Small could be beautiful on China's road to urbanization. Some 400 million people are set to move from rural areas to cities over the next 15 years, according to the McKinsey Global Institute.

There are fears that already crowded big cities such as Beijing, Shanghai and Chongqing will not be able to cope with ever more rural migrants.

Many from the government downward believe the only solution will be to create a new generation of smaller cities, many of them satellites to existing cities.

Mark Yaolin Wang, professor at the department of resource management and geography at the University of Melbourne, believes one of the only solutions is to transform 2,000 existing towns into cities.

"They are a much better route to development. These towns have existing infrastructure and distinctive heritage and culture," he said.

"The problem with creating new cities around existing larger cities is that they lack character and have no personality."

Despite being the world's most populous country with 1.3 billion people, China remains one of the least urbanized countries in the world.

Although its level of urbanization increased from 13 percent in 1950 to 41 percent in 2005, according to McKinsey, it remains well below the 75 percent levels found in the United States and Europe.

Even by 2025, after the next wave of rural migrants, the figure is only set to increase to 64 percent.

By then eight cities, Beijing, Shanghai, Chengdu, Chongqing, Guangzhou, Shenzhen, Tianjin and Wuhan, will have populations of more than 10 million with some already megacity behemoths.

Wang at Melbourne University said one of the challenges will be persuading rural migrants to move to smaller cities.

"People will still want to move to the bigger cities because that is where the better jobs and opportunities are," he said.

"If people keep drifting to the bigger cities, the problem will become unsustainable. Already people in professional jobs are finding the cost of living, particularly property, in the major cities unaffordable and this I think will provide an opportunity to the development of small- and medium-sized cities, since they will be the only alternative."

Rural migration is now much more fluid in China as a result of the gradual relaxation of the hukou, or household registration system.

In the past, it has been difficult for people with rural hukou to obtain registration in urban areas and they have often relocated illegally.

Richard Baum, author of China Watcher and a past director of the Center for China Studies at University of California, Los Angeles (UCLA), said urbanization, while bringing benefits, had led to a wealth divide between rich and poor in China.

"The massive urban migration over the past 20 years has created a gulf between rich and poor," he said.

"Urbanization is always a mixed bag but to the extent it has brought rising incomes it has been more a blessing than a curse."

He believes the growth of smaller cities is one of the keys to China's future economic development.

"If there is to be a focus on regional urbanization with cities of between 500,000 and 1 million rather than between 5 and 10 million there needs to be a serious rewriting or even abolition of the hukou rules," he said.

A major issue with urbanization is the effect on the environment. In August, the National Development and Reform Commission (NDRC), the leading China planning agency, launched an initiative to create low-carbon development plans in five provinces and eight cities across China, some of which were smaller second-tier urban centers.

Wu Changhua, Greater China director of The Climate Group, the international climate solutions organization, based in Beijing, said there needs to be greater focus on smaller cities.

"In Beijing urban planning in the past has been moving outwards from First to Second to Third Ring Road and beyond and it is not really sustainable," she said. She believes new cities could provide the key and pave the way to a lower carbon future.

"They provide a way of integrating low carbon solutions into the urbanization process. New satellite cities have to be workable for people. People have got to be able to shop, have leisure facilities and go to work there," he said.

Dominic Bettison, managing director of international architects Wilkinson Eyre's China operations, insists new cities provide opportunities for groundbreaking architectural solutions which address climate change.

"You can look at having district cooling or district heating where a series of buildings or streets have linked systems, which use very little energy," he said. "In smaller cities you can also have smaller-scale buildings rather than having the necessity to build huge skyscrapers. Smaller buildings can make greater use of natural ventilation with less reliance on air conditioning."

Baum, the US author and academic, now living in France, said it is inevitable urbanization will cause further climate damage, whether smaller cities take the lead or not.

"You might see a reduction in the pace of environmental degradation but not a reversal of it. Maybe 40 or 50 years down the road carbon intensity may be reversed to the point where you see some improvement but that is a long way off," he added.

"People trumpet China's wind and solar panel industries but most of that is for export and is not being used domestically. Coal remains China's biggest energy resource and coal is not clean energy - yet, at least."

Li Dexiang, professor at the school of architecture at Tsinghua University, said the solution to China's urbanization process was to create sustainable cities and living environments.

"The key is to build basic infrastructure and provide job opportunities locally, to ease the traffic pressure from workers moving between areas all the time," he said.

He said it was important there was still a focus on rural areas rather just rural migration into the cities.

"It is important to balance the urban and rural development. Lots of the rural labor force will be transferred to cities during the urbanization process. But you have to remember that agriculture is still a major primary industry and will remain a main determinant of the Chinese economy in the future," he added.

Jeffrey N. Wasserstrom, author of China in the 21st Century: What Everyone Needs to Know, and professor of history at the University of California, Irvine, argues urbanisation is becoming something of a muddied issue.

"In many parts of the country it is difficult to draw a line between what is a rural and an urban area. Even in rural areas there are very few families where at least one family member isn't working in a city, at least for part of the year," he said.

China's urbanization process remains a unique event in history. Never before have so many people moved from the countryside to cities. In just over a generation China has moved from being a largely agrarian society to urbanization levels of more than 40 percent.

Britain, the first industrial nation, took 80 years to achieve this more than 200 years ago and the United States needed 80 years. Policymakers are having to cope with challenges never dealt with before.

Li at Tsinghua University said it is a steep learning curve for everyone but he believes smaller sustainable cities are part of the solution.

"It is an inevitable trend to develop small cities around large ones such as Beijing, Shanghai and Chongqing. They don't even have to be satellite cities but can form long ribbons, depending on the local geographic situation," he said.

But he warns climate damage remains the big headache for everyone.

"The current development model uses up significant fossil energy and can create severe pollution. These problems provide a bottleneck to the urbanization process," he said.