China’s People-Oriented Urbanization and Economic Growth


The sustained economic growth for China is attributed to urbanization being its main driving engine. Therefore, China has been more focused on increasing urbanization in the country in order to achieve sustainable economic development. Initially, China used the land-revenue urbanization strategy which eventually was faced by a lot of problems. This strategy was unfair and excluded other people such as new migrants from being acknowledged as an urban residence during the conversion of rural land to urban agglomerations (Lim, 2014, p.227). This formed unfulfilled and incomplete urbanization. Therefore, to address these problems, China has resorted to people-oriented urbanization; a strategy that takes all people and includes them into the urbanization process. In essence, China finds that it is essential to place people at the primary process of urbanization, aided by systematic as well as institutional innovation and also unleash the development capacity of urbanization in the form of reform (Lim, 2014, p.230). Therefore, there is need to increase reform of the fiscal together with the tax system and also financial and investment mechanisms, encourage the use of public-private partnership model, so as to aid in building a diverse as well as a sustainable urban financing system. Priority should be placed at gradually addressing the problem of basic public services for the rural migrants who are transferring to urban centers, so as to attain the objectives for people-oriented urbanization.

Suppose China maintains its commitment and make implementation for the necessary reforms, people-oriented urbanization could eventually become a global urbanization model, yet addressing the issue of pollution, increasing the economic growth of the country, making cities more favorable for people to settle and also allow people to reap benefits from the country’s development (Hofman, 2018, p. 27). It is necessary for China to manage its urbanization in order to attain its objective of being a high-income country. Proper administration of urbanization is important in unleashing the perspective of urban centers to increase efficacy and also encourage innovation. The main aim of people-oriented urbanization strategy is to make sure that good governance is practiced at the city level, at the same time meeting the challenge to reinforce urban environmental protection as well as to control pollution. Therefore, it is essential for China to establish institutional mechanisms for effectual, inclusive as well as sustainable urbanization. This paper will discuss the reforms that can make China be able to attain a sustainable as well as people-oriented urbanization at the same time addressing the land-revenue purported urbanization problem.

Institutional and land management reforms

To achieve sustainable as well as people-oriented urbanization, China has to undertake institutional and land management reforms. Since most of the urban expansion due to land-revenue purported urbanization in the past years was aimed at converting rural land, the farmland that is currently available is near the red line of approximately 120 million hectares that is actually regarded as the minimum required assuring food security (Chen and Naughton, 2017, p. 23). More efficient land use will definitely need strong and effective property rights, more land requisition compensation amount, new systems for transforming rural land to urban land uses, as well as market-driven pricing to be implemented in urban land allocation. This will help to avoid conflict between the landowners and the government. To ensure peaceful and effective land requisition that is centered on people, stronger and effective property rights have to be established. This should be accompanied by a reasonable amount of compensation to be paid to the landowners (Chen and Naughton, 2017, p. 25). China will also have to establish different and more eco-friendly systems of converting rural land to urban uses so as to ensure sustainability and the well-being of people.

Moreover, the Chinese government should establish legal limits that govern and control the amount of land that should be taken and converted for public purposes by the Chinese local governments. To ensure sustainability and food security, it is important for China to develop legal limits on the amount of land that should be taken for urban uses by the local governments. These limits will help in controlling land requisition thus helping in protecting the well-being of the people through sufficient food production from the rural farms (Chow, 2015, p. 12). People-oriented urbanization can also be achieved by China by protecting private investment through establishing market-based pricing for industrial land as well as shift the industrial land zoning to commercial uses and also residential uses. This will help to solve the problem of housing and insufficient places for people to live. This strategy will integrate the immigrants who had earlier been excluded and they will also be able to get a place to live. It will also promote the growth of the services industry as well as offer a robust financial foundation for small urban centers and also lower the cost of housing. This will eventually lower the cost of living for the people.

Reform the hukou household-registration system and labor force mobility

Given that there are more immigrants who are currently part of the Chinese society and reside in China and have been excluded in the urbanization processes, the hokou household-registration system requires to be reformed so as to offer equal access to essential and quality government services to all citizens inclusive of the legal immigrants. Initially, the land-revenue driven urbanization strategy used the hukou household-registration system which excluded the immigrants (Wang et al., 2002, p. 117). This led caused a problem whereby immigrants were left stranded and increased conflict between them and the government as they were excluded from the government housing allocation as the government requisite rural land for urban uses.  Additionally, most of the rural acquired were used for industrial and urban uses creating a shortage of residential area. Therefore, China should reform the hukou household registration system by evolving it into a residency system giving it a minimum public service standard to every resident.

Moreover, the Chinese government should establish a more mobile and flexible labor force. This can be achieved by removing barriers to labor movement from rural to urban centers and also between cities so as to assist in boosting workers’ wages. To survive, people need to have a source of income (Wang et al., 2002, p. 126). Therefore, the government should make it easy for people to get sources of income by facilitating and easing the people’s mobility either from rural to urban centers or from cities to cities in order to get employment and earn wages to facilitate their personal needs. In essence, as the country is focused on economic development through urbanization, it needs to focus on the people well-being by either providing employment to them or facilitating their efforts of seeking sources of income.

