Monday, May 29, 2017, 11:50 AM CST – China

Politics

Urbanization

Pushing The Limit

In its search for a new development model, China’s urban planners have moved to place boundaries on city expansion

In the last few decades, China’s rapid economic growth has been accompanied by an unprecedented rate of urbanization. Between 1978 and 2014, China’s urban population increased from 170 million to 750 million. In 1978, 17.9 percent of China’s population lived in the country's cities. In 2014, this number had increased to 54.8 percent. It is estimated that by 2020, more than 60 percent of China’s citizens will live in urban areas.

While rapid urbanization has helped China lift millions out of poverty, rapid urban expansion, in tandem with an export- and investment-led development model, is now being blamed for some of the country's most pressing problems, such as environmental degradation, dwindling agricultural land resources and social unrest resulting from the forced appropriation of land by local governments.

While China’s urbanization rate is impressive, the construction rate in many Chinese cities has managed to outstrip even the exponential growth in the urban population. For example, between 2000 and 2010, the average size of China’s cities increased by 64 percent, far more than the 46 percent increase in urban population officially documented in the same period.

It is estimated that municipal governments in more than 100 Chinese cities have aspired to develop their cities into what are often referred to as “international metropolises,” and more than 400 cities are enacting plans to establish new districts.

As the Chinese government released its “Made in China 2025” strategy – a public search for an alternative and more sustainable development model – the fact that Chinese cities have been expanding at what most experts agree is an unsustainable rate has become a focal point of China’s urban development policy.

Compulsory

 In July 2014, the China Ministry of Land and Resources (MLR) and the China Ministry of Housing and Urban-Rural Development (MOHURD) announced that they will jointly conduct a “pilot” program to delineate the “boundaries” of China’s urban expansion.

More recently, in June 2015, Zhang Xiaoling, assistant to the president of the Land Surveying and Planning Institute under the MLR, told the Guangdong-based Southern Metropolis Daily that both the MLR and the MOHURD have selected 14 cities, including some of China’s largest such as Shanghai, Beijing, Guangzhou and Shenzhen, to be included in phase one of the pilot program. According to Zhang, urban development boundaries for these cities will be drawn up within the year. He added that, unlike guidelines on urban development previously released by the government, these boundaries, once set, will be “compulsory.”

Moreover, according to Dong Zuoji, director of the MLR’s land planning department, similar urban expansion boundaries will eventually be imposed upon more than 600 cities across China.

While officials claim that boundaries for emerging cities will change over time, those set for already large conurbations will be much more strictly enforced. According to a decree released in 2014 on “new-type urbanization” by the State Council, China’s cabinet, the government will tightly restrict the development of megacities, which have a population of more than five million people while allowing cities with smaller populations to continue to expand “at a reasonable speed.”

So far, it is estimated that 88 Chinese cities fall into the government’s “megacity” category, 13 of which have a population in excess of 10 million. 215 Chinese cities have official populations calculated as being between one and five million.

According to Zhang Xiaoling, while the central government will impose some kind of “permanent” boundary for megacities, “dynamic” boundaries will have to be set up for smaller cities that are still developing. “For example, we could set up a boundary for 2020, then another boundary for 2030,” said Zhang.

“The key is to limit the size of relevant cities and to prevent blind expansion,” he added.

Food Security

At a press conference held in late June, Hu Cunzhi, vice-minister of the MLR, told reporters that his ministry will establish an appraisal mechanism aimed at increasing the efficiency of land use in China's newly established urban districts. Hu said that the overarching goal is to reduce by 30 percent the amount of land required to produce US$1 of economic output, increase urban capacity by 10 to 30 percent, and increase construction density by 5 to 8 percent.

A major objective behind limiting urban expansion is to ensure China’s food security by safeguarding the country’s dwindling arable land resources against further urban encroachment.

Ensuring food security has long been one of China’s core strategic priorities. For decades, the Chinese government has claimed that 1.8 billion mu (about 300 million acres) of farmland are needed as a “bottom line” underscoring long-term food security at the national level.

According to official data, China’s total arable land reserves fell by 124 million mu (24 million acres) between 1996 and 2006. It is estimated that, by the end of 2010, the total land area still occupied by arable land was 1.83 billion mu (301 million acres), a figure barely above the “red line” set by the central government. Many experts even suspect that the actual figure has already fallen below the government’s “red line,” given the existence of massive illegal and unreported land appropriation operations in some localities.

In addition to its efforts to more firmly delineate city boundaries, the MLR is also working with the Ministry of Agriculture to assess the quality and total area of farmland surrounding 106 major cities. Based on their assessment, high-yielding farmland will be permanently included in China’s “fundamental farmland” strategic reserve, making it off-limits to developers.

It is argued that by limiting urban expansion, local governments will be compelled to change wasteful policies and practices. Rather than relying on enhancing urban sprawl to further enhance economic growth, city officials will have to focus on increasing the efficiency of urban land use.

Government vs. Market

However, although few dispute the problems underlying and resulting from China’s rapid urbanization, many are concerned about the wisdom of this proposed State-led approach to tackle them.

For many observers, the government’s plan may in fact exacerbate several existing problems associated with urbanization. For example, housing prices, already way beyond the means of most residents in major cities such as Beijing and Shanghai, could rise even further as the expansion of urban residential areas is capped. The fact that the cities with the most expensive housing will be subject to the strictest controls on further expansion have further fueled such concerns.

Moreover, with an ever-growing income gap between China’s urban and rural communities, experts are concerned that an even clearer boundary between urban and rural areas will further entrench this income disparity, possibly exacerbating already palpable social tensions between town and country.

For others, a more fundamental flaw in the plan is its State-driven approach, which economists have criticized as adhering too closely to the principles of planned economy, in effect making it a regressive move at a time when China is supposed to be pushing reform.

Cai Yuanming, an economist at Tsinghua University, argued in a commentary published in Guangming Daily that redistribution of land, one of China’s most important economic resources, should be conducted through market-based mechanisms, rather than made subject to the discretion of the government’s economic planners.

To a large extent, the fundamental reason behind China’s extensive and largely inefficient process of urbanization is the government’s ability to obtain rural land at an arbitrarily low price through appropriation. The increasing income disparity between rural and urban residents can also tempt rural villages, desperate for prosperity, to sell their land to unscrupulous developers.

According to Cai, to protect agricultural land resources, the government should focus on establishing a fair land market where farmers’ ownership rights are well-protected. He has also argued that the government should address the problem of market failures through agricultural subsidies and revenue redistribution to rural communities, measures which can, in his view, encourage the development of agriculture, and are preferable to imposing “compulsory” boundaries on cities.

“As long as farming remains an unprofitable business, and the revenue of local governments in rural regions remains far behind that of [those in] urban areas, farmland protection will not be a rational choice for local governments,” commented Cai.

Without addressing these fundamental problems, the central government’s plan to set up city boundaries may simply lead to a repeat of the previous failure of similar schemes. Zhang Shaoqin, head of Shanghai’s City Planning and Land Resources Bureau, recently admitted that the expansion of the Shanghai metropolitan area has already reached a proposed 2020 limit set down in a development guideline previously approved by the State Council.

Many are concerned that lines on a map will not be able to stop those charged with ensuring the continued prosperity of China’s ever-growing urban centers, nor can they help overhaul China’s overall development model. 

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