China's economic explosion

China's cities: faster, bigger, better?

The rapid expansion of cities and swelling of urban populations has been the most spectacular feature of China's rapid development

When Deng Xiaoping visited the undeveloped Pudong area of Shanghai in 1992 and exhorted China to build faster and bigger, an economic explosion was to ensue that would change the world. Today Pudong has joined Manhattan and the City of London as one of the world's foremost business hubs.

Countless other Chinese cities are determined to follow in Shanghai's steps. Cities have been the engines of China's economic growth, contributing 70% of its annual gross domestic product. But they are also the stage on which China's most intense social and environmental struggles are being played out.

The rapid expansion of cities and swelling of urban populations has been the most spectacular feature of China's rapid economic development over the past two decades. China has become one large construction site: the stock of urban buildings has doubled in a mere five years, reaching almost 15 billion square metres in 2004. In 2005, Shanghai constructed more building space than exists in all the office buildings of New York City. Construction projects in China account for 30% of the global total.

The largest human migration in the history of mankind has been occurring in tandem. China's urban population has grown from less than 20% of the total in 1980 to more than 40% today. A change on the same scale occurred over 120 years in the UK. More than 200 million people have moved to China's cities in tha past 25 years, providing the labour to fuel the country's breakneck economic growth. Urban population growth is expected to continue unabated, reaching 60% of the total population by 2030. In the next two decades China's cities are expected to absorb about 300 million people - equal to the current US population - from rural areas.

To a large extent, this shift has been willed and encouraged by the government. It is straightforward to see why. Simply put, there are too many farmers in the Chinese countryside. The productivity of labour in the agricultural sector is merely one-quarter of that in the service sector and a whopping nine times lower than in industry. To sustain economic growth and achieve its developmental goals, China has little choice but to shift the large pool of surplus rural labour into higher-productivity urban-based jobs.

While a compelling economic logic underpins China's great urbanisation drive, the mounting social and environmental strains it causes cannot be ignored.

As well as providing a ready supply of cheap new labour, urbanisation has added to a growing pool of urban poor. China's 130 million migrant workers are marginalised economically and socially. They are parties to a primitive and unstable social contract that is beyond the protection of the law.

This denies them many rights, including social security guarantees enjoyed by the permanent residents of cities. These people have low pay, unstable jobs and inadequate medical care. They are mostly crammed in to ramshackle "villages" (dormitories) with an average of five square metres of living space per person and often no heat, running water or sanitation facilities.

Urban expansion has meant large-scale conversion of productive agricultural land for urban development. The area occupied by China's cities expanded by 50% between 1998 and 2005. Close to 50 million farmers have been deprived of their land in this way, with only meagre compensation as solace. Land grabs have become the number one cause of protests in China.

Land conversion has in some cases become a major driver rather than a mere symptom of urbanisation. Indeed, the sale of land to developers is an important source of revenue for municipalities - which are not allowed to borrow from capital markets - as well as a source of significant personal enrichment for corrupt local officials. It has been estimated that earnings from the urbanisation of rural land commonly contribute up to two thirds of the revenue of local governments.

As a result, China is repeating the same mistakes that the US had committed, in building sprawling cities that are more suited for cars than for people. Indeed, in some cases, roads are built primarily for the purpose of urbanising land. The ensuing land development is almost always oriented towards the private car and very difficult to serve effectively with public transport. Such mistakes will lock China into a future of rising oil dependence and severe urban air pollution from fuel combustion.

Cities are often built without regard to basic ecological constraints. Beijing has sufficient water resources to sustain a population of about 10 million, yet today it is home to 17 million residents and growing. Scientists warn that the aquifers below the North China Plain may be drained within 30 years. Yet above ground cities are booming and new developments mushrooming like there's no tomorrow.

The pervasiveness of prestige projects is another salient feature of urban wastefulness. Extravagant government offices, outsized piazzas, unnecessary convention centres and expectant central business districts are the norm even in most economically backward areas.

So far, so familiar: most of the aforementioned problems are not unique to China. Where China stands out is in the extent of experimentation with alternative and more sustainable city models.

In the search for solutions to its urbanisation challenges, China has flung its doors wide open to international co-operation. The world's leading engineering, urban planning and design firms are converging in China and the boldest experiments are taking place.

In Huang Baiyu in Liaoning province, a future is being built in which cities function like superior organisms: self-sufficient in energy, with waste streams recycled endlessly. Similarly ambitious and innovative urban concepts and designs are being tested in "eco-cities" in Wuhan, Zhejiang and Shanghai, to name but the most prominent.

China has become a global laboratory of urban change and an incubator of technological, design and policy innovations. Paradoxically, therefore, China's urban mayhem has made it the epicentre of global debate on sustainable urbanisation.

The author is National Co-ordinator for the UK-China Sustainable Development Dialogue, and an Environmental Economic consultant to the World Bank in China. He is also founder and director of EnAct 21, a policy advisory consultancy dedicated to promoting sustainable development through diplomacy. He writes here in a personal capacity and his views do not necessarily reflect those of the UK government or of the World Bank.

LEO HORN-PHATHANOTHAI