jornal

9 Conclusion

Introduction There has been extraordinary urbanization, development and transformation in China since the 1970s. The previous chapters have introduced the theoreti- cal mechanisms and models of Chinese urbanization and analyzed the courses of urbanization and development since the late 1970s at the provincial and city scales in China. Using urbanization, development and governance as key links, the critical issues for understanding the rapid urbanization in China have been studied systematically: the role of state and scale in urbanization, the new pro- cess of dual-track urbanization, the changing regional urban systems, sustainable urban development and the regional development, integration and governance in the Hong Kong–PRD region. The theoretical perspectives of the scale theory of social-spatial transformation, dual-track urbanization, TSEs and theory of border- land studies are applied to the Chinese cases. Under these theoretical perspectives, the previous chapters have demonstrated how the urbanization process and urban and regional developments unfold in China with detailed empirical evidences and data analyses. This concluding chapter will revisit the key empirical findings and theoretical insights. Prospectus of urbanization, regional development and gov- ernance in China will be discussed in the final section.

Scale, state and dual-track urbanization The rapid urbanization process coupled with strong government planning, regula- tion and policy intervention in post-reform China have attracted the attention of many scholars. Scholars are divided about the uniqueness of the Chinese urbani- zation process and if the Western theories can be applied to the Chinese case. For example, some scholars argued that the urbanization process in China is unique in the pre-reform period of state socialism and the reform period of market tran- sition (French and Hamilton 1979; Ma 2002; Chan and Zhao 2002). Friedmann (2006: 440) argued, “China’s urbanization, although entwined with globalization processes, is to be understood chiefly as an endogenous process leading to a spe- cifically Chinese form of modernity.” Other scholars believed that Chinese cities and Western cities share similarities in the broad urbanization process, and the

172 Conclusion

concepts and theories of urban change developed in the Western context, such as “rent gap theory,” “urban regime theory” and “urban growth machine,” are also relevant to Chinese cities (Wu et al. 2007; Zhu 1999; Zhang 2002).

Urban development and urbanization are general processes, and many existing Western theories have been developed to explain them, often in the context of developed countries. The basic principles can be or have the potential to be applied to other countries, including China. However, some countries have specific politi- cal and economic contexts that have two implications. First, some theories devel- oped in such context may have less applicability to China. “Urban regime theory” developed in the American context is one example. Second, when applying some theories to the Chinese context, great attention needs to be paid to unique factors and endogenous processes that affect urban development and urbanization on top of the general urbanization process. Thus there is great potential to conduct origi- nal urban China research by either applying the existing Western theories with new or revised interpretations in the context of China or developing new theories or models of urbanization regarding the unique process in China. Such original academic research builds on exiting theories, and thus is not meant to replace the existing theories.

Chapters 2 and 3 made attempts to apply the scale theory to the Chinese context and used the dual-track urbanization model to explain the urbanization process in post-reform China. The scale theory is developed mainly in the context of Western capitalist societies to describe the scalar organization of capitalism. As a general sociospatial theory, the general principle of scale theory is also relevant to transi- tional socialist economies where scalar configuration has also been rearticulated by liberalization and globalization. In addition to territorially bounded practices and relations, one important form of de- and re-territorialization in China is the shrinking or expansion of physical space – the urban space reorganization. The rescaling of central and local states is a politically constructed process. It does not just mean the decline of the central state and the rise of the local state. There have been intensive interactions and negotiations between local and central govern- ments over administrative powers, revenue sharing, taxation, investment projects and loans. Under a hierarchical administrative system, the central government has substantial power in the process of changing city scale and territorialization. The local governments also participate in the process actively.

The new mode of dual-track urbanization is a consistent interpretive frame- work for urbanization in pre-reform and post-reform China, which shows clearly the complicated relationships between the urban or rural residential location of people with the hukou status of non-agricultural or agricultural population, their occupational attachment to non-agricultural or agricultural sectors and their enti- tlement to state sponsorship in terms of state benefits and social privileges.

