Chinese Cities’ Four Modernizations

WASHINGTON, DC – Among the most significant developments driving China’s economic growth and rising living standards is the shift from a rural, agricultural society to a modern, urban one. With almost 700 million Chinese – more than half of the population – already living in cities, the centrality of urbanization to China’s future is indisputable. But exactly how the trend will develop remains far from certain.

At last November’s Third Plenum of the 18th Central Committee of the Communist Party, China’s top leadership laid out one path forward. The meeting’s communiqué and the subsequent road map for reform offer a glimpse into how China’s leaders anticipate the country’s urban development, including the role that public policy will play in guiding the trend.

So far, China has largely taken a “Field of Dreams” approach to urbanization: “Build it, and they will come.” Indeed, over the last 30 years, massive public investment and economic liberalization spurred rapid urban growth in coastal provinces. And now China’s leaders are increasingly taking that strategy inland, making critical investments in physical and human capital.

But the effectiveness of these investments will depend on the sequence and rate of their implementation, and on how skillfully they are adapted to each locality’s distinct resources, needs, and aspirations. Four interrelated issues must be addressed.