In an excellent article, Bloomberg highlights a glaring contradiction in China’s recent “New Urbanization” plan. The plan calls for a number of wide-ranging reforms in land reform, labor migration policy, urban planning and local government finance in order to fuel another decade of economic growth, in a more sustainable way.
But at the same time, the plan continues a long standing national policy of trying to steer growth away from the megacities of Beijing, Shanghai and the Pearl River delta in favor of small and medium-sized cities. It’s an understandable impulse – it seems natural to want to spread growth around the country, and boosting smaller cities would pull some of the pressure off the housing, transport and environmental pressures the big cities are fighting.
But it’s a mistake. The reason people are still flocking to the big cities in spite of those problems is that’s where the opportunity is. China’s (and every nation’s) biggest cities are also the disproportionate drivers of growth and innovation. The World Bank/State Council Development Research Center report behind the New Urbanization plan concluded that China was giving up significant economic growth by limiting the size of big cities. And while big cities’ environmental challenges are equally big, it’s much easier and more efficient to deal with them in concentrated form than spread all over the country. Beijing, Shanghai, Guangzhou and Shenzhen are enormous – but comparing China to other nations, you would expect them to be even bigger. There is a strong suspicion that an important reason why China’s leaders still try to channel urbanization to smaller cities is the tremendous sums that have been spent there on new urban districts that need residents and commercial tenants.
The examples of Tokyo and Seoul show that huge, very dense cities can still support a very high quality of life and environment. Instead of trying to cap its big cities, the State Council should be leading the effort to improve them.
I discuss these same issues at greater length (and, I hope, depth) in an upcoming article in Planning Magazine.