Few days ago, I was roaming about in a hutong in Si Dao Kou, which lies alongside the third ring road near Da Zhong Si subway station, one of the busiest areas in Beijing. I expected to see anther hurly burly scene in the city: private cars come and go with noisy horns, pedestrians walk with high-tech cellphones in their hand and fashionable people come out of luxury stores holding a Gucci bag.

What I saw shocked me, even though I have been living in Beijing for almost four years: the hutong was taken over by middle-aged or elder street vendors. Squatting by the roadside, they were selling shoes, T-shirts, trousers, fans and lamps—all of which were, as one could easily tell from their outlooks, second-hand. Between the roadside market and the busy main road lies a grand shopping mall with a cinema attached to it, a mall that neither sellers or buyers in the second-hand market can afford to shop in.

Sadly, the sight is not exceptional in Beijing—the economic, cultural and political capital of China. The reality is, with the rapid urbanization process, quite a number of the rural poor         are forced into the metropolis, living in urban slums with low living standard.


Perhaps that is why the Reuter’s news article on May 23 has caught so much public attention.

According to Reuter, Premier Li Keqiang has rejected an urbanization proposal drafted by the National Development and Reform Commission (NDRC), a proposal that plans to spend $6.5 trillion (40 trillion yuan)to bring 400 million people to its cities over the next decade so as to stimulate the economy. Sources said that China’s top leaders fear another large scale of spending could increase the already-heavy local debts and inflate a property bubble.

The NDRC denied the report the next day, affirming that the urbanization plan will be issued in this year.

Nevertheless, the original piece has once again triggered a round of heated debate on the urbanization issue—or more accurately, “townization” (cheng zhen hua) as to differentiate from cheng shi hua in Chinese.

From Cheng Shi Hua to Cheng Zhen Hua

The process of urbanization in China keeps pacing up ever since the enforcement of the Reform and Opening policy in 1978. Five hundred million people migrated into cities in the past three decades, a scale that outnumbered the total population of America, the United Kingdom, France and Italy. Last year, China’s total urban population rose to 52.6% of the total population, first time larger than its rural population.

The fact that China’s economic growth goes hand in hand with its urbanization tells the significance of such figure as statistics suggested that every 1% up of the urbanization rate would bring about $1.63 billion (10 billion yuan) of consumption and investment in infrastructure construction increases.

But it might be more of a figure for the government and top leaders than for ordinary citizens just as what Weibo user @red007 doubted: “Are the people being urbanized willing to be urbanized or is it just the government’s own wish? If it is the latter, the consequences [of urbanization] suck. ” User @好时光音乐睡眠仪 echoed by saying that “urbanization should be a natural process, but the Chinese government is used to transforming the society without regard to the reality; it is just crazy.”

What @red007 said is exactly the core problem with the issue: China’s urbanization is not about urbanizing its people but about turning farmlands into city-like places—without building them and making them dweller-friendly. Meanwhile, the temptation of huge profits from grabbing lands from the hand of farmers makes the blind expansion even more uncontrollable.

And there is the hukou (the household registration system) issue. In China, social welfare, including education , medicare, pension, qualification of buying houses or even cars, is bonded with one’s hukou and it varies widely from urban to rural hukou.

The list of problems caused by previous urbanization process is endless and that explains why the incumbent leaders, President Xi Jinping and Premier Li Keqiang, reframed the term cheng shi hua (urbanization) to cheng zhen hua (townization) and made it one of the priority work this year. While cheng shi hua emphasizes on centering development on large and medium-sized cities, cheng zhen hua switches the attention back to upgrading the rural sites and advocates transferring the rural population to near towns instead of to metropolis.

Urbanizaion: carnivals of the privileged groups?

Yet, the change of wording fails to clear the doubts of Chinese netizens, some of who regard the NDRC’s urbanization drafts as “carnivals of the privileged groups”. Weibo user @家兴不如国旺天下太平 warned that:

“If the government forcefully push the trend of urbanization, it would become a good chance for the government to raise money and make profits whereas a disaster for the people. However, it will also be a catastrophe for the government in the long term. Do not take it for granted that if a government can be powerful enough to force its people to pay for all the bad results—the more the people pays, the more debts the government bears and debts will need to be paid sooner or later.”

The truth is, China has been relying on local government spending to support urbanization.

China Development Bank is reported to have signed a Memorandum of Understanding (MOU) recently to lend $24.47 billion (150 billion yuan) to southeastern Fujian province to support its urbanization in the next three years and channel 30 billion yuan into urban projects in central Anhui province, acts that accelerate worries about the loan binge in China. In fact, Fitch cut China’s long-term currency rating to AA- from A+, warning against the government’s excessive debt levels. Fitch estimated China’s local government debt at $2.12 trillion (13 trillion yuan)—a quarter of its GDP.

The stunning figure highlights the urgency of adjusting the urbanization path as is suggested by Weibo user @何翠云:

“The nature of so-called hukou reforms and cheng zhen hua is a fair redistribution of wealth. The amount of resources is fixed; if the government does not alter its ruling style and corrupted officials do not correct their wrongdoings, what could be left for ordinary people? Without the redistribution of profits, restrictions on the government’s power and the supervision of corruption, hukou and cheng zhen hua reforms would doom to failure.”

However, in the eyes of the government, such worries seem unnecessary. Kong Jingyuan, director of the NDRC, reassured that the conference on promoting urbanization would be held later this year and the urbanization plan would be issued this year as scheduled.