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Development Strategy and Regional Economy

The Main Risks for China’s Urbanization Drive and Policy Options(No.97, 2017)

2017-11-08

By Li Shantong, Department of Development Strategy and Regional Economy, DRC, Wu Sanmang, China University of Geosciences & Wang Fei, Beijing Information Science and Technology University

Research report No.97, 2017 (Total 5172) 2017-8-22

Abstract: A large number of problems and contradictions accumulated during the early period of rapid development of China’s urbanization have loomed up in a concentrated way in the mid-to-later phase of urbanization drive. With regard to finance, the financing mode of urban construction, which relies heavily on land transfer and land mortgage, is no longer sustainable. Local debt risks have become the major hidden trouble in China’s financial system. As regards the real estate sector, the slowed urbanization pace, the limited increase of urban labor population and swift growth of senior citizens will lead to slowdown of housing demand, and risks of China’s real estate sector will be further exposed. In terms of social integration, the number of urbanized rural population is rather low, and the population living in urban shanty towns is large, and the contradiction resulting from urban-rural dual structure is remarkable. In view of environmental governance, the environmental pressure brought about by constant increase of economic volume, and the advance of urbanization drive remains high. Transformational development and quality improvement have become the major challenge facing China’s urbanization endeavour, and how to deal with the challenge has become the top issue to be addressed for the healthy development of urbanization in the future.

Key words: urbanization, risks, transformational development