Urban and Rural China

That is to say, it is a quite common reality for a country to be divided into urban and rural areas. For sure, the commonality is hidden in all sorts of peculiarities. In short, in Europe, America, Japan, and other developed regions and countries, the cities take up a large share and the urban-rural gap is insignificant, so people generally do not discuss social and economic problems from the urban and rural perspectives. As in the United States and France, 2012 was a year of China’s general election, and no political party seemed to use the urban-rural gap as leverage. In developing countries, especially low-income lands, the share of cities is small, and yet the urban-rural gap is very large, so this determines that the foundation, focus and difficulty of national development are in the rural areas. So if the majority of the population are farmers, it is not difficult to understand that the development of the national economy cannot be achieved without ultimate improvements to the rural areas, agriculture and the condition of farmers.

Urban and rural China constitute an economic and social structure in the formation, which is characterized by a low urbanization rate and a large urban-rural gap. However, over the past few decades, continuous choices and experiments by China on strategy, institutions and policies have brought distinct and non-negligible features to today’s urban and rural China. First, industrialization is leading and urbanization is lagging behind; second, marketization reform has stimulated a tremendous population flow between urban and rural areas, irreversibly changing the mapping of economic opportunities, and is forming a new social structure; third, accelerated urbanization is accompanied by rapid economic growth, leading to extreme tension between the urban and rural areas.

What we could not neglect is not only the entanglement of sorrow and joy in the urban and rural development of China, but also some hard-to-explain logic behind these phenomena. Without industrialization, cities will not be able to provide more opportunity to rural areas and accommodate the residents. Why is it that the gate of cities is increasingly closed to the countryside when national industrialization is so heated? Furthermore, under the dynamic mechanism of socially rising to higher places during industrialization and urbanization, lots of people are moving from the lower-income countryside to cities with better opportunities and higher income. From this perspective, a large urban-rural income gap will strongly stimulate migration into cities, and when more migrants become integrated, the per capita income will be close. But, so far, what the urban-rural gap stimulates in farmers seems to be only working in cities. They go to cities to make money when they are young and strong and have to go home when they are old. Doesn’t this mean that the urban-rural income gap ultimately will be further widened after having been narrowed for some time? Besides, there is a so-called argument that “land urbanization outweighs population urbanization.” Allow me to explain later to readers who have not heard of this awkward concept. Doesn’t such a concept say that China’s accelerated urbanization means a decrease of population density? If this is the case, should it be called urbanization or de-urbanization?

What is most difficult to understand is that the fast growth of the national economy, driven by industrialization and urbanization, has brought unexpected tension to both urban and rural China. The element in the relevant news is either a piece of land or housing for six or seven cases out of ten. It is weird. Land and housing are just “factors of production”; we can simply calm down and “allocate” them, and then the job gets done. Even if the interests of the demand and supply sides are contradictory, and even if the business fails, still the friendship remains, as an old Chinese saying puts it. Why in these cases, are things turned into violent fights? Personally, I do not believe in the abstruse doctrine of “class struggle,” but I tend to believe that somewhere there are problems with the institutions and the policies. Therefore, from a certain perspective it is as if the invincible accelerated urbanization is horribly greeted by some sort of curse.

Under the general title of “Urban and Rural China,” there are many fascinating topics. Perhaps everyone has heard about “urban villages,” but to understand the term’s origin we need to explore together. What about “city-in-the-village?” This concept is seldom heard about, and probably we won’t be able to understand it until we have seen with our own eyes the 300-m high skyscraper in “China’s No. 1 Village” in Jiangyin. And what’s more, there is also “city-in-the-city,” and I have seen a few of them with some of my understanding, which I am more than happy to share with the readers. There are also many places that are part of a city but look like countryside. Not only the mindset and interpersonal relationships of the “rural China” depicted by Fei Xiaotong are still popular in today’s urban and rural China, but also the spatial features of many metropolises are still “very rural”; people are used to these kinds of phenomena. There are just so many phenomena worth sorting out and so many truths worth exploring between all the urban and rural areas of China!

With solid observation, I have long wanted to write a series of commentaries on urban and rural China. Since listening at the China Economists 50 Forum in 2007 to the city of Chengdu’s experience with urban-rural integration reform we – a group of colleagues and students having the same interests, we – have continued to survey and investigate Chengdu over the years. Apart from examining urban and rural Chengdu, we have also studied carefully the cases of Chongqing, Changsha, Jiaxing, Tianjin, Beijing (suburbs), Zhenjiang, Foshan (Nanhai) and Shenzhen to g a better understanding of urban and rural China. Some of the students who, in January 2008, lived with me in the farmers’ houses of Chaping Village, Daguan Township of Dujiangyan, have gone overseas to further their study and others have started their careers. So I think now is the time to process the accumulated investigation materials. I would see myself making a start with the text, and looking forward to better works by new rising stars.

