Urban development juggernaut for China | The Daily Star
12:00 AM, August 10, 2010 / LAST MODIFIED: 12:00 AM, August 10, 2010


Urban development juggernaut for China

A worker waters a tree outside the construction site of highly priced apartments in Beijing's Central Business District.Photo: Reuters

"That means growth," Stephen Green, chief China economist at Standard Chartered, told Reuters Insider TV. "And it means better education and health care. It means higher labour productivity and higher wages. People living in urban areas tend to consume more. So this is really the crux of China's transition into a wealthier, more balanced economy, and the faster it happens, the better."
From the window of Duan Guofei's new apartment, Gushi's ambition to leap from sleepy town to grandiose city begins to look more plausible -- even if it is not happening as fast as they might like in terms of creating jobs.
Duan and his wife, Rang Fei, live in Xiangzhang Garden, a housing development where many apartments have been sold and real estate agents give tours to a stream of prospective buyers.
Their apartment is decorated with soft-focus wedding portraits, and a large flat-screen television sits across from their glass coffee table. It is a far cry from the mud-brick village homes they grew up in. Duan's parents were farmers and his wife's father a village teacher.
The young couple is part of a generational shift in rural China. They have worked in far-off cities, too costly and officially unwelcoming to offer them a permanent home, and yet they feel too attached to urban life to return to their home villages.
"Before you used to build a house in your home village," Duan said. "Now everyone is buying in the county seat. All my parent's relatives have moved here, because life is so much easier."
Gushi, which lies in a remote corner of Henan province bordering on rural Anhui province, is an intense example of how migration has transformed the Chinese countryside.
About 500,000 of its 1.7 million population work elsewhere as migrants in factories, shops or offices or as merchants, said Cai Liming, deputy head of the county propaganda department. The county government is betting it can draw these migrants back to buy homes, invest their savings and create jobs. But many find only disappointment when they migrate back.
"There's some work here but the wages are lower," said Wu Anxia, who moved here from Shanghai to ensure her son went to a decent school, because government restrictions barred children of migrants from good ones in Shanghai. "I was a warehouse manager in Shanghai," Wu said. "But back here in Gushi, there's nothing. So I became a cleaner."
In the first phase of urbanisation, from the start of the country's post-Mao reform era in 1978 to the present, rural citizens began migrating to booming coastal towns from Tianjin in the north to Shenzhen in the south. About 140 million made the trek last year.
Few of these migrants stay on. The hukou system of residency registration deprives them of benefits, such as public education, away from their home villages. Only 19 percent of rural migrants had settled permanently in cities as of 2004, according to the National Bureau of Statistics.
In the new phase of urbanisation, the government's strategy is not to move farmers to big coastal cities, but to draw them to new urban areas in the hinterland. Its clearest expression came in the Communist Party's No. 1 Document in January, a policy blueprint for 2010. In it, China vowed to reform the hukou system by giving rural citizens the right to the same services as urbanites -- but only if they move to small cities within their own province.
By 2025, the country will have 221 cities with populations of a million or more, compared to 35 in Europe, according to a report by McKinsey & Co, the consultancy firm. China had 108 such cities in 2004.
But whereas work awaited migrants who flocked to factories on the coast over the past two decades, the creation of cities and employment by decree in the interior is less of a sure thing.
China tried once before to develop small cities in a hukou reform experiment in the 1990s.
"There was not much success because of the limited employment opportunities and poor public services in small cities," said Tao Ran, an economist at Renmin University in Beijing. The modern furnishings in Duan and Rang's apartment in Xiangzhang Garden cannot gloss over Gushi's shaky prospects for creating lasting jobs. Duan earns about 2,000 yuan ($295) a month decorating homes. But officials fret the property sector, the pillar of the town's economy, will suffer as empty apartments pile up.
The man who presided over Gushi's transformation now waits out his days in a detention cell. Guo Yongchang was the Communist Party secretary of the county for four years, before his fall in a cloud of corruption charges last year. One of his subordinates, Fu Kongdao, the deputy head of the county in charge of land decisions, committed suicide in early 2009.
Guo's ambitions for the town, and for himself, are visible across Gushi, and so are the costs. They are seen in the 10-storey polished stone building that dominates the new government compound, in the expansive square next to it, and in the unfinished villas marooned on once-fertile farmland.

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