Asian cities set to fuel growth worldwide

Each year, hundreds of billions of dollars are poured into roads, railways, subways, bridges, tunnels and airports, infrastructure that is vital for cities of the 21st century. But it does not stop with infrastructure.

Cities must be livable. They must be clean, environmentally friendly and healthy places to live, work and raise a family. They must also be places where technology becomes part of the urban environment.

With China's urban population projected to rise to about 1 billion by 2030 - or close to 70 percent of the nation's population - China's leaders are seeking a more coordinated urbanization process.

Not only in China, but globally, there has been a huge shift of people from the countryside to cities. At the same time, it is creating enormous social and economic changes.

Economists say moving from the countryside to a large city is socially liberating for many people, giving them access to a wide range of services, such as healthcare and education, that are difficult to obtain in rural areas.

A study by Oxford Economics-"Which Cities Will Be Leading the Global Economy in 2035?"-forecast that by 2027 the aggregate gross domestic product of all Asian cities, led by China, will for the first time exceed the combined GDP of all North American and European cities.

It said that by 2035, Chinese cities will generate more output than all the cities in North America or Europe. New York will still be the biggest urban economy in the world, with the largest finance and business services sector. It will be followed by Tokyo and Los Angeles, with Shanghai and London tied for fourth place.

Yet China's cities will influence global economic growth by contributing an increasing share of national GDP.

The reason that Asian and Chinese cities look set to become bigger than the sum of European and North American cities is because their economies have been growing faster. This has been happening for several years, and Oxford Economics has forecast that it will continue, although more slowly.

Shenzhen and Guangzhou, both in Guangdong province, are already among the largest Chinese cities and are also among the fastest growing. This relates to the success and importance of the Pearl River Delta economy, with its favorable proximity to Southeast Asia and trade routes to Europe.

Costs are also competitive relative to Beijing and Shanghai, and the environmental challenges are arguably not as great.

Meanwhile, it is probably too early to say what impact the Belt and Road Initiative will have on Chinese cities in terms of overall employment and GDP numbers.

In the long term, if the BRI strengthens overland trade with Europe, central and southern Asia, the east coast of Africa and Southeast Asia, then a number of Chinese cities on those routes may see benefits.

However, it should be remembered that ports and logistics centers do not in themselves generate high levels of employment. Rotterdam, for example, is Europe's largest port but the city's economy is quite small by European standards.

There may even be more benefit to Beijing from the Belt and Road, since the initiative creates work for banks, lawyers, accountants and other advisers in China's capital. Many Chinese manufacturing cities will also benefit.

Cities are now the lifeblood of the global economy.

Today, roughly 4.2 billion people live in cities around the world, and this is set to rise to 5.2 billion by 2030 and 6.7 billion by 2050, according to United Nations data.

If the potential can be maximized, it has been estimated, roughly 85 percent of global growth could be generated in urban areas over the next decade.

New technologies can help governments tackle the challenges associated with cities. We're heading into a new era of "smart cities", where the connectedness of people, vehicles and infrastructure will allow cities to become cleaner, more efficient and safer places to live.

Making this possible across the globe is the rapid rollout of the smartphone, coupled with the internet of things and potentially game-changing technologies such as autonomous vehicles.

In the emerging world, as millions of people urbanize over the coming decades, many cities will be building infrastructure and will have the chance to maximize the economic benefits that come from using smart city technologies.

With China's growth, global growth will be driven even more by Asian economies. These countries' cities, as they get bigger and more dynamic, will provide close to 80 percent of growth.

As long as infrastructure spending is maintained, we could see China's urban areas becoming the most important part of an already important trend for the global economy.

The author is a China Daily correspondent based in Sydney.