People-oriented urbanization

Urbanization will be a main engine for sustainable economic development in China, and urbanization will also promote the restructuring of China’s economy, as it boosts consumption, investment and development of the service sector. The apparent gap between China’s current urbanization rate of slightly above 50 percent and nearly 80 percent rate of developed countries means China still has great potential for growth in investment and consumption as more rural residents become urban residents in the next 10 to 20 years.

However, the system for distributing fiscal resources from the central to local governments is too rigid to help promote the country’s urbanization. The governance capability in cities also lags behind the current urbanization trend, with city governments usually attaching more importance to infrastructure construction than to integrating new residents.

Given the obvious development gaps among different regions, it is unrealistic for them to apply the same strategies to boost urbanization. But many of them do so in practice. And for farmers to become urban residents takes much more than simply moving them, sometimes unwillingly, from their villages to apartment buildings built on the villagers’ land. This kind of fake urbanization only raises the urbanization rate on paper and it can never be an engine driving sustainable development and urbanization.

Farmers’ property rights of land must be protected and they should be entitled to urban residents’ welfare, especially the opportunities of education and training to ensure they can earn a living when no longer farming.

Providing migrant workers with their overdue citizen welfare entails huge government financial inputs. The central government needs to set aside more funds for local governments to support urbanization, or allow city governments to come up with new legal and reliable sources of revenue so they can cater to both their existing and new residents.