Li Keqiang

What does Chinese premier Li Keqiang think of urbanisation, really?

PUBLISHED : Tuesday, 28 May, 2013, 10:00pm
UPDATED : Tuesday, 28 May, 2013, 10:02pm

The scale of China’s urbanisation is unprecedented in human history, as Premier Li Keqiang said in his first press conference after taking office. The initiative is not only crucial to the development of China, but also has implications for the rest of the world. Therefore, it is only natural for people to pay close attention to its details and progress.

So, when the “news” emerged recently that Li had “vetoed China’s 40-trillion-yuan urbanisation plan”, it took everybody by surprise. This is either "creative reporting" on the part of the media or an overzealous attempt to score a scoop. Regrettably, though, the report has put some government departments in a very awkward position. Discerning readers should understand that when Premier Li is in the process of taking China’s market-orientated reforms to the next level, there should be no reason for the government to unveil such a plan now. And since it never existed, Li could not have imposed a veto.

It is also worth noting an article Premier Li published in the Swiss newspaper Neue Zürcher Zeitung during his visit to Switzerland last week. It highlights “China’s ongoing efforts to prudently drive the country’s urbanisation —an endeavour which is expected to unlock the ever-growing market demand of hundreds of millions living in rural areas.” These words summarise the core idea in Li’s plan, but I would like to highlight some aspects of the drive as follows:

First, a new wave of urbanisation is a natural step in the overall modernisation of China. After more than three decades of reforms and “open door” policies, the country has achieved a certain degree of economic strength. Time is ripe now to seriously tacklw the urban-rural divide. Urbanisation not only makes sense to many of the rural population, but is also a way for the government to achieve a fair provision of basic public services. Farmers have the right to demand due and reasonable opportunities. It might take time for this to happen, but the possibilities are real.  The idea that farmers can find a better life in the city is not just a fairy tale.

Premier Li has a thorough understanding of what China's urbanisaton entails. He has said that he believes it can boost consumption, investment and employment, which will generate wealth and benefit the people as a whole. He frequently visits rural villages and conducts “field studies” to understand the aspirations of people there. Many farmers have reportedly told him that they want to lead a better life like those in the city. With urbanisation opening up possibilities, they can relocate and start by working in manufacturing or service industries. For those who stay in the village, there is still a chance to boost their incomes or even “get rich” by running a larger scale of operation. The trend is unavoidable and, indeed, more than ten million farmers are now making the move to cities every year.

This new type of urbanisation is a people-oriented programme. China currently has 260 million rural migrant workers. It is a long and complicated process for them to plan a move and become part of urban society. Issues like employment support and social security also come into play. Li has pointed out that urbanisation must not mean simply building larger and larger cities. Instead, it should allow for the balanced development of small, medium and large cities in eastern, central and western parts of China.

Attention should also be given to stopping the spread of the morbid phenomenon where shiny skyscrapers dominate one side of the city while run-down shanties rule the other. In fact, Li has pledged that his administration would lift more than 10 million families out of urban shanty towns, as a way of solving the problem and lowering the threshold for urbanisation. He has stressed it is particularly important for the new type of urbanisation to go hand in hand with the modernisation of farming methods, as well as to safeguard arable land, ensure food security, and protect the interests of farmers.

Urbanisation is obviously a complicated re-engineering project on a grand scale, involving many complex problems and will lead to profound economic and social change. Li has therefore emphasised that other reforms should proceed in parallel to ensure steady progress and that there should be corresponding change to modernise industry, agriculture, and information.

Government agencies, such as the National Development and Reform Commission, have been proactively implementing the premier’s ideas and administrative plans. It is well known that China’s 12th Five-year Plan is in fact Li’s brainchild and, more than a year ago, the Commission pushed for research on urbanisation with emphasis on people, “green” policies, lowering carbon emissions, and steady urbanisation.

Currently, the Commission is close to finalising a national blueprint, but it has yet to work out forecasts on the size of the investment needed. The plan has yet to be submitted to the State Council, so the report that Premier Li had vetoed a 40-trillion-yuan urbanisation plan is totally unfounded. The Commission has noted that it would work out plans to gradually and comprehensively reform the household registration system, based on the capacity of each city and the size of the migrant population that has already moved in. The Commission would also look into the provision of relevant public services, reforms for the social security system, and measures for an orderly transition of migrant farmers into urban areas. The ultimate goal is to extend basic public services to a larger permanent resident population.

The full urbanisation plan is set to be introduced in a year. It is a massive project and requires constructive ideas and suggestions from the most capable. To conclude, China’s rural residents are being presented with an once-in-a-lifetime opportunity for development and betterment. This is a great opportunity for China, and the whole world. 

The author is a Beijing-based media commentator.