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As plows began streaming through the fields of Zhaojia Village in Shandong Province this April， Zhao Rui remained on the sidelines. His visage revealed a longing to join his parents and ease their workload， but he didn’t know how. Zhao left home seeking work in Guangdong when he was 18 and returned to the county seat at age 25 as a businessman specializing in steel recycling.
Zhao is one example of the millions of migrant workers who are kindling dramatic change in over 3，000 Chinese cities. The tide of urbanization has tipped the population balance between urban and rural areas， bringing unprecedented migration to cities.
Urbanization Benefits
Official statistics indicate that China’s urban population has reached 51.27 percent of the total. The country has witnessed dramatic economic progress thanks in large part to the efforts of a huge number of migrant workers. “Urbanization serves as one of the engines for China’s economic growth，” remarked Professor Zhou Qiren from the China Center for Economic Research of Peking University at the 1st Nobel Economists Summit of China （NESC）.
Urbanization has brought a higher concentration of essential production labor， while at the same time increasing demand for infrastructure investment， which in turn stimulates economic growth. As formerly poverty-stricken people gain better earning power， it also promotes more widespread consumption. Development in other parts of the world has demonstrated that one percent increase in urbanization will lead to two percent of growth in consumption.
Zhao Rui has seen the economic benefits of urbanization firsthand. His parents work the fields year-round but earn only a few thousand yuan for their efforts， while he brings home over 2，000 yuan a month by working in the city. And yet earning power still isn’t his top motivation. “My daughter will grow up in a city， which offers her a promising future， much better than mine！” Like so many economic climbers before him， Zhao understands that benefits to the next generation increase exponentially.
It’s time for China to examine its urbanization model and look towards a mode of “human urbanization” rather than“land urbanization.”
Urbanization Problems
Given the overwhelming advantages of urbanization， Chinese governments at all levels have consciously pushed the urbanization drive forward. However， some have simply pursued large-scale urban expansion regardless of actual demand. Aimlessly expanding occupied land often results in a massive waste of precious resources. “The nature of urbanization lies in scale，” explains Zhang Ping， deputy director of the Institute of Economics， Chinese Academy of Sciences. “The core of scale is decided by population density – crucial for the development of the service industry and key to consumption growth. Unfortunately， China’s pace of land urbanization over the last few years has far exceeded urban population growth.”
Zhao Rui understands the situation due to his own experience. Although he has settled in Xintai County， he is still classified as a “farmer” because he cannot get permanent urban residency， which effectively cuts him off from the social security and public welfare that urban residents enjoy. “My daughter is three years old， but she can’t go to school here due to our residency status，” Zhao illustrates. “We also can’t enjoy other welfare such as medical insurance and old-age pensions. The only way for us to survive after retirement is to work extremely hard today and save money for the future.”
“How can China’s 200 million migrant workers consume without welfare guarantees？” asked Economist Gu Shengzu at NESC. “Boosting domestic demand and stimulating consumption through urbanization is nothing but empty talk. It’s time for China to examine its urbanization model and look towards a mode of ‘human urbanization’ rather than ‘land urbanization.’”
New Urbanization
The new generation of Chinese leaders has already become aware of the problems of urbanization and proposed the concept of “new urbanization，” which focuses on farmers， integration of urban and rural infrastructure， and equal access to public services. Reform of the household registration system is an inevitable step in China’s future urbanization. Economist Gu Shengzu expressed his opinion at the 1st NESC： “The current system has not only classified urban and rural residents but also served as the basis for distributing public resources.” Gu urged reform under the principle of differentiated paths for different demographics. This plan is intended to preferentially transform the floating population with stable residency and income into urban residents， placing emphasis on permanently settling the new generation of migrant workers while requiring county seats and central townships to accept farmers with open arms.
Another matter is addressing specific problems that have emerged in public services， including housing， employment， education， medical treatment and public health， insurance， subsidies and unemployment compensation for the low-income group.
