Incomplete urbanization roadmap

(China Daily)
Updated: 2010-08-02 14:15
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There is definite consensus that urbanization will fuel China's fast economic growth in coming years. However, if Chinese policymakers really want urbanization to become the principal growth engine, they must do more to enrich and empower those farmers who have emigrated to cities in search of better prospects.

A report by the Chinese Academy of Social Sciences has revealed that China's urban population touched 620 million last year, accounting for 46 percent of the country's total.

This urban sprawl is twice that of the population of the United States and one quarter more than the combined population of the 27 countries of the European Union. Moreover, it is projected to grow by 10 million a year in the next five years. This will certainly make China a largely urban-centric nation.

Given that Chinese farmers on average earn just one-third of what their urban cousins take home annually, it is easy to conclude that rapid urbanization will result in a substantial increase in the country's overall income levels, thereby incurring massive urban infrastructure investment.

For a country that is shifting from export dependence for growth, an increasing number of richer consumers and robust investment growth is definitely needed to sustain its long-term growth story.

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Nevertheless, such a growth prospect is far from certain if the country's widening wealth gap within cities is not properly addressed soon. Though most migrant workers are earning more in city jobs, they have made little progress in climbing the urban social ladder. This has been largely due to their general lack of equal access to many urban welfare resources.

The current pace of urbanization is only a reflection of the fact that millions of farmers are working at least six months a year in urban areas.

Only by reforming the country's rigid household registration system will migrant workers become equal and permanent members of urban society. And, that still seems quite a way off.