Global Poverty Reduction and Development Forum-2013-Chapter I

Chapter I: Experience and Challenges in China's Urbanization

 

LI Yining

Director, Faculty of Social Sciences, PKU;

Honorary Dean and Professor, Guanghua School of Management, PKU

 

 

1. A China-specific urbanization path

The traditional urbanization mode does not suit China's specific national conditions. Data from China's National Bureau of Statistics (NBS) suggests that China's urbanization rate has exceeded 50%. However, urbanization experts reckon that the actual number is still less than 40%. There are facts to support the experts. The dual household registration system is still in use, which means that rural migrant workers, though living in urban areas now, are still classified as rural residents according to their household registration. They are not entitled to the same treatment as the urban residents and this is especially true when it comes to the new generation rural migrant workers. Therefore, it is highly relevant to choose a China-specific urbanization path. Surveys in Zhejiang, Fujian and Guangdong provinces have shown that the children of rural migrant couples in the 1980s are at an employable age. These young people, however, remained as farmers though they have received education and lived in cities. Faced with this, they have fewer employment opportunities and more prejudices. More than often, they end up with the same situation as their parents and can only marry one of their kinds. This situation is in dire need for solutions and change. The cost grows higher if we continue to delay the integration of rural and urban areas.

From another perspective, if China wants to catch up with the developed countries with more than 90% of urbanization rate, the urban living environment is bound to degrade and people's living standard will be sacrificed. Cities provide more job opportunities in the tertiary industry with population increase. However, the increase still fall short of the the demands from rural migrant workers (RMWs).

It is apparent that China needs an urbanization path that suits its specific conditions. Such a path should consist of three parts: old urban area, new urban area and new rural community. This new mode is also called "in-situ urbanization" in some regions. I once conducted a survey in Gongcheng Yao Autonomous County in Guilin City of Guangxi. Rural housing there was transformed and reinforced and residents' sources of income were expanded to include fruit planting & processing, pig rearing and initial processing of pork. People's living standard there seems almost the same as the urban residents in Guilin. This is a typical example of the in-situ urbanization. At then end of Nov. 2012, I led a delegation from the CPPCC Economic Committee to visit some counties in Hangzhou, Jiaxing and Huzhou of Zhejiang Province. Local leaders told us that they had pushed forward quiet and peaceful urbanization, urbanization without demolition and forced moving. Residents feel that they are enjoying the same good life as their urban counterparts. Income gap is also narrowing. In Pinghu County of Jiaxing and Anji Country of Huzhou, farmers told us that they now had access to water, electricity, roads, school, hospitals and community services just as the urban residents. There have been some short-distance movings of certain households. They willingly accepted it for better life and there has been no complaint at all. This is the feedback regarding the in-situ urbanization.

In the following, I will discuss the three parts of the urbanization path in detail.

2. Transformation of the old urban area

The old urban area refers to the established districts that have long existed, even before industrialization. Since industrialization, some industrial enterprises have been founded in the old urban area. With its expansion, the number of residents increased, resulting in narrow streets and crowded living environment. With the establishment of industrial enterprises, commerce and the service sector also developed rapidly.

The development orientation for the old urban area is transformation. As the industrial enterprises have caused environment pollution, it is important to move them out of the old urban area. We have taken the "two retreats and three advances" measure in the old urban area and it has been proved correct. "Two retreats and three advances" refers to the retreat of two industries from and advance of three industries into the old urban area. The old urban area is thus turned into the commercial and service center suitable for people's living. Many buildings in the old urban area should be maintained, renovated and protected as cultural heritage, as they are public facilities constructed in the Ming, Qing Dynasties and the Republic of China era. Some streets, ports and shops should also be protected to retain their styles and features.

While transforming the old urban area and treating the environment, we should pay special attention to the demolition of shanty districts. The shanty districts were built before industrialization with poor quality. Residents tend to have a very low living standard and have received little education. Among them, some are retired or laid-off workers, or even jobless people. Social security becomes a big issue as many of the residents are jobless, driving up crime rate.

