The Ascent and Plateau of China’s Urban Centers

Publication: China Brief Volume: 8 Issue: 24

Urbanization in China has an obvious economic but also a profound social and political significance for the authorities in Beijing. It can not be simply understood as a concomitant output of China’s industrialization, nor does it only refer to the changes in a population’s geographic distribution or the people’s life-style, for China, urbanization represents an opening for another social transformation.

Rural-to-Urban Migration

Since the institution of the Chinese huji system (the household registration system) in 1958 the door to China’s urban centers had been tightly closed off to the rural peasants. The huji system segregated the urban from the rural areas as a means for the government to maintain control over labor. Rural peasants accounted for over 80 percent of the total population during the 1960s-70s [1]. In 1983, following the boom of village and township enterprises promoted by the late patriarch Deng Xiaoping’s first wave of economic reforms, rural people were permitted to reside and work in towns—with the catch that they were not entitled to receive state welfare such as grain rations reserved for the urban people. However, the infrastructure of these sparse towns were too weak to accommodate the lifting of the flood-gate that allowed hundreds of millions surplus rural laborers to migrate within China. In the 1990s, particularly after the Chinese government began its second wave of economic reforms to propel its transition to a more market-oriented economy in 1992, the rapid development of the economy brought about a huge demand for labor in urban centers, for example, the urban labor force employed increased from 156 millions in 1992 to 173 millions in 1995 [2]. Although there was still no sign that Beijing was planning to loosen controls of the huji system, the demand of the urban labor market nevertheless beckoned rural laborers. The changes brought about by economic development led to a significant social transformation in modern China. The rush of hundreds of millions of rural laborers to the urban areas, created a powerful wave that not only broke down the regulatory walls erected under the antiquated system of a planned economy, but also accelerated the process of urbanization.

At the beginning of China’s reform and opening up, the urban population made up 17.9 percent of the total population [3], but by 2007 this percentage increased to 44.9 percent [4]. During the same period the total population of China increased from 963 millions to 1321 millions, and that of an urban area increased from 172 millions to 594 millions, at annually growth rate of 4.27 percent. Meanwhile, the rural population decreased from 790 million to 728 million at the annual rate of -0.28 percent [5]. The implementation of the one-child policy in the early 1980’s resulted in a very low natural growth rate (China Brief, December 8). Thus, the main drivers behind the rapid growth of the urban population are the result of two major factors: rural to urban migration and increasing mobility of the population; and the extending of the present cities and the development of new ones.

China’s Floaters

The "floating population" of China generally refers to the recent trend of people changing their actual permanent residence, but retaining their hukou (registered residence). This migrant population was 6.57 million in 1982, which accounted for only 0.66 percent of the total population at that time. Since towns were opened up to the rural population in the mid 1980s, however, the migrant population has increased rapidly to 18.1 million in 1987 and 21.35 million in 1990. Since then, the rate has increased even faster to become 70.73 million in 1995 and 102.29 million in 2000.  The rural population makes up the majority of this “floating army” and, according to a survey carried out by the Ministry of Labor and Social Security, the total rural population working away from their hukou was about 120 million in May 2005, among which 100 million worked at urban area. In 2005, the number of “floating” workers in China stood at roughly 147.35 million or approximately 11.3 percent of the total population [6]. The path of this migrant population has mainly flowed from the rural hinterlands in Central and Western China to the more economically developed Eastern and Coastal areas. At present, the percentage of the migrant population is close to being 20 percent of the total permanent resident population of the urban area in China. In fact, in cities such as Dongguan, Shunde, and Nanhai in the Zhujiang Delta Area, the size of the migrant population is even larger than that of the locally registered residents. Population migration, especially rural to urban migration, brings about a strong and profound impact on the economic and social development of China. First of all, it provides the comparative advantage of cheap labor, which supports the fast economic growth of China; secondly, it increases the income of rural people (for example, the income from wages and salaries through remittances made up 36 percent of total income for rural families in 2005) [7]; thirdly, it promotes the development of infrastructure and public services in urban centers; finally, it increases the stock of human capital in the migratory labor force, which in turn enhances their development capacities in other respects.

China’s Campaign to Build Cities

The nationwide expansion of existing cities and up-spring of new cities has been buttressed by urbanization. According to a report issued in November 2008 by the National Bureau of Statistics (NBS), the number of cities in China at the end of 2007 was 655, which was 462 more than that in 1978, and the administratively designated towns numbered 19,249, which was nearly 8 times that in 1978. Most astonishing was the precipitous growth in the size of cities. In 2008 there were cities 83 cities with an urban population between 1 and 2 million was 83 (as compared to 19 in 1978). The number of megacities (population over 2 million) has rised from 10 in 1978 to 36 in 2008. Furthermore, of those 36, there are 20 megacities with a population over 5 million. The largest among them are Shanghai, Beijing, Tianjin, Chongqing, Guangzhou and Shenzhen—all with a population of more than 10 million [8]. In 2007, the area and above cities (excluding the counties within the jurisdiction of area) had a total population of 371.56 million, 1.2 times more than that in 1978, and the corresponding administrative area of land was 62.2 square kilometers, 2.2 times larger than that in 1978. The city that best represents this phenomenon is Shenzhen, which had a population of 310,000 when it was first established as a special economic zone in 1979 and has now developed into a megacity with a population of over 10 million.

