Three interactions needed

On the road to new urbanization, three interactions must be achieved.

First, we must foster a sound interaction between cities and the countryside. The issue at the core of the urbanization drive is the market-oriented reforms of the supply factors. Extensive use of the factors will inevitably lead to low productivity. The protection of and respect for complete property rights of the means of production are necessary conditions for the factors’ access to the market and their highly efficient distribution, and subsequent economic efficiency. The decision of the third plenum grants farmers with the rights to possess, utilize, benefit from and transfer their contracted land, and the use of their contracted operation rights as mortgage or guarantee. The rights to mortgage, guarantee and transfer farmers’ housing properties are meant to revitalize the means of production, improve capital gains and to bring benefits to the farmers, and subsequently promote the upgrading of the productivity of these factors. With the reinvigoration of the rural and agricultural means of production, the momentum and driving force for rural reforms will muster to promote the urban-rural integration, the equal exchange of urban and rural means of production, and the balanced distribution of public resources.

Second, we must develop a sound interaction between urbanization and industrialization. The country must integrate itself into the global production network and upgrade the competitive edge of its urban system. With the functional areas of modern industries as the base, it is imperative to speed up the development of the leading industries, such as modern manufacturing, modern services and modern urbanite-oriented agriculture, and to extend the chain of urban industries.

Third, we must form a sound interaction between big cities and the medium-sized and small cities and small towns, and to develop a multi-level urban system. In the new type of urbanization, a division of industries among big cities and medium-sized and small cities should be defined according to their advantages in human resources and industrial chains. With big city clusters as the bases and a rational division of industries among medium-sized and small cities, it will help prescribe a solution to the “mega-city diseases” and the problems of “poverty-stricken belts around big cities.” It will also be helpful in promoting reasonable distribution of regional industries and the industrial development of city clusters.

The decision also mentioned improving the standards for setting up cities. Strict examination and approval procedures should be exercised, and counties qualified for administrative division adjustments could be elevated to the status of cities in an orderly manner. For towns with strong capacity in absorbing population and strong economic power, administrative powers compatible with their population and economic scale could be granted. Residence registration control in medium-sized and small cities will be eased, and a series of innovation and reform measures in medical service, health and education will be adopted. The social security system for medium-sized and small cities and their residents will be further strengthened, so as to make these cities and the quality of life in these cities more attractive, and to make them the real foundation for the urbanization drive.

Zhang Monan is a researcher at the Strategic Studies Department of the China International Economic Exchange Center.

This article was first published at www.chinausfocus. To see the original please visit http://www.chinausfocus.com/political-social-development/plenum-decision-charts-new-road-for-urbanization-drive/