There’s always room for a few million more.
With three of the world’s largest cities within its boundaries and an urbanisation plan expected to move 100 million more citizens into its metropolises over the next several years, diminutive urban areas would not appear to be among China’s problems.
According to a former head of the World Bank for China, however, amping up China’s sagging economy and spurring innovation could require bringing more people into Shanghai, Beijing, Guangzhou and other megalopolises.
The theory by Yukon Huang of the Carnegie Endowment for Peace runs against the prevailing wisdom of China’s government which has been seeking to avoid expansion of its first-tier cities.
Economists Say Bigger Cities More Efficient
Moving more of China’s population into its biggest cities will make the country more efficient, Huang said in an account by Bloomberg. The efficiencies come from better infrastructure in the largest communities, such as improved transportation systems. Businesses would also benefit from having more people in the largest cities, as this would make it easier to reach more consumers.
China already has three of the world’s largest cities, with Shanghai ranking first with more than 24 million people, Beijing in third with 21 million people, and Guangzhou in third with more than 12 million people.
“China’s big cities are actually too small,” Bloomberg cited Huang as saying. “If China wants to grow at 7 percent for the rest of this decade, it’s got to find another 1 to 1.5 percentage points of productivity from somewhere.”
Andy Xie, a noted economic thinker and Morgan Stanley veteran agrees with Huang premise, saying that expanding China’s largest cities could add $2 trillion to China’s production over the next decade.
China’s Plan Aims to Expand Small and Mid-Sized Cities
While China’s plan for urbanisation is frequently cited as propelling future growth in the housing market, so far the vision that the government has is quite different from what Huang and Xie are recommending.
This might be the kind of scene the government is trying to avoid
Although China’s State Council approved a law reforming the country’s hukou system in March thus freeing up many rural citizens to move into cities, that plan so far only allows open migration to small cities and some migration to mid-sized communities.
For the 100 million rural citizens who might be able to relocated to an urban area, the country’s first-tier cities, where the economists say the greatest efficiencies lie, are still off the table.
Fear of Slums Versus Need for Growth
The rationale most frequently given for China to continue to restrict migration to megacities such as Shanghai, Beijing and Guangzhou is the fear that these urban magnets would be over-run with new arrivals and the carefully planned infrastructure in these showcase communities could be overwhelmed.
However, some economists think China’s cities still have room to grow.
Although China already has four cities over 10 million people (Shenzhen is the fourth) the number of people in these cities is seen to be small compared to China’s 1.4 billion population.
When viewed by population density, China’s cities are among the most sparsely populated major centres, with Shanghai the most densely populated at 3,809 people per square kilometre. By contrast, Dhaka has more than 39,000 people per square kilometre, and Mumbai has 20,000. Beijing has less than half the population density of Shanghai.
| Rank by Pop. | City | Population | People/km² | Country |
|---|---|---|---|---|
| 1 | Shanghai | 24,150,000 | 3890 | China |
| 2 | Karachi | 23,500,000 | 6663 | Pakistan |
| 3 | Beijing | 21,150,000 | 1289 | China |
| 4 | Delhi | 17,838,842 | 7846 | India |
| 5 | Lagos | 17,060,307 | 17068 | Nigeria |
| 6 | Istanbul | 14,160,467 | 6467 | Turkey |
| 7 | Guangzhou | 12,700,800 | 3305 | China |
| 8 | Mumbai | 12,655,220 | 20680 | India |
| 9 | Moscow | 12,111,194 | 4825 | Russia |
| 10 | Dhaka | 12,043,977 | 39670 | Bangladesh |
Shanghai’s population density puts it roughly in the same neighborhood as famously sprawling Los Angeles (which has 3,178 people per square kilometre), and well behind New York, which has 10,724 people per square kilometre.
By allowing more people into its biggest cities, China would also be bringing more of its citizens into its most efficient environments. This move could help to drive the productivity gains necessary to drive China’s next wave of economic growth.
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