Putting urban finances on a more sustainable footing

The Chinese government can achieve the people-oriented urbanization by making the public interest a priority by putting urban finances on a more sustainable footing. This can be achieved by shifting from land revenue system to a revenue system which would make sure that a larger amount of the local expenditures are funded by the local revenues including, the property taxes, as well as revenue obtained out of urban services charges.  The government should avoid putting the financial burden for the local expenditure on the people directly but rather place it on the local governments to finance the local expenditure using the local revenues (Shambaugh, 2016, p. 128).  This will ease the lives of the people and also be able to sustain and maintain their livelihoods through the urbanization transition. It will also make it easy for the people who used to live in rural areas to adapt to urban areas due to the affordable cost of living since the local government supports the residents to finance local expenditures.

China should also create a financial discipline for its local governments in order to avoid irregular borrowing of funds which can lead to bad debts. However, local governments should be permitted to borrow funds directly but should be with strict rules provided by the government. A smooth development and transition to urbanization can be achieved by ensuring that funds are available at the local government through raising enough funds from local revenues or borrowing but the borrowing should not be irregular in such a manner that will lead to bad debts. Bad debts are detrimental to urbanization and development (Shambaugh, 2016, p. 129). Therefore, the Chinese government should establish strict rules on local government borrowing in order to achieve its people-oriented urbanization.  Having sufficient funds enable the government to provide better public services to the people as well as driving urbanization in the area.

Reform the urban planning and design

China can also attain people-oriented urbanization through the reformation of the urban planning and design. This can be achieved by considering the government prices specifically for the industrial land onto the market value as it will promote land-intensive industries to shift to small or secondary cities. The main intent here is to encourage a balanced development, balanced availability of job opportunities and also reducing the congestion of industries in one city in order to reduce the rate of pollution (“Made in China?,” 2015). All these are aimed at improving the well-being of the residents. More land will be available for residential uses rather than industrial uses, therefore, being able to accommodate a big population. Job opportunities will be available and evenly spread among cities and urban areas thus enabling people to secure job employment in order to earn wages. Decentralization of industries will also help in reducing environmental pollution thus promoting the health and well-being of the citizens. Furthermore, cities can also utilize the existing urban land by means of flexible zoning, characterized by small plots as well as more mixed land uses which can result in a more efficient urban growth and development. Also, China should also ensure that they link transport infrastructure with the urban areas as well as encouraging coordination among urban centers can promote better containment of both congestion and also environmental pollution.

Management of environmental pressures

     As a matter of fact, China already has established strict environmental laws, policies, and standards which are meant to protect the environment and to mitigate the environmental pressures. So, the most crucial task for attaining a greener, sustainable and people-oriented urbanization is enforcement. The environment is very important and needs to be protected in order to sustain the lives of the people and other living organisms. Every development or urbanizations strategies and activities need to take into consideration the environment by ensuring that they do not cause negative implications on the environment (Loo and Wang, 2017, p. 737). Protecting the environment promotes the wellbeing of the people. Unfortunately, China’s environment is significant damage due to the high environmental pressures that have been caused by urbanization and industrialization. For China to attain its sustainable as well as people-oriented urbanization, it has to manage the existing environmental pressures and prevent others from occurring. The environmental regulations need to be strictly implemented and accompanied by harsh punishment on those that violate these regulations. For instance, market-based tools like taxes as well as trading systems for water pollution, carbon, energy as well as air pollution may also be utilized in meeting the environmental targets (Barnett et al., 2015, p. 141). China requires placing more emphasis on green governance through enhancing institutions, and the incentives as well as instruments that facilitate proper environmental management. Environmental policies and standards should be more channeled and incorporated in every form of development. By doing so, China will be able to attain its people-oriented urbanization; urbanization that is based on environmental conservation and management, green management.

Improve local governance

Local governance is very important in ensuring the wellbeing of the citizens and also driving development and urbanization that is focus people-oriented. So, the Chinese government has to focus on improving its local governance so as to enhance government services that are aimed at improving the people’s wellbeing. Local governance can be improved through performance evaluation systems. China’s performance evaluation system for the local government personnel can be modified to provide more incentives for a additional effectiveness, inclusivity as well as sustainable urbanization activities (Wang et al., 2012, p. 354). These officials may be trained on how to provide public services efficiently. Moreover, the constant and regular audit should be conducted so as to evaluate their performance and their effectiveness in rendering public services. To add on it, local governments may also enhance their financial management as well as transparency using tools like medium-term expenditure framework inclusive of their full disclosure of financial expenditure and framework. Corruption and mismanagement of funds should be avoided and ensure that equitable allocation of resources is practiced. The Chinese government should ensure that the people are satisfied by public services (Wang et al., 2012, p. 355). People-oriented urbanization can only be achieved by ensuring that the people are satisfied by public or government services. Such satisfaction will make them cooperate with the government throughout the urbanization process.


To sum up, as China looks to be a more industrialized and urbanized country worldwide, has put more focus on promoting economic growth and development through urbanization. Since it is clearly determined that China’s economic growth is significantly propelled by urbanization, China now seeks to change its urbanization strategy from land-revenue driven urbanization to people-oriented urbanization so as to address the challenges posed by the land-revenue driven urbanization. It is evident that China actually has the capacity of attaining the people-oriented urbanization by undertaking reforms. These reforms include; institutional and land management reforms, the hukou household registration system, and labor force mobility reform, putting urban finances on a more sustainable footing, urban planning and design reforms, management of environmental pressures and the improvement of the local governance. By undertaking these reforms, China will be capable of attaining the people-oriented urbanization.