Good growth lessons from Chinese cities

If we are looking for Good Growth for our cities, we need to look at what has been happening in China and its cities over the past few decades. 

Chinese cities offer valuable lessons in urbanisation, particularly regarding sustainable development, infrastructure development, and economic growth. Lessons include the importance of tapping into natural capital, fostering sponge cities for flood management and the potential of mega-regions for intergrated development.  Additionally, reforms in land ownership and the hukou system, alongside a focus on social inclusion, offer insights for other rapidly urbanising regions. 
Specific Lessons:
 
  • Tapping into Natural Capital:
    Cities can leverage their natural surroundings for sustainable growth, as seen in the Sponge City Initiative, which uses nature to manage flooding. 
     
  • Mega-Regions and Integrated Development:
    The formation of mega-regions, like the Beijing-Tianjin-Hebei region, demonstrates how interconnected cities can drive regional economies through coordinated infrastructure and economic activity. 
     
  • Reforming Urbanization:
    China’s urbanization process, while rapid, has also involved reforms to the hukou system and land ownership, leading to more inclusive and sustainable growth patterns. 
     
  • Importance of Land Value Capture:
    Reforms in land ownership, allowing for the sale of land use rights, have enabled cities to capture increased land value and reinvest in urban development. 
     
  • Financial Incentives for Sustainability:
    Sustainable practices can be incentivized through financial mechanisms like sustainability-linked loans, as demonstrated by some Chinese banks. 
     
  • Coordination Across Jurisdictions:
    Effective growth requires coordination between cities, even across administrative boundaries, to ensure cluster-wide needs are addressed. 
     
  • Careful Development Approaches:
    A more careful approach to development, respecting urban design, ecology, and existing context, is crucial for long-term success. 
     
  • Public Space as a Tool:
    Public space can play a vital role in addressing social, cultural, and environmental issues, and should be considered a key element in urban planning.
     
    This apart, we should recognise the following. The Chinese economy is more decentralised than Americans. Whilst it maybe very centralised politically, at the local level they are not as local Mayors compete like CEOs, measured by GDP growth, innovation and results. If you achieve the best GDP growth, you get promoted to Beijing. This while the worst performer are shown the door. This has created the Chinese economic miracle pure competition at the government level. This has been referred as the Mayor Economy by Keju Jin in her book “The New China Playbook – beyond Socialism & Capitalism” She goes further and suggests that China has incredible fundamentals – skilled workforce, political stability, infrastructure. So while the economy is weak now, the foundations are solid. They’re at $10,000 per capita income, doing cutting-edge tech and thats never happened before.  

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