From quantity to quality

Urbanization is the inevitable path to modernization. All developed countries in the world have completed their urbanization drive. China has entered a new development phase of building a modern socialist country in all respects. In this phase, promoting high-quality urbanization is crucial to foster a new development paradigm, and is also essential to realizing rural vitalization and common prosperity.

China's urbanization process started right after the founding of the People's Republic of China. In the early period, from 1949 to 1978, the country's urbanization rate increased from just 10.64 percent to 17.92 percent. The process accelerated after the launch of the reform and opening-up policy, especially since the mid and late 1990s. From 1996 to 2020, the urbanization rate soared from 30.48 percent to 63.89 percent.

The process is not complete yet. China's urbanization rate is still 10 to 20 percentage points lower than in major developed countries, and the growth pace is expected to slow in the coming years, going by new demographic distribution and population migration trends.

Historically, whenever a country's urbanization rate reaches 60 to 70 percent, deceleration sets in. As China's urbanization rate hit 63.89 percent in 2020, a slowdown is highly likely in the near future.

Urbanization, in essence, is the result of human migration. The growth of China's migrant population has been on the decline in recent years since peaking in 2013.

In 2020, the migrant population dropped by 4.66 million from the year before. Although those moving from the rural areas to the cities and towns still form a majority of the migrant population, their proportion is declining, while the relocation of people among cities has been growing.

Major cities play a leading role in driving urbanization, but their capacity to absorb the migrant population is weakening. In recent years, the population growth in China's metropolises has been slowing down. In 2020, the country had 11 cities with a population of over 10 million, and their total population numbered 183 million, an increase of 44 percent from 2010.

However, the growth rate has declined by 6.2 percentage points compared with the previous decade. For example, Beijing has seen consecutive negative population growth since 2017, while Shanghai's number of residents has barely risen. According to national censuses, 40 cities witnessed population contraction from 2010 to 2020.

The willingness of rural people to settle in the cities is also decreasing. The transfer of the agricultural population is the key driving force of urbanization. Findings of some surveys indicate that less than 30 percent of rural people polled are willing to settle down in the cities. The large cities where most of the migrant populations are concentrated impose high thresholds for obtaining permanent residence permits, while the smaller cities and towns which have eliminated restrictions for settlement are less attractive to migrant people.

Besides, the expansion of urban areas has slowed since 2010. During the period from 2010 to 2019, newly urbanized areas grew by 0.67 percent annually, much lower than the 5.1 percent registered from 2000 to 2010.

Based on the above-mentioned analysis, China's urbanization rate is expected to rise from 64 percent in 2020 to 75 percent in 2035, but the growth speed will gradually drop. During the 14th Five-Year Plan period (2021-25), the growth of the urbanization rate will be 1.03 percent annually on average, 0.32 percentage points lower than that during the 13th Five-Year Plan period (2016-20). And the number is projected to be 0.83 percent from 2025 to 2030 and 0.63 percent from 2030 to 2035.

After that, the urban population is expected to plateau at around 75 to 80 percent.

The slowdown of urbanization is not a worrying phenomenon in itself. Rather, it should be viewed as a result of improved livelihoods and economic development. In the drive for modernization, more attention should be paid to improving the quality of urbanization. Currently, China's urbanization process has many problems, including high thresholds for obtaining permanent residency in big cities, huge disparity in basic public services between rural areas and urban areas, and other obstacles preventing the migrant population from integrating into urban life.

To ensure high-quality urbanization, efforts need to be made to promote the transfer of the agricultural population to cities by accelerating the elimination of restrictions on acquiring permanent residence, and granting migrants equal access to basic public services. It is also imperative to optimize the urban layout, expand the clusters of big cities, improve urban public services and infrastructure, and remove the barriers hindering the flows of people and factors inside and among clusters of cities. Besides, to accelerate the institutional reform for rural-urban integration, the authorities should protect the property rights of migrants in their rural hometowns and allow them to enjoy the benefits from property transactions, and increase the transfer payments from central and provincial governments to localities with large numbers of migrants.

The author is an associate researcher of the Institute of Population and Labor Economics at the Chinese Academy of Social Sciences. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn