To do it effectively, the government must transfer surplus rural workers to non-agricultural jobs, and in so doing steadily promote urbanization. That will help increase rural residents' incomes and let farmers also enjoy the benefits brought by the country's economic prosperity. Urbanization will bring huge numbers of rural residents into cities and towns.

But there has not yet been a consensus among officials, academics and interested groups on which model of urbanization China should follow because of the complexity of the issue and the huge regional differences in the country.

Jinan, the capital city of Shandong Province in East China, has reportedly practised a new method of urbanization in recent years.

According to a report in the Economic Observer, the Jinan municipal government has entrusted the Sanlian Group, a State-owned enterprise, to carry out some projects and turn villagers into urban dwellers.

With the authorization of the city government, the group negotiates with villagers on the land they want to develop. When the agreement is approved by the villagers' congress, the village's self-governing organization, the group gets the right to develop the land, which is owned collectively by the villagers.

In return, the group gives a monthly allowance and a house to each household as well as compensation for occupying the land. Some residents also become employees of the group.

Arrangements are also made for medical care, pensions and other social security issues, which are currently only enjoyed by urban citizens in China.

The group's plan to develop the land must be approved by the city government. In the two projects that have been finished in Jinan, most arable land was retained but the villages were pulled down and redeveloped.

Under this so-called "comprehensive urban development model," villagers who have lost some of their farming land get a lot back.

The model has won high praise for its innovation and creativity.

Fan Hengshan, an official from the National Development and Reform Commission, expressed his opinion of it during a discussion hosted by the Economic Observer.

Fan thought Jinan's project produced a "win-win" situation for the developers, the government and the farmers.

It not only puts land development under the supervision of the government, but also settles the biggest problem in land development, by offering employment opportunities and long-term social security, Fan said.

More importantly, as Fan pointed out, the model is in line with the country's trend of accelerating urbanization.

Fan's opinion was echoed by Dong Liming, a researcher with Peking University. Dong suggested the model be used across the country.

Dong said the Jinan model helps implement the overall city development plan, while resettling farmers and building more infrastructure.

Similar schemes were carried out in as early as the 1950s in Britain and also used to build new cities in the United States, although in the latter the practice was more market-orientated, according to Dong.

At the same time, prudence is also urged by experts.

Wang Weiguo, a professor with the China University of Politics and Law, said several points should be guaranteed if the model is to be adhered to and made popular in other areas.

First of all, farmers' rights to land use should be respected. Only if this happens can farmers get their due rights during the process of urbanization.

Without this, the government and developers might only give a one-off compensation payment to farmers, which could lead to them being excluded from the whole urbanization process.

Second, being such an important resource, land should be allocated through the market - that is, bought and sold at the going rate -instead of by administrative means.

Third, the necessary mechanism should be designed to protect the legal rights of developers during the process.

Chen Wenling, head of the Department of General Affairs of the Research Office under the State Council, stressed that land development and urbanization will probably lead to fewer problems if initiated by businesses for profit rather than by the government single-handedly.

When the needs of farmers and enterprises match, land development projects have a better chance of turning villages into cities and farmers into urban citizens.

Li Lianzhong, with the Policy Research Centre of the Central Committee of the Communist Party of China, warned the interests of the government, developers and farmers should be balanced. In this way, it is more likely that social justice will be achieved.