China’s strategies towards an efficient, inclusive and sustainable urbanisation

China has currently more than 100 urban agglomerations that exceed one million in population and this is likely to increase to 140 urban centres by the year 2025. Given the sheer dimension of its population and the continuous urbanisation, China’s government is seeking a more organised and sustainable urbanisation process by enforcing some major strategic reforms.

The reform areas were identified in 2014 by a joint research group from the World Bank and the Development Research Centre of China’s State Council. They are a) improving policies on land properties, b) providing better mobility and access to social services by reforming the hukou – residential registration system, c) adjusting the fiscal and financial system d) restructure the urban planning and e) responding the environmental problems.

Reforming land management and institutions

In the light of heavy urbanisation in the last 30 years, the expansion to the rural land has become inevitable which leads to a noticeable scarcity of farmland. Rural land conversion potentially has implications for China’s food security. In fact, the report indicates that the amount of farmland available is close to the “red line” as only 120 million hectares [1] are left – the minimum necessary to ensure the food security for the vast country.

An optimization of urban land use will require stronger property rights for farmers. The protection depends to a large extend on local governance and control. Therefore, legal limits and mechanisms need to be reset for the local governments if they want to take rural land for public purposes. In case of land requisition by the local government which causes relocations of farmers, a higher compensation or market driven pricing must be offered to the farmers, providing a good and sufficient start of a new life in the city as many of them have never experienced the city life before.

Reforming hukou, social services and labour market institutions

Hukou is the household registration system in China. Having a hukou in urban cities means having access to the social and public services. However, the major metropolises in China have made it very difficult for the migrants from the country sides to obtain such a registration. This has become the main obstacle for millions of migrants who work hard but often need to live in harsh circumstances. The limited access to the social and public services made it difficult to raise a family in the cities, since without the hukou registration they do not have the right of free education for their kids.

Therefore, adjusting the hukou household registration system is inevitable – on the one hand to increase the labour mobility, providing urban migrant workers equal access to a general standard of public services; on the other hand, to follow the actual process of the migration influx which is important to guarantee the housing supply in urban areas.

Reforming urban finance

China’s shift to an innovative and modern economy in the next decades will require an amendment of the financing system. The challenge for the adjustment is to address the existing weaknesses in the system, from an overall central-driven to a more sharing revenue system. A reasonable sharing system should enable the local governments to generate resources and incentives in order to meet expenditures, for example, for the public services to all residents. In other words, fostering financial disciplines among local governments will become crucial for the reform.

Moreover, China is promoting the involvement of the private sectors in broader urban development. They could play a larger role in financing and delivering infrastructure and other public services.

The fiscal system will need to encourage people and enterprises to move to the places where they are most productive, not to where they get the best tax or land deal from a local government. [2]

Reforming urban planning and design

The new approach of the urban planning in Chinese cities is to move from superblocks to smaller plots with a structured connectivity. Reducing the size of blocks would help create more vibrant urban environments such as offering small enterprises to have their business in the neighbourhood. The wish for community-based living environment is not new. In fact, Peter Calthorpe, an urban designer who has made extensive research on urbanisation process in China points out in a TED video:

The history, of course, of Chinese cities is robust. It’s like any other place. Community was all about small, local shops and local services and walking, interacting with your neighbours. It may sound utopian, but it’s not. It’s actually what people really want.[3]

Besides, the connectivity among urban cities initially will incite a better and convenient public infrastructure among them, which encourages better management of congestion and pollution. So far, the public infrastructure in major cities has failed to provide door-to-door trips although these agglomerations have benefited from major investments in metros, bus rapid transit and bus systems [4]. The inconvenience is caused by poor physical and service integration, as for instance described as below:

“…the excessive transfer distances, mismatched schedules, separate ticketing systems, or lack of easily accessible transfer facilities…these problems are caused mostly by institutional fragmentation at the city level, where different agencies are responsible for each different aspect of urban transportation (metros, buses, road construction, traffic management, land use).” [4]

Managing environmental pressures

No other modern cities rely on coal for their energy supply as much as cities in China do. Therefore, reducing its use is one of the major urban energy strategies of China. There have been discussions on applying cleaner natural gas as a viable alternative to coal production. However, the problem of China’s air pollution is multifaceted, caused by the growth in private car use, the production of heavy industries, the ignorance of environmental standards and the lack of a functional controlling system.

As a matter of fact, China does already have strict environmental regulations. The challenge is to enforce the standards and laws in concrete measures, such as increasing fees or modifying taxes and trading systems for carbon, air, energy and water pollution. For example, in order to reduce the use of polluting vehicles, China is going to scale up the registration parking fees and the costs for the fuel. In the longer term, the traffic management needs to be improved towards a sustainable and low-emission public transportation in order to encourage residents going green. The report indicates that:

Over time, establishing efficient mechanisms for regulating, metering, and financing distributed power generation from renewable sources and natural gas distribution will promote their use. [5]

By implementing all these reforms, China hopes to direct the urbanisation process to an efficient, inclusive and sustainable future.

References

[1] The World Bank and Development Research Centre of the State Council, The People’s Republic of China, (2014). Urban China – Toward Efficient, Inclusive, and Sustainable Urbanization. [ebook] Washington DC: World Bank Group. Available at: https://openknowledge.worldbank.org/handle/10986/18865. P. 27
[2] The World Bank and Development Research Centre of the State Council, The People’s Republic of China, (2014). Urban China – Toward Efficient, Inclusive, and Sustainable Urbanization. [ebook] Washington DC: World Bank Group. Available at: https://openknowledge.worldbank.org/handle/10986/18865. P. 54
[3] https://www.ted.com/talks/peter_calthorpe_7_principles_for_building_better_cities/transcript
[4] The World Bank and Development Research Centre of the State Council, The People’s Republic of China, (2014). Urban China – Toward Efficient, Inclusive, and Sustainable Urbanization. [ebook] Washington DC: World Bank Group. Available at: https://openknowledge.worldbank.org/handle/10986/18865. P. 154
[5] The World Bank and Development Research Centre of the State Council, The People’s Republic of China, (2014). Urban China – Toward Efficient, Inclusive, and Sustainable Urbanization. [ebook] Washington DC: World Bank Group. Available at: https://openknowledge.worldbank.org/handle/10986/18865. P. 66

Keywords

Urban agglomeration, China, Hukou registration system, urbanization, Chinese metropolises, incentives, inclusive urbanisation, nonmotorized public transportation, trading system