Optimizing Urban Development1 Shahid Yusuf and Kaoru Nabeshima

42485 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized DIRECTIONS INDEVELOPMENT Countries andRegions Consequences, Strategies, China Urbanizes Shahid YusufandTonySaich and Policies China Urbanizes China Urbanizes Consequences, Strategies, and Policies Shahid Yusuf Tony Saich © 2008 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved 1 2 3 4 10 09 08 07 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW,Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. ISBN: 978-0-8213-7211-1 eISBN: 978-0-8213-7212-8 DOI: 10.1596/978-0-8213-7211-1 Library of Congress Cataloging-in-Publication Data China urbanizes : consequences, strategies, and policies / edited by Shahid Yusuf and Anthony Saich. p. cm. ISBN 978-0-8213-7211-1 — ISBN 978-0-8213-7212-8 (electronic) 1. City planning—China. 2. Urbanization—China. 3. China—Population. 4. China— Economic conditions—2000- I. Yusuf, Shahid, 1949- II. Saich, Tony. HT169.C6C474 2007 307.1’2160951—dc22 2007032196 Cover photo: Corbis Cover design: Naylor Design, Washington, D.C. Contents Preface ix Contributors xi Abbreviations xiii Chapter 1 Optimizing Urban Development1 Shahid Yusuf and Kaoru Nabeshima Chapter 2 Rural–Urban Inequality in China 41 Albert Park Chapter 3 Migration, Hukou, and the City 65 C. Cindy Fan Chapter 4 Poverty and Vulnerability 91 John G. Taylor Chapter 5 Finance for Urban Centers 105 Patrick Honohan Chapter 6 Energy Policy 125 Edward S. Steinfeld v vi Contents Chapter 7 Water and Urbanization 157 Zmarak Shalizi Chapter 8 The Changing Role of Urban Government 181 Tony Saich Index 207 Box 8.1 The Survey on Citizen Satisfaction with Government 189 Figures 1.1 Financial Development in Selected Countries, 2005 10 1.2 Investment in Urban Infrastructure in Shanghai, as Percentage of GDP, 1985–2004 22 2.1 Real Urban and Rural per Capita Income, 1978–2005 42 2.2 Ratio of Real Rural to Real Urban per Capita Income, 1989–2005 43 2.3 Grain and Agricultural Input Price Indices, 1993–2005 52 8.1 Government Service Satisfaction/Importance Matrix 190 8.2 Citizen Satisfaction with Different Levels of Government, 2003–05 191 8.3 Citizen Satisfaction with Different Levels of Government, by Income Level, 2003 192 8.4 Urban Respondents’ Rating of Satisfaction with and Importance of Various Government Functions, 2003 196 8.5 Organization of Urban Government 201 Tables 1.1 Percentage of Population Living in Urban Areas in Selected Asian Countries, 1980–20052 1.2 Urban Population in China and East Asia, 1960–2005 2 1.3 Rice, Wheat, and Maize Yields in Selected Countries and Regions, 1997–2002 16 3.1 Size of “Floating” and Migrant Population, 1990 and 2000 71 3.2 Interprovincial Migration within and between Regions, 1990 and 2000 73 Contents vii 3.3 Self-Declared Reasons for Intercounty Migration 74 6.1 Energy Production and Consumption, 1991–2005 128 6.2 Projected Demand for Primary Energy and Oil in Selected Countries in 2025 129 6.3 Alternative Projections of Growth in Final Energy Demand in China, by Sector 130 6.4 Energy Intensity, 1991–2005 131 6.5 Total Energy Consumption, by Sector, 1997–2005 136 6.6 Imports and Exports of Energy, by Type, 1991–2005 142 7.1 Population of China, 1980–2005, by Region 159 7.2 Gross Water Availability per Capita, in North and South, 1980–2005 160 7.3 Water Use, by Sector, 1980–2005 165 8.1 Subnational Expenditure Shares and Functional Allocations in Selected Asian Countries 184 8.2 Urban Residents’ Attitudes toward Government Behavior, 2005 192 8.3 Highest- and Lowest-Rated Categories of Government Service by Urban Residents, 2003 and 2005 194 Preface Urbanization and urban development will leave a deep imprint on struc- tural, social, and economic change in China for decades to come. In 2007 the urban share of China’s population was almost 44 percent, and the urban economy accounted for nearly 80 percent of domestic output. Both these percentages will be rising, the first steeply, the second much more gently, because the urban