1. Urbanization in China: The Next Decade Shahid Yusuf The World Bank February 22nd, 2010

2. Why an Urbanization Strategy is a Priority Promoting industrialization. Promoting industrialization. Leveraging productivity and innovation for growth. Leveraging productivity and innovation for growth. Quality of life Quality of life Resource use and carbon emissions. Resource use and carbon emissions.

3. The State of Urbanization in 2008: A Snapshot Urbanization rate: approaching 50 percent. Urban built up area rising fast. Urbanization rate: approaching 50 percent. Urban built up area rising fast. Urban population including migrants: almost 650 million. Urban population including migrants: almost 650 million. Living space per capita has risen fivefold. Living space per capita has risen fivefold. Share of GDP: over 80 percent. Share of GDP: over 80 percent. Number of cities: more than 650. Number of cities: more than 650. Cities with population in excess of 1 million: 120. Cities with population in excess of 1 million: 120. Secondary cities growing faster. Secondary cities growing faster.

4. China’s Population by Residence, 1980-2007 (million)

5. The Shape of Things to Come Continuing shift in composition of GDP from the primary sector to the urban sector and from industry to services. Continuing shift in composition of GDP from the primary sector to the urban sector and from industry to services. Migration to cities: 20+ million per year. Migration to cities: 20+ million per year. Rising demand for urban infrastructure, housing and services. Rising demand for urban infrastructure, housing and services. Transfer of populations from interior areas and the north to coastal locations. Transfer of populations from interior areas and the north to coastal locations. Concentration of population in a few vast urban regions: Pearl River, lower Yangtze Valley and the Bohai region. Concentration of population in a few vast urban regions: Pearl River, lower Yangtze Valley and the Bohai region.

6. Urban Development: The Challenges Managing migration to mega and secondary cities to optimize long term geographical distribution of urban population. Managing migration to mega and secondary cities to optimize long term geographical distribution of urban population. Accommodating demand for housing and services. Accommodating demand for housing and services. Controlling overbuilding of high income housing and managing threat of housing bubbles. Controlling overbuilding of high income housing and managing threat of housing bubbles.

7. Urban Development: The Challenges (cont.) Designing polycentric urban regions so as to maximize agglomeration economies while keeping cities compact and low carbon. Limiting consumption of arable land. Designing polycentric urban regions so as to maximize agglomeration economies while keeping cities compact and low carbon. Limiting consumption of arable land. Building or maintaining an industrial base. Building or maintaining an industrial base. Creating a system of sustainable financing comprised of adequate and buoyant local taxes and user charges, and with access to term financing. Creating a system of sustainable financing comprised of adequate and buoyant local taxes and user charges, and with access to term financing. Ensuring that urban planning and governance are equal to the challenges cities face. Ensuring that urban planning and governance are equal to the challenges cities face.

8. Land Consumption Per Capita

9. Private Vehicle Ownership in China, 1995-2008

10. Cars and Space: International Data

11. Urban Strategy and Policy A long term urbanization strategy that promotes future urbanization in the areas south of the Yangtze (with enough water) and away from vulnerable coastal locations. A long term urbanization strategy that promotes future urbanization in the areas south of the Yangtze (with enough water) and away from vulnerable coastal locations. A nationwide transport infrastructure to anchor the urbanization strategy. A nationwide transport infrastructure to anchor the urbanization strategy. Industrial and innovation policies to build capabilities in manufacturing, productive services, technology and training. Develop enough tradable activities to achieve trade/current account balance. Industrial and innovation policies to build capabilities in manufacturing, productive services, technology and training. Develop enough tradable activities to achieve trade/current account balance. Urban planning, and design policies and techniques for grouping secondary cities within a networked urban region. Urban planning, and design policies and techniques for grouping secondary cities within a networked urban region. Implementation of land use and other policies is the key test: i.e. building compact vertical cities that are livable and well served with public transport. Implementation of land use and other policies is the key test: i.e. building compact vertical cities that are livable and well served with public transport.

12. Urban Strategy and Policy (cont.) Design, codes and standards for cities, infrastructure, buildings, and appliances so as to realize objectives of compactness and low resource and carbon intensity. Design, codes and standards for cities, infrastructure, buildings, and appliances so as to realize objectives of compactness and low resource and carbon intensity. Local taxes, user charges, center-local fiscal arrangements, fiscal discipline rules to mobilize resources for long term/recurrent expenditures. Local taxes, user charges, center-local fiscal arrangements, fiscal discipline rules to mobilize resources for long term/recurrent expenditures. Public sector salaries and incentives to attract/retain leadership and managerial/technical expertise needed to build and run “smart cities”. Harnessing ICT and organization design to reduce transaction costs and increase accountability. Public sector salaries and incentives to attract/retain leadership and managerial/technical expertise needed to build and run “smart cities”. Harnessing ICT and organization design to reduce transaction costs and increase accountability. Raising adequate fiscal resources, mobilizing talent and developing tradable sector vital for secondary cities. Raising adequate fiscal resources, mobilizing talent and developing tradable sector vital for secondary cities. Institutions for governance and inter-jurisdictional coordination in urban regions comprised of a matrix of cities. Institutions for governance and inter-jurisdictional coordination in urban regions comprised of a matrix of cities.

13. Advantages and some Cautions Advantages and some Cautions Growth momentum. Growth momentum. Early stage of urbanization. Early stage of urbanization. Few capital constraints because of high savings rate. Few capital constraints because of high savings rate. Awareness of global warming and readiness to embrace green technologies. Awareness of global warming and readiness to embrace green technologies. National innovation system geared up to generate skills and technology. National innovation system geared up to generate skills and technology. Organizational apparatus for planning and implementing urban/industrial policies with demonstrated track record. Organizational apparatus for planning and implementing urban/industrial policies with demonstrated track record. Sense of urgency. Sense of urgency.

14. Thank you