ABSTRACT
China’s urban transition, though far from complete, has been among the most visible and commented upon aspects of its development. According to United Nations population statistics, the share of China’s population living in urban areas grew from an estimated 19 per cent in 1980 to 26 per cent in 1990, 36 per cent in 2000 and 51 per cent in 2011 (United Nations 2012).1 The United Nations projections show continuing urbanisation, with the urban share reaching 70 per cent in the early 2030s. The Chinese Government is reportedly planning for an even more rapid urbanisation, with the 70 per cent share reached by 2025 (Johnson 2013). For a country with a current population of over 1.3 billion, this on-going urban transition represents a massive demographic shift. During the first decade of the 2000s, China’s cities grew by about 21 million residents each year. This figure would have been considerably higher were it not for the relatively rapid decline in China’s overall population growth rate, which fell from almost 3 per cent per annum in the late 1960s to under 1 per cent by the late 1990s and is estimated to be less than half a per cent in the early 2010s. Even with this continuing decline in the overall population growth rate, China’s cities have swelled in population from 172 million in 1978 when liberalisation began to 712 million in 2012. Thus, over this period, China’s cities have had to accommodate 540 million additional people, which is more than twice the current urban population of the United States. Without the decline in overall population growth rates, the challenge posed by such a rapid urban transition would have been even greater. This urban transition, and its spatial particulars, has been intimately bound up with China’s economic strategy, which is summarised in this introduction and
described in more detail in later sections of this chapter. To put it simply, China’s economic strategy, as it emerged in the 1980s and 1990s, relied on the efficient coming together of labour and capital in adequately-serviced and well-located urban places, convenient to international markets. Initially, special economic zones were used to attract foreign capital and to facilitate access to international markets, and these zones soon became the sites of what amounted to urban growth machines. Urban officials were given strong incentives to pursue economic growth, and the land system was radically reformed to enable bureaucratic entrepreneurs to sell to commercial enterprises the serviced land they needed to compete effectively. The national system of population control, centred on the household registration system, or hukou, was also radically reformed to allow these enterprises to exploit one of China’s major comparative advantages internationally: low-cost labour. China’s economic growth since 1978, like its urbanisation, has been extremely rapid, averaging in real terms around 10 per cent per year for over 30 years. In effect, urbanisation and economic growth have fed off each other and for its level of income per capita China’s level of urbanisation has never been exceptional. Moreover, as illustrated in Figure 3.1, China’s economic output and its urbanisation rate have grown in tandem and very much in line with the relationship between urbanisation and GDP per capita that is observed internationally. What is exceptional in the global context is the scale of the transformation that this has
entailed, given China’s large population. Indeed, China’s shifts in both urbanisation and economic production levels are astounding, particularly when one considers that China contains a fifth of the world’s population and, on both of these axes, has radically shifted its position relative to most other countries in the world. While the reforms have been radical and their consequences monumental, the underlying strategy of economic liberalisation has been gradual, experimental and spatially circumscribed. It is often described with two expressions ascribed to Deng Xiaoping, who led the reforms: ‘crossing the river by groping for stepping stones’ and ‘letting some people and some regions get rich first’. Most of the experimental ‘groping for stepping stones’ took place in cities, where most of the people allowed to ‘get rich first’ soon came to live. At the start of the reforms, the emphasis was on the rural production system. Farmers were given more responsibilities for their land and their produce; production for the market was encouraged; and the resulting cost-cutting reduced the need for agricultural labour. Partly in response, rural and small-town industries were developed and labour employed in the agricultural system was released. As early as 1980, however, China began experimenting with special economic zones, which were to become central to the emerging urban growth phenomenon in the coastal region. The initial selection of coastal zones was based on their advantageous position for trade and foreign investment and reflected the tactic of liberalising and giving special support to places considered most likely to succeed economically. The very first special economic zones were located in rural areas, partly to avoid the possibly destabilising effects that liberalising reforms might bring to urban centres. The benefits of agglomeration soon became clear within these zones as they grew, and the next major round of liberalisation (and favouritism) shifted the locus to cities and then to the broader coastal region and to select inland cities. The decentralisation that accompanied liberalisation also favoured cities, which were in a better position to take advantage of decentralising authority and were willing and able to experiment with new approaches to attracting investors and workers and initiating large development projects. Partly because of the political as well as economic advantages accruing to cities, smaller settlements aspired to become cities, and the advantages of city status were conferred on settlements that were not only large enough but successful enough to warrant it. Throughout the 1980s and for most of the 1990s, the number of cities, and of urban towns, increased rapidly. The experimental approach also extended to support given to the different types of special economic zones that local governments were allowed to create, with the more urban xincheng (new districts) favoured over the more rural kaifaqu (development zones) after the latter became over-extended in the 1990s and were no longer felt to be contributing to economic growth. In effect, the manner in which liberalisation was pursued not only gave markets more influence over which places and enterprises would succeed, but also advantaged those places that the markets would tend to favour, amplifying the inequalities that the market alone would in any case have created. Thus, given China’s economic position at the end of the 1970s, liberalising markets for
capital, labour and commodities favoured the coastal region, and especially coastal cities – the same cities favoured by the government’s policies and plans. By the 2000s, the coastal model was being extended inland, but the coastal region already had an important economic and infrastructural lead accompanying its locational advantages. For China’s liberalising cities to succeed economically, they needed to make serviced land available to productive users. While increasing land use for industry and other productive purposes could be accommodated to some degree through central planning, the extremely rapid land conversions needed for China’s economic transformation required something more. There was thus considerable experimentation and struggle with respect to urban land. From a legal point of view, the two groups that had the most obvious claims to China’s urban and periurban land at the start of the reforms were the central Government and the rural collectives (Lin 2009). Yet the two groups that emerged with the greatest power over and benefits from urban land in the expanding cities have been local governments and developers. After some experimentation with land in coastal locations, an urban landleasehold market was established nationally in 1988 (Yeh, Xu and Liu 2011: 13). Rural land stayed collectively owned and, even after the reforms, could not officially be leased for profit. Ownership of urban land stayed with the State, but could now be leased for a fixed term. This created greater opportunities for local governments and other power brokers to use urban land to attract and guide commercial development. The conversion of rural to urban land also became, by implication, critical to making land available for productive enterprises and residential development. Over the course of the 1990s, with the control of urban land becoming increasingly central to China’s urban development, local governments gained a more pivotal role in making this land available. In 1998, it was formally stipulated that all administratively-allocated land should be transferred to municipalities first, before being leased to developers. The most common model has become one in which planners and entrepreneurial bureaucrats take the lead in securing land and converting it into serviced land, whose long-term leases could be sold to enterprises or to other property developers. While this created a potential locus of corruption, it also became an effective means of financing the infrastructure as well as providing the serviced land needed for urban economic expansion. It also made planners very aware of the value of land. Another ingredient needed to make China’s cities attractive to investors was workers willing to work at comparatively low wages. To support market-driven economic growth, China needed its cities to become productive and profitable places for capital and labour to come together. In effect, for liberalisation to succeed on a large scale, workers would need to move to the favoured locations, especially to coastal cities, and to offer their labour at a comparatively low cost. Migration and low wages went hand-in-hand in that keeping wages low required increasing the numbers of workers.
