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China is building 220 new million-dollar cities by 2025

URBANIZATION / China has chosen urbanization as its main strategy. In China, 11 million housing units are built every year, and 10–15 districts are completed every day. The country is now offering standardized turnkey city models to other countries at a loan cost of $4 billion – Ukraine next?


Ekstrem poverty has many dimensions. It is not just a matter of lack of income as measured by the UN and the World Bank based on less than two dollars a day in income. However, this measure does not capture the complexity of poverty and the consequences for economic, social and ecological sustainability. China is often referred to when success in the fight against extreme poverty is described. It is to represent reality.

If the target is taken as a basis, China has, according to President Xi Jinping, already eradicated poverty. In contrast to the OECD countries' 60-year development policy prioritization of the countryside, China has chosen urbanization as its main strategy. The experiences, as in other countries with strong urbanization, confirms that it leads to increased average income. Byvekst appears not only as a consequence of, but also as a prerequisite for economic development. At the same time, the 'Middle Kingdom' has understood the export potential that urban growth entails. Especially with regard to Africa and Asia. Based on its own experiences, the country has offered standardized 'turnkey' models. Entire cities become export goods, e.g. to Angola, where Nova Ciudade de Kilamba is the most famous project. The borrowing cost is 4 billion dollars. – Ukraine next?

Chinese housing

Economists at the International Monetary Fund (IMF) have long argued that global urbanization is moving too slowly when it comes to reducing poverty. This particularly applies to African states. Part of the explanation can be found in the UN Population Division's migration analyses. They conclude that out of 164 countries, 70 per cent aimed to actively prevent migration from the countryside to the city. A study (2007) found that the apartheid system in South Africa and the village relocation in Tanzania were most effective in this respect.

With Deng Xiaoping's 'reform and openness policy' in 1978, the number grew migrantis from 150 to 800 million in 40 years. Deng's starting point was the IMF-inspired 'Special Economic Zones'. In 1995, he followed up by changing from a Marxist planned economy to a socialist market economy – from housing as a social right to housing as a commodity. This market – and no longer the state – was supposed to provide people with housing.

Begge Photo © Eduardo Moreno

In 1985, 20 percent of China's population lived in cities. The proportion has increased annually by 1 per cent and is now 60 per cent. In China, 11 million are built every year residentialunits and 10–15 districts are completed daily. According to Forbes, China used more concrete from 2011 to 2013 than the United States did in the entire 1900th century. Between June 2019 and June 2020, $1,4 billion was invested in Chinese housing, while at the peak of the US real estate boom before the financial crisis in 2008, $900 billion was invested annually. The BBC estimates that half of all construction in the world in the coming decade will take place in China. That is twice as much as the United States. Greenhouse gas emissions and the resulting pollution are defined by the authorities as China's biggest environmental challenge.

Foreign capital has flowed in to exploit an almost unlimited labor market with high discipline and low wages. Economic elites have also emerged inspired by Western consumption patterns. Because of. few investment opportunities, property has become lucrative for those with spare capital. Especially for property barons from Hong Kong and Singapore. The consequence is extensive overinvestment where newly built residential areas remain uninhabited.

At the same time, millions live off migrant-workers in increasing numbers in slums, slums, containers and prefabricated barracks. Despite a liberalization of the hukou system, workers in China have limited social and economic rights rights. At any time they can be sent back to where they came from. But according to the UN, they are not extremely poor. Rights violations are not reflected in money.

By 2025, China's plan is to gather 70 percent of the population – close to 900 million – in cities. That means urbanizing another 200-250 million. According to the McKinsey Global Institute, it will create 220 new ones byhas at least 1 million inhabitants. Europe has only 35 such cities. The strategy is to strengthen the national economy by increasing the demand that urban and housing construction creates.

The eco-city – 'bullshit'?

The eco-city was started to try out green design and technology. Today, this is a global movement with China leading the way. In the West, it is about nature, carbon reduction, limited car traffic and less consumption. In China revolves the eco city about economic growth, improved living conditions, greater mobility and social progress. Currently, China is building 285 eco-cities. "The prefix 'eco' expresses purpose, bravado and bullshit," writes China expert Austin Williams (2017). He believes that soon more than 50 per cent of the cities will be labeled 'eco', 'green', 'low carbon', 'smart' or 'park'. Nevertheless, this is a drop in the ocean compared to greenhouse gas emissions and air pollution.

At the same time, President Xi Jingpin has launched a 'culture war' with a spotlight on the needs of ordinary people. It already started in 2020 with attacks on private business, especially property developers and 'big tech'. Now the focus is on culture, education and entertainment. Faced with destabilizing factors such as inequality and the environmental crisis, the president needs to consolidate power. He will promote the shift from an elitist, capitalist system to a more grassroots socialist, i.a. by strengthening the independence of trade unions and removing hated working time regulations. The cities are the axis of the power struggle. This could, for example, have global consequences when the housing investment company Evergrande is threatened with bankruptcy and 1,4 million home buyers may lose their savings.

Covid-19 forces us to rethink the UN's poverty targets. We were lagging behind even before the pandemic. Within a few years there will be hundreds of millions more poor. According to the recently resigned UN adviser for human rights and extreme poverty Philip Alston, the challenge begins with "not just speaking truth to power but fundamentally speaking truthfully about the human condition".

China, some facts:

China used more concrete in the period 2011 to 2013 than was used in the United States throughout the entire 1900th century. According to Forbes, the country should have used a whopping 6,6 billion tonnes, while the US's total cement consumption over a century when almost all roads and bridges, the Interstate system, the Hoover – the dam and many of the world's tallest skyscrapers were built – was 4,4 billion tonnes of concrete .

At the height of the US real estate boom, ahead of the 2008 financial crisis, according to The Wall Street Journal, around $900 billion a year was invested in residential real estate, while around $1400 trillion was invested in Chinese housing between June 2019 and June 2020.

In 2019, Goldman Sachs estimated the total value of Chinese housing and developer holdings at a whopping $52 trillion, according to The Wall Street Journal. The housing market is thus twice as large as the American one.

               (Erik Rolandsen, Capital)

Eric Berg
Erik Berg
Erik Berg worked in the Ministry of Foreign Affairs / NORAD from 1978 to 2013. He now heads Habitat Norway.

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