China Integrated Economic Development of Small Towns

Under the 11th Five Year Plan (2006-2010), agriculture, rural and urban development policy was driven by two key government programs, a program of sound urbanization, which sought to accelerate the absorption of rural labor in urban markets, and a "new socialist countryside (NSC) policy" seeking to increase farmers income and rural living standards. This dual-track policy reflected China's new development paradigm that emphasizes the building of a well-off and harmonious society with balanced development across regions and sectors.

Despite the massive economic development within the country since the beginning of economic reforms in 1978, China's countryside lagged far behind the cities. Most noticeably, the countryside was at the bottom end of an ever-widening urban-rural income gap. In 1978, for every one RMB the average rural person had, as disposable income, the average urban dweller had 2.57 RMB. In 2007, thirty years later, the average urbanite now had 3.33 RMB to every one RMB of disposable income that a rural person has. The gap had increased by nearly 30%. The call for building up the new socialist countryside was a high priority activity for the government and was listed in the 11th Five Year Plan (FYP) as one of the "main tasks and strategic priorities". This approach was consistent with China's existing approach of addressing the three rural issues (San Nong Wenti) of agriculture,farmers and the countryside.

On the other hand, urbanization is one of the most critical future trends for the development of China. Urbanization is expected to continue and reach 70% by 2030, from a current level of about 50%. China is now facing the overwhelming task of absorbing the migration of 300 million people from rural to urban areas between 2010 and 2030, and creating at least 200 million off-farm jobs. In other words, 10 million people need to be employed and housed in urban areas each year during the first thirty years of the 21st century.

Despite the fact that Chinese cities are significantly undersized and agglomeration economies not fully exploited, it is too much to expect China's existing 661 cities to resettle all of these migrants. It is against this background that town development has already played and will continue playing a key role in facilitating the world's largest-ever urbanization process.

World Bank.China.Project Information. CN Integrated Economic Development of Small Towns (P118597)

CN Integrated Economic Development of Small Towns (P118597)