Urbanization in China: Policy Issues and Options
Presented by: Vernon Henderson, Brown University
Thursday, Sept. 23, 12:30-2:00 PM
Recent economic achievements of China have been enormous. Since 1978, real GDP per capita has grown at about 10 percent a year. Urban population has risen from 18 percent to 46 percent of the nation. This presentation will discuss some of the policy reforms that may be necessary to sustain economic growth under urbanization in the future. China needs to further integrate the urban and rural sectors, and create more unified national land, labor and capital markets. There is a basic tension between the possible emergence of potentially over-sized mega cities and enhanced access of migrants to basic urban services available to all non-migrant residents, a tension that seems to be enhanced by biases in capital markets and fiscal allocations. Besides economic implications, potential reforms have enormous social and governance implications. China could benefit from an urban policy structure that provides appropriate incentives for decision-making by public officials and that replaces an obsolete command structure by introducing incentive structures to inform choices concerning city financing, the use of urban land, treatment of migrants, and provision of local public services.
Vernon Henderson is the Eastman Professor of Political Economy and Professor of Economics and Urban Studies at Brown University, and a Research Associate of the National Bureau of Economic Research His research interests include microeconomic theory, urban and regional economics, economic development, and public finance. He has conducted research on aspects of urbanization, productivity, and growth in the USA, Brazil, China, Korea and Indonesia. He has current projects on corruption in urban land market auctions and the relationship between transport infrastructure and urban growth in China, aid relief in Aceh Indonesia, and the use of night lights to measure economic growth.