More on China’s urbanization

In the last fifteen years, the inland city of Chongqing has doubled in population to almost seven million people. In order to keep up with China’s ambitious plans for urbanization of its populace (half of whom still live in farming communities), Chongqing has to add 500,000 people a year. Economist:

in the heart of China, the hilly riverside city of Chongqing is burning with ambition and wreathed in a shroud of smog. Visitors are astonished by the scale and pace of its growth: shopping malls, expressways and a throng of skyscrapers, including one that looks like the Chrysler building. Work on a $200m opera house is under way. But Chongqing’s megacity dreams are troubled.

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In China’s sometimes confusing administrative nomenclature, Chongqing is called a municipality, one of only four that enjoy provincial-level status (the others are Beijing, Shanghai and Tianjin). It is a region as well as a city. The municipality covers an area the size of Scotland (much of it just as rugged), and its population is scattered over thousands of towns and villages straddling the Yangzi river. According to official figures, about 45% of Chongqing’s people live in urban areas (nearly half in the would-be-Manhattan of Chongqing proper). But Chongqing’s leaders, determined to make their vast municipality an oasis of modernity in China’s backward west, say that by 2020 the municipality must be 70% “urbanised”.

Statistics like these make China’s property developers drool. The municipality’s official population is more than 30m, which if it were a single city would make it one of the largest in the world. To achieve the 2020 target, country-dwellers must move into urban areas at a rate of more than 500,000 a year…

Chongqing has been helped by massive central-government support since the late 1990s, aimed at reducing the imbalance between the prosperous coast and more sluggish interior…All this money is bringing rural job-seekers flocking into Chongqing. Many, known as stick men, loiter on the streets carrying bamboo poles used for lugging loads up the hilly streets (so steep that pedal-driven vehicles are hardly to be seen). The city is one of the magnets for the huge shift of people from the countryside that is transforming China. Yet, as Chongqing also shows, maintaining this flow of people is becoming increasingly tricky.

To see why, go the village of Qilin, a lush expanse of paddy fields, bamboo and maize about 60km (38 miles) north-east of Chongqing city. A billboard at the village headquarters says the population is 4,300. Nearly 2,000 of them have gone to work elsewhere. Those left behind are mostly school-age children and the middle-aged and elderly, who would have little chance of finding jobs in urban areas. Labour-intensive industries prefer people in their late teens and early 20s, but they have gone…

Chongqing…is China’s third- or fourth-biggest car manufacturing centre, with an expected output of 1m vehicles this year, up 25% from 2006. Like the rest of China, Chongqing is booming. In the first six months of this year its economy grew by more than 14%, compared with 11.5% during that period for the country as a whole. In a decade, it could be as wealthy as Shanghai now.

China’s middle class today is bigger than the population of France, bigger than Germany’s — maybe bigger then both of them by now, given the dizzying pace of change. “Chongqing…could be as wealthy as Shanghai” in ten years or so. The velocity of China’s progress towards a huge and prosperous middle class continues to be breathtaking.

2 Responses to “More on China’s urbanization”

  1. gs Says:

    Wishing the Chinese well, I share Dinocrat’s wonder and concern at the pace of their development. Iirc I’ve previously commented that their trajectory toward modernity cannot be considered robust until they’ve passed one or two business cycles.

  2. gs Says:

    This is interesting: the P/E of the FTSE/Xinhua 25 is 22 (click on the ‘Portfolio’ tab at the link). Japan’s is 19. The S&P 500′s prospective P/E is 15; the Nasdaq’s, 21. The S&P Europe 350 comes in at 14. If China’s growth is real, it isn’t insanely priced.

    (Jack recently quoted the WSJ:

    Few consider Chinese stock prices cheap: Shanghai-listed shares trade at an average 55 times last year’s earnings.

    This number might be compatible with the Morningstar result I cited if Morningstar weights the average by market cap and the Journal does not.)

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