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China's challenge in tackling urbanisation woes

Publication Date : 04-08-2014

 

Once a backwater in China's often overlooked west, the city of Chongqing in the last two decades has been transformed into a sprawling metropolis where skyscrapers stretch endlessly along the Yangtze River.

Carved out of Sichuan province as a municipality in 1997, creating an area the size of Scotland, it now has a population of about 30 million, two-thirds of whom are farmers.

As of 2011, about a fifth of the urban centre's population of seven million are migrants from outside of Chongqing.

This influx of migrants has led to shantytowns and strains on the infrastructure, resulting in growing friction between permanent residents and migrants.

Chongqing native Wang Shiqun, 59, recalled having to wait four days before she was admitted to a hospital when running a high fever three years ago.

"We never had to worry about this in the past but the city's infrastructure hasn't kept up with its population," she said.

"Traffic has worsened, the trains are crowded and the competition for good high schools is now very intense."

Chinese policymakers, who want to raise the urban population from the current 54 per cent to 60 per cent by 2020, seem to agree that big cities are struggling to accommodate their ever-growing populations.

In March, they unveiled a new urbanisation plan aimed at curbing population growth in megacities like Beijing and Chongqing by diverting millions of migrant workers to smaller, inland cities.

This runs counter to the global trend of creating megacities, and has drawn mixed reviews from local and foreign experts and ordinary Chinese alike.

"Having small cities rather than mega ones might make sense from a management perspective but China cannot create too many because then they will be ineffective and inefficient," said urbanisation expert Karen Seto of Yale University in the United States.

For Liu Houming, 27, a Xi'an native who works at a state-owned firm in capital city Beijing, there is little appeal in moving to a small city: "It's more important to find a good job, and these are in big cities."


A new plan

According to the new blueprint for managing urbanisation, population growth for cities with more than five million people will be "strictly controlled".

The population of medium-sized cities of three million to five million will be "reasonably set", while controls will be eased in small cities of fewer than three million people.

Some experts, however, say this new emphasis on smaller cities is "counter-productive" as it does not capitalise on the synergies of big cities.

For one thing, most new jobs in the private sector are likely to be in big cities where economies of scale mean lower business costs.

"I'm not optimistic about the plan's success as migrants will continue flocking to large cities for jobs. The policy is counter-productive," said Professor Chan Kam Wing, an urbanisation expert with the University of Washington in the US.

Similarly, Professor Hu Xingdou, a specialist in migrant issues at the Beijing Institute of Technology, said farmers will be unwilling to give up their land for life in a small city as they see it as a negative trade-off.

"How is it a people-centred approach if you're still trying to push people to places they don't want to go? It should be medium and large cities that China should develop instead because these can sustain growth," he added.

Provinces like Shandong and Henan, for instance, have population sizes of about 100 million - just under Japan's - but lack a thriving city like Tokyo, he noted.

Not everyone is pessimistic about the new policy. Some experts say small cities can be a viable strategy for managing urbanisation if there is adequate socio-economic planning and good execution by local officials.

Paul Procee, the lead urban specialist at the World Bank, said how small cities are linked with the larger economy and the quality of services such as education is the critical issue.

"It's important not to focus on growth of small towns, but to create more attractive ones instead," he added. "People will move only if the basic quality of life is comparable to large cities."

Added Beijing-based social policy expert Yuan Xin: "Local governments need to attract industries by offering preferential policies and building up infrastructure to create economic activity that can generate new jobs."

This will allow China to avoid its previous failed urbanisation attempts that led to "ghost towns" in many small cities.

Legacy issues

China's challenge in managing its urbanisation woes is unique, not just for the size of its population of 1.3 billion, but also because of the hukou - or household registration - system that divides Chinese into urban and city dwellers.

The 56-year-old system, a legacy of China's command economy, was instituted to prevent farmers from moving to the cities where workers enjoyed privileges such as subsidised housing and free education.

While the system has been liberalised to allow farmers to move to cities to work, many of these migrant workers still hold rural hukou that shuts them out of the social safety net of the cities they work in.

Plans are now afoot to overhaul the system, with the government announcing last week that the classification of people as rural and urban residents will be phased out gradually.

A system of "residence permits" will also be introduced, allowing migrants access to public services and more equal treatment in the cities.

But with the reforms including exemptions for mega cities, migrants will still find it very difficult to be officially registered in cities like Beijing and Shanghai unless they meet certain criteria.

Chinese policymakers, however, think they can turn this intractable problem into a trump card in their efforts to persuade the country's roughly 245 million migrant workers to move to smaller cities.

The March urbanisation plan promised new city hukou for 100 million people over the next six years.

But most of these are likely to be given to migrants who agree to reside in cities like Jinjiang, a tiny coastal city of just two million people, where hukou restrictions have already been eased.

Jinjiang was allowed to relax its hukou policy in September 2012 as the first "test city" in Fujian province to introduce an open-door policy for migrant workers.

The lure of better access to 28 types of public services promised by the local government, such as education and health care, appeared to have worked: 9,000 migrants have since transferred their hukou to Jinjiang.

Among those who made the switch is Chen Xiufu, 50, a migrant worker who has worked and lived in Jinjiang for over a decade but had his rural hukou in south-western Sichuan's Mianyang city.

His decision in 2012 to switch his family's hukou to Jinjiang allowed his son to take a crucial university entrance exam in the city, saving the family an expensive trip back to Sichuan for the test.

Jiangxi native Luo Lianxiang, 24, who works at a tea house and has a resident's permit, is similarly pleased with the changes.

She moved to Jinjiang 10 months ago to be with her husband, and the migrant-friendly policies have now made it more likely that they will settle there.

Persuading these migrant workers to stay is critical for the local economy of Jinjiang, where a fifth of the world's sports shoes are made.

At Quanzhou Dexin Shoes, for instance, three out of four of its factory workers are migrants.

Having had to turn down orders due to a lack of workers in the past, its general manager Zeng Yuanjing welcomes the city's new open-door policies.

He is not worried about the strain on the city's coffers that migrants might cause.

"It is a virtuous circle. With more workers, we can fill more orders, pay more taxes and cover any added cost from having more migrants in the city," he said.

- See more at: http://www.stasiareport.com/the-big-story/asia-report/china/story/chinas-challenges-tackling-urbanisation-woes-20140804#sthash.gIujlOwu.dpuf

 

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