Blindly expanding Chinese cities is ‘like spreading out big pancakes’

China’s urbanisation programme needs planning, not haste, a Chinese cabinet minister told reporters in Beijing this week

China’s bid to expand its urban population needs better planning, according to Xie Zhenhua, vice minister of the National Development and Reform Commission (NDRC). Speaking at the launch of the United Nations Development Programme (UNDP)’s latest report in Beijing, Xie said the obstacles to China’s urbanisation plans are becoming increasingly visible.

“The challenges to the sustainability of city developments, the planning of urban areas, the ability to provide public services and the capability of urban governance have become more severe,” Xie said.

The old urbanisation model that sacrifices environment and social equality for the sole sake of speed will be difficult to continue, according to the vice minister.

The vice minister’s words echoed the findings of the UNDP report, entitled Sustainable and Liveable Cities. Citing the ageing population, growing inequalities and environmental degradation as the major challenges of China’s ambitious urbanisation programme, the report warns that “the window of opportunity for addressing many of these is relatively small”.

The government plans to move 250 million people into newly-built cities and towns over the next dozen years. Though detailed planning has yet to be finalised by the State Council, sources have reported that the target will be to achieve 60% urbanisation by the end of this decade. By 2030, it is predicted that more than 70% of China’s population will be urban dwellers and as much as 75% of China’s Gross Domestic Product (GDP ) will be generated in cities.

The cost of this will be substantial. China Development Bank, one of the country’s major financiers, estimated in May that $8.1 trillion, slightly less than the 8.2 trillion annual GDP of China in 2012, will be needed for the programme. But the direct bearers of the cost, China’s municipal governments, are already sitting on a mountain of bad debt. ‘Ghost cities’ caused by hasty urbanisation could further worsen the current local government debt crisis.

As Li Tie, a senior official at NDRC, told South China Morning Post last month, "Cities’ blind expansion is like spreading out big pancakes – one day when local fiscal capabilities get too stretched, the bubble might burst."