We have accumulated rich experiences in demolishing the shanty towns for transformation of the old urban area. That is integrating the new urban area construction, investment attraction and transformation of the old urban area to plan as a whole. The following are the practices of some cities.

They first construct a batch of standard and qualified residential buildings for households in the shanty districts. The surrounding facilities include public transportation, schools, medical facilities and hygienic facilities that ensure better living for the residents.

Then they attract investment to construct industrial enterprises in the new urban area or construct commercial or service enterprises in the original shanty district in the old urban area to resettle these unemployed residents.

Supports are given to unemployed residents who are willing to start their own business such a private company or a small and micro-sized enterprise. In addition, the unemployed can also work as housekeepers, cleaners and security guards in the new urban area. Some cities are rigorously supporting SMEs to ease employment issue as SMEs are a major employer in the economy. By doing this, the incentives for urban residents and rural migrants to engage in SMEs are also increased.

3. Planning of the new urban area

The new urban areas usually lie in the suburb. They are evolved from industrial parks, hi-tech development parks, entrepreneur parks and logistics parks. There boasts a great lot plants and improved infrastructure, showing great potential for development.

The new urban area is home to both enterprises and residents. Some of the residents are migrants from rural areas while some are private businessmen with rural household registration status. While some towns are integrated into the old urban area, others are included into the new urban area. Considering local residents and employees from the newly constructed industrial enterprises, commercial zone, service zone and residential zone are added to the original industrial parks in the new urban area.

For the new urban area, the most important part is creating industrial park for the industrial enterprises. This is beneficial to the industrial enterprises in four aspects. First, industrial park has improved infrastructure and convenient transportation that can lower down cost. Second, centralized pollution sources are easier to be monitored and managed for treatment. Third, clustering in the industrial park can facilitate information exchange and capture new business opportunities. Fourth, industrial park provides better government services and help from the administration committee of the park.

In Bijie City of Guizhou, we also visited the entrepreneur park for small and micro-sized enterprises. Apart from being the base for small and micro-sized enterprises, the park also gives the entrepreneurs a sense of belonging and feeling of home. Government's relationship with these enterprises has also become closer. Enterprises gain more support and help from the government than before.

The new urban area always tends to be the foundation for newly emerging industries. The newly emerging industries are the most rapid growing sectors. For a city (mainly the new urban area), industrial enterprises and newly emerging industries are the best support for local economy, employment and fiscal revenue.

The new urban area, may it be constructed on a wasted land or developed with the help of nearby towns, shoulders much less historic burden than the old urban area. That is where the new urban area's advantages lie. In the same time, the new urban area provides much more job opportunities than the old urban area. The new urban area can also be a nurturing land for various technicians and specialized service personnel. It can also be the source to send out such talents to old urban areas and new urban areas in other cities.

We have found a new problem in our research of several new urban areas: technicians tend to be much too mobile. Why is this? Some employers think that skilled young technicians pay too much attention to job terms. If their salary demands are not met or they hear somewhere else is offering greater pay and welfare, they would hop off the current job regardless of the contract signed. This is also true of the grass root management personnel. In addition, some technicians and employees are not willing to work far away from home, because it costs more for couples to live separately. These demands are justified. However, it is difficult for the enterprises to provide housing for employees and their family in the current stage. This issue remains to be solved in the new urbanization process. The orientation for future efforts should be enabling rural migrant workers and couples doing business to live with their families.

4. Construction and transformation into the new rural community

1) Requirements for constructing the new community

Constructing the new socialist rural area has become popular in many places. In many places, the socialist new countryside is built upon the original villages through renovation of old houses. In other places, it is built on open fields near the villages. When old houses are demolished, the land is rearranged for agricultural purposes. Both ways of the socialist new countryside are the starting point for the new rural community.

