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Xia Bin: Urbanization Depends on Further Reforms

Xia Bin, Director-General, Financial Research Institute, Development Research Center of the State Council (DRC), People’s Republic of China, wrote that the two key issues affecting urbanization in China are welfare benefits to farmers and urban planning. 

 Xia stated that the Chinese leadership has adopted the strategy that China must accelerate urbanization in order to stabilize the economy. At the minimum, according to Xia, China must carry out reform in these areas: 
1. To accomplish the objective of increasing the welfare benefits to farmers, reform is needed in the household registration system, housing, the medical system, retirement, education, the financial system, and land use; 
2. To accomplish the objective of ensuring the source and efficacy of the funds for urban infrastructure construction, reform is needed in the financial system, land administration, the allocation of resources, the division of power between the central government and local governments, the price mechanism involved in the factors of production, and the overall government administrative system;
3. In order to optimize urban planning, including the creation of new municipalities, a series of policies must be revised.
“In short, we can say China has almost no existing system and policy it can follow without addressing the need for improvement in the areas of reform that must be carried out in order to achieve its urbanization strategy. Therefore, the current strategy to promote urbanization is to promote further reforms. The essence of the urbanization strategy is to accelerate China’s reforms.” 
Source: China Economic Times, December 2, 2013