Sustainable urbanization

The rich experiences of Germany and other countries can help China avoid traps and overcome problems

When Premier Li Keqiang visited Germany in late May, a number of cooperation agreements were signed between the two countries, and they agreed to implement the China-German urbanization partnership and carry out cooperation to build low-carbon eco-cities. Urbanization therefore is an important field for exchange and cooperation between the two countries, and indeed China and Europe.

But four questions concerning China's urbanization need to be answered.

First, how to increase the urbanization rate?

According to international experience, when a country reaches the middle or late period of industrialization, its urbanization rate is usually around 70 percent. In 2012, China's urbanization rate was officially 52.6 percent, which was more or less the same level as that of Germany in 1950 (52.9 percent), Japan in 1955 (56 percent), and that of the Republic of Korea in 1978 (53.3 percent).

All these demonstrate that, although China's urbanization has been proceeding rapidly in recent years, its urbanization rate is not as high as it should be and it is lagging behind its industrialization. However, it also implies the huge potential of domestic demand will be a future driver for development, which is a major condition to support a medium GDP annual growth rate of 7 to 8 percent over the next decade. That is to say, China's urbanization can potentially develop at an annual rate of 1 to 1.2 percent over the next 10 years. Learning from the urbanization experiences of other countries, Germany in particular, will be very important if China is to achieve smooth and more sustainable urbanization.

Second, how to increase the population level of urbanization?

The official urbanization rate is 52.6 percent, but this includes the 260 million rural migrant workers in the urban population. If rural migrant workers are not included, China's real urbanization rate is only 35.2 percent. This is much lower than the world average of around 52 percent, and it is less than half that of countries such as Germany and the ROK.

Premier Li Keqiang has long been emphasizing that "the essence and the core of urbanization is population urbanization". The low level of population urbanization directly affects not only the quality of urbanization, but also the upgrading of the economic structure and transformation of economic development patterns.