As China continues to urbanize, rural residents move to satellite cities of major city clusters, Liao Qun, chief economist at China CITIC Bank International, wrote for the China Chief Economist Forum on their WeChat account.
Despite past progress, China’s urbanization rate (slightly below 60 percent in 2018) trails behind that of most developed countries (over 80 percent). Urbanization rate is a key indicator of a country’s development, Liao said.
China’s urbanization will hit 80 percent by 2045, which will help sustain China’s economy to grow an annual average 4.0 percent, the article read.
But Liao also drew attention to a new development – that rural population will probably flock to satellite cities of city clusters.
The rise of city clusters is a natural result from urbanization and economic development. China already has 15 such city clusters. For China’s urbanization to continue, rural populations must move to these clusters, Liao noted.
And because major cities in these clusters are well-developed, their satellite cities will see faster development and accommodate arrivals from rural regions, he explained. This inflow will drive city growth, from increasing supplies to expanding demand, he said.
Liao cited the 2014 policy that gives migrant workers permanent urban residence in cities as an example. In the past, many migrants did not have opportunities to settle down in major cities, and would instead save their money with plans to one day return to their hometowns. But once a part of the urban community, they will increase their spending, or even buy a home.
Considering the crowded state and increasing home prices in top cities and improving regional transportation, migrant workers in big cities are increasingly likely to settle in these smaller cities, Liao predicted, which will also drive the flow of rural population to satellite cities.
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