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May 09, 2013

China will have new urbanization plan unveiled later this year

The National Development and Reform Commission, China’s state planning agency, is due to produce a report later this year laying out a path for a new kind of urbanization. Executing on the transition to this new plan will be key to China's future growth, development and uplifting the lower classes into a solid middle class. It could be the difference between whether China stalled out at just under double the GDP of the US or is able to push on to about 4 times the GDP of the US.

Li Tie, director general of the NDRC’s China Center for Urban Development, said the report involves a “new model of city development,” which would include three main parts:

1. There would be a focus on “low carbon” development — meaning trying to assure Chinese cities ease their horrendous pollution.

2. It would be reform of the household registration, or hukou, system. For smaller cities the system would be “totally liberalized,” Mr. Li said. He didn’t lay out his thoughts fully, but seemed to suggest that all residents would enjoy the same rights and benefits regardless of where they were born. For larger cities, migrants would get “resident cards” which assured them “improved treatment” and access to social services.

3. China would look to increase “clustering” in big cities. Mr. Li didn’t explain what he meant by that, but in urban planning speak, clustering usually means trying to develop industries or specialties in a city or group of cities. That’s a way to build on the intellectual frisson of urban life, where new ideas can spawn new industries.

Those proposals address some of the most vexing problems with life in China’s cities: pollution, widening social inequality and lack of innovation. They also suggest that China’s leaders are committed to making urbanization into something more than another building spree.

There has been talk of residency permits for replacing the Hukou back in March, 2013



There has been talk of a US$6 trillion plan over ten years to increase social programs and revamp urbanization.

They have to build up the housing, education and medical facilities.
They have to provide more social services.
They have to create more jobs and higher quality jobs.
Interest-rate liberalization - provide a better return to individual savers.
Shift the dividend policy for state-owned enterprises


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