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Spatial and institutional urbanisation in China

  • In Honor of Shin-Kun Peng
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Abstract

This paper sheds new light on the characteristics of urbanisation in China, which commenced as a comprehensive social–economic plan in 2014, from the perspective of ‘spatial urbanisation’ and ‘institutional urbanisation’. The paper argues that urbanisation in China comprises not merely ‘spatial urbanisation’, i.e., the concentration of population in certain areas as has been commonly observed in developed countries, but also ‘institutional urbanisation’ in which the institutional barrier has remained in situ to prevent migrants from becoming urban citizens and to suspend true urbanisation. To obtain clear picture of two kinds of urbanisation, the paper conducted the simulation analysis using input–output model. This econometric analysis indicates that ‘spatial urbanisation’ will boost the manufacturing sector, leading to economic growth, while ‘institutional urbanisation’ will cause a structural change towards a service-based economy, which could result in the so-called ‘middle-income trap’ being avoided. Nevertheless, the advancement of ‘institutional urbanisation’ is extremely costly rather than ‘spatial urbanisation’.

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Fig. 1
Fig. 2
Fig. 3

Source: NBS (2016)

Fig. 4

Source: NBS (2016)

Fig. 5

Source: NBS (2016)

Fig. 6
Fig. 7

Source: China Statistical Yearbook

Fig. 8
Fig. 9

Source: China Statistical Yearbook

Fig. 10

Source: China Statistical Yearbook

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Notes

  1. The term ‘middle-income trap’ was first defined in Gill and Kharas (2007). It means that a middle-income country cannot become a high-income country unless it can find other sources of growth as low-wage labour, the previous main source of development, disappears.

  2. This ‘new human-centred style of urbanisation’ intends to remove the strong restrictions on movement into small and medium cities, but still emphasises the control of the number of migrants by the level of contribution to large cities. Friedman (2017) refers to it as ‘just-in-time (JIT) urbanisation’ in that China promotes economic growth efficiently by expelling uneducated worker from large cities and drawing the appropriate and required labour force there.

  3. Figure 3 illustrates the linier relation but the non-linier relation could match better if the economy of agglomeration works.

  4. It is represented as the so-called Environmental Kuznets Curb (inverted U shape). But it is still a debatable issue whether this hypothesis can be applied to the case of China.

  5. 97% of capital formation are created in cities. Therefore, 1086.9 billion yuan out of 1120.5 billion yuan in investment is increased by 1% urbanisation.

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Funding

This study was funded by JSPS KAKENHI (Grant number JP15K06261 and JP16K02002).

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  1. Daito Bunka University, Tokyo, Japan

    Nobuhiro Okamoto

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  1. Nobuhiro Okamoto
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Correspondence to Nobuhiro Okamoto.

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Okamoto, N. Spatial and institutional urbanisation in China. Asia-Pac J Reg Sci 3, 863–886 (2019). https://doi.org/10.1007/s41685-019-00113-y

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