Usually, when I write a series of columns I do not set a plan. The collection of The Lesson from the Currency, which was completed at the New Year of 2012, started with Can the War of Words Determine Exchange Rates?, dated April 20, 2010. The writing came from the original impulse of getting things into shape for the controversial RMB exchange rate for myself as well as for students and readers. I had no plan at all. I just wrote one article after another but had not expected to write a total of fifty articles. In between I was busy with some other projects, the writing was put aside several times and so the whole writing of the series took one and half years. The previous series was a commentary on the debate on the new round of healthcare reform. I thought a new reform plan would be formulated soon, but by the time I had written the fortieth article, the healthcare reform scheme was still not born. As the saying goes: man proposes and God disposes. Having expressed everything I wanted to, I stopped at “where I should,” not violating the rules of writing. The Farmer’s Income Is a Series of Events, written in 2002, was a slightly different case, because before I set to the writing, I entered with one shot a dozen key words into the laptop as if I was preparing a topic for discussion. But, once I started the writing, I seemed to follow the natural logic and forgot about the preset plan. With this experience, it is better probably to write a series of commentaries and not to plan it. I am slow-witted, but not stupid. I know what I am doing and stop when there is a slight reminder from the students, the editors or readers. And by the way, I will not respond to each and every reader letter, but I will read them all. And I will also read abuses really quickly unless the critique has good grounds.

Unsurprisingly this ambiguity led to a hilarious anecdote. It was before the opening, and the organizer held a forum to elucidate the theme of the Expo. One of invited speakers was best-selling author Han Han. Surprisingly, this young man threw on cold water with his opening remarks, saying, “My topic today is City makes life worse.” Reading online records, I concluded he did nothing more than enumerate all the bad things about urban life in metropolises, and at most he was speaking against the Chinese translation of the theme of the Expo. If the English expression was the target, perhaps ironically, the only thing that this author and blogger could say is, “Worse City Surely Makes Worse Life.”

China is hosting the World Expo once in a century, so how come there is a flaw in the Chinese language translation of the theme? Unreconciled, but not going to the site, I went to find some background materials to read. It turns out that since the decision was made to bid for the World Expo, Shanghai Municipal Government Development Research Center had begun the study on its theme. The task group put together nine principles for theme setting, made a primary screening of the thirty-two nominated themes, and selected three, two of which were related to cities. In November of the same year, the then chairman of the International Bureau of Exposition (BIE), Ole Philipson, put forward ten exhibition themes, each of which included city and life. After numerous expert seminars throughout the research, the theme of the Shanghai World Expo was finally set: “Better City, Better Life.”

There was a person in charge of the work backstage, and his name is Ji Lude. According to his résumé, he was sent to the countryside of Northeast China as an “educated youth” and returned to study and teach at Fudan University. He got involved in Day 1 of Shanghai’s bid, and spent eleven years from bidding to hosting the event. Ji’s responsibility was theme rendition. So when the reporters questioned the difference of meaning between the Chinese and English-language versions of the theme, he was the person to explain: “The Chinese and English versions are consistent down at the deep level. The Chinese expression is a means-and-end relationship, while the English shows a parallel relationship. Of course some people will claim that cities are no good at all and challenge why we say they are nice and great. But we also need to ask what should be our road and directions? We should not question this theme only because the city where we live is not nice. The theme is not a conclusion but a direction.”

It seemed this was something difficult to figure out. But, as I read on, I became enlightened by the explanations to BIE (Bureau International des Expositions), made by Ji Lude on behalf of the organizing committee. After the host for the World Expo 2010 was awarded by international votes, the organizer still needed to submit to BIE a “Registration Report” with a clear positioning in order to send invitations to participating countries. Reportedly, Vincente Gonzalez Loscertales, secretary-general of BIE, was dissatisfied with the initial draft and pointed out over 180 problems that required modification. Ji and his team went back and spent two weeks working day and night to revise the text, and the Registration Report eventually was approved at the BIE Executive Committee Meeting. The news release didn’t get down to the details of the process, but my eyes brightened at one statement: Ji Lude knowingly linked up China’s urbanization process with the theme of the World Expo – it was this single move that convinced the experts of the executive committee that the theme of the Shanghai World Expo makes sense.

