Investigation on New problems and New Trends of urbanization in China

Because farmers' citizenization is linked to land and property rights, there are a lot of "counter-urbanization" phenomena in some places. Some migrant workers do not want urban hukou, and even many of the original urban hukou population, want to change to rural hukou, in order to get land.

The pace of urbanization in China has been slowing down in recent years. The data show that from 2006 to 2010, the national urbanization rate increased by 1.39% per year on average, 1.58% in the eastern region, 1.21% in the first four years of the 12th five-year Plan and only 0.98% in the eastern region. The central and western regions are still accelerating so far, but in 2014, the urbanization rate in the central region was 49.8%, and that in the western region was 47.4%, which is close to 50%. During the 13th five-year Plan period, the urbanization rate in the central and western regions will also gradually slow down. From the perspective of development, the speed of urbanization in China will decline in the future, and comprehensively improving the quality of urbanization will be a new normal of urbanization in China in the future. This is called urbanization transformation.

What are the reasons for the deceleration of urbanization in China

First, China has entered a deceleration stage of rapid urbanization. Whether it is our estimate or that of the United Nations, China's urbanization rate will be around 68% in 2030. What kind of concept is this? We know that the urbanization rate of 30% to 70% is within the range of rapid urbanization, of which 50% is a turning point. It was the acceleration phase before, and then the deceleration phase. China's urbanization rate is expected to reach about 70% in 2033, which means that China still has nearly 20 years of room for rapid urbanization, but this rapid advance is a deceleration.

Second, the concept of development and the external environment have changed. In the 13th five-year Plan, the Central Committee put forward the "five major ideas", among which the very important one is the concept of green development. In the past, China's urbanization was supported by high consumption, high emissions, low efficiency, low wages and low costs. Under the new concept of development, this low-cost supporting environment no longer exists. For example, in the past, China's industrialization depended on low wages of labor and low prices of land. Another is that we do not pay the cost of citizenization of migrant workers, do not pay is not do not pay, just delay the payment. It was not paid before, but it will be paid now and in the future. In addition, the price of resources is distorted and the cost of environmental pollution is transferred to the society, such as haze and air pollution. The price of resources does not reflect the real cost, and this extensive urbanization supported by low cost has come to an end.

Third, the demand for urban employment will decline, and the growth rate of jobs will also decline. The central government proposes to be innovation-driven, coupled with the rapid rise in wages, these two reasons will cause many enterprises to use robots or more capital to replace labor, so the demand for labor will decline.

The fourth is the influence of citizenization. The citizenization of agricultural transfer population and urbanization in China are separated and disjointed. The cost of citizenization has been deferred, and the next step is to make up for its shortcomings. We have calculated that the average cost of citizenization of the transferred agricultural population across the country is about 130000 yuan per person, while that of farmers in Beijing is 512000 yuan per capita in concentrated urbanization areas and 200000 yuan in non-centralized urbanization areas. Considering the cost of citizenization, it is impossible for China's urbanization to advance too fast in the future.

What are the key issues facing China's urbanization at present?

At present, the problem facing China's urbanization is not the level, nor the speed, but the low quality, that is, the gap between the urbanization rate of the registered population and that of the resident population is too large, which is a key issue. The core of comprehensively improving the quality of urbanization is to promote the citizenization of agricultural transferred population.

But now we are faced with a difficult problem, that is, there is a downward trend in the citizenization willingness of the agricultural transfer population. According to a survey conducted by the National Bureau of Statistics, the willingness to citizenize agricultural migrant population in many areas since 2014 is relatively low, with only 30% to 50%. What problem does this reflect? In the past, under the urban-rural dual structure, due to the great difference in urban and rural welfare, farmers strongly wanted to go to the city, but due to institutional and policy reasons, farmers could not come in. In recent years, the central government has accelerated the reform of the household registration system. Many cities have abolished agricultural and non-agricultural hukou, and small and medium-sized cities have been liberalized to encourage farmers to go to cities, but farmers are reluctant to go to cities. The first reason is that the central government has clearly given more property rights to farmers. Second, public finance is tilted to "agriculture, rural areas and farmers", and the level of public services in rural areas is constantly improving. Third, the expectations of farmers are increasing, and the opportunities for future development options are also increasing. From the perspective of development opportunities and expectations, this is one of the most important reasons for the decline of farmers' willingness to become citizens. In order to solve this problem, we must speed up the reform of the rural collective property right system and open up the links between urban and rural areas.

The income gap between urban and rural areas has been narrowing continuously.