“Today， with bubble bursts following growth， it is extremely urgent for us to look for new drivers of economic progress，” Gu Shengzu asserted. “When we get it right， new urbanization will bring huge benefits to our future economic development and serve as the greatest engine for promoting domestic demand.”
Zhao is one example of the millions of migrant workers who are kindling dramatic change in over 3，000 Chinese cities. The tide of urbanization has tipped the population balance between urban and rural areas， bringing unprecedented migration to cities.
Urbanization Benefits
Official statistics indicate that China’s urban population has reached 51.27 percent of the total. The country has witnessed dramatic economic progress thanks in large part to the efforts of a huge number of migrant workers. “Urbanization serves as one of the engines for China’s economic growth，” remarked Professor Zhou Qiren from the China Center for Economic Research of Peking University at the 1st Nobel Economists Summit of China （NESC）.
Urbanization has brought a higher concentration of essential production labor， while at the same time increasing demand for infrastructure investment， which in turn stimulates economic growth. As formerly poverty-stricken people gain better earning power， it also promotes more widespread consumption. Development in other parts of the world has demonstrated that one percent increase in urbanization will lead to two percent of growth in consumption.
Zhao Rui has seen the economic benefits of urbanization firsthand. His parents work the fields year-round but earn only a few thousand yuan for their efforts， while he brings home over 2，000 yuan a month by working in the city. And yet earning power still isn’t his top motivation. “My daughter will grow up in a city， which offers her a promising future， much better than mine！” Like so many economic climbers before him， Zhao understands that benefits to the next generation increase exponentially.
It’s time for China to examine its urbanization model and look towards a mode of “human urbanization” rather than“land urbanization.”
Urbanization Problems
Given the overwhelming advantages of urbanization， Chinese governments at all levels have consciously pushed the urbanization drive forward. However， some have simply pursued large-scale urban expansion regardless of actual demand. Aimlessly expanding occupied land often results in a massive waste of precious resources. “The nature of urbanization lies in scale，” explains Zhang Ping， deputy director of the Institute of Economics， Chinese Academy of Sciences. “The core of scale is decided by population density – crucial for the development of the service industry and key to consumption growth. Unfortunately， China’s pace of land urbanization over the last few years has far exceeded urban population growth.”
Zhao Rui understands the situation due to his own experience. Although he has settled in Xintai County， he is still classified as a “farmer” because he cannot get permanent urban residency， which effectively cuts him off from the social security and public welfare that urban residents enjoy. “My daughter is three years old， but she can’t go to school here due to our residency status，” Zhao illustrates. “We also can’t enjoy other welfare such as medical insurance and old-age pensions. The only way for us to survive after retirement is to work extremely hard today and save money for the future.”
“How can China’s 200 million migrant workers consume without welfare guarantees？” asked Economist Gu Shengzu at NESC. “Boosting domestic demand and stimulating consumption through urbanization is nothing but empty talk. It’s time for China to examine its urbanization model and look towards a mode of ‘human urbanization’ rather than ‘land urbanization.’”
New Urbanization
The new generation of Chinese leaders has already become aware of the problems of urbanization and proposed the concept of “new urbanization，” which focuses on farmers， integration of urban and rural infrastructure， and equal access to public services. Reform of the household registration system is an inevitable step in China’s future urbanization. Economist Gu Shengzu expressed his opinion at the 1st NESC： “The current system has not only classified urban and rural residents but also served as the basis for distributing public resources.” Gu urged reform under the principle of differentiated paths for different demographics. This plan is intended to preferentially transform the floating population with stable residency and income into urban residents， placing emphasis on permanently settling the new generation of migrant workers while requiring county seats and central townships to accept farmers with open arms.
Another matter is addressing specific problems that have emerged in public services， including housing， employment， education， medical treatment and public health， insurance， subsidies and unemployment compensation for the low-income group.
“Today， with bubble bursts following growth， it is extremely urgent for us to look for new drivers of economic progress，” Gu Shengzu asserted. “When we get it right， new urbanization will bring huge benefits to our future economic development and serve as the greatest engine for promoting domestic demand.”