The further development of the new rural community generally includes five aspects:

First, greening must be a priority in the new rural community. The community should include appropriate greening areas in the living environment. Constructing residential buildings should not be the sole purpose.

Second, a clean environment should be an important part. The community should prevent pollution, recycle and reuse rubbish and conform to low-carbon requirements.

Third, public services in the community should be enhanced, which should include hospitals, kindergartens, primary school, nursery home, public transportation, tap water, telecommunications, and cultural and security facilities. The goal is to provide public services that are basically equal to those in urban areas.

Fourth, the new rural community should provide the same social security as the urban areas regardless of the dual household registration system.

Fifth, democratic management system should be employed in social management. The community manager should be elected and removed from office, if proven incompetent, by the residents.

Based on the above aspects, autonomous villages are therefore transformed into autonomous communities and the new rural community has become a new grass-root unit in urbanization. This ensures equal rights between urban and rural residents and therefore the household registration will no longer be a restriction. Integration of urban and rural areas in terms of residents has thus become a fact.

2) Employment modes in different communities

Employment varies in different new rural communities and thus is community-specific. We have discovered many different measures to promote employment in our study.

(1) In some communities, leading enterprises encourage farmers to investment land into them. According to the characteristics of each piece of land, the enterprises plant fruit trees, crops, grapes and fodder. On construction land, they build factories; and on grassland, livestock farms for pigs, cows, sheep and chickens. Some farmers voluntarily seek employment in urban areas. Others are employed in community factories or gardens, livestock farms as said above. This way, farmers receive not only salaries but also dividends from their land investment. The enterprises has also built dorms for residents and adopted a community management mode for the dorms. Public services are also in the charge of the enterprises. This is called the "enterprise+community+farmers" mode. We have witnesses this mode applied in Yantai City of Shandong. There exists, however, one concern about this mode. If a certain company fails or goes bankrupt in market competition and is taken over by another company, what will become of the operation mode? Will the failure of the company influence farmers' employment and living? Though there is no sign of failure, is it possible that companies will suffer from losses one day? One feasible suggestion is that the companies set aside a risk guarantee fund from their annual profit. When an emergency comes, such a fund can help to ease the difficulties facing farmers.

(2) In some communities, farmers' specialized cooperatives play the principal role. Farmers' specialized cooperatives engage in a wide variety of production, including tea, watermelon, and oranges. These cooperatives motivate farmers to renovate old housing or build new ones in the open field. The cooperatives are mainly in charge of production. After renovation and construction projects, the village committee or community management committee are elected by residents. This is called the "farmers' specialized cooperatives+ community+ farmers" mode. Under such a mode, the cooperatives sign contract with leading enterprises where the enterprises provide technologies and means of production (seeds, fertilizers and irrigation machinery) and purchase products for sales and distribution. This mode is seen in Jinjiang, Changshou and Liangping in Chongqing. The disadvantage of this mode is that the cooperatives are made up of local farmers (even farmers in the same village). Due to their small scales and weak foundation, they lack the capability in market expansion and thus are not well trusted by the farmers. In addition, without the cooperation with leading enterprises, cooperatives have only limited capability in market competition. This forces farmers in a dilemma: too much dependence on or even control under leading enterprises, or meager profit without the support from enterprises. How can this be solved? One possible way is to unite cooperatives together. United cooperatives boast greater prospect for development.

(3) In some communities, municipal or township governments involve farmers in constructing the socialist new countryside. Farmers are given construction subsidies as incentives for renovation or new construction projects. Governments also invest in public facilities and adopt a community management mode. Farmers develop towards specialized production, such as vegetable greenhouse and strawberry greenhouse. Such intensive cultivation is highly productive and thus can increase farmers' income. Households are in charge of their own production while the community takes care of transportation and helps farmers to sell products in markets. The community can also help farmers to create tourist spots called "happy farmhouse". Tourists are attracted to purchase local handicrafts, fresh vegetable and fruits and local specialties. This mode is called "self-operation under community guidance". This mode is seen in Bijie City of Guizhou. Under such a mode, farmers are conscientious and agricultural commercialization goes smoothly. The community provides farmers various services and guidance in production. The disadvantage, however, is that the community, though providing much help, is not an economic entity. It cannot organize all farmers and therefore farmers are still individuals in the market, which means they are in a disadvantaged position. Moreover, vendors' shops line along the village roads, indicating fierce competition among farmers themselves. Based on that, our suggestion is to connect community guidance with collective operation of the farmers. Therefore the following substitute is proposed.

