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| The urban reset | |
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 The China Sustainable Urbanization Forum: Theory, Policy and Practice 2025 underway at Tsinghua University on November 13 (COURTESY PHOTO)
As China's cities shift from breakneck expansion to improving the layout and functions of existing urban spaces, the questions facing policymakers are no longer how to attract migrants, but how to integrate them; not how to build new megaprojects, but how to make cities more livable and inclusive. These themes were front and center at the China Sustainable Urbanization Forum: Theory, Policy and Practice 2025, held at Tsinghua University on November 13, where officials, scholars and industry experts gathered to weigh the challenges facing the next planning cycle and the reforms needed to meet them. Edited excerpts of some participants' views follow: Bringing two halves together Wei Houkai, member of the Chinese Academy of Social Sciences (CASS) and former Director of the Rural Development Institute at CASS: After decades of rapid expansion, China's urbanization is shifting into a lower gear. The share of people living in urban areas took off after reform and opening up began in 1978, passing the 30 percent mark in 1996 and reaching the halfway point by 2010. In the years since, the surge has settled into a slower climb. From 2021 to 2024, during the first four years of the 14th Five-Year Plan (2021-25) period, growth eased to an annual average of just 0.78 percentage points. (During the 13th Five-Year Plan (2016-20), the annual growth rate was 1.31 percentage points—Ed.) Our projections suggest growth will stay around this level through the 15th Five-Year Plan (2026-30) period. By 2050, roughly four fifths of Chinese citizens will be living in the country's cities and towns. These numbers show a shift to a more measured phase, one in which the priority is less about speed and more about quality. At its core is the steady integration of rural migrants into their urban surroundings. The principle is simple: Those who help build the city should be able to share fully in what it offers. Rural migrant workers have been indispensable to China's urban boom, but many still struggle to enjoy the same access to public services and opportunities as registered urban residents. The key to narrowing this gap lies in ensuring equitable access to basic public services. Additionally, difficulties in transferring the management rights for contracted rural land not only prevent rural migrants from fully unlocking the value of their rural assets as they seek full integration into urban life but also hamper the efficient use of agricultural land. Therefore, authorities should consider allowing the rights to be transferred more openly and across wider regions. (Starting in 2014, China began piloting a reform to separate farmland ownership rights, contract rights and management rights. The reform allows farmers to retain the contract rights but transfer the management rights—Ed.) Li Daokui, Dean of the Academic Center for Chinese Economic Practice and Thinking at Tsinghua University: In the first three quarters of this year, China's real GDP saw a year-on-year growth of 5.2 percent, a rate that would place China among the fastest growing major economies. But nominal GDP rose by 4.1 percent, the lowest since the start of reform and opening up, aside from extraordinary periods such as the pandemic. (The primary difference between real GDP and nominal GDP lies in the fact that real GDP is adjusted for inflation or deflation, whereas nominal GDP is not—Ed.) Many economists reckon that nominal GDP growth needs to return to about 7 percent a year to be considered healthy—and the way to get there is by boosting domestic demand. Among the many measures available to boost domestic demand, urbanization is regarded as one of the most significant. To break it further down, roughly half of China's 1.4 billion people now live a fairly modern urban life, with central heating in winter, air-conditioning in summer, high-speed trains for daily travel, and generally higher levels of consumption and living standards. The other half, however, have yet to fully enter modern urban life. This group can be divided again into two: One half remains in rural areas, mostly seniors and children, with relatively limited spending power; the other half are migrant workers in cities who have not yet fully become urban residents. To lift national consumption, it is essential to better integrate these 700 million people into the modern urban economy. Expanding their access to jobs, education, healthcare, housing and other public services, as mentioned in the Communist Party of China Central Committee's recommendations for formulating the 15th Five-Year Plan, would unlock a vast reservoir of consumer demand. From the ground up Yu Qiang, Director of the Public Services Department at China International Engineering Consulting Corp.: There are multiple directions in which China's urbanization can proceed. One direction is inward, which involves renewing and upgrading the urban spaces that already exist. The primary task of urban renewal is to address excess housing inventory and thereby reduce the tightening effects that falling house prices have on the broader economy. Once the market is balanced, it becomes possible to focus on building quality homes that are safe, comfortable, eco-friendly and smart. By revamping old residential blocks, idle factories and aging villages that have been enveloped by growing cities, we can use existing housing stock to meet new demand, while simultaneously improving housing quality and strengthening community infrastructure. Another direction we can pursue is downward, meaning a shift of focus to the county level. For years, many counties have been locked in a race for higher GDP. Going forward, they need to identify their leading industries and concentrate resources on areas where they hold real advantages. At the same time, policies and evaluations should be tailored to local conditions to avoid pointless competition. Li Zhi, Assistant Dean of the China Institute for Development Planning at Tsinghua University: A central paradox in China's urban development lies in the misalignment between its spatial planning and development agenda. While local development plans are revised every five years, spatial planning are typically drawn up over a 15-year horizon, thereby causing a lag in adjusting spatial planning to changing development goals. Cities vary in their industrial structures, so planning must be fitted accordingly. Moreover, county-level cities, regional centers and megacities each play distinct roles within the national economic agenda. Development plans should therefore be realistic, targeted and aligned with a city's specific position and responsibilities. Li Daokui: For decades, local finances have depended heavily on industrial expansion and large projects. This has steered authorities toward the kinds of projects that deliver fast GDP gains and sound fiscal returns. What gets sidelined, as a result, is the quieter, slower work of people-centered urbanization—reviving idle towns, regrouping hollowed out villages, helping rural migrants integrate fully into city life and improving everyday public services. These efforts matter enormously, but they rarely deliver quick results, which is why they often receive far less weight in current urban development assessments. To change this, national goals need to be broken down into measurable, enforceable metrics and built into the evaluation system. Only when indicators such as equitable access to basic public services are included in officials' performance reviews will local authorities be genuinely motivated to push reforms in areas like household registration and public service upgrades. Much like students who study harder when exams are looming, officials without clear performance pressures have little reason to take the initiative. What is equally important is to address local government debt. Over the past two decades, the many infrastructure and urban construction projects have powered fast development. But much of that building spree was financed through heavy borrowing. As a result, many local authorities have amassed a towering pile of debt. That burden now directly weakens their capacity for urban renewal. Economists call this a "debt overhang," where liabilities are so large that they discourage fresh investment. With a mountain of debt looming over them, local governments naturally prioritize debt repayment, leaving less room for household registration reform, service upgrade and other urban renewal projects that require money upfront. To break this impasse, the Central Government could consider issuing a tranche of long-term sovereign debt. Part of the funding would help ease local governments' repayment pressures, while the remainder could be channeled into a dedicated fund transferred directly to county administrations to upgrade public facilities and services and support the integration of rural migrants into urban life. Counties are the main front of China's urbanization. Over the 15th Five-Year Plan period, around 100 million rural migrants are expected to settle in county towns. Supporting their transition to full residency would not only boost domestic demand but also strengthen local finances over time, thereby creating a virtuous cycle in which economic growth and improvements in people's wellbeing reinforce one another. BR Copyedited by G.P. Wilson Comments to pengjiawei@cicgamericas.com |
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