In the pre-reform period, only state-sponsored urbanization prevailed during the period of “urbanization from above” (Ma and Fan 1994; Lei 2001). In the post-reform period, the nature of state-sponsored urbanization was transformed during the reform era and a pro-urban regime emerged. A new track of spontane- ous urbanization has emerged in post-reform China. Rural urbanization and the

Conclusion 173

growth of the urban temporary population are two important streams of spontane- ous urbanization. In the reform period, both tracks of urbanization are important, but the speed of spontaneous urbanization is faster than that of state-sponsored urbanization.

A new regime of active pro-urbanization has emerged since 1997, marked by China’s tenth FYP, which was approved by the National People’s Congress on 2001 March 15 (Wang 2001). It is likely that the hukou system will be radically reformed eventually and that it will only retain its function of population regis- tration, while other administration functions for allocating state benefits may be scrapped. Nevertheless, there remains a requirement for people to have a local hukou status, and those who cannot meet such a requirement will remain defined as part of the temporary population, which is likely to continue to be an important component of spontaneous urbanization in the near future.

Urban system and sustainable urban development Because of the urban agglomeration effect, urban systems are unbalanced and consist of large and small urban centers. Concepts of city-regions, metropolitan regions and urban clusters have been used to describe large urbanized areas. There is no standard demarcation of urban clusters. An urban cluster is often drawn by a central city that may overlap with urban clusters drawn by other central cities. This may result in problems of planning and development coordination (Luo and Shen 2008). With rapid growth of urban population and its concentration in major urban centers, urban systems have been dramatically transformed in China. Chap- ters 4 and 5 analyzed the urban system in the Guangdong province and sustainable urbanization in Shenzhen city as a result of uneven development under the social- ist market economy. The study attempts to demonstrate how the new urbanization process is forming a new urban system. Considering the substantial discrepancy among the rank-size distribution of cities in terms of population and economic indicators, especially owing to the existence of a “temporary population” and the policy of “designating a whole county as a city,” the urban system in Guangdong province was analyzed using demographic and economic indicators with refer- ence to rank-size distribution of cities.

The primacy of Guangzhou in Guangdong varied by population and economic indicators. The primacy index was the largest in terms of non-agricultural popula- tion and commercial wholesale and retail value, as Guangzhou continued to be the trading center of the province, and the growth of non-agricultural population was largely controlled. The primacy index was close to two (which was the case of Zipf’s rank-size rule) in terms of hukou population and total retail value. The pri- macy index was the smallest, just over one, in terms of total population and GDP. Considering city size in terms of total population and GDP, the urban system in the region now has twin-centers of Guangzhou and Shenzhen. This is largely due to a large temporary population and dramatic economic growth in Shenzhen. It is clear that rank-size distributions of various population and economic indicators are not the same. Thus it is useful to examine the rank-size distribution of urban

174 Conclusion

size based on various population and economic aspects, and the relative positions of top cities in the urban hierarchy.

The high level of urbanization in the PRD region is associated with its advanced economy in contrast with non-PRD region in Guangdong province. Correlation analysis of time-series data also shows significant correlation between economic variable and the size of urban built-up area and employment. Clearly, economic factor plays an important role in the recent expanding urbanization in Guangdong and in China in general. This does not exclude the role of policy and institutional factors, but any institutional reforms and policy changes must be based on sound economic foundations. Right institutions and policies will only work in regions and cities with right economic foundations.

The emergence of Shenzhen as a major urban center in South China is an outstanding case (Chen and de’Medici 2010). Rapid economic growth is fueled by the massive inflow of migrants from all over China. Previous studies often emphasized the importance of foreign investment in Shenzhen and PRD in gen- eral. The study found that both domestic and foreign investments have significant contributions to the rapid economic growth in the city, similar to previous study on PRD (Shen et al. 2001).

With rapid population growth and the expansion of the city, a city will face various social and environmental problems such as the provision of housing and urban infrastructure, the problems of increasing crime rates and environmental pollution. Shenzhen provides a good case to address these issues. Generally, Shenzhen’s performance is better than many other major cities in China in terms of environmental protection.

Shenzhen’s case indicates that it is possible to move toward balanced develop- ment in social, economic and environmental dimensions, even for new large cities such as Shenzhen. Other old and large cities may face even more environmental problems because of inertia in economic structure and the historical legacy of poor urban infrastructure. With further industrialization, rising living standards and expectations for high quality of life, Chinese cities need to invest more to reduce environmental pollution and carbon emissions. The recent move to smart cities may help to build more efficient, environmental friendly and sustainable cities (Batty 2013).