(4) As mentioned above, in some communities where farmers are organized by governments to construct a socialist new countryside, governments support farmers in collective entrepreneurship where the total or the majorities of laborers are employed in the secondary industry, construction sector and logistics. Farmers co-establish companies for production and elect board of directors for operation management. Their living is taken care of by the community whose committee is also elected by the farmers. We call this the "collective operation under community guidance" mode. This mode is seen in Binhai New District of Tianjing. There is a concern about this mode: will we retreat back to the planned economy system under collective operation? In planned economy, some villages established collectively operated enterprises (formerly known as "community enterprises" and "township enterprises"), which in fact were controlled by township cadres. Though some of cadres were indeed quite capable, arbitrary control turned the "collective operation" into family businesses. "Collective operation", therefore, is a non-standard organization mode backed up by no laws or regulations. It is suggested replace the name collective operation with "farmers' specialized cooperatives" or "limited responsibility company" where regulatory framework is available. Regulatory framework is the guarantee for sustainable development of the new community.

The modes of new rural communities, of course, are not limited to the above-mentioned ones. Different regions should consider their own conditions in exploring a suitable mode, which is nothing but natural. We cannot be limited to just one mode on this vast land of China. We have viewed the co-existence of different modes as a normal and optimistic phenomenon in China-specific urbanization, because it greatly mobilizes the enthusiasm of the people. Standardization is a must because only by this can we avoid various vulnerabilities.

Here, let's analysis this issue from another perspective. Say we do not build new rural communities and there will be only the old urban area and the new urban area. How can we resettle the farmers directly into the urban area and ensure them a better living? How can we solve their employment? So there is no way better than the new rural communities.

Moreover, the features of new rural communities are constantly improving. The socialist new countryside as the starting point of the communities is compliant with the dual household registration system. In the future, the socialist new countryside will gradually evolve into new communities along with the promotion of industrial parks, circular economy, better public services and integrated social security. This is the result of giving full play to people's enthusiasm. It is safe to say that the new rural community cannot be built without people's support. And that is what we call the "Chinese characteristics".

From this perspective, China's urbanization has embodied the dual transition of China's economy. The dual transition refers to "development transition" and "system transition". Development transition refers to the transition from an agricultural society into an industrial society. System transition refers to the transition from planned economy to market economy. Since the reform and opening-up in 1979, the two transitions have been implemented concurrently. When China completes urbanization, it will mark the success of the dual transition. Eliminating the dual household registration sytem may be a key in the dual transition. China can only ensure equal rights and status for its urban and rural residents through an urbanization road that suits its specific conditions. By then, the "new rural community" can be renamed as "new community", because there is no need to stress "rural" any more.

To be more specific, the "new community" as an integral part of China's urbanization best reflects China's characteristics and national conditions. The "new community" will be the new town in China, which means the new rural communities will be urbanized.

5. Methods to ease urban housing issue

Urban housing price and shortage have always been a hard nut to crack in urbanization. These two issues have given the most severe headache for farmers resettling in urban areas. Our research in some cities suggests that some farmers who have worked many years in cities feel unsettled there. They have no sense of belonging and cannot buy an apartment to keep living in cities. They say that settling down is more important than seeking employment. They can achieve employment through opening up small shops and booths, but they will only feel home when they have a house (purchased or rented) because that makes them feel like before. When it comes to their blending in, they talk more boldly, saying that it is not difficult to blend in small towns and once they have rented a house, they quickly get to know the neighborhoods. However, when it comes to cities, it is just the opposite. They will never have enough money to buy a house. It is not easy to rent a house either due to the high rent in cities. Once rent is paid, there would be very little money left to feed the whole family.

