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Old Posted Jun 27, 2018, 7:00 PM
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China is trying to turn itself into a country of 19 super-regions

China is trying to turn itself into a country of 19 super-regions


Jun 23rd 2018

Read More: https://www.economist.com/china/2018...-super-regions

Quote:
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By 2030 roughly one in five of the world’s city-dwellers will be Chinese. But this mushrooming is not without its flaws. Rules restricting migrants’ access to public services mean that some 250m people living in cities are second-class citizens, who could in theory be sent back to their home districts. That, in turn, has crimped the growth of China’s cities, which would otherwise be even bigger.

- Restraining pell-mell urbanisation may sound like a good thing, but it worries the government’s economists, since bigger cities are associated with higher productivity and faster economic growth. Hence a new plan to remake the country’s map. The idea is to foster the rise of mammoth urban clusters, anchored around giant hubs and containing dozens of smaller, but by no means small, nearby cities. The plan calls for 19 clusters in all, which would account for nine-tenths of economic activity. China would, in effect, condense into a country of super-regions. Three are already well on track: the Pearl River Delta, next to Hong Kong; the Yangzi River Delta, which surrounds Shanghai; and Jingjinji, centred on Beijing.

- For some urban planners, the strategy is beguiling. They see the clusters as engines for growth that could transform China into a wealthy, innovative powerhouse. But others think it is a trap—a government-driven exercise in development that will lead to gridlock and waste. --- Hu Qiuping, a safety manager for a chemicals company, is in the urban vanguard. She lives in Wuxi, a city of 6m about 150km west of Shanghai. A trip between the two used to take a couple of hours. Today the bullet train takes just 29 minutes. Every Monday and Friday she works in Wuxi, inspecting the chemicals factory. From Tuesday to Thursday she travels to the firm’s headquarters in Shanghai.

- For those in bedroom communities near London or Manhattan, Ms Hu’s train rides probably sound familiar. But three features make China’s super-regions exceptional. The first is scale. The biggest existing city cluster in the world is greater Tokyo, home to some 40m people. When it is fully connected the Yangzi delta, where Ms Hu is based, will be almost four times as big, with 150m people. The average population of the five biggest clusters that China hopes to develop is 110m. Part of the reason is that the physical area of most of the Chinese clusters will also be bigger. The most prosperous, the Pearl delta, is expected to cover 42,000 square kilometres, about the same as the Netherlands.

- Given that spread, it might seem nonsensical to talk of the clusters as unified entities. But the second point is the speed of transport links, notably the bullet trains between cities. This expands the viable area of China’s clusters. The Jingjinji region around Beijing has five high-speed train lines today. By 2020 there should be 12 more intercity lines, and another nine by 2030. Towns that are woven into the networks can see their fortunes change almost overnight. Plans for a new intercity train to Haining, a smaller city in the Yangzi River Delta, partly explain a doubling of house prices there. “The way that we measure distances has changed from space to time,” says Ren Yongsheng of Vantown, a property developer in Haining.

- The third difference is the top-down nature of the clusters. China is far from alone in wanting to knot cities together. “Cluster policy” has been in vogue in urban planning for years, with governments trying to devise the right mix of infrastructure and incentives to conjure up the next Silicon Valley, or something like it. But China has intervened more heavily than most. To encourage people to disperse throughout clusters, it has raised the barriers to obtaining a hukou, or official residency permit, in the wealthiest cities and lowered them in smaller ones nearby. Whereas Shanghai is picky about granting permits to migrants, Nanjing, to its west, has flung its doors open to university graduates.

- The concept of city clusters is grounded in the theory of agglomeration benefits, which holds that the bigger the city, the more productive it is. A large, integrated labour market makes it easier for employers to find the right people for the right jobs. As companies gather together, specialised supply chains can take shape. Knowledge also spreads more easily. In advanced countries, the doubling of a city’s population can increase productivity by 2-5%, according to the Organisation for Economic Co-operation and Development, a club mostly of rich countries. Studies have found that the potential gains in China are even bigger, perhaps because of its cities’ surprising lack of density.

- But China’s government has long resisted the emergence of true megacities. It aims to prevent the population of its two biggest cities, Beijing and Shanghai, from exceeding 23m and 25m, respectively, in 2035—little bigger than they are today. City clusters are a workaround. In the jargon of urban planners, they represent “borrowed size”: cities can, in principle, have the benefits of agglomeration with fewer of the downsides such as congestion. Alain Bertaud of New York University says that, if integrated well, China’s city clusters could, thanks to their size, achieve levels of productivity never seen in other countries. He says it would be comparable to the differences between England and the rest of the world during the Industrial Revolution.

- Sceptics, however, note that the most successful clusters tend not to be creations of the government. As China’s economy has modernised, the tendency towards concentration has been irresistible, especially in coastal areas. Some towns have specialised in electronics, others in the clothing industry and so on. There has also been much more migration to the coast than to other regions. It is the clusters that have coalesced naturally, especially the deltas of the Pearl and Yangzi rivers, that have the brightest prospects. Beyond these coastal conurbations, the outlook is dimmer. Several of the 19 designated clusters seem fanciful. An economic zone linking Nanning, a poor provincial capital, to Haikou, a port on Hainan island, some 500km and a ferry crossing away, is unlikely to amount to much.

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