A celebrated Chinese economist has underscored the need for China to adopt a unique pattern in its urbanization effort, much owning to the country's current urban-rural dualism that was implemented in the late 1950's.
Li Yining, Honorary Dean of Guanghua School of Management at Peking University, said on Thursday in Beijing that the urban-rural dual household registration (hukou) system formed the stumbling block in China's urbanization process.
Data from China's National Bureau of Statistics (NBS) show how urbanization in China exceeded 50 percent in 2011, a figure first in history, with more people living in the cities.
Nevertheless, Li questioned the NBS calculations, saying the official statistics should not have included urban-dwelling migrant workers who do not possess an urban household registration. The NBS reportedly has regarded those who have lived in cities for more than six months as part of the "urban residential population," and listed them under urbanization achievement, irrespective of their hukou conditions.
The underlying reason, he explained, is that urban and rural household registrations differ remarkably in terms of people's welfare and benefits, including their rights to equal education, medical care and job opportunities.
"Experts on China's urbanization have argued the factual urbanization rate in China is less than 40 percent," Li said. He also pointed out that temporary urban-dwelling migrant workers usually reside in the cities as second-class citizens. Worse still, their children often stand to suffer the same fate.
Li maintained that he, along with a handful of scholars, still do not agree to have an overnight eradication of China's dual household registration system due to the severe chaos a sudden influx of rural population to the cities would cause, while city-dwellers would rush to purchase villagers' houses, similarly disrupting the rural order.
"Urbanization requires a prolonged process, with much preparation to be done. An anxious approach would only cause social turmoil," said Li, who assured that a reform of the household registration system would "just come naturally."
He advised for China's urbanization to follow a unique pattern. Besides renovating old towns and planning new ones, he encouraged the establishment of new-type communities in rural areas, an approach also known as "on-spot urbanization."
Gongcheng Yao-ethnic group Autonomous County in Guilin of Guangxi Zhuang Autonomous Region as well as several counties in Zhejiang Province -- has reportedly taken the lead in this regard. Rural industries, such as fruit processing, meat production, forage production, develop well in these places.
"Villagers and townspeople both felt life in the countryside was little different from that in the city; and so was their household income. Changes are taking place without massive relocation," said Li, recounting his Zhejiang field research in late 2012.
High housing prices are yet another major obstacle in China's urbanization. Li said an insufficient supply was the primary reason; land-transfer auctions held by local governments too were a driving factor in the constant rise of housing prices.
The solution, according to Li, could follow the example of government procurements, in which the government states its demands and specifications for a property project and "grants the bid to whoever offers the lowest price."
"With confirmed housing specifications, developers have to compete in offering the lowest price per square meter to win the bid. Bid winners who fail to meet the target will be fined or disqualified from future biddings," Li said.
As far as issues on containing the fast property rise in major cities went, Li said the government's administrative regulations should limit people's speculative actions -- such as reselling houses shortly after purchasing them -- instead of limiting people from buying them. He explained speculation was in fact the main factor propelling the property market into overdrive.