Why is housing price so high in urban areas? Why is rent high as well? The primary reason is the supply shortage, followed by expensive land cost. The government is selling land through auction, which is the source for soaring land cost. During the CPPCC of 2011, 2012 and 2013, I have shared my opinion with the press regarding the substantial increase in housing prices.

In 2011, I said that the government should sell land through calls for bids instead of auction. If a piece of land is sold through auction, bidding prices are surely to increase due to limited land area. And that's what gives rise to the so-called "land king". Local governments acquire extremely high revenue through land auction. In turn, the real estate developers need to increase their housing prices to compensate for their high bids. Therefore, the housing prices are pushed up. Land cost is playing a more and more important role in pushing up housing prices. I propose a government procurement mode for selling land. In such a mode, the government first announces the standards and requirements for machinery equipment to be used on the land. Bidders provide qualified products and the government chooses the ones with the lowest cost. It is the same with selling land. The government stipulates the land price, standards and specifications of residential buildings and open bids for real estate developers. Where qualities are the same among bidders, the lowest per m² price will win the bid. If successful bidders cannot complete the project on time, fail to meet technical specifications or sell houses above the bidding price, they will be punished through large amount of fines or eliminated off bidding qualification. In this way, the land price will not be pushed up.

In 2012 CPPCC, I said the measures to curb housing price increases should not be restricting demands. Instead, it should be increasing supply. Residents' rigid demands cannot be avoided. For instance, when a college graduate gets married, he or she must have a house first, at least a rented one. When migrant workers settle in cities, they sooner or later will need a house. They need to be able to buy or rent one. I continued to say that purchase restriction is a wrong way, though sales restriction might help a bit. By saying purchase restriction, I mean the restriction imposed on house buyers; and sales restriction means if a house buyer wants to resell the house as soon as possible, he or she needs to pay tax. The shorter the ownership period, the higher the original buyer pays tax. The tax is gradually reduced year after year. Sales restriction can minimize the profit of profiteers, and it is of some use.

In 2013, I answered questions from the press in an open manner. Some reporter asked my opinion regarding the newly issued "Five Regulations Rules". I smiled and said, "time will tell", "If demands can be forced to squeeze through such a method to lower down housing price in Beijing, why do we still need economics?" Others asked, "Young people in the U.S. are not so eager to buy a house as their Chinese peers. Why are Chinese young people so anxious?" I answered," China and the U.S. have different national circumstances and cannot be compared in this respect." It has already been 200 years since America industrialized and there is no more rural surplus labor. Rural population only accounts for several percent of its total and its farmers would not want to seek employment in cities because they have their own farms and housing. It's quite different in China. Urban population only accounts for a half of the total. With industrialization and urbanization, many farmers and their families are preparing to enter cities for better lives. That's the situation China's faced with. In cities where renting and buying a house are both way too expensive, housing is inevitably a hard nut to crack. How can China be compared with the U.S. in this respect? In addition, the mindsets of the two countries are also different. In Chinese people's mind, buying a house is like getting rooted in the city. A house is one's property and renting one will not solve the long-term problem. As such, urban residents are trying every means to buy a house instead just renting a temporary one.

Now that there is the housing shortage, what can be done? Just like the old saying: the government provides affordable housing and leaves the luxurious and cozy ones to the hand of the market. The government and the market complement each other. Therefore, the housing demand of different classes will be met by increasing supply in such a way. This will also reassure the public opinion featured by pessimism towards housing solutions. Once public trust is maintained, social stability will be ensured.

6. Easing housing shortage by increasing supply

As mentioned above, suppressing demand cannot solve housing shortage in urban areas and increasing supply should be adopted. In the following, I will discuss this in details.

