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Yao Yang: The Two Critical Points of Urbanization in China

2013-12-18

Where will China’s urbanization go? What kind of measures will the 18th Third Plenary advise?

On November 4, 2013, on the “Heavenly Province Summit Forum” held in Chengdu, President of the NSD Yao Yang, based on analyses of global urbanization trends and the natural resources of China’s various regions, proposes his two suggestions for China’s urbanization.

Yao Yang points out: “China’s path to urbanization is inseparable from the global process of urbanization, which involves concentrated migration into cities, ultimately forming large scale urban agglomerates. Many of the sporadic efforts at urbanization around China today are impractical; ultimately we must revert to the path of having larger cities drive the development of smaller cities.”

Although there is no optimal scale, this is not to say there are absolutely no rules to urbanization. Yao Yang expresses, “Although there is no optimal scale for any city, there may exist an optimal region for urbanization.” People across the nation will continue to move into many regions, but not all will congregate in large cities. Some will disperse into neighboring urban districts; in other words, there exists an overall trend of both city-bound migration and urban sprawl.

Looking overseas, there is clear evidence of regionalized urbanization. The United States’ urbanized regions primarily consist of the Northeast, the Great Lakes, the South and the Pacific Coast. The central region is generally very sparsely populated. Japan has very high population density, yet it also displays obvious concentration, particularly in the Kanto and Kansai regions, taking up a 40%-50% of the total population. Federalist Germany is no exception.

Returning to the question of domestic urbanization, as Yao Yang points out, China’s population will, in the course of China’s urbanization, converge in the following regions: aside from the already well-developed Pearl River Delta, Yangtze River Delta, and Bohai Region, Yao Yang is also optimistic about the Yangtze region surrounding Wuhan, with its substantially sized surrounding population and plentiful water resources.

The NSD’s Sichuan and Chongqing MBA/EMBA school alumni, as well as listeners at the Heavenly Province Summit were concerned with the future of urbanization in the Sichuan Basin. Regarding this, Yao Yang says Chengdu has seen a lot of change in the past few years, with its unique water resource and industrial advantages. The key to the future is how to transform Sichuan from a major population exporter into a major population importer. Yao Yang mentions that on his recent trip to Chengdu he met many masters and doctorate students as well as MBA/EMBA alumni from the NSD, which he says is a sign of a reflux of human talent into Chengdu and bodes well for the development of urban agglomerates.

In regards to Chengdu’s development, Yao Yang also suggests Chengdu cooperate with Chongqing and its surrounding cities. This touches upon the second problem of China’s urbanization, and that is shifting the emphasis on each city, catering to their unique characteristics and paying attention to the division of labor between large, medium, and small cities within the agglomerate.

Yao Yang expresses, urbanization will first target those agglomerates which are ready. The role of these agglomerates, in turn, is to appropriately handle its division of labor. For example, the megalopolises Beijing and Shanghai should concentrate on developing their high-end services industry, middle-tier cities should develop their high-end manufacturing industries, while mid-sized to smaller cities should focus on their agricultural and low-end services industries.

As for the current situation, the Pearl River Delta and Yangtze River Delta regions have already set up a good system of city labor division. However, the Beijing-Tianjin-Tangshan region has limited its development to a Beijing-centered outward dispersion. This sort of urbanization is unconducive to the development of urban agglomerations as well as the coordination of labor division.