Urbanization in China

Urbanization in China increased in speed following the initiation of the reform and opening policy. By the end of 2015, 56% of the total population lived in urban areas, a dramatic increase from 26% in 1990.[1]

China's increase in urbanization was one of the several functions of the surpluses produced from the agricultural sectors in Chinese (farming and pastoral dependency). This judgment is based on (1) the fact that not until the end of the Qing Period did Chinese begin importing moderate quantities of foodstuffs from the outside world to help feed its population; and (2) the fact that the handicraft sector never challenged agricultural dominance in the economy despite a symbiotic relationship between them.

By the same token, urbanization rarely exceeded ten percent of the total population although large urban centers were established. For example, during the Song, the northern capital Kaifeng (of the Northern Song) and southern capital Hangzhou (of the Southern Song) had 1.4 million and one million inhabitants, respectively. In addition, it was common that urban residents also had one foot in the rural sector due to private landholding property rights.

Urban population grew steadily at around 3%-20% from 1950 to 1965. Urban population experienced a 'great jump' in 1958-1961 during the "Great Leap Forward" in conjunction with the massive industrialization effort. During the Cultural Revolution years of 1965-1975, urban population growth dropped as a result of 'rustication'. From 1962 to 1978, it is estimated that almost 18 million urban youth moved to the countryside.

However, after reforms were launched at the end of 1978, urban population growth began to accelerate. The inflow of foreign direct investment created massive employment opportunities, which fostered urban population growth. In the 1990s, urban population growth started to slow. This reflected a slower increase in employment growth following the restructuring of the state-owned enterprises (SOE).

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