1) There is still room for expanding construction land

Our experience in recently years has witnessed a diminishing area of land for housing construction in suburban areas. However, rural areas far away from the urban downtown still hold great potential for housing construction. Hence is the inevitable trend to construct new houses in far-away rural areas. Such areas provide wasteland, low-productivity land and slopes, not suitable for agriculture but appropriate for housing construction. Through re-measurement and rights authentication, urban development plan can be modified and re-created to include qualified land into housing construction. Bids are then opened after pre-pricing of land to attract bidders of qualified technologies and specifications. In the same time, road and public facilities should be constructed to make new buildings a real community for residents. According to our pilot experience in re-measurement and rights authentication, the actual area of agricultural land increased. Thus we are well above the bottom line for arable land (1.8 billion mu).

2) We should continue to renovate the old urban area, demolishing shanty houses and building new communities on empty land or converted construction land

For the old urban area, demolishing and reconstruction is a long-term task. On one hand, the project can only be implemented phase by phase due to limited budget. On the other hand, it involved various groups of residents, including urban residents, migrant workers and their families, the employed, the unemployed, senior citizens living alone, the physically challenged and left-behind children. When it comes to resettlement, they have various demands. Some can be met while others are not. Therefore it takes a long time to handle such delicate matters. Nevertheless, it is a project bound to be implemented.

We have studies the demolishing and renovation projects in Shenyang and Fushun of Liaoning Province. We discovered that good results come from a comprehensive plan, great efforts, satisfactory residential buildings and support in employment. Also, newly constructed communities are holding much more residents than the old ones.

3) The construction of new communities holds greater potential

The construction of new community is an innovation in China's urbanization. The predecessor of the new community is the socialist new countryside, where old houses are renovated or demolished to build new ones. After construction of industrial parks, environment treatment, improvement of public services and integration of urban and rural social security, the socialist new countryside has evolved into a community. Considering China-specific urbanization, the new community has been viewed as an integral part and also the "new town" to absorb more farmers in the future.

The new communities hold greater development potentials. With the increase in commercial activities, service industry and handicraft business in the new communities, more and more farmers are attracted by more job opportunities and higher incomes. Farmers see it as a better place to earn a living than the urban areas and therefore they would like to take root in the communities.

Our research finding in Qianxi and Dafang counties in Bijie City of Guizhou suggests that after moving to the new houses, some farmers will rent their original houses to non-local migrant workers who are employed in the vegetable greenhouse or doing some small businesses. In this way, the old houses are rented to increase the income of local farmers and in the same time non-local farmers are provided with cheap rent houses.

Some new rural areas or new communities in rural Beijing have attracted many tourists by "farm hostels" and "farms restaurants" ("happy farmhouse") operated by local farmers. Some are even understaffed and are recruiting workers. The cooking of some owners equals to professional chiefs while those familiar with businesses are taking charge of purchasing and management. Some of the waiters and busboys are non-local farmers, who have with them their families and have settled in the community. It can be seen that the new rural community or the new community holds great potential for absorbing non-local farmers. In the future, we should try to expand it capacity to absorb more non-local farmers.

7. Urbanization and Poverty Reduction

If urbanization only targets urban expansion and urban economic growth without shattering the dual household registration system, migrant workers will be left behind in poverty regardless of increases in per capita income of urban residents. Therefore, poverty reduction should be on the agenda of urbanization. We should prioritize not only reforming the dual household registration system, but also bridging the gap between urban and rural social security. This is an important lesson learnt in China's urbanization since the 21st century.

The relationship between urbanization and poverty reduction can be analyzed from the following four perspectives.

1) Urban employment in urbanization

Urban employment in urbanization consists of two parts. First, urban residents reaching employable age should be provided with job opportunities. Second, meet the employment demand from the spouses and children of migrant workers. Employment has a huge bearing on poverty reduction.

