China’s push for megacities: is bigger better?

Fei-Ling Wang, Professor of International Affairs at the Georgia Institute of Technology and expert on China’s megacities explains the pros and cons of creating these new urban city groups

To sustain continued, robust economic growth – something of crucial importance to its legitimacy and stability – the Chinese government has lately employed a bold stimulus plan of “city grouping” (chengshiqun), the creation of a few megacities by integrating groups of cities and nearby rural areas. So far, Beijing has decreed that four “world-class” megacities should be formed: the Jingjinji Integration (2015) in the north, which includes Beijing, Tianjin, and Hebei Province (population: 110 million); the Chengdu-Chongqing City Group (2016) in the west, with 18 cities (population: 91 million); the Yangtze Delta City Group (2016) in the east that includes Shanghai and two dozen other cities in three provinces (population: 150 million); and the latest, the Greater Bay Area (2019) in the south, with nine cities that include Hong Kong, Macao, Shenzhen, and Guangzhou (population: 70 million). In addition, seven cross-provincial “national” megalopolises were also approved in 2017-18, with a total population of around 410 million: The Middle Yangtze, The Central-Plains, The Harbin-Changchun, The Beibu Gulf, The Guanzhong Plains, The Hubaoeryu, and The Lanzhou-Xining.

City grouping is an example of central planning with key Chinese characteristics. It focuses on the economically prosperous and politically important regions and in it, one can see some vestiges of the “Major Region” (daqu) structure of governance and planning from the Mao era. It also allows for economies of scale to come into play. Efficient chains of production and logistic networks have already been extensively developed among the cities in these areas, and even more synergy and streamlining is likely to be harvested by further integration. It’s also worth noting that the Greater Bay Area’s design may have an additional political motive: a tighter control over the two wealthy but occasionally politically complex Special Administrative Regions (SARs) of Hong Kong and Macao.

It may be somewhat self-evident, but if the megacities can elevate themselves onto the next level of economic development, there would be enough of a boost to lift the boat of the whole Chinese economy

There are more peculiar motives as well. The megacity push reflects Beijing’s sometimes contradictory needs to maintain strong political control while stimulating the economy. It is a way to uphold the all-important household registration (hukou) system that segregates and controls the people by regulating internal migration whilst simultaneously increasing the mobility of resources, including labour and homebuyers, so as to generate new growth. By giving the most desirable first- and second-tier cities more towns to expand into, the influx of migrant “low-end people” into the glittering urban centres may be more reliably diverted and managed, while ensuring the continuation of economically beneficial urbanisation.

It may be somewhat self-evident, but if the megacities, each comparable to a major EU member country in size, can elevate themselves onto the next level of economic development whilst avoiding the so-called “middle-income trap,” there would be enough of a boost to lift the boat of the whole Chinese economy, even though the rest of the country (up to three-fifths of the population) may be left behind. To be sure, China’s impressive economic growth over the past three decades has been an extraordinary model of a dual-economy and multiple societies functioning under a single government.

As it is now politically favoured, just about every provincial capital has been expanding massively to “absorb” nearby cities and counties

Like so many other central planning policies though, the devil of the megacity plan is in the detail. The plan is mostly an “administrative urbanisation” that may only lead to minimal economic advantages, if any are forthcoming at all. Urbanisation through official re-categorisation or renaming of people from rural to urban, or from lower-tier towns to higher-tier cities, is not the same as urbanisation driven by market forces. Within each megacity, there are also still numerous control mechanisms and exclusion barriers based on where one’s hukou is located:  the “central districts,” the “non-central districts,” the “remote districts” (formerly county-seats and townships), and the rural.

As it is now politically favoured, city-grouping has been emulated throughout China. Just about every provincial capital, for example, has been expanding massively to “absorb” nearby cities and counties, renaming them city districts. The national megacities and the many more “regional” mini-megacities, both inter- and intra-provincial, may make the report cards of the local governments look nice in terms of GDP figures, growth rate, and the urbanisation ratio. But the real impact on economic efficiency remains questionable. The scheme has allowed for land grabs by local officials and their contractor friends. Bureaucratic re-categorisation of regions and ever greater concentrations of power have already led to waste, irrational resource allocation, and reduced competition and innovation, contrary to the optimistic ambitions behind the plan.

The Greater Bay plan may bring an additional pitfall for those in Hong Kong and Macao: as they witness more complete administrative integration of the two SARs with the PRC, foreign countries like the United States may find themselves reconsidering their special treatment of the two cities, causing the “value” of the SAR brand to evaporate quickly.

Fei-Ling Wang is Professor of International Affairs at the Georgia Institute of Technology and a member of the Council on Foreign Relations, USA. His published books include Organization through Division and Exclusion: China’s Hukou System (Stanford University Press, 2005) and The China Order: Centralia, World Empire, and the Nature of Chinese Power (State University of New York Press, 2017).