Regional development, integration and governance Urban performance depends on both urban competitiveness (internal factors) and the external environment (external factors). Different external environments pre- sent different development opportunities for various cities and thus affect their urban performance differently. Hong Kong’s case shows how its hinterland, the PRD region and mainland China in general have provided favorable investment and trade opportunities for Hong Kong and stimulated its economic transforma- tion from an industrial city to a major world city since the 1980s. While Hong Kong benefited from a favorable position in the division of labor in the Hong Kong–PRD regional production system before the change in sovereignty in 1997

Conclusion 175

(Shen 2003), such an advantage is being challenged by the rise and upgrading of the economic structure of Guangdong and the neighboring cities in the hin- terland after 2001. Hong Kong is facing increasing competitive pressure in the post-handover period because of the narrowing gap between Hong Kong and the mainland in economic terms.

Compared with other cities in mainland China, Hong Kong’s competitive- ness builds on a sound legal and institutional framework, a free market system, sophisticated business community, diligent and relatively well-educated labor force, efficient and clean government, good infrastructure and dense international networks. The overall trend suggests that Hong Kong will continue as a leading world city in Asia and China. But Hong Kong will no longer be the only city to dominate the economy of China. It will have to compete aggressively while also cooperating closely with other major Chinese and Asian cities to remain dynamic and prosperous.

Accelerating globalization worldwide has resulted in the restructuring of the political, economic, social and culture orders in the world. Such global restruc- turing often involves dense and complicated governance processes at the inter- national, national, regional and local levels. The Hong Kong–PRD region has experienced rapid globalization and regional integration in recent decades. This has involved the PRD region on the mainland that has implemented a reform and open door policy since 1978 and, more importantly, Hong Kong that has been a well-known free port for many years.

The framework of TSEs is adopted for a study of cross-border governance in Hong Kong, especially the role of the state. The author argues that a tension-free model of regional integration has never existed in southern China because of com- plexities of the governance network and the interaction between geoeconomic and geopolitical TSEs. The shift from cross-border protectionism to a cross-border free trade zone in Hong Kong’s cross-border urban governance since 2001 was a result of the rearticulation of the state cutting through the geoeconomic and geopolitical TSEs.

The divergent interests and visions of a cross-border relationship between Hong Kong and the PRD region have been the focus of debate both before and after 1997. The return of Hong Kong to China in 1997 was expected to be a catalyst for developing close economic relationships between the two, especially at the governmental level. The nationalist TSE and the pro-economic-integration TSE were expected to reinforce each other. Close economic cooperation between Hong Kong and the PRD region was high on the agenda of the first chief executive of the HKSAR. Nevertheless, there was little progress in cross-border cooperation in the period of 1997–2000. Indeed, July 1997 marked the beginning of a period of cross-border protectionism because of the emergence of the politically distancing TSE in post-handover Hong Kong and the potentially negative economic impact of cross-border development on Hong Kong.

Hong Kong’s economy entered another round of stagnancy after the 9/11 event in New York in 2001. In the meantime, the economy on the mainland continued to grow despite a worldwide economic slowdown. After China’s entry into the

176 Conclusion

WTO in 2001, the argument that Hong Kong would suffer from closer economic- integration has been outweighed by the argument that closer economic integration will benefit Hong Kong. Thus the HKSAR government moved toward a close economic relation with the PRD.

It is clear that the HKSAR government plays an indispensable role in mediat- ing the cross-border integration between Hong Kong and the PRD according to its own political and economic considerations. This is in stark contrast with the notion of the laissez-faire policy of Hong Kong. The case of cross-border gov- ernance of Hong Kong vividly shows the role of the state as a gatekeeper in the globalizing process, even for the freest economy in the world.

Hong Kong and Shenzhen, the PRD in general, is often considered an advanced case of cross-border regional integration facilitated by political history, kinship and business ties (Grundy-Warr et al. 1999: 309). A smoother and deeper integra- tion than other cross-border regions is often expected. But this is not the case, especially in terms of institutional integration and social integration. Close eco- nomic integration between Hong Kong and Shenzhen has been emerging. Limited progress in the institutional integration took place after 2001. But the integration of cross-border communities has lagged well behind economic and institutional integrations.

