China offers growth lesson

Economic growth in China highlights the need to recognise the principles of sustainable development, suggests Ivan Turok.

The cylinders of China's burgeoning economic engine, its cities, are powerful magnets drawing foreign investment, government infrastructure spending and labour migration from the countryside.

The bonanza began in southern coastal cities such as Shenzhen during the 1980s and subsequently spread elsewhere. Urbanisation is happening on a scale without worldwide historic parallel, creating towering skyscrapers and consuming the surrounding farmland. Yet underlying this economic progress are nagging concerns about the sustainability of current trends and the risks to future prosperity.

The most visible sign of city growth is a huge property boom in high-rise housing, offices and business parks stoked by the release of pent-up demand from the cramped substandard municipal housing blocks of old.

Another important catalyst of urban change has been the emergence of a new class of entrepreneurs, managers and professionals. They have taken full advantage of the shift towards a market economy by starting or acquiring enterprises of all kinds and introducing a fresh ethos and lifestyle to urban society. This has fuelled a consumer boom in cars, luxury household items, fashionable clothing, electronic devices and up-market housing.

Government incentives and infrastructure have underpinned the resurgent cities. Development zones in the southern coastal belt have exploited the economic links with Hong Kong. The state remains a major investor in roads, rail, ports, power and water supply. Every city has several new ring roads.

Large-scale migration injects both labour supply and consumer demand into the growth machine. China's urban population - currently 36 per cent of the total - is forecast to increase over the next 25 years by a staggering 300 million. Despite government attempts at regulation, people continue to leave the countryside in search of economic opportunity. The movement of skilled staff from northern cities to their more prosperous southern counterparts is a newer phenomenon.

The expansive form of urban growth is a looming concern. Although new housing typically consists of apartment blocks built at high density, commercial and business park development is more spread out. Development projects around the city complicate the provision of public transport systems and encourage car travel, with implications for road congestion, air quality and safety on the streets.

Gridlock and pollution are already a problem in cities like Beijing, despite car ownership rates below ten per cent. In contrast, Dalian on the east coast is obliged to plan more carefully and redevelop lower-density inner areas because it is hemmed in by the sea and surrounding hills.

According to the UN, China's cities have some of the highest levels of air pollution anywhere in the world.

The imbalanced geography of development is a second challenge. With growth rates approaching 20 per cent, southern cities are overheating, which has led to water and power shortages, overloaded transport and higher raw material prices. In response, the government has tried to curb growth by cutting steel and cement production and reducing bank loans to small and medium-sized enterprises.

Yet the northern cities and the rural interior need all the jobs they can get due to the decline of heavy industries. Old industrial areas need retraining programmes and business support schemes to facilitate adjustment and diversification. Migration causes a loss of skills to the affected regions and wasteful duplication of public infrastructure and services.

A more explicit regional and rural development policy might help to alleviate harmful imbalances and distortions. Although China has made huge progress in lifting 300 million people out of poverty over the past 25 years, there are still more than 160 million living on less than a dollar a day, mostly in the rural interior.

The property-led character of growth poses a third challenge. The staggering scale of construction risks outstripping occupier demand, especially as developers' understanding of the market is limited. Empty buildings suggest a growing gap between property supply and the real economy. There are also concerns about low-quality construction and materials causing premature deterioration of the building stock, the liveability of surrounding areas and the urban design quality.

At the heart of these problems lies uncertainty in government and civil society about the right balance between planning and market forces. Co-ordinated public action has brought about big improvements in education, health and housing, at least in the relatively privileged cities.

However, socio-economic problems tend to be seen through many filters rather than an integrated urban perspective with proper co-ordination of land-use, transport and investment. Individual property redevelopments are handled speedily but not always sympathetically to the architectural heritage and natural surroundings.

A change in perspective is needed to give China's local institutions and communities a stronger role in urban planning and design and to find ways of respecting environmental considerations. Unprecedented prosperity should provide its cities with the resources and demands for better management of development in the interests of all-round sustainability.

Ivan Turok is professor of urban economic development at the University of Glasgow. He recently returned from a study visit to Beijing, Shenyang, Dalian and Changchun at the invitation of the Chinese Academy of Sciences North-East Institute of Geography and Agricultural Ecology.

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