Li Keqiang

Li Keqiang warns of urbanisation risks in first speech as premier

Pushing villagers into cities could cause loss of arable land and create urban poverty

PUBLISHED : Monday, 18 March, 2013, 12:00am
UPDATED : Monday, 18 March, 2013, 5:28am


Related topics

Premier Li Keqiang has warned of the hidden risks of an "unprecedented" urbanisation push in the world's most populous nation, saying the relocation of millions of rural residents to cities would take a long time.

Addressing his first news conference as premier yesterday, at the end of the annual legislative meeting, Li said the risks include the loss of arable land and creation of new urban poverty, suggesting he would proceed with the urbanisation carefully.

Some researchers have warned that migrant workers might lose their countryside land once they are relocated, and that a lack of good jobs in urban areas may keep their incomes low, causing the wealth gap to widen.

Analysts have said asset bubbles could form due to massive investment in infrastructure projects by local authorities in the name of urbanisation. Some of the projects ignore real demand.

In response, Li said the urbanisation strategy was crucial to the interests of rural residents. He said farmers often told him during his tours to the countryside that they wished to "live the same lives as urban dwellers".

"Urbanisation will usher in a huge amount of consumption and investment demand, increase job opportunities, create wealth for farmers and bring benefits to the people," said Li, who began exploring the topic as a doctoral student at Peking University.

But he also cautioned that it was also a "complex systemic project" that must be bolstered with various reforms.

In carrying out the project, the government would have to consider the different stages of development between cities and regions, he said.

"Urbanisation is not about building big, sprawling cities," he said. "We should aim to avoid the typical urban malady where skyscrapers coexist with shanty towns."

The new administration will upgrade substandard housing for more than 10 million households over the next five years, he said.

Meanwhile, the government was determined to protect farmland and secure grain supplies to safeguard farmers' livelihoods, Li said. His pledge reiterated that made by his predecessor, Wen Jiabao , without adding new details.

He also didn't elaborate on the specific reforms needed to propel the urbanisation drive.

Official statistics show that more than half of the mainland's 1.3 billion people now live in cities, but the actual rate is much lower if migrant workers outside the welfare net are excluded.

Policy advisers have suggested that land ownership be reformed to allow farmers to sell their land at market prices. They also urged Beijing to overhaul the household registration system, or hukou, that prevents migrant workers from enjoying urban education, medical and other services in cities where they live but are not officially residents.

Li said he would study the more than 500 suggestions submitted by lawmakers at the legislative meeting. He also vowed to narrow the gap between the social welfare enjoyed by rural and urban dwellers in such area as old age pensions.

Li Yang, deputy president of the Chinese Academy of Social Sciences, said in a recent interview that the complexity of the urbanisation proposal was now becoming apparent, forcing the government to postpone its release, originally slated for the March legislative meeting.

"Deeper research into this issue has revealed many problems," he said.