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May 25, 2007

Rate of Urbanization has been underestimated in China

In 2004, it was estimated that China would be 58 to 60 percent urban 2020, and the urban population would hit 800 to 900 million. The urbanization rate was 37.7 percent in 2002. More recent figures suggest urbanization is at 42% in 2004, so urbanization is happening faster. A more recent university study indicates that China will be 50% urban in 2007. At a total population of 1.33 billion that means 665 million urban dwellers. 36-40 million people have been moving to the cities every year since 2002.

By 2015, at the rate of 35 million people per year moving to the cities, China would have 900 to 950 million in the cities and towns and 65-68% urbanization.

I believe the faster than expected rate of urbanization is also driving the growth of China's economy at faster than expected rate.

The small towns will accommodate 200 to 300 million, and the other 600 million will go to cities. To accommodate the 600 million people, 200 big cities, each holding over 300 million, or 300 cities each supporting 200 million are needed," predicts Lian Yuming, Director of the Beijing International Institute for City Development at the Beijing Summit of China City Forum.

The law of city development in the world indicates that urbanization process will start to accelerate in a country when its per capita GDP exceeds US$ 1,000; as the per capita GDP exceeds US $ 3,000, the development will rise rapidly.


More recent statistics show that small town populations increased 27.5% from 2000 to 2005

China is expecting 24 million new job seekers in cities and towns this year However, only 60% of the population is employed. So the young people moving to the cities and towns could find a job and then a fraction of them could move non-employed family over. Again consistent with about 30-35 million people moving to the cities and towns each year.

Here is a discussion on how to invest to benefit from China's development and urbanization

China's urban workers had a 17.8% wage gain over 2006

April 2007 statistics for China

A discussion of world urbanization is here at open the future

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