Of course it makes sense. Putting aside all the conversations, discussions, complaints, and earnest and systematic criticism, if we start from the perspective of actual behaviors and ask the question: do people really believe that “City Makes Life Better?” The answer is very clear, because more and more people actually choose to live in cities, although urban life is not always satisfactory and is even awful in many ways. This is evidenced by figures on official website of the World Expo: in 1800, that only 2% of the world’s population lived in cities; this figure rose rapidly to 29% in 1950; and by 2000, about half of the world’s population moved into cities. According to the UN’s prediction, urban population will account for about 55% of the world’s total in 2010. China is lagging behind in this aspect, but it is catching up quickly – in January 2012, the National Statistics Bureau of China announced 51.27% of its 13.5 billion people live in cities or towns.

This is the capability of cities. Cities accommodate not only people who believe “cities are better,” but also people who criticize, revile and hate them. Generally the latter disagree with “City Makes Life Better,” but their own behavior of living in cities and being unable to separate from cities demonstrate that they, in fact, also agree with the Chinese translation of theme of the Shanghai World Expo. People who think that the countryside is not good enough, or it is good but they would not live there, can choose to move into cities. But those already moved into cities and finding themselves unsatisfied, seldom move back to the countryside unless there is no choice. Most of them criticize cities and improve cities, or move to a better city for a better life.

The capability of cities was perceived through comparison. I remember this point from a news report a dozen years ago. At that time, the newly appointed World Bank president, Paul Wolfowitz, visited China, and he had a conversation with Ma Sheba, a villager in Dongchuan Village, Gansu Province. Wolfowitz asked, “What do you want your children to do in the future?” The villager replied, “I hope they can go to college.” The president then asked, “What job then?” to which Ma replied: “To stay in the city and work in a company would be great.” And the president asked, “Isn’t it good to do farming?” Ma thought about it for a moment and said, “It is good, but it’s not as good as working in a city.”

I wrote a short commentary on this talk. Looking at it now, Ma, the farmer from Gansu, was really talking about the capability of cities. And this is also the key to the unstoppable worldwide trend towards urbanization. And from here this book unfolds, with the question, “Why do cities have such a unique capability?”

Economic Density Outweighs Population Density

As many people gather in a relatively small geographic space, when the population density reaches a certain standard, the place will be called a city. On a global scale, this trend is becoming increasingly evident, and the “urbanization” wave is just unstoppable.

It seems that we humans are not just social animals, but social animals that tend to gather. Why do people all over the world like to gather in cities? While unable to give good reasons from the perspective of culture and civilization, I believe that the economic motive seems quite straightforward – cities generate higher income.

Take as an example Tokyo, which I visited once in 2010. The population density of the Greater Tokyo Area has long been impressive, with 25% of Japan’s population living in only 4% of the country’s total area. However, Tokyo’s economic concentration is even higher: in 2010, Tokyo’s per capita GDP stands at 72,000 US dollars, which is 67.4% higher than the national average. Doing the math, we can tell that the Greater Tokyo Area alone accounts for 40% of Japan’s total GDP.

The same is true of other large cities. According to the 2004 census, Osaka accounts for 1.6% of Japan’s population but 4.1% of the country’s economy (measured by GDP); London accounts for 11.8% of the UK’s population and 13.3% of its economy; New York City accounts for 2.3% of the US population and 3.5% of its economy; Chicago accounts for 0.92% of the US population and 1.25% of its economy; and Los Angeles has 1.3% of the US population, and 1.68% of its economy. (These top three cities together account for 4.52% of the US population, and 6.43% of its economy). Toronto accounts for 13% of Canada’s population and 14.4% of its economy. For developing countries, this also seems to be the case – for instance, Mexico City accounts for 19% of the country’s population but 20% of its economy. Former World Bank president Robert Zoellick has provided a more exaggerated example: 35.7% of Egypt’s population live in its capital city, Cairo, which only takes up 0.5% of the country’s total area but accounts for more than half of its GDP!

A final example is from the preface of the 2009 World Development Report, titled “Reshaping Economic Geography.” The theme of the report was to discuss the geographical imbalance of economy and wealth distribution: population, production, and wealth are concentrated in cities, especially large cities and developed regions. Readers should not be misled by the word “reshaping” and take it for granted that a new world can be “shaped” as easily as making a cake. On the contrary, the finding from almost one generation of research shows that no matter how many people prefer “more balanced growth,” global evidence suggests that the logic contained in human’s economic activities is to aggregate in the course of flowing, and then flow again and aggregate again until population, economy, and wealth are geographically concentrated within a relatively small area.