sector is already the dominant economic force. Given these changes, the urban dimension figures prominently in China’s 11th Five-Year Plan. Urban issues were also central to the World Bank’s study, China’s Development Priorities, by Shahid Yusuf and Kaoru Nabeshima, prepared in close consultation with China’s National Devel- opment and Reform Commission (NDRC). The chapters in this volume were initially prepared for that study. They were subsequently revised and updated in order to incorporate feedback received in seminars and discussions in China and to reflect the latest research. The chapters, all written by leading specialists on China, examine key facets of the urbanization process, highlighting both the challenges for and options open to policy makers. By stitching together the implications of migration, poverty, urban financing, governance, energy use, and water consumption, the chapters provide an integrated perspective on the recent past and the medium-term outlook for urban change in China. ix x Preface We are deeply grateful to the U. K. Department for International Development (DfID) and the Asia Programs at Harvard University for generous financial support, without which the preparation and publication of this volume would not have been possible. We thank David Dollar, Bert Hofman, the staff of the NDRC, Jianqing Chen, and Julian Chang for the support they provided throughout this study. We also greatly appreciate the efforts of Marinella Yadao and Rebecca Sugui in helping us prepare the manuscript; our editors Stuart Tucker and Patricia Katayama; and our production manager Mary Fisk. Finally, we thank the contributors to this volume for their patience and perseverance in revis- ing their chapters, and Kaoru Nabeshima, who helped us shepherd the study since its inception and who contributed substantively to the volume’s structure and content. Contributors C. Cindy Fan is Professor, Department of Geography and Department of Asian American Studies, University of California—Los Angeles. Patrick Honohan is Professor of International Financial Economics and Development, Department of Economics and Institute for International Economic Studies, Trinity College, Dublin. Kaoru Nabeshima is a Consultant, Development Research Group, World Bank. Albert Park is Reader in the Economy of China, Department of Eco- nomics and School for Interdisciplinary Area Studies, University of Oxford. Tony Saich is Daewoo Professor of International Affairs, Kennedy School of Government, and Director, Harvard University, Asia Center. Zmarak Shalizi is former Senior Research Manager, Development Research Group, World Bank. Edward S. Steinfeld is Associate Professor, Department of Political Science, Massachusetts Institute of Technology. xi xii Contributors John G. Taylor is Professor of Politics, Director of MSc Development Studies Programme, London South Bank University. Shahid Yusuf is Economic Adviser, Development Research Group, World Bank. Abbreviations ADB Asian Development Bank APERC Asia Pacific Energy Research Centre CASS Chinese Academy of Social Sciences CBO Congressional Budget Office CCP Chinese Communist Party COD chemical oxygen demand CPI consumer price index CULS China Urban Labor Survey DfID Department for International Development EIA Energy Information Administration FAO Food and Agriculture Organization FDI foreign direct investment GDP gross domestic product GNP gross national product GW gigawatts HGF Housing Guarantee Fund HPF Housing Provident Fund IEA International Energy Agency IT information technology LP legal person xiii xiv Abbreviations MLSS Minimum Living Security Standard MOCA Ministry of Civil Affairs Mtoe million tons of oil equivalent MWR Ministry of Water Resources NBS National Bureau of Statistics NDRC National Development and Reform Commission NGO nongovernmental organization PADO Poverty Alleviation and Development Office PPA power purchase agreement PSB Public Security Bureau OECD Organisation for

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