Many Hong Kong and Shenzhen residents consider the different value and political systems in the two cities the main barriers of Hong Kong–Shenzhen integration. These profound gaps exist under the political and cultural context of OCTS and Chinese culture. They affect social and institutional integration. The OCTS adopted in Hong Kong and Shenzhen/mainland China, to some extent, is to maintain the social and political differences across the Hong Kong–Shenzhen boundary. There is no agenda to abolish the boundary, and it is in the best interest of both Hong Kong and mainland China to continue OCTS beyond 2047.

Prospectus of urbanization, regional development and governance in China According to recent population censuses (NBS 2011: 96), the urban population in China more than tripled in the period of 1982–2010, increasing from 210.82 mil- lion in 1982 to 458.44 million in 2000 and 665.57 million in 2010. The level of urbanization reached 56.1% in 2015 (NBS 2016). It is expected that the urban population in China will further increase to 1,030 million in 2035 and the peak of 1,051 million in 2047, according to the projection of Population Division, Depart- ment of Economic and Social Affairs, United Nations (2014). The level of urbani- zation will reach 71.1% in 2035 and 75.8% in 2050.

Different from other countries, the population in a Chinese city does not just consist of local residents and migrants because of a unique hukou (household reg- istration) system. It actually consists of three parts: the local population (people with local hukou), permanent migrants (with local hukou) and temporary migrants (without local hukou) (Shen 2005). The temporary migrants contribute to the bulk of the increased urban population and usual residents in Chinese cities based on

Conclusion 177

the census definition in the reform period. The current urbanization of China is incomplete and not inclusive. To achieve a complete and high level of urbaniza- tion in China, attention should be paid to three important aspects: the usual rural to urban migration, the integration or inclusion of the floating population in the existing urban areas and the urban-rural integration in the urban periphery. A sys- tematic and sustainable approach is needed for efficient and sustainable urbaniza- tion with an efficient urban system and high livability.

Given the large urban population and high population density in China, a num- ber of mega-city regions and mega-cities will emerge in China. According to the projection of Population Division, Department of Economic and Social Affairs, United Nations (2014), there will be 41 mega-cities in the world by 2030, each with a population of ten million or more. Seven of them will be in China, includ- ing Shanghai, Beijing, Guangzhou, Chongqing, Tianjin, Shenzhen and Chengdu. These mega-cities will play a pivotal role in the further development of the urban system and economy in China. The policy makers and planners need to address the following key issues: the functional division of these mega-cities with medium and small cities; the efficient regional inter-city and intra-city transport systems, especially railway services for passengers; the sustainability and livability for residents; dynamic education, research and innovation systems; regional govern- ance and coordination to manage inequality; and the resource and environmental protection.

In the Hong Kong–PRD region, there are a number of developments that will stimulate urban and regional development in the region. Guangdong-Hong Kong- Macauo Greater Bay Area development was promulgated by Premier Li Keqiang in March 2017 in the government report for the 12th National People’s Congress, and thus this Greater Bay Area development has become a national strategy. Good progress has been made on this initiative. The Framework Agreement on Deepen- ing Guangdong-Hong Kong-Macao Cooperation in the Development of the Bay Area was signed on 1 July 2017, and the Development Plan for City Clusters in the Guangdong-Hong Kong-Macao Bay Area will be released in 2018. Various suggestions have been made by academics, business sectors and other organiza- tions in Hong Kong on this joint planning exercise.

In the meantime, a number of major infrastructure projects are underway, and some will be completed for operation very soon. Hong Kong International Airport was completed for operation in 1998. It was ranked the busiest airport in terms of handing air cargo, 4.38 million tons, and number eight in terms of passenger throughput, 68.1 million, in 2015. The airport will reach its full capacity in 2020. After keen debate in Hong Kong, the third runway project started in August 2017, with an estimated cost of HK$141.5 billion. The funding sources include a 49% bank loan or bond, 33% airport dividend and 18% airport tax (AAHK 2017). The completion of the project will support the development of various economic sec- tors in Hong Kong.

