October 27, 1999	atimes.com

China China looks to new megacities to spur growth By Antoaneta Bezlova BEIJING - Alarmed by more than 20 months of enduring deflation, China is about to reverse its long-standing policy against creating megacities, and accelerate urbanization in a bid to propel the country's economic growth. New plans to turn 300 million peasants into urban residents in the next 15 years were announced last week by the powerful State Development Planning Commission (SDPC) which is the key drafter of the country's 10th Five-Year Plan (2001-05). These gargantuan plans amount to a dramatic change in the country's urbanization policy so far. For years, China has been fighting a vexatious battle to contain the rise of megacities in its Marxist belief that big cities have outlived their days. Under late paramount leader Deng Xiaoping, the country favored smaller cities on the assumption that large and medium cities alone could not absorb the vast surplus rural population. In the early 1990s, it has tried to create buffer cities - small urban settlements with populations of less than 500,000 people - to prevent the country's few big cities from swelling to unmanageable proportions. More than 200 such settlements were built in the seven years prior to the government ban on use of arable land for construction in 1997. Then, alarmed by satellite photos which showed that China was losing at least 500,000 hectares of arable land a year to housing, roads and factories, the government discouraged further expansion of small towns. Now, economic pundits from the liberal-minded National Economy Research Institute who designed the new urbanization plan, suggest China should reverse the policy of opposing megacities and develop super-large and large cities. After trying every reflationary measure short of devaluation, China's planners are increasingly aware they are running out of options to halt the country's declining growth. According to Xu Lin, SDPC division director, creating megacities will kill two birds with one stone. It will rekindle sluggish consumer demand, boost investment spending, and raise China's low urbanization level to the world average. ''We deem that accelerating urbanization pace is the most effective way to expand domestic demand and encourage rural modernization,'' Xu told the China Daily newspaper. The SDPC envisages 85 million peasants moving to the cities within the next five years. It is assumed that each of them will spend $3,600 on housing and infrastructure, amounting to capital spending of over $300 billion. Xu Lin is optimistic that the new policy will stimulate domestic demand for products such as TV sets, refrigerators and washing machines, which state-owned enterprises keep churning out but which have been gathering dust in warehouses across the country. He predicts that purchases worth $48.2 billion in the next five years will greatly help diminish oversupply. The sheer magnitude of the proposed migration to the cities beggars imagination. If 85 million peasants are to be shifted to the cities in the next five years, the movement will bear uncanny resemblance to Chairman Mao Zedong's campaign to send urban intellectuals to the countryside during the Cultural Revolution. More than 70 million people were sent to the villages in the 1960s in a tide of ''reverse urbanization'', the consequences of which China is still struggling to overcome. China says its current urbanization rate is 32 percent, which means a total of 350 million people live in cities. The real figure, though, is more likely about 17 percent if economic and social indicators of the cities are considered. Only 219 million Chinese, or 17.4 percent of the population, have access to tap water - a basic indicator for urbanization - and only 207 million are registered as non-agricultural population. What economic reformers under Deng did in a desperate bid to catch up with the world's average urbanization rate of 50 percent was to redefine the urban areas of the country by adding thousands of small rural townships. They encouraged peasants to flock to these towns by giving them legal residency and a job. Most of these new urban residents live in towns with a population less than 200,000. China has only two megacities of more than 10 million people - Shanghai and Beijing. The third city, Chongqing, with a registered population of over 30 million people, is an artificial megacity created through merging Chongqing proper with the Three Gorges basin. City planners claim China's urbanization is progressing at a rate of 0.5 percent a year, but official figures suggest that the influx of rural migrants to the cities is slowing because of rising urban unemployment and restrictions on the kind of work they are allowed to do. Beijing and Shanghai have tried to expel as many rural migrants as possible in the past five years by introducing regulations limiting the sectors in which migrants can work and launching periodic raids on migrants with no residency permits. (Inter Press Service)

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