China’s urbanisation

I have just seen the section on the Guardian called “The Other China”, dedicated to the “huge but often unreported cities on the frontline of China’s urbanization”. It is a welcome occasion to finish a post that I had in the pipeline since my 4,000-kilometre train journey through China in October 2016.

Approaching Dalian

Two books provided much of the background reading during that trip. The first one is How the City Came to Mr. Sun. I wrote about it on this blog before. I met one of the authorsDaan Roggeveen, in Shanghai, where he helped fill some gaps in my understanding.

The book is a tour of ten or so second-tier cities that many outside China have not heard of before. The Guardian’s list of 100+ Chinese cities with more than one million inhabitants conveys a similar message: There are a lot of cities in China, and most of them are growing really fast.

The other book is called China’s New Urbanisation Strategy. It is a 2013 English translation from a China Development Research Foundation research project that concluded in 2011. The CDRF is the research arm of the Chinese State Council. For a government-affiliated organization, I found their report surprisingly open and critical.

At any rate, both books are already rather “old” when we consider the speed at which things change in and around China’s cities.

I asked Daan about just that: How did their book fare with some years having passed? Fortunately, most of the judgments they made turned out prescient. Their outlook for China’s urbanisation becoming much more about quality than quantity is beginning to play out in the more advanced cities across the country.

Nonetheless, and also with the help of the Guardian articles offering a fresher perspective, I will try to jot down some of the major developments that have taken place in the five years since 2011, the cut-off point for both books. Before that, however, I need to refresh my knowledge on the history and theory of China’s urbanization.

The structure of the following piece therefore is as follows. I briefly review urban (economic) history in China, explaining how the current urban structure has emerged over the last centuries. A great recent Urban Affairs article helps tons. Some spatial features of the rather recent urbanisation spurt are highlighted then. These are related to the history of urban planning and one result of China’s municipal finance, i.e. that of “quasi-urbanisation”.

The houkou system of forced registration in the countryside for millions of migrant workers remains at the heart of many of the negative sides of urbanisation according to China’s New Urbanisation Strategy. It is also here that quite some change has taken place as of late. One major aspect of this debate relates to housing for new city dwellers. Given my recent interest in the topic, I will spend some time looking at this.

Daan also kindly shared with me his insights into how features of China’s urbanism are being transplanted to Africa in the wake of Chinese investments on the continent. It therefore makes a lot of sense to first contextualize China’s experience. For that, I will try and find some points of overlap and difference between China and Japan’s historical urbanisation experience, before looking at the relevance of China’s urbanisation model to the wider world.

In short, in developing a new theoretical framework with which Asian urbanisation history can be understood better, China deserves a lot of attention. I end on some remaining observations from my week-long journey. [But wait, who is going to write those 5,000 words? I decided to leave the above in place, because it’s a nice structure for a possible future piece. Below, however, some more unstructured thoughts.]

Chinese urbanisation: the long view

Before industrialisation in the West, and given its sheer size, China had the world’s largest cities and an urbanisation rate slightly below global average. The unification of the Chinese empire under the Qin dynasty was the pivotal moment for cities. It spurred the development of a centralised political system and rapid growth of centres of administrative and economic power.

This was especially true for the four capital cities Nanjing, Xi’an, Luoyang and Beijing, as well as Chang’an and Hangzhou, all of which cracked the one-million marker at some point during their history. All throughout, China’s urbanisation rate as a whole hovered at around or below 10 percent.

Political factors prevailed in the foundation and growth of the early Chinese cities, resulting in their rather uniform look. In his book on Beijing, Victor Sit notes that “the walls were oriented to the cardinal points of the compass; the major streets formed a similarly oriented grid; gates were surmounted by a gate tower; the seat of the government occupied the most central or auspicious location of the city, either at the centre or the northerly central location, facing the major street and the main gate of the city in its southern wall.” To some extent, Sit surmises, these features are still observable principles behind city planning in the post-1949 period.

With the Opium War, China’s traditional industries and urban mode of commerce got under pressure. Interior cities declined, while coastal regions benefited from increasing trade links. Xi’an’s population had declined to 125,000 by 1930; Chengdu’s to 350,000. Shanghai, Tianjin and Guangzhou, in contrast, grew rapidly during the nineteenth century and early twentieth century. By the time of the Communist takeover in 1949, China’s urbanisation rate was still around 10 percent, far lower than the world average at the time, which stood at 28 percent. With 16 percent, the average developing country’s urbanisation rate was also higher than China’s.

Major changes took place from 1949 onwards, although it is not simply a story of stable growth. Zhang (1991) describes the 1950s as the “Great Leap Forward” in Chinese urbanization, with the total urban population more than doubling and accounting for almost 20% by 1960. The 1960s witnessed a slowdown and even reversal of this trend, and during the ensuing Cultural Revolution urbanization rates stagnated, i.e. cities grew in tandem with the overall population.

A great recent paper by Gu et al (2015, accessible here) quotes Zhu’s division of Chinese urbanization into three distinct periods: anti-urbanization until 1979, rapid urbanization due to industrialization and globalization from 1979-2010 and the current “city-living” period. Going further back, however, the authors see continuities in today’s cities with prior socio-spatial configurations, which is where it becomes interesting.

