Chinese urbanization bottlenecks_in sight of OECD and McKinsey

This entry summarizes the bottlenecks of Chinese urbanization in OECD and McKinsey, it is probably relevant for us in trying to come up with a systematic solution for developing eco-cities for different cities.

The challenges Chinese cities faces fall into four sectors: 1) land and spatial development; 2) resources and pollution; 3) labor and skill, and 4) funding.

Both McKinsey and OECD emphasize the threat in the “land and spatial development” sector. OECD considers the current the spatial structure and form of Chinese metropolitan regions posed major constraint to their development. Chinese metropolises often have a combination of highly dense central areas and much dispersed suburban areas. As a result, many municipal governments, at least in the larger cities, are attempting to reduce generally high population densities within inner urban areas by promoting resettlement to suburbs.

If the average densities of inner urban areas are assumed to remain stable until 2015, suburban towns and townships within statutory cities would need to absorb most of the projected 117 million new non-farming residents in this period, meaning an average annual exponential suburban growth rate of 3.8%, at the highest end of recent urban growth rates in developing countries. Metropolitan regions will become large, sprawling urban areas with growing congestion and pollution costs that detract from the agglomeration economies. International comparisons are draw in the OECD research showing that highly-productive metropolitan regions like Paris and New York, where there are lower central core densities and far fewer sub-centers.

[note: McKinsey projected that by 2025, Chinese urban population will reach 1 billion. In the coming decade, averagely around 17.7 million new inhabitants are to move in to Chinese cities annually, the equivalent of one New York City (17.8 million) or Seoul (17.5 million)]

Sustainable financial solution remain a central challenge for such an urbanization course with unprecedented scale and speed in a developing country with several environmental constrain and middle-low average per capital income. Both OECD and McKinsey research identified and emphasized the financial challenge of Chinese urbanization, but neither of them conducts a in-depth study on the subject, as we mentioned earlier, Chinese urbanization is local, and balance sheets, revenue resources and expenses patterns varies wildly from city to city.

Another challenge that both McKinsey and OECD called for urgent response is the importance to sustain and improve talent pool in large Chinese metropolis, for human capital is the key driver of global competitiveness for metropolitan regions around the world.

Posted by fiona liu / 8.5 years ago / 4988 hits