Structural Collision

As a result of the huji system, Chinese society has effectively been divided into two sectors: the “urban-rural plate structure” and “plate-of-area structure.” The foundations of these two sectors are the huji system and the dependent institutional arrangements of people’s livelihood for such social welfare as education, employment, housing, health insurance and social security. The huji system and the dependent institutional arrangements, which were the product of China’s planned economy, largely remained untouched during the reform era.

The huji system was established in 1958 and its initial goal was to guarantee the high accumulation of capital for industrialization. The system divides the population into two parts: city hukou and agricultural hukou. The government allocated food and other living necessities to the people according to the type of hukou it assigns, and established different systems of education, employment, social security and social welfare for the people with city hukou and the people with agricultural hukou. Despite its initial intention, the huji system has since then become a powerful instrument for the government to control migration from rural to urban areas and even labor mobility between cities. In rural areas, a hukou also serves as the basis for determining the allocation of land among rural residents. Thus, the huji system in China is much more than a registration system, and is actually an instrument for distributing social and public resources and regulating political rights (according the Election Law, the ratio of populations the congressman or councilors represented between rural residents and urban residents is 1:4, that means 4 rural residents).

As China’s economy continues to develop, the shift of labor between different industries and urbanization has increasingly revealed a contradiction in the system. This conflict resulted in the formation of two unique social groups: a “floating population” and a new social group in cities—“nongmin gong” (literarily “farmer proletariats”—that is rural workers without an urban hukou). Furthermore, while the dualistic nature of society in the past mainly referred to the segregation between the urban and rural areas, the problem has now also extended to the inner urban area. Although rural workers are now allowed to enter the urban market, they are not entitled to enjoy the same rights and treatment as the locally registered population. The huji system builds a “glass wall” that separates rural and urban workers in terms in income, social security, medicare, education attainment and so on. So the conflict between plates aroused by the social change in China brings about not only an abundance of cheap labor, but also a new lowest social class in the social hierarchy of the urban areas. This situation is only exacerbated by the lack of institutional reforms such as social welfare and social security.

Some local governments have begun to reform this antiquated system and establish new rules and regulations that create a uniform system that provides an equal opportunity for all residents irrespective of original types of hukou. On the other hand, functioning purely as a household registration system, the huji system will retain it value for the implementation of demographic, social, and economic development plans and for the management of cities.

Economic Opportunity or Revolving Door?

According to data from the National Population and Family Planning Commission, in the following 25 years, the speed of urbanization will be about 1 percent per year and the urbanization level will probably be 60 percent in 2025 and 70 percent in 2030. This means that by 2030 the urban population will reach 1.05 billion people- an increase of approximately 500 million from the current level [9]. Such a fierce structural change will certainly have a profound on the impact on the economic and  political structure of China. China’s resilient social fabric has so far been able to accommodate the development of the economy and the urbanization in the past 30 years. However, there is evidence that it is approaching the limit of its tolerance. When industrialization and the development of the economy accumulate more energy for urbanization, the huji system and the institutional arrangements of people’s livelihood imposed by the government will not be capable to support the urbanization of China any longer, on the contrary, they will produce more social unrest and constrain sustainable development of the economy. Thus, in recent years, the resolution of issues stemming from inequalities created by the huji system have become not only the most intense political demand of the Chinese people, but also the priority for the Chinese government. Among this issues are the desired right for people to enjoy the same national treatment regardless of their hukou status, the elimination of social inequities, the narrowing of social differences, and changing the duality in the social structure. In the speech at the 17th National Congress of the Chinese Community Party (CCP) on October 15, 2007, President Hu Jintao emphasized that the government will establish a basic system of social security that will cover both urban and rural residents so that everyone can be assured of basic living standards (Xinhua News Agency, December 24).

Due to China’s rapid urbanization, the existing income distribution and social security systems are facing tremendous strain. Addressing these challenges requires the Chinese government to carry out a sweeping reform of the existing huji system, serious restructuring of the dependent social welfare and security system, and the eradication of the institutional barriers to population migration.


1. National Bureau of Statistics, Statistical Yearbook of China, 2006.
2. National Bureau of Statistics, Statistical Yearbook of China, 1996.
3. Ibid.
4. National Bureau of Statistics, Report of China’s Reform and Opening in past 30 Years, No,1, 2008.
5. Ibid.
6. Calculated based on the data of 1% Population Survey in 2005, National Bureau of Statistics,
7. National Bureau of Statistics, Statistical Yearbook of China, 2006.
8. National Bureau of Statistics, China City Statistical Year Book, 2007, China Statistics Press, 2007.
9. National Population and Family Planning Commission, Report of National Strategy for Population Development, China’s Population Press, 2007.