They hold that in pre-socialist China, the “Asian mode of production” shaped urban spaces and their inhabitants. This was the “traditional period”. The proto-globalization following in the 19th century only had a limited impact on coastal China primarily but nonetheless influenced Chinese urban planning in its emulation of the West. The socialist era from 1949 onwards saw rather minor influences from abroad except for some Soviet ideas on city planning prior to the Sino-Soviet split.

China’s changing involvement in the world economy makes it susceptible to the cyclical forces of the Kondratiev Waves, super-long cycles of predominant technologies and products leading to a particular accumulation regime. The stagnation period between them (think the transition from ICT to genetic/nano engineering we’re witnessing right now) is stabilized by “spatial patterns”. Why did I not study human geography before?

(Also, it is great the authors cite Kondratief, who I see in an urban studies article for the first time. “Despite” being a Soviet economist, his theory of long-term patterns has been of appeal to economists ever since the early twentieth century, also because the validity of his argument is so hard to refute. I remember my dad telling me about him before I even finished school.)

The authors move on to describe their concept of socio-spatial layers, almost analogous to geological layers in archeological excavation work. Each period leaves distinct traces in the built environment, which are in turn described. Of particular interest are the socialist period’s danwei — integrated working and living units. In a linear-growth planned economy, these tended to be increasingly located in satellite towns, explaining much of the spatial growth of cities during this time. There are some fantastic time lapses on the Guardian website here covering a period of a little over 30 years.

There were a few major dates for Chinese cities after the Third Plenary Session of the CCP in 1978. Grain harvests were at record levels and the end of the Cultural Revolution led to the migration and return of millions of people from the countryside. In 1986, the seventh Five Year Plan attempted to ‘avoid the over-growth of large cities and selectively develop some medium and small cities’ (still quoting from Gu et al 2015).

Another wave of market-led liberalization started in 1993. A hallmark of this was the loosening of restrictions on urban migration, leading to seasonal and permanent migration of rural workers into the burgeoning cities along the coast. The continuing expansion of the city leads to more and more changehongcun — or villages in the city. The cover of How the City Moved to Mr. Sun is adorned with a photo of just one of these.

China’s increasing interconnections with the world economy were reflected in massive changes in its urban landscape. The urbanization rate eclipsed 50% around the early teens, i.e. China drew level with average world levels. The share of the urban population living in large cities and megacities increased from 40% to 50%. Cities are now primarily driven in their development by the growth of the tertiary sector.

The authors’ conclusion is best encapsulated in this graph:


Urbanization is conceived as a series of layers that reflect the prevalent modes of production as well as the “related logics of production of space”. These layers have a profound influence on the next period’s spatial manifestation. Taken together, this paper presents a simple but powerful approach to studying urban history in China (and beyond).

Moving on, I wanted to look at “quasi-urbanization”, a term that the book China’s New Urbanisation Strategy uses but that appears to be a Chinese invention, with no real equivalent in English.

It is a relatively multifaceted term. One the one hand, the report describes a “quasi-urbanized” status, in which rural migrant workers lack political rights and are thus unable to enter urban society. With it, the authors describe the implications of the hukou system, China’s urban household registration. This links benefits and urban amenities such as schools, healthcare, etc. to an urban resident permit, which rural migrants cannot easily possess. This is currently being reformed, albeit very slowly given its political sensitivity.

The other manifestation of quasi-urbanization is to do with legal urban status that is conferred upon a territory. Very often, cities encroach upon their adjacent rural areas without a change in the built environment. As a result, large “empty” areas with agricultural patterns of production become “urbanized” by decree rather than by form. This is something that happens around the world, and especially affects fast-growing Asian countries. Japan had to grapple with this, too, especially in the 1960s (see e.g. Steiner 1965).

An important issue in this discussion is municipal finance. Municipalities derive a substantial amount of their income from selling land plots to developers. This has led to a lot of land designated as urban and for construction. Scattered high-rise residential developments along the rail tracks and other transport nodes, without commensurate development of other urban facilities, are a result of this.

The proliferation of these often gated communities has led to an ever greater reliance on car-based transport. At the same time, the massive construction of living space has also meant a rapid increase and improvement in living space for China’s population. Poor urban dwellers in Africa and Latin America would certainly prefer an apartment in such a tower block over urban poverty.

China’s cities matter greatly for global environmental sustainability. Their (and India’s) future development will determine a large part of additional CO2 emissions. Will cities be car-centric and sprawling or will they be dense and traversable by public transport?

The development of subway lines and other forms of public transportation has truly been breathtaking. However, this battle will be fought in China’s secondary and tertiary cities which are more susceptible to sprawl, where resources are scarcer and economies of scale smaller, making car-based traffic much more appealing. The state of highway construction as well as urban planning guidelines suggest that China has opted for car-centric development for now but that it is recognized as a problem.

I wanted to get this draft out on the blog, but I realize much more work needs to be done to bring better order and structure into this. This could be a nice research project for an investor audience.

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