Chinese cities' four modernizations

The environment, migration, financing and land rights should be addressed to achieve more promising and sustainable development

Among the most significant developments driving China's economic growth and rising living standards is the shift from a rural, agricultural society to a modern, urban one. With almost 700 million Chinese - more than half of the population - already living in cities, the centrality of urbanization to China's future is indisputable. But exactly how the trend will develop remains far from certain.

At last November's Third Plenum of the 18th Central Committee of the Communist Party of China, the country's top leadership laid out one path forward. The meeting's communiqué and the subsequent road map for reform offer a glimpse into how China's leaders anticipate the country's urban development, including the role that public policy will play in guiding the trend.

So far, China has largely taken a Field of Dreams approach to urbanization: "Build it, and they will come." Indeed, over the last 30 years, massive public investment and economic liberalization have spurred rapid urban growth in coastal provinces. And now China's leaders are increasingly taking that strategy inland, making critical investments in physical and human capital.

But the effectiveness of these investments will depend on the sequence and rate of their implementation, and on how skillfully they are adapted to each locality's distinct resources, needs, and aspirations. Four interrelated issues must be addressed.

For starters, Chinese infrastructure investment has led to enormous gains in construction-related industries and employment, while boosting local GDP considerably. Given that local officials' career prospects depend on maintaining high growth rates, the emphasis on infrastructure development is likely to continue, despite sustainability concerns stemming from the massive consumption of water, energy, and land that such investment entails.

But China cannot afford to ignore its deepening environmental crisis. Especially in China's massive interior, rapid urbanization requires high output from steel mills, chemical refineries, and coal-fired electricity plants, leading to the dangerously high levels of air pollution that have become synonymous with Chinese-style development.

Ever-worsening air quality has forced China's government to begin focusing on cleaning up local particulate pollution and building a low-carbon economy. To this end, China's National Development and Reform Commission has issued its first-ever blueprint for adapting to climate change.

Moreover, since January, the authorities have required 15,000 factories, including State-owned enterprises, to disclose official data on airborne emissions and water discharge. And the government has pledged to spend $280 billion on measures to reduce air pollution over the next five years. To boost these policies' effectiveness, sustainability metrics should be factored into local leaders' performance evaluations. This is easier said than done in a country where, for more than 30 years, living standards have been seen in more narrowly economic terms.