To meet the demand of so many job seekers, urban areas must create job opportunities through sustained economic growth. Economic growth alone, however, cannot address employment from its root, because there still exists uncoordinated employment structure. If job seekers do not meet the technical requirements of the vacancies, relevant technical training should be provided. In addition, household registration status should not be criteria in employment. Rejecting rural residents is absolutely unjustified.

To create more job opportunities, support to small and micro-sized enterprises (SMEs) must be enhanced. Skilled urban new job seekers and rural job seekers are encouraged to start up their own SMEs, so as to create more jobs. To meet urban development demand, public services and modern service industry will be greatly expanded to create more employment. This can meet social demand while providing more employment and increasing people's income.

2) Labor forces are always the powerhouse behind agriculture, breeding industry and forestry. These sectors can help to ease employment pressure and reduce poverty in urbanization.

In the current stage, we must plan as a whole urban and rural development. We can never afford to neglect rural areas and agriculture. It should be noted that income gap still exists due to the dual household registration and there are signs that such gap is going to widen in the near future. Urban-rural income gap must be given enough attention. Through years of experience, we believe reform and development are the only means to narrow income gap. The key reform component should be the elimination of the dual household registration system and its restrictions on farmers. If this is completed, farmers will be entitled to the same rights and interests as the urban residents. We will try to give farmers the right of property and the right to generate income through the property. In employment, we will eliminate prejudices and push the integration of urban and rural social security. This is the system guarantee for farmers and rural areas to get rid of poverty. The key development component should be supporting migrant workers to seek employment and to start up SMEs to increase income. Also, farmhouses should also be improved to attract tourists. Farmers' specialized cooperatives may also play an important role in bringing new technologies for scaled operation and productivity improvement. This is conducive to poverty reduction as well.

3) Education resources should also be equally allocated to clear the way for social mobility, which can help low-income households to shake off poverty earlier.

Under the dual household registration system, education resources are allocated unequally, tilting over the urban areas. In terms of compulsory education, rural schools have always been faced with financial problems, poor equipment, weak staff and low-caliber students, which result in much lower senior high admission rate compared with urban areas. College admission rate is of no exception. In recent years, it has become a common phenomenon that rural children are not willing to continue senior high school education. During our visit in Chifeng and Tongliao in Inner Mongolia, farmers asked us," what benefit can high school bring? It's even more difficult to get admitted by universities. So it's better to start seeking jobs in urban areas after junior high, which not only saves money but also brings income."

This mindset hinders our poverty reduction efforts towards low-income families. Let's just set aside whether a junior high graduate can find a job or not. Even if he or she finds one, it's likely to be low-paid labor jobs, which does nothing to help reduce poverty. Therefore, we need to change the inequality in education resource allocation during urbanization. In the three urbanized areas, namely the old urban area, the new urban area and the new community, education resources should be mobilized to provide free compulsory education and senior high education, even excluding the accommodation fees for boarders. Secondary vocational schools should also provide free education (including free accommodation). This will become an important measure in poverty reduction and urban construction.

4) One of the reasons for repoverty of low-income families is that some family members are haunted by chronic diseases. "Disease-caused repoverty" should also be given enough attention in urbanization.

In our research regarding Wulong, Pengshui and Shizhu counties in Chongqing Municipality, we have found that some low-income families, finally getting rid of poverty through their own efforts and government support, went back to poverty some time later. Why is this happening? Some village cadres briefed us on several reasons. First, some family lose their breadwinners in car accidents or floods; second, some family lose their properties when their houses catch fire and get burnt down; third, when a son is getting married, the family is likely to borrow money beyond their repayment ability; fourth, some families are troubled by family black sheep who lose all the money through gambling; and fifth, some family members are haunted by chronic diseases that are too expensive to treat. The last reason is the most prevailing one. Apart from the five reasons, some repoverty cases are caused by getting cheated in business cooperation, natural disasters or animal epidemics that hit growers.

