Governments must plan carefully and make a bigger effort to improve the welfare system amid the mainland's unprecedented urbanisation drive, panellists at the Boao Forum for Asia warned.
Zhang Yue - president of air-conditioner manufacturer Broad Group, based in Hunan - said 60 per cent of urban construction in the world occurred in China, with the country accounting for more than 60 per cent of global output and consumption of materials such as cement, glass and steel. However, he said, in many areas urbanisation lacked scientific planning.
He noted that it was not easy to reconstruct roads and buildings. "If we plan wrong, then future generations may have to bear the bad results," Zhang said during the panel discussion.
In 2011, the National Bureau of Statistics said the percentage of the population living in cities had exceeded 52 per cent last year, from just 36.2 per cent in 2000.
Fred Hu Zuliu, founder and chairman of investment firm Primavera Capital Group, called for higher-quality employment opportunities and improved social security - namely health care, pensions and unemployment insurance - as local governments relocate farmers to cities.
"Without industrialisation, a modern service industry and attractive jobs, there should not be urbanisation," he cautioned. "Artificially imposed urbanisation is meaningless. Transferring poverty from rural areas to cities is meaningless."
Urbanisation has become a hot topic since Li Keqiang elaborated on his vision for it during his first news conference as premier last month. He began exploring the issue while a doctoral student at Peking University.
Li warned about hidden risks, such as the loss of arable land and the creation of new urban poverty, but said urbanisation would usher in huge demand for consumption and investment, increase job opportunities and benefit people such as farmers.
Zhang Xinqi, mayor of the coastal city of Qingdao in Shandong province, said there were up to 200,000 people from 50,000 families living in underdeveloped old parts of Qingdao, and this had created a major hurdle during the city's push for urbanisation.
Central areas of Qingdao were almost as populous as Hong Kong, and public resources such as schools and hospitals were already failing to meet the demand from a rapidly growing population, he said.
Zhang Yue criticised local governments for paying more attention to appearance than utility when planning the development of an area.
"We have divided up a region according to functions, separating residential areas and industrial parks. But living in such a place, we consume so much energy [driving] on roads, and we live an unhappy life," he said.
According to a study conducted by the State Council's Development Research Centre, by 2030, nearly 67 per cent of the population will live in cities - or about 300 million more people than were doing so last year.