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China's Urbanization Boom May Be Slowing

After a period of modernization and urban growth unrivaled in human history, several forces promise a slump, or at least a slowing. Maybe it's time to improve existing cities, not keep building new ones.
August 2, 2016, 2pm PDT | Philip Rojc | @PhilipRojc
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Whatever your opinion of China's government, it cannot be denied that the country has undergone a miraculous transformation over the past several decades. Pumped up by global and regional trade, the country's cities have absorbed rural migrants in the hundreds of millions.

As Adam Minter writes, "For a while, seemingly all a local government had to do to inspire growth was kick some farmers off their land, build an industrial park and offer tax breaks to the first factory willing to open up." But that might not last too much longer, for several reasons. 

The first is demographic. "In the 1970s, China had a surplus of young, under-employed workers in its countryside. That's no longer the case. The working-age population has been in decline since 2011, and the country's birthrate continues to drop."

In addition, the impetus to move to cities has faded somewhat. "Today's workers also aren't nearly as interested in moving away from home as past generations were. Last year, China's migrant population fell by 5.68 million -- the first decline in three decades. Conditions in the countryside have improved markedly in recent years, and rural incomes are rising faster than urban ones, thanks to decades of infrastructure investment and the growing reach of e-commerce." 

All things considered, it's unlikely Beijing will meet its goal of boosting the urbanization rate to 60 percent by 2020. But then again, it's China.

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Published on Monday, July 18, 2016 in Bloomberg
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