China's Urbanization: Consumption, Construction and Risks

Pil Soo Choi (), Sanghun Lee (), Ik Joon Moon () and Su Yeob Na ()
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Pil Soo Choi: Korea Institute for International Economic Policy
Sanghun Lee: Korea Institute for International Economic Policy
Ik Joon Moon: Korea Institute for International Economic Policy
Su Yeob Na: Korea Institute for International Economic Policy

No 13-7, World Economy Brief from Korea Institute for International Economic Policy

Abstract: Urbanization is the most important social-economic phenomenon in China today. Xi Jin-Ping regime would focus on urbanization for the new growth momentum on one hand and cure for social instability on the other. Urbanization rate will reach 70% until 2030 creating almost 20 million urban populations annually. It leads to the huge demand for consumption and construction with risks of restructuring. After the establishment of the People's Republic of China in 1949, urban migration caused by the heavy-industrialization policy initiated China's early urbanization. The Great Leap Forward and the Cultural Revolution which generated reverse migration, however, delayed the earnest onset of urbanization until the end of 1970s. Since the Reform and Opening, rural industrialization by TVEs and land reform expedited urbanization. In the 2000s, urbanization accelerated with deepening reform. Expansion of fixed assets investments led to development of urban areas and the increase in urban population. Immediately following the start of the Reform and Opening, urbanization in China occurred among small cities and townships. From the 2000s, urbanization began to be perceived as one of the national strategies for economic development. The 11th five year plan had focused a city-cluster strategy which materialized in the 12th plan as 'Two Crosses and Three Ordinates; and the 'Self Functioning Region.' It is expected that China's urbanization rate will increase steadily albeit at a lower rate. Various calculations made in different researches reveal that China's urbanization rate would reach 60% in 2020 and 70% in 2030.

Keywords: China; Urbanization; Consumption; Construction; Risk (search for similar items in EconPapers)
Pages: 4 pages
Date: 2013-02-27
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