Focus on urbanization, Shanghai FTA

Western cities such as London serve as a good example of successful urbanization, where large, grassy public spaces and parks litter all parts of the city from the outskirts right through to the very center.

The style and appearance of new buildings is also important. At present,

A2 Investment in much-needed public services such as health, education and transportation will also generate jobs and directly fuel sustainable economic growth and enhance the overall quality of life. Gross national happiness is even more important than gross domestic product.

Any cost-benefit analysis of urbanization in China misses the real point here, which is the lack of urbanization outside of China's first-tier cities and eastern coastal areas. Special economic zones need to be established in parts of West China, especially Northwest China. These zones require considerable government support and incentives in order to attract investment, which will act as the key catalyst to economic growth.

A3 This is an extremely significant move and one which will undoubtedly stimulate further the Shanghai economy and make the city an even stronger attraction to overseas investment and foreign businesses. However, other cities in less developed and more inaccessible locations across China should also be afforded similar if not greater government support.

Examples of such cities include Chongqing and Chengdu in Southwest China and Lanzhou and Xi'an in Northwest China. These cities should form the focus of the next phase of urbanization and economic development in the Chinese mainland.

Ren Yuan, professor of demo-graphy and urban studies at Fudan University

A1 On the surface, urbanization is largely reflected by massive construction of buildings, expansion of commercial properties etc. But a genuine takeoff (for urbanization) depends on the development of local industries, the creation of job opportunities and the consequent congregation of population. Otherwise those lands will become empty cities and lead to a severe waste of investment.

Currently there are far fewer job opportunities in medium and small cities than first-tier cities. So people may still flock to bigger cities looking for jobs, which triggers a population explosion that would be overwhelming. Infrastructure investment-led activities may, in the short run, churn out sizable fiscal income from land sales and a promising GDP growth rate, but they are more likely to cause and amplify debt risks from local government.

A2 Urbanization should never rely on heavy fixed-asset investment but on industrial upgrade and economic innovation. Without a robust real economy, infrastructure expansion could only generate asset bubbles. Today a worrying phenomenon is that the growth of the real economy is inevitably slumping while local governments still strive hard to reach the urbanization goal. But the gap of land urbanization and population and city development urbanization is being enlarged. As a result, land prices soar rapidly, barring emerging industries from accessing the new market and handy funding. These factors would further push up the cost of living, contain the free flow of talent and restrain the benign cycle of a healthy economic development. Instead of new buildings, the government should translate the surging urbanization rate into a significant rise in livelihood and bring tangible social benefits to its residents.