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Meeting the challenges of China’s growing cities

China’s cities are booming. Intelligent policies could make the good effects prevail over the bad ones.

JULY 2008 • Janamitra Devan, Stefano Negri, and Jonathan R. Woetzel

Economic Studies, Country Reports Article, Meeting the challenges of China’s growing cities

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China’s dramatic economic growth is intensifying the challenges of urban policy. Mass migration to the cities is leading to urban sprawl, the loss of arable land, and spiraling demand for energy and natural resources, as well as contributing to the challenge of providing social services. It’s time for policy makers to rethink their approach to these problems and to the direction that urbanization has taken so far.

About 600 million Chinese now live in cities, yet that represents only 45 percent of the population, compared with more than 80 percent in the United States, so China’s cities are likely to grow considerably. New research by the McKinsey Global Institute projects that by 2025 China’s cities will add 325 million more people, including about 230 million migrants. Following the current trend, the country’s urban population will reach 926 million by 2025 and top 1 billion by 2030 (The full report, Preparing for China’s urban billion, is available online).

Rapid urbanization will contribute to GDP growth but also carries serious challenges. By our estimates, demand for energy in urban areas will more than double, and demand for water will increase by 70 to 100 percent. Providing health care and education...

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