Urbanization in China

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China presses on with plans to move its economy away from exports and investment to a model based on services and domestic consumption.

For the state, urbanization will encourage this shift.

From 2010 to 2025, it is estimated that 300 million Chinese now living in rural areas will move into cities. Beijing ultimately aims to integrate 70% of China’s population, about 900 million people, into cities by 2025.

The Chinese Communist Party's belief in progress is on full display in its proclamations on urbanization. Yet, the Chinese model of urbanization causes several problems.

Farmers in China have no property rights. Officials are able to grab agricultural land on the peripheries of urban areas and make money for themselves and their cities by selling it to developers. This has led to dystopian planned settlements and forests of empty high-rise office and residential buildings around many cities.

China’s cities are now largely made up of two classes: a property-owning middle class which takes holidays in Europe and a migrant underclass which toils in factories and menial jobs but is denied public services because its household registration (hukou) is still in the countryside.

The plan to ease hukou requirements in small- and medium-sized cities while maintaining tight population controls in economically dynamic cities with populations over five million will probably do nothing to tackle class inequality.

Beijing attempts to stabilize a new class structure, which before long will be legitimated by invisible market forces rather than the all-too-visible hukou cudgel.