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An Analysis on Urbanisation in China

Urbanisation can be defined as the movement of people from rural to urban areas and

the increase in the proportion of a population living in cities. In China the threshold of

urbanisation is the adoption of economic reforms and “open-door” policies in 1978

.Then urbanisation in China experienced an excessively rapid pace. By the end of 2005,

compared with 17.9%in 1978, 47% of the total population lived in cities (National

Bureau of Statistics of China, 2006).The primary reason of overheating urbanisation in

China is the imbalance between urban and rural areas. Inevitably, some negative aspects

have appeared. This essay will analyse three negative effects induced by urbanisation in

China, which are the narrow employment opportunities, the decrement of basic arable

land and the insufficiency of social resources, and then outline and evaluate two

possible solutions, which are the basic arable land protection and more financial

investment into towns and villages.

The imbalance of income and infrastructure between urban and rural areas could be

considered as the major reason of urbanisation in China. According to a report, “in

2003, the average income of urban residents was ¥8,472 whereas that of rural residents

was only ¥ 2,622”(NBS,2004),which showed the ratio of urban to rural income was

more than 3:1.Another survey showed “shifting one worker from farm to migratory

work increased family income by 49.1%, whereas adding one farm worker increased

family income by only 9.0% ”(Zhao, 1999).As a consequence a large number of

migrant workers from rural areas flow into cities, in order to support their family in


With the rapid urbanisation in China, some undesirable consequences have appeared.

Narrow employment opportunities could be considered as one of the major problems.

Because of excessive migrant people into urban areas, there are not sufficient

employment opportunities in cities. According to a survey, in 2002 “the number of

employees working in state-owned enterprises fell from the previous record high of 75

million to 40 million, with nearly 20 million people laid-off”(Li, 2006). Consequently,

both those who were laid off from the state-owned enterprises and the unemployed in

the cities, now seek jobs in the third industry, in direct competition with the migrant

workers that have traditionally pursued these positions. Then it would more difficult for

migrant workers to find jobs in cities. A recent White Book on Social Protection and

Security (NBS, 2008) by the Chinese government indicates that the tension between the

surplus labours in cities and the structural employment problems will continue for a

considerable length of time.

In addition, quantities of basic arable land are reducing. Currently, per capita arable

land in China is 1173 hectares, which is only 47% of the world average (2500 hectares)

(NBS, 2008). Furthermore, it is predicted that with the rapid urbanisation, per capita

arable land in China will drop to 953 hectares in the year 2010 and 893 hectares in 2030

(Nian&Yao,2002).The tendency of unreasonable occupation of arable land is the chief

threat to China’s continued capacity to produce adequate levels of staple cereals. What

is worse, a reduction in cereal production may raise the food price, which could affect

the stability of economic development in China.

Thirdly, social resources and capacity to provide social services are severely strained in

Chinese cities. Especially, for example, lack of accommodation/housing could be the

most serious problem. According to the national housing census in China, in

2003,42.1% of urban households were overcrowded and 6.1% of them were homeless.

This survey also revealed that nearly 90% of these people are migrant workers (Centre

for Development Studies at the State Council, 2003). It can be seen that with the

development of urbanisation massive people centralize in cities, limited resources and

services in urban areas can not meet the excess demand.

These three undesirable consequences of urbanisation in China mentioned above have

already intensified people’s concern. In order to minimize the negative effects, two

possible solutions are suggested.

One possible solution is basic arable land protection. In every village a basic arable land

protection zone could be designated. According to Farmland Protection Regulation in

