China’s urbanisation push could be at a ‘bottleneck’, with slowest migration growth rate in quarter-century
- Downward trend may continue as economic situation remains challenging during the pandemic and fewer jobs are available in major cities
- Demographer warns that the higher the urbanisation rate, the lower the fertility rate – a worrisome prospect as China tries to cope with plunging births
China’s decades-long urbanisation push may have reached a bottleneck, after the movement of rural residents to large cities rose by less than 1 percentage point last year for the first time in 25 years.
The nation’s urbanisation rate of permanent residents rose by 0.83 percentage points to 64.72 per cent last year, according to data released on Monday by the National Bureau of Statistics, about China’s economic and social development.
China’s urbanisation rate was estimated to increase by an average of 1.03 percentage points annually during the 14th five-year plan (2021-25), with an aim of reaching 75 to 80 per cent by 2035, according to a report on the country’s population and labour issues, released in late December by the Chinese Academy of Social Sciences.
“This is the first time since 1996 that the urbanisation ratio rose by less than 1 percentage point,” according to Zhang Zhiwei, chief economist at Pinpoint Asset Management.
Last year, China’s demographic figures showed a year-on-year increase of 12.05 million permanent residents in urban areas, to 914.25 million.
The number of rural permanent residents fell by 11.57 million, to 498.35 million, while China’s so-called floating population, featuring mostly migrant workers, reached 384.67 million in 2021, 8.85 million more than in 2020.
The population living in areas other than where they hold household registration, for at least six months, reached 504.29 million, or 11.53 million more than in 2020.
Cracks in China’s US$1.7 trillion housing market, about seven times the size of the US market in 2019, are widening. Sales rose 3 per cent in 2021 and are forecast to drop by 5 to 10 per cent this year, according to estimates from eight research reports from brokerages, money managers and rating companies compiled by the Post.
Rural residents are facing great pressure to live in urban cities, said Peng Peng, executive chairman of the Guangdong Society of Reform, a think tank to the provincial government overseeing China’s main economic engine.
“The economic situation has been not good [in the past year] … Many companies are laying off workers and lowering wages, while living costs remain high,” Peng said. “China’s urbanisation may have reached a bottleneck – that is, most rural residents who are able to move to urban areas have done so.”
A greater increase in the urbanisation rate would come only if economic growth resumes and more benefits for migrant workers are provided fairly in cities, he added.
“Now that the urbanisation rate of permanent residents has surpassed 64 per cent, it is not surprising that the rate of urbanisation is slowing down,” said He Yafu, an independent demographer who has written extensively about the nation’s birth rate.