Since 2009, the income gap between urban and rural areas in China has been narrowing. The ratio of per capita disposable income of urban residents to per capita net income of rural residents was 3.33 in 2009 and 2.90 in 2015. So, is the narrowing of the income gap between urban and rural areas a long-term trend or a short-term trend in recent years? I think this is a long-term trend. That is to say, in the future, China will enter a new period of steady narrowing of the income gap between urban and rural areas. Why do you say that? This is related to the stage of development of our country. First, China's industrialization has entered a later stage, the city-oriented industrial growth in the past, the driving force of economic growth will decline. In the future, China's small cities, small towns and rural areas will show great potential for development. Second, the large-scale transfer of agricultural population to cities in recent years is conducive to the development of moderate scale operation in rural areas and the increase of farmers' income. In order to increase farmers' income and solve the problems of agriculture, rural areas and farmers, it is necessary to reduce farmers. Isn't it urbanization to reduce the number of farmers? Third, in the new stage, the central and local governments have the ability to invest more resources, especially public resources, into the field of agriculture, rural areas and farmers. It can be said that the narrowing of the income gap between urban and rural areas is an important prerequisite to ensure China's long-term economic stability and medium-to-high-speed growth.

It is becoming more and more difficult to increase farmers' income under the new situation.

The income gap between urban and rural areas should be narrowed, not to depress the income of urban residents, but to find ways to speed up the growth of farmers' income. In recent years, the growth of farmers' income is faced with a big problem, that is, farmers' income is highly dependent on wage income. The proportion of wage income in the net income of peasant households increased from 20.2% in 1990 to 45.3% in 2013, while the proportion of household operating income dropped sharply, from 75.6% in 1990 to 42.6% in 2013.

From the contribution source of increasing farmers' income, the contribution rate of wage income to the increase of farmers' income has increased greatly. From 1991 to 1997, the contribution rate of wage income growth increased from 26.8% to 52.5%, while that of household operating income decreased from 68% to 33.8%. If the net income of planting industry in household operating income is calculated, its contribution to the increase of farmers' income will be even lower. From 2014 to 2015, wage income accounted for 47.6 per cent of the growth of disposable income of rural residents, while net operating income accounted for only 28.6 per cent. The growth of farmers' income is highly dependent on wage income, and it is abnormal that agriculture contributes less and less to the increase of farmers' income.

In the future, with the promotion of urbanization and the acceleration of citizenization, it is more and more difficult for farmers to increase their income. There are two main reasons for this: one is the calculation of income after citizenization. In the past, when farmers went to work in cities, most of their wages flowed back to the countryside, that is to say, a considerable part of their wage income was counted in the income of farmers' families. After counting them as urban residents, from a statistical point of view, their income is part of the income of urban residents, not as the household income of farmers. In this way, the contribution of wage income to the increase of farmers' income will decline. The increase of farmers' income will rely more on operating income and property income. The second is the problem of agricultural profit space. From the perspective of household operating income, prices have ceilings, costs have floors, and costs are rising. Now the prices of a considerable number of domestic agricultural products exceed the international market prices. In this case, the price increase and profit space of domestic agricultural products will be limited. For example, from 2004 to 2014, the total production cost of China's three major grains-rice, wheat and corn-grew at an average annual rate of 10.5%, faster than GDP, including an average annual growth rate of 7.6% for materials and services, 12.2% for labor costs and 14.2% for land costs. Of the increase in the total cost of agricultural production during this period, 45.4% came from labor costs, 32.4% from material and service costs, and 22.2% from land costs. At present, the cost of land transfer is about 80-1200 yuan per mu, and the annual income from growing grain is only a few hundred yuan.

The two-way flow of urban and rural elements will become a new trend.

In the past, the population, capital and technology of our country all flow from the countryside to the city, which is a kind of one-way flow. Now there are some new developments:

First, there is a trend of slowing down the migration from rural areas to urban areas. The number of migrant workers in China increased by an average of 13.11 million a year from 2001 to 2002, 5.87 million from 2003 to 2012, and 1.83 million from 2013 to 2015, less than 2 million. The growth rate of migrant workers is declining.

Second, from the perspective of development, the speed of agricultural labor transfer will gradually slow down. Although it is still accelerating at present, the employment proportion of agricultural labor force fell by 1.04% per year in 2001-2005, 1.62% in 2006-2010 and 1.8% in 2011-2014. However, this accelerated decline is not sustainable. On the one hand, the employment proportion of agricultural labor force is getting lower and lower, already less than 30% in 2014; on the other hand, the transfer rate of migrant workers is declining, the speed of urbanization is decelerating, and the speed of labor transfer will also decline in the future. I estimate that the transfer rate of agricultural labor force will gradually slow down in the next 15 to 20 years, and it is expected that the proportion of agricultural employment in China will drop to about 12% by 2030.

Third, the speed of capital to the countryside, technology to the countryside, and talents to the countryside is accelerating. The future integration of urban and rural areas in China is a two-way integration of urban and rural areas. At present, Beijing-Tianjin-Hebei, Yangtze River Delta, Pearl River Delta and other developed areas have entered a new stage of two-way urban-rural integration.