The village cadres see repoverty as an ardous task due to its various reasons. Some researchers suggest that some of the difficulties can be solved through commercial insurance while other more common ones, such as gambling or local customs, can only be resolved through the social security reform during urbanization. Medical insurance is a part of the urban and rural social security, aimed at eliminating different medical treatment due to the dual household registration. In addition, the medical network should also ensure equal distribution of hospitals and clinics. Farmers believe that the issue of accessibility of medical services is not only triggered by the reimbursement policy difference between urban and rural areas, but also by unequal distribution of medical units. It is much more time-consuming to receive treatment as the density of medical units is quite low in rural areas. The above aspects should all be considered in urbanization to avoid repoverty.

8. Unitary household registration system--a gradual process

Urbanization at current stage is contributing to deepening China's reform. It aims to break the dual household registration system that has existed for 50 years, so as to achieve urban-rural integration. The dual household registration is the basis for the urban-rural dual system. Therefore, to achieve urban-rural integration, we must eliminate the dual household registration system.

To have a uniform system, should reform in the household registration come first or later? The academia is widely disputed on this issue.

Scholars who want the registration system to be reformed first hold that since 1958 when the registration system was established, it split into two parts to restrict the population flow from the rural areas. Therefore, the registration system must be reformed first if we want to achieve rural-urban integration. That equals to destroying the base of the dual system.

I, however, hold the opposite opinion. It is not difficult to cancel the dual registration system. But how much help can it do to urbanization? The restrictions in the last 5 decades are not likely to disappear by just announcing to cancel the dual registration system. Nor will a uniform system emerge. Once announced, there would be no barriers for the rural population to enter cities. It is possible to cause urban disorder due to too many migrants. Still, if urban residents hear that they are free to migrate to rural areas, they may rush there and purchase the houses left behind by rural migrants. What can we do if such things go wild? It can therefore be seen that urban-rural integration is a long-term process. More haste, less speed.

In recent years, I have said in many discussions that the reform in the registration system will naturally arrive if we are fully prepared in other aspects. We have already begun to resettle farmers in the new communities, provide them with employment, education facilities and public services. They are now enjoying their new life there. Only in this situation can we safely say that it is now mature to transit to a uniform registration system. Under such a system, the people of China, no matter in rural or urban areas, share the same type of ID card that no longer distinguishes them as rural or urban residents.

This will be a gradual process whose aim is to ensure equal rights and elimination of prejudices.

There are still, however, some disputes regarding this. Urban areas are divided into four categories according to their scales, namely mega cities, large cities, medium-sized cities and small cities. It is suggested to try the uniform system in medium and small-sized cities and expand to mega and large cities later when enough experience is accumulated. The reason is that cities differ from one another in many aspects. In urbanization, we should do further research to address the differences among the four types of cities in implementing a uniform registration system. If not, cities with 10 million or even 20 million of population, such as Beijing, Shanghai, Guangzhou, Shenzhen and Tianjin, will be unable to absorb the large number of migrant workers once the reform is done. Therefore, it is justified to postpone the reform in mega cities. But there are also disputes about this method. Some say that the mega and large cities are strong in finance. If they don't take the leading in urban-rural integration, it's totally unreasonable to push the poor small cities to the front line.

In summary, the order for cities to unify the registration system should be considered according to the financial capacity, resettlement of farmers, employment prospects, public services and facilities. A comprehensive consideration suggests rolling out this policy in richer small cities and new communities. It's not reasonable for all cities to compete with each other and seek only speed but not the actual effects in the reform process. If speed is the only target, the problems will recur in the future, leaving much more troubles for urbanization.

Here I would like to revisit the goal of urbanization. That is to achieve people-oriented urbanization, which means prioritizing the increase in people's living standard. Therefore, we can slow down a little bit and proceed more prudently and firmly, so as to reach our original goal.

From this perspective, the significance of the new community can also be seen. Without the new communities or in-situ urbanization, hundred millions of farmers would rush directly to the old urban areas and new urban areas. If this happens, is China still able to achieve its urbanization targets while integrating urban and rural social security systems?