China there are two kinds of basic arable land protection districts. The first level

comprises high-quality land with high productivity, and the second level consists of

good-quality land with moderate productivity (Rousseau & Chen, 2001). For example,

if it is unavoidable to build national projects, such as highways, energy production or

transportation, the state should approve the conversion of land parcels less than a

mandatory standard, and then the same amount of arable land lost to conversion must be

replaced by new arable land. An official data indicated that due to the policy of basic

arable land protection, the aimless utilisation of arable land as result of urbanisation

have declined from 43% in 2000 to 27% in 2005( NBS,2005 ). A study by economists

Li and Jacoby (2000) using data from villages in Hebei and Liaoning Provinces found

that 76% of farmers obtained compensative arable land in 2000--2003 whereas the

number was only 27% before. It is obviously that to some extent through the protection

of basic arable land the urban overexpansion could be avoided. However, there are still

some drawbacks. Firstly, the vague definitions of high-quality and good-quality land

easily cause misunderstanding. The government and the farmers may have different

standards. Secondly, the compensative arable land may not as fertilizable as the original

one. For instance, most of the land in Pinghu City was prime agricultural land that could

be cropped two or three times a year. The local government used compensatory land

policy to meet its “no net loss” requirements but the scope of further gains from

compensation was quite limited (Ma & Cui, 2002). From this evidence, one could

assume that the protection of basic arable land is more concerned with quantity of

arable land than with quality and in the long term this just addresses symptoms but not

root causes.

The other possible solution would be more financial investment into towns and villages.

The financial investment involves two aspects: one is the construction of infrastructures

in the countryside; the other is the establishment of new economic centers. Firstly, the

Chinese government should improve rural social services. The National Bureau of

Statistics reported that in 2005, the fund from the central budget for the rural

infrastructures reached 10 billion dollars which was 2 billion dollars more than that in

2004 and over 5 billion more than that in 2002(NBS,2005 ). Obviously, this would

contribute to diminish the imbalance of resources between the rural and urban areas.

Secondly, new economic centres should be projected for economic boom and job

creation in rural areas. During the past decade, Chinese government established three

rural industry models, which are “Sunan model” in southern Jiangsu, ‘‘Wenzhou

model’’ and ‘‘Pearl River Delta model’’ in southern Guangdong, and the three new

economic centers absorbed massive labours from countryside. Take Sunan as an

example, the whole town or village has become a specialized production base for one

particular product (silk), a phenomenon known as ‘‘one-town one-product” or ‘‘one-

village one-product.” During the five-year period from 2000 to 2005, the number of

rural private enterprises in Jiangsu almost doubled from 111,792 to 202,253, while the

number of individual businesses increased by 70,000 and reaching 796,732(NBS,2006).

Meanwhile the total employment increased by 280% reaching 6.74 million, which

accounted for 75% of the total rural non-agricultural labour force in 2001 (Wei, 2002).

As Zhang (2000) claims, in China the crucial factor in minimizing the negative impacts

of urbanisation is the development of small towns and villages, especially the economic

development in these areas.

It is obviously that more employment in small towns and villages would decrease the

rural to urban migrations, which would relieve the pressures of citie and promote the

social stability and security. This would favor the contribution of a sustained, rapid and

sound economic development in China. Even though nowadays the financial investment

in rural areas is considered an ideal solution in China by most of the economists and

socialists, there are still some challenges. On one hand, it would be costly to fund the

establishment of infrastructures in rural areas and requires the government, a large

budget for the project, especially for a developing country. On the other hand, the

development of economy in small towns and villages may be slow. It is well known that

as a developing country, in China most of towns suffer from poor infrastructure, poor

environment, poor education and less developed social security systems, and these

factors will surely restrict the development of economy in rural areas.

In conclusion, the imbalance between urban and rural areas leads to the overheating

urbanisation in China. Consequently some unfavorable effects, including the narrow

employment opportunities, the decrement of arable land and the insufficiency of

resources, have arisen. Recently serious concern has been expressed about these

problems. In order to minimize these negative effects two possible solutions has been

mentioned above, which are the protection of basic arable land and the more financial

investment into towns and villages. Through comparison the latter one is a more

suitable solution for the integrated development of economy and society. In the future,

urbanisation is inevitable in China because of modernization and globalization.

Assistance to rural areas is a proper way to balance the inharmonic development of

society. In the long term, it is essential to take into full consideration the economic and

social conditions related to urbanisation and strive to build a resource-conserving and

environmentally friendly society.

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