Ambitious urbanisation efforts draw to a close for most areas

Flow of domestic migrants in China is moving in the direction of the Greater Bay Area, Yangtze River Delta and handful of economic hubs

Over the past few weeks, most local governments across China published residents’ data for 2023 that revealed new trends in domestic migrant flows.

As of yesterday, 29 of the mainland’s 31 provinces, municipalities and autonomous regions – except northeastern Heilongjiang province and Tibet – had reported such data, which showed a decline in population size at two-thirds of local administrations.

While the National Bureau of Statistics had already reported a 2.08 million decrease in the nation’s population last year, the residents’ data released by local government authorities indicated that the impact of such a decline was unevenly distributed.

The overall pace of urbanisation across the country also accelerated. The mainland’s urban population rose by 12 million last year, nearly double the 6.5 million increase recorded in 2022. Still, urbanisation in various local administrations appeared to have ceased.

When Beijing ended the country’s draconian zero-Covid-19 policy, many migrant workers returned to the major cities to seek jobs not available in rural areas

That resulted in the population of Shanghai, for example, growing by 115,600 last year after posting a 135,400 fall in 2022. The population of Beijing recorded a modest 15,000 gain last year, which reversed six consecutive years of decline.

It showed how the so-called Matthew effect – in which prosperity grows in advanced urban centres, while poverty increases outside them – appears on the mainland. Migrant workers favour the country’s coastal cities and local economic hubs, where job prospects, wages and public services are better compared to those in economically disadvantaged smaller cities and towns that struggle with a shrinking and ageing local population.

Yet in spite of the return of migrant workers to big cities, China’s urban population has recorded a smaller annual increase compared to the 2009-18 period when the major cities recorded at least 20 million new urban residents each year.

Some of these smaller cities are going the extra mile to become more relevant to young Chinese consumers. Harbin, provincial capital of Heilongjiang, mobilised resources to win back domestic and foreign tourists as a winter break destination. Tianshui, the second-largest city in northwestern Gansu province, has widely promoted its spicy hotpot in social media.

A second-tier industrial town in eastern Shandong province, Zibo, has tried hard to sell itself as the nation’s “outdoor barbecue capital”.

Those marketing efforts, however, could not overcome the harsh reality of domestic migration. Shandong, for example, saw its population shrink by 400,000 last year because of outflows, the second-largest decrease among all mainland provinces.

The populations of leading coastal provinces, meanwhile, have risen primarily because of migrants. Eastern Zhejiang province, known for its vibrant private economy and e-commerce supply chains, saw its population grow by 500,000 in 2023.

Local residents of Guangdong province, who are defined as those who have stayed there for more than six months, increased by 490,000 last year. Its population prospects are particularly bright because it has one of the highest fertility rates in the country.

Local economic hubs have also been absorbing more people at the expense of neighbouring cities. Central Henan province, for example, recorded an overall population decrease of 570,000 in 2023, the steepest decline among all provinces. Yet its provincial capital of Zhengzhou, home to the world’s largest iPhone manufacturing facility, gained 180,000 new residents in the same period.

The population of southwestern Sichuan province fell by 60,000 in 2023, but its capital of Chengdu reported 135,000 new local residents in the same period.

The data shows the flow of domestic migrants is increasingly moving in the direction of the Greater Bay Area, the Yangtze River Delta and a handful of local economic hubs. This also means that urbanisation efforts in the great majority of cities and towns are probably over.

Harbin mobilised resources to win back domestic and foreign tourists as a winter break destination