Urbanization should be of people

A recent story in China Securities Journal is making headlines. In C county, Shandong province, many public servants were told that they must find buyers for at least two newly built condos in the county, or their salaries might be suspended. That’s a lesson for every county that equates urbanization to mass building of homes, says a column in Beijing News. Excerpts:

What happened in C county is not an isolated case. As early as 2009, Hanting district in Weifang, in the same province, issued a formal document that required all officials beyond a certain level to help sell at least one condo.

Obviously, the local governments are behaving almost absurdly in both cases and their wrong deeds should be corrected. But the absurd story reveals the more serious problem behind: The mode of construction-led-urbanization is unreliable and the cost of solving the problems that come with it might be high.

Echoing the wave of accelerated urbanization, many local governments promoted the mass building of real estate properties and derived huge profits in tax and land transfer fees; some of the constructions have exceeded the capacity of local population growth. In C county, for example, the population is about 200,000, but the apartments that have been built in recent years are enough for at least 50,000 households.

Without the support of enough job opportunities, welfare coverage and other public resources, mass building of houses will only lead to empty cities and possible crisis. By “urbanization”, we mean that of people, not buildings; mass building of houses without moving the people into cities will create big problems.

The case of C county imparts a lesson that every county mayor should learn — what to do in the ongoing process of urbanization.