Evolution of Chinese Urbanization Policy in FYPs
China’s unitary structure of governance is a hierarchical system through which functional responsibilities are delegated from the central to provincial governments (second tier), to a third tier of prefectures and prefecture-level cities, to a fourth tier of districts, counties, and county-level cities, and a fifth tier of towns, townships, and neighborhood committees in cities. Under the unitary structure, all organs of government, including party committees, peoples’ congresses, executing administrations, are required to follow the directions of their higher-level counterparts.
(I) 1950s-1970s: Cities as industrial basement
With the establishment in 1949 of the People’s Republic of China, the government focused on transforming cities into industrial bases. As a result, urban share of the national population grew rapidly from 10.1% in 1949 to 15.4% in 1957. Starting from 1958, China introduced the residency registration system (Hukou), under which all citizens of China
are assigned an agricultural or non-agricultural residency designation at birth, based on that held by parents, strictly limited rural-to-urban migration. China fell out with Soviet Union in 1963, and hence readjust its national spatial strategy to emphasizing warfare preparation. Until 1977, the urbanization level was literally frozen at this level in this decade.
(II) 1980-1990s:“controlling the big cities, moderating development of medium-sized cities,
encouraging growth of small cities”: National Urban Planning Law (1989)
In the first decade of opening up, from 1978 to 1988, China’s national urbanization strategy was stated as: “controlling the big cities, moderating development of medium-sized cities, encouraging growth of small cities”, which was later codified in the National Urban Planning Law in 1989. In 1994, the central and local government rearranged the fiscal liaison, ending up the local government’s reliance on inter-governmental transfer as the main revenue income; partly result from a common recognition for the urbanization financial demand. The local government profited, and made land-leasing become the principal source of off-budget revenues, leading to massive redevelopment of inner-city neighborhoods, and to new residential and industrial park development in outer urban and suburban areas in many cities. In 1990s, large volume of foreign investment in manufacturing poured in to many coastal cities, resulting real estate boom which has largely driven China’s economic growth up to today.
The national Eighth Five Year Plan (1991-1995) explicitly addressed the “urbanization” issue for the first time, however, it retained the policy “control the big cities, moderate development to medium-sized cities, and encourage the growth of small cities”. The national Ninth Five Year Plan (1996-2000) again repeated the central government’s urban policy, but strengthened the emphasis on controlling large cities: “strictly control the growth of big cities, reasonably develop medium-sized cities and small cities”.
At the end of the 1990s, the two most critical issues for the government are: 1) regional and rural-urban disparities; and 2) stagnation and low consumption in domestic market. These challenges formed the backdrop for the government’s adjusting urbanization policy.
(III) 10th FYP (2001-5): promoting town-based urbanisation
The Tenth Five Year Plan (2001-2005) explicitly put city and town-based urbanisation as one of five key policy thrusts. Three key policy measures were designed to promote towns-based urbanization: 1) allowing conversion of agricultural to non-agricultural hukou for rural residents permanently relocating to towns within their counties; 2) land reforms designed to create secondary markets in farming rights by allowing farmers to permanently sell off their rights to other farmers to encourage economies of scale in production; and 3) promotion of industrialization in towns with implied approval of conversion of agricultural land to town construction land (largely for industrial parks). The third policy measure, industrial development of rural towns, however was largely unsuccessful, and as a result, waves of rural surplus labours were forced to cities to find employment.
(IV) 11 FYP (2006-10) : competitive metropolitan and balanced development of different size cities
The Eleventh Five Year Plan (2006-2010) placed much stronger emphasis on the development of metropolitan regions across the country, and promoted an urbanization process through “balanced development” of cities and towns regardless of their size. Governments at both central and local levels appear to be now trying to plan and control development at a scale that encompasses both rural and urban focused developments.
(V) 12 FYP: inclusive growth and Eco-cities
12 FYP addresses urbanization as a central issue, and emphasizes on "inclusive growth", aim at reducing urban-rural income gap. In his report to kick-off the NPC and CPPCC, Primier Wen Jiabao emphasized to continue with the "Chinese characteristic urbanization", and garanteed to gradually assimilate migrant workers into urban society, on the condition that they have stable employment and have lived in the urban area for some years (not detailed). FYP projected that from 2011 to 2015, the population living in urban areas will continue to grow and is likely to reach 51.5%. 12 FYP targets at creating 45 million jobs in urban areas, keeping registered urban unemployment below 5% and boosting domestic consumption. As part of the drive to realize these goals, the government will boost investment in “improving people’s livelihood”, for example to built and renovate more apartments for low-income families, and extend the current urban pension schemes to including the 357 million urban residents. 12 FYP aims at 16% cut in energy intensity, corresponding to 17% cut in carbon intensity. Following the adaptation of the 12 FYP, a series of complementary policies, like the National Main Function Zone (2010) etc.
