities," the Plenum said.

Largest cities

In other words, not all rural dwellers will be allowed to simply relocate to Beijing and Shanghai.

The DRC-World Bank study suggests that China's largest cities will "boost their role as gateways to the world, ... moving increasingly into services, knowledge, and innovation."

Secondary cities are seen as attracting more land-intensive manufacturing, while "hinterland" cities and rural towns will focus on smaller enterprises, it said.

Still, the report concedes that "the largest cities will likely become larger," presenting environmental challenges and a seeming contradiction.

Limiting sprawl

A major focus of the study is the need to limit urban sprawl, which promotes energy waste and pollution. Greater density "would reduce the energy intensity and car use in cities, thus improving environmental sustainability," it said.

But the report also argues that environmental health hazards have risen precisely because more people are packed into cities. The study says that "mortality rates have been increasing, in large part because 200 million more people now live in cities compared with a decade ago."

The conflict raises questions about whether the projected benefits of conservation will outweigh the near-term pollution effects of new construction projects and whether new entrants will realize a better quality of life.

Last month, Deputy Finance Minister Wang Bao'an said the plan would require 42 trillion yuan (U.S. $6.75 trillion) of investment by 2020, suggesting a building boom that could dwarf pollution-causing stimulus programs of the past.

"There are a lot of contradictions here," said Daniel Gardner, a China scholar and Smith College history professor in Northampton, Massachusetts. "The government is pitching this as an environmental palliative, at least somewhat, but the focus is quite clear —economic growth."

Related reforms

Gardner said the DRC-World Bank study makes the case that denser development would ultimately be more efficient than a sprawled-out alternative, but it is harder to argue that China will produce less pollution with its urbanization program in 2020 than it does now.

The success of the plan also depends on a comprehensive series of measures including land reforms, tax law changes, and energy initiatives that have yet to materialize.

"I don't think there's any question that pollution is going to grow as a result of this urbanization plan because there are too many measures that they have to take, which they haven't taken, that would be required to prevent further degradation," said Gardner.

The government's drive to shift the basis of economic growth from investment to consumption is also unlikely to be a cure-all for pollution.

"More consumption tends to mean more environmental degradation," Gardner said.

Problems not yet solved

In comments to Radio Free Asia, the China Sustainable Cities Project of the Washington-based Natural Resources Defense Council (NRDC) noted several problems, which are discussed by the DRC-World Bank study but have yet to be solved.

Tax reform is seen as essential, since local governments have been using land sales to finance their budgets, encouraging inefficiency and sprawl. Yet, the central government has been slow to expand property taxes beyond pilot programs aimed at second or high-end homes in Shanghai and Chongqing.

"Local governments finance 80 percent of spending on health and education," said the NRDC advocates. "If cities are to accommodate a wave of new residents, fiscal reform needs to happen."

The DRC-World Bank paper also recommends allowing farmers to profit from enhanced land rights, so they can afford urban homes, but it sets no deadline for reforms to take place.

"Without tax reform or changes to rural residents' property rights, Chinese cities will grow in a low-density, car-dependent manner that will only put greater strain on the nation's fragile environment," the NRDC said.

Using more energy

Yet, greater density may not solve China's environmental problems, either, since it may mean millions of new consumers using more energy than they do now.

The NRDC cited World Bank estimates that city dwellers use three times as much energy as their rural counterparts.

"An exponential increase in energy demand without a paradigm shift toward more sustainable consumption would only lead to more congestion, air pollution and associated threats to public health," the NRDC said.

Still, millions of China's rural residents are likely to seek the economic benefits of urbanization, even if it means moving to smoggy cities.

"Remember, they're struggling already with water scarcity, water contamination, soil contamination, and indoor air pollution," Gardner said.


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