Urbanization in China and the Coordinated Development Model—The case of Chengdu

AbstractChina's urbanization faces two greatest difficulties of creating non-farm jobs to “landless farmers” and providing required amenities and social services to urbanites-to-be. In the earlier phase of development, TVE employment had provided important relief to the job pressure. Later, the “Small-city Strategy” that emphasized forming towns and small cities around where rural population resided successfully deterred rural population's entry into large cities. Today, China is implementing a Coordinated Development between the urban and rural sectors, aiming to reach a balanced development between the two sectors by making not only large cities more welcoming to rural migrants but also the small cities, towns, and areas where rural population now reside harder to leave. At the core of the coordination are three concentrations of rural residents, farmland, and firms, intended to help rural residents to settle in large cities, small cities and towns, as well as new residential areas in the countryside, to de-segment land to realize economies of scale, and to gather firms of a same industry in organized industrial areas to gain agglomeration economies and create non-farm jobs. This article examines the trajectory of China's urbanization, analyzes the working mechanism of the Coordinated Development model, and investigates Chengdu's practice of the Coordinated Development, which will help to provide insights into the new developments in China's urbanization.Keywords: UrbanizationCoordinated DevelopmentThree concentrationsLand de-segmentationLand-use-right exchangeConsolidated industrial areasNew residential communities Notes1 In China, counties, usually farther away from the municipal urban center and close to rural areas, are under the administration of cities of district level (di ji shi), and some large counties may have under their administration lower level cities (xian ji shi).2 For more details on the specifics of the moving and settlements, see To Return Rights and to Enable, Laying a Solid Foundation for Sustainable Development: An Investigative Research of Chengdu's Coordinated Development between the Urban and Rural Sectors,” Research Group, National Development Research Institute at Peking University (CCER), June 2009.3 How farmers’ “residential land” is exchanged involves the protection of farmers rights to the land, the well-being of urban-dwellers who purchased the housing built on the land and were considered illegal and non-tradable, and the rights of local government to solicit sales of the land upon farmers. While land-ownership is still collective, farmers have become practical owners of the residential land on which they can build commercial houses, or engage in other commercial activities, or sell the land to the government. Though such rights have not yet been written into the law, they have been repeatedly emphasized by the central government in October 2008 and its series documents thereafter (Meng, 2010).4 In practice, however, there is a conflict of interests when it comes to land sales because local governments, acting as protectors of public land and fiscal revenue seekers, would have strong incentives to requisite land at lowest prices from farmers and sell land at highest prices to developers. As a result, farmers’ interests are often infringed upon and corruptions take place.5 For detailed analysis of land policy reform, see Ding (2003), for example.6 Tan, Heerink, Kuyvenhoven, and Qu (2006) show that increases in plot size have a significant impact on technical efficiency in rice growing.7 Pan and Zhang (2004), based on data from the Third National Industrial Survey, show that concentration of firms of the same industry within one geographical area results in agglomeration advantages, whereas externalities from urban development per se do not show such effect.8 Whether or not these benefits have resulted in the case of Chengdu is yet to be shown by future research, however.9 See The Outlined 12th Five-year Plan on Chengdu's Economic and Social Development, published by the Municipal Government of Chengdu, March 2011.10 A survey by Y. Zhang of China's Social Science Academy shows that 80% of rural residents are unwilling to give up their contract land for urban residence and that those who are willing are primarily for the education opportunities in the city for their children (Guangzhou Daily, October 29, 2010).11 A 200,000 yuan annual fund designated for community development is equally distributed among urban communities and rural villages (Interview notes with the mayor of Chengdu, Mr. GE Honglin, by CCTV 2, November 12, 2010). The mayor also expressed that to compensate for the past underdevelopment in the rural sector, 61.8% of future moneys for development will be allocated to the countryside, and, 38.2%, to the urban sector (Interview notes with the mayor of Chengdu, Mr. GE Honglin, by CCTV 2, November 12, 2010).12 This is announced by the mayor on national TV (Interview notes with the mayor of Chengdu, Mr. GE Honglin, by CCTV 2, November 12, 2010), though there still can be many job seekers who are unaware of such a service.