Focus on urbanization, Shanghai FTA

Many local governments also wish that the central government will grant them preferential policies to develop some kind of special economic zone.

For example, Hainan province was granted the right to be a duty-free zone. But local governments should think carefully before they submit their applications: do they really have the condition for such zones?

Gao Guoli, deputy director of the Research Institute of Territorial Development and Regional Economics under the National Development and Reform Commission

A1 The central government and local governments are divided on this point. The central government hopes to change from the old style urbanization, which is characterized by high energy consumption and high pollution, to one putting people first. But given the current fiscal system and performance evaluation system, local officials still focus on establishing new towns or industrial parks to attract new city dwellers, without paying sufficient attention to support facilities and public services.

A certain degree of extension of both residential and commercial property is inevitable during urbanization, but it must be built in line with actual demand. Some empty new towns or so-called "ghost towns" were built in recent years, raising concerns that the urbanization of people has lagged behind the urbanization of land.

Expansion of the real estate sector shouldn't be set as a purpose of urbanization, otherwise, it may worsen local debt risks and trigger a new round of bad loans.

A2 Urbanization must be promoted in line with local conditions and bolstered by industrial development. Small and medium-sized cities are the driving forces of the current round of urbanization as they have a more urgent need to make changes. I don't think high-tech industries or emerging industries are the best choices for most small cities that lack technology, management and talent.

They should initially make full use of their comparative advantages, making efforts to link their development closely with neighboring bigger cities.

In developed regions, the target of new urbanization should be set to improve international competitiveness. With growing industrial support, more jobs will be created and more people will come to cities, generating more business revenues and consumption.

A3 The main purpose of the central government's decision to allow a free trade zone in Shanghai is that it improves the level and efficiency of China's opening. The major point is to improve the whole east coast's national competitiveness, rather than promoting new-style urbanization.

China has become the world's second-largest economy, largest exporter and second-largest importer. Now, as it faces the urgent need to transform and upgrade its economic development, Shanghai has been chosen as the spearhead. The new Shanghai free trade zone will also help to promote urbanization in eastern coastal regions.

Mike Bastin, a researcher at Nottingham University's School of Contemporary Chinese Studies

A1 Not at all. A far longer term perspective is needed here. Commercial property is preferred due to the short-term gain and the belief that this is "modernization". Urbanization in China needs to focus on China's lesser-known second- and third-tier cities but this requires considerable government support and subsidy. At present, only a handful of China's biggest cities are "developing", which is leading to a vicious circle of pollution and environmental degradation.

Urbanization across China also requires investment in public services as well as public parks and gardens. Any continued erosion in public space will soon have a hugely detrimental effect economically as well as socially.