The Si Dao Kou area, which lies near the Da Zhong Si (大钟寺) subway station and alongside the third ring road, is one of the busiest areas in Beijing. Like so many hurly-burly scenes in China’s capital city, private cars blare their horns as they come and go, pedestrians walk with high-tech smartphones in hand, and fashionable shoppers emerge from luxury stores holding Gucci bags.
Several days ago, amidst the glitz in Si Dao Kou, a hutong, or traditional alleyway, was seemingly taken over by middle-aged or elder street vendors. Squatting by the roadside, they sold second-hand shoes, T-shirts, trousers, fans, and lamps. Between this roadside market and the busy main road nearby lies a grand shopping mall with a cinema attached to it, a mall that neither sellers nor buyers in the second-hand market can likely afford to patronize.
The changing face of China
This sight is not exceptional in Beijing. With China’s rapid urbanization, a huge number of rural poor have been forced from their homes after developers, in league with local governments, repossess their land. The compensation landowners receive is often inadequate, and they respond by moving into large cities to find work. But while large Chinese cities offer the prospect of gainful employment, they are often expensive, forcing migrant workers to live in urban slums.
Perhaps that is why a Reuters article from May 23 has garnered so much attention, both at home and abroad. The article reported that Chinese Premier Li Keqiang had rejected an urbanization proposal drafted by the National Development and Reform Commission (NDRC), a powerful policy-planning body. The proposal seeks to spend 40 trillion RMB (about US$6.5 trillion, almost the size of the entire annual output of the Chinese economy) to bring 400 million more people to Chinese cities over the next decade or so. Its aim is to stimulate China’s economy.
Some applaud the proposed stimulus, as well as top leaders’ evident determination to propel China’s urbanization, which has transformed the once-agricultural nation. Others are more cautious about the economic fallout from an easing grip on the real-estate sector, which many fear is a bubble. Still others warn that such urbanization plans might not be sustainable.
The NDRC denied the Reuters report the day after its release, stating that the urbanization plan has yet to be issued, and thus yet to be considered. Sources say that China’s top leaders fear another large scale of spending could increase already-heavy local debt and further inflate what increasingly appears to be a bubble in the nation’s real-estate market. The article nonetheless triggered a round of heated debate on urbanization in China’s mainstream and social media.
The consequences of urbanization
The process of urbanization in China began with China’s Reform and Opening policy, which officially launched in 1978. Since then, in the largest migration in human history, five hundred million Chinese have migrated to cities in the past three decades, a number larger than the combined population of the United States, the United Kingdom, France, and Italy. Last year, China’s total urban population rose to 52.6% of the total population, exceeding its rural population for the first time.
China’s economic growth and its urbanization go hand in hand. According to Mingpao Daily, statistics suggest that every 1% increase in China’s urbanization rate will bring about 10 billion RMB (about US$1.6 billion) of additional consumption and investment in infrastructure construction.
This figure appears to interest government leaders more than ordinary citizens. As a user on social-networking platform Weibo @red007 wrote: “The key question: Are the people being [urbanized] willing to be [urbanized,] or is it just the government’s wish? If it is the latter, the consequences [of urbanization] are terrible.” User @好时光音乐睡眠仪 wrote that urbanization “should be a natural process, but the Chinese authorities are used to transforming society without regard to reality; it is just crazy.”
Complaints about “unnatural” urbanization hit the problem on the nose. China is not only urbanizing its people, but also its land, including once-desolate areas such as Ordos in northern Inner Mongolia Autonomous Region, Hebi in central-east Henan Province, and Shiyan in central Hubei Province. These changes are not organic, but rather are ordered by authorities, meaning such areas often lack the infrastructure or amenities one would expect in a mature city. But the temptation for local governments to continue the practice is immense, given the huge profits that can be had from grabbing land from the hand of farmers, who are prohibited by law from selling their own land directly to developers.
And then there is the hukou, China’s vilified household registration system. The Mao-era policy binds the receipt of social benefits to one’s residence, meaning that urban migrants often receive different education, healthcare, housing, and pensions than city natives. In some cases, they even have trouble buying cars.
Did I say urbanization? I meant “townization”
The list of problems caused by urbanization is long, which explains why President Xi Jinping and Premier Li Keqiang have reframed the urbanization (cheng shi hua) question as “townization” (cheng zhen hua) and have made achieving “townization” one of this year’s priorities. While urbanization centers development on large and medium-sized cities, “townization” focuses on upgrading rural sites and advocates transferring the rural population to nearby towns instead of to more distant metropolises.
Yet, the change of wording has failed to clear the doubts of some Chinese netizens who regard the NDRC’s urbanization plans with suspicion. Weibo user @何翠云 mused:
The nature of so-called hukou reforms and ‘townization’ is a fair redistribution of wealth. … if the government does not alter its ruling style and corrupted officials do not correct their wrongdoings, what is left for ordinary people? Without the redistribution of profits, restrictions on the government’s power and the supervision of corruption, hukou and townization reforms will be doomed to failure.
Meanwhile, user @家兴不如国旺天下太平 darkly warned:
If the government forcefully pushes the urbanization trend, it could become a good chance for the government to raise money and make profits, but a disaster for the people. However, it will also be a catastrophe for the government in the long term. Do not take it for granted that if a government can be powerful enough to force its people to pay for all the bad results — the more the people pays, the more debts the government bears and debts will need to be paid sooner or later.
The comment was subsequently deleted.
The incumbent government is surely aware of the collateral damage from urbanization. Weibo user @刘主饪, a director at the Small and Medium Sized Cities Research Lab, defended the authorities’ motives, writing:
The purpose of neo-townization is to ease social conflicts and to cushion class conflicts that are caused by urbanization. Some governments misunderstood it as forced demolition…to which Beijing must put a stop.
And the economic benefits it has produced are indeed appealing. Yao Jingyuan, researcher at the Counselor’s Office of the State Council, regarded ongoing townization as a “pillar of China’s future economic growth” and “powerful in boosting domestic demand.”
With potential upside — and citizen skepticism — both high, China’s leaders and citizens can likely agree on this much: urbanization and “townization” appear at this point to be unstoppable trends. For them to succeed, careful management of the trends themselves, and the messaging that surrounds them, will be a necessity.