China pushes to urbanise smaller cities

China pushes to urbanise smaller cities

Thursday, December 19, 2013 – 03:00

Esther Teo

The Straits Times

China will relax or remove rigid household registration restrictions in small and medium-sized cities as part of the country’s urbanisation push and to give migrant workers equal access to a range of services in cities.The household registration, or hukou, system has for decades discriminated against migrant workers.

At a two-day urbanisation conference last week, Chinese leaders said hukou restrictions will be fully removed in towns and small cities to allow migrant workers to be more integrated. The restrictions in medium-sized cities will be gradually eased while “reasonable conditions” will be set for settling in big cities, according to a Xinhua news agency report last Saturday.

In stark contrast, the population in mega cities, already straining under the ever-growing numbers of migrant workers, will be strictly controlled in a bid by Beijing to even out development across the country.

Hukou reform is key to this urban push as millions of migrants who have moved to towns and cities are unable to benefit from urban welfare, education and health services because they are classified as rural residents.

“The key is providing urban hukou to migrant workers and improving their capability to settle in urban areas,” the report noted.

Observers added that the hukou – and corresponding benefits – offered by smaller cities will in turn draw more migrants from mega cities instead.

The Xinhua report cited three metropolitan areas that will be developed in the next steps in China’s urbanisation: the Pearl River Delta with Guangzhou at its centre, the Yangtze River Delta with Shanghai at its centre, and the Bohai Economic Rim with Beijing and Tianjin at its centre.

Moreover, city clusters across the country’s central, western and north-eastern regions will be developed and turned into growth engines as part of Beijing’s new urbanisation strategy, it said.

These were some of the tasks outlined at the central urbanisation work conference, the first time China’s top leaders gathered to discuss how to manage the trend in the long term.

Others include urbanising migrants from the agriculture sector, raising the efficiency of urban land use, establishing multi-sourced and sustainable financing, and strengthening the management of the urbanisation process.

Both President Xi Jinping and Premier Li Keqiang spoke at the conference held at the tail end of a separate economic meeting, underscoring the close link Beijing sees between the two. The economic meet ended last Friday and set growth targets for next year.

Mr Li has championed urbanisation as a “huge engine” for growth as he attempts to shift the world’s No. 2 economy from an investment- and export-led model to one driven by domestic consumption.

Beijing-based sociologist Hu Xingdou told The Straits Times that while mega cities like Beijing require restrictions as the city’s infrastructure is strained by its growing population, many provincial capitals like Wuhan and Changsha can be developed further to attract migrants.

“But it is vital for urbanisation to be market-led, according to the movement of the people rather than government officials’ attempts to direct it in the pursuit of GDP (gross domestic product) growth. If not, ghost cities might emerge,” he added.

The Xinhua report also cautioned against undue haste in chasing after quick results. Concerned that local governments might see urbanisation as an opportunity to boost infrastructure or develop too rapidly, the meeting warned that targets should be “practical and realistic”, Xinhua said. Officials should not pursue “quick results”, but quality “human-centred urbanisation”.

However, experts say quality urbanisation cannot be achieved without Beijing first pushing through difficult reforms.

“City clusters are the right direction. But urbanisation involves complex fiscal and social security reform, hukou reform, and land reform, and therefore can only occur gradually,” said Barclays’ economist Jian Chang.

Ms Shu Yun, 46, a Sichuan native working as a housekeeper in Beijing, is sceptical that changes to the hukou system will be made any time soon.

“If there are reforms, I might tell my daughters to consider settling in smaller cities after graduation if they can get better welfare there. Life in Beijing can get very tough if you’re second-class.”