High-speed railway in the Hong Kong–Shenzhen section is another major cross-boundary project. It is 26km to link Hong Kong with the high-speed rail- way network over 20,000 km, which will be expanded to 38,000 km in China by

178 Conclusion

2025. The HKSAR government approved the project in 2009, and the funding was approved by the Legislative Council on 8 January 2010. It has been very controversial in Hong Kong. The main objections include the land assumption and the relocation of Choi Yuen Village in the early years, expensive cost (over HK$80 billion) and the co-location boundary checkpoints of mainland China and Hong Kong in the Western Kowloon station.

The current objection to the arrangement of co-location boundary checkpoints is centered on two concerns. First, this arrangement violates the Basic Law, which states that mainland laws cannot be implemented in Hong Kong, except for those listed under Appendix 3. Second, when mainland officials work in the Western Kowloon station, they may arrest Hong Kong residents illegally. These concerns are overstated, as the co-location boundary checkpoint of mainland China only uses a very limited space in the station for the purpose of boundary controls to facilitate passengers. There is not much ground to assume that mainland offi- cials will arrest Hong Kong residents in the station beyond a normal boundary checkpoint control such as Lowu or Futian. The alternative option to replace the co-location boundary checkpoints will significantly affect the efficiency of the cross-boundary travel, as passengers have to get off the high-speed train to go through the mainland boundary control procedures in Shenzhen. A passenger may use at least one additional hour to complete the procedure and get on another train, whereas one hour may allow the passenger to travel 250–300km if the co-location boundary checkpoints are adopted.

The HKSAR government signed an agreement with Guangdong government on the cooperation of co-location boundary checkpoints, which was approved by the Standing Committee of National People’s Congress in December 2017. Local legislation will proceed for approval from the Legislative Council of HKSAR in 2018. The Hong Kong–Shenzhen high-speed railway section will start operation in the third quarter of 2018. It will provide three important functions (Shen 2017). First, it will provide frequent direct services between Hong Kong and Shenzhen in 19 minutes, linking central business districts of the two cities. It will also relieve the congestion of the East Rail line service from Hong Kong to Lowu and Lok Ma Chau (316,000 passengers a day in 2015). Second, it will provide frequent services between Hong Kong and other cities in the PRD, including Guangzhou, the provincial capital of Guangdong. Third, it will provide regional high-speed railway service to some major cities such as Beijing and Shanghai, and many other cities by transit in mainland stations such as the Shenzhen North station. High-speed railway is more competitive than air services within the distance of 1,000–1,200km. The Western Kowloon high-speed railway station can play the role of regional airport, and its passenger throughput is expected to be close to that of Zhuhai Airport and much greater than that of Macao Airport. The co-location boundary checkpoints of mainland China and Hong Kong in the Western Kow- loon station will become an important case of regional governance and inter-city cooperation in the region.

Hong Kong, Zhuhai and Macao Bridge (HZMB) is a cross-boundary project linking Hong Kong with Zhuhai and Macao in the western PRD. Again, this

Conclusion 179

project has been controversial between Hong Kong and other cities in PRD, and within Hong Kong. For example, there was a suggestion from Shenzhen that the bridge could also land in Shenzhen, making it a double Y bridge. This suggestion was not favored by Hong Kong and was not adopted. Another controversy is the effect that the HZMB projects would have on the air quality and health of resi- dents’ in the surrounding environment. One resident applied for a judicial review on the EIA (Environmental impact assessment) report, which was not successful. Another controversy is the high cost of the construction of the project. After some delay, the construction of the bridge started in 2012, and it will be open to traffic in 2018. The bridge will significantly reduce the traffic time from Hong Kong to western PRD and will have profound impact on the development of western PRD in the long term. One important issue of regional governance and inter-city cooperation is which and how vehicles from the region can get licenses to use the new bridge to facilitate the cross-boundary flows and also to make use of the bridge efficiently.

Two important trends will affect future urbanization and regional development in China. The first is sustainable development, including social, economic and environmental sustainability, which need the efforts of all citizens, social organi- zations, enterprises and governments to work together to achieve economic devel- opment, social equity, environmental conservation and quality and healthy living. The second is the smart cities with the wide use of information technology, arti- ficial intelligence, big data analytics and Internet of Things (Batty 2013). New urban systems and new urban forms are emerging with new (sharing) economies. At the time of this writing, it seems that human society and cities are entering a new era of greater transformation with rapid technology innovation and much uncertainty.

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