The Economist - 19_25 April 2014

SPECIAL REPORTCHINANumber of skyscapers*72Total, 2014Pre-2000Completed2000-14NATIONAL AVERAGE35.646.9HEBEIHEILONGJIANG17.5JILIN43X I N J I A N GINNERLIAONINGGANSUBeijingBEIJINGMONGOLIADalianSHANXITianjinnTIANJINQINGHAININGXIAIASHANDONGT I B E TZhengzhouChinaUnited StatesHENANJIANGSUSHAANXIANHUIShanghaihaiNominal GDP at current exchange rates, $trnSICHUANSHANGHAI50HUBEIChengduNingboFORECASTZHEJIANGCHONGQINGGJIANGXI40ChinaGDP per person, 2012, $’000HUNANFUJIAN301-44-77-10YUNNANGUIZHOU10-13 13-16KunmingGUANGXIXiamen20 NATIONAL AVERAGE = 6.1GUANGDONG †ZhongshanUnited StatesIndiaPopulation, 2012, %Hong10MacauRural,RegisteredMaomingKongliving whereurbanJapanregistered*250+ metres tall0Urban, with rural status ‡HAINAN† Guangdong data exclude1990 95 2000 05 10 15 20 25 30Hong Kong and MacauSources: Council on Tall Buildings and Urban Habitat; Economist Intelligence Unit; Haver Analytics; The Economist estimates‡ Registered as rural, living elsewhere2edness of their middle-class residents. The largely rural countrythat Deng Xiaoping (himself of peasant stock) set out to “reformand open up” in the late 1970s had become overwhelmingly urbanin its economic and political focus. Thanks mainly to a tideofmigration, China’s urban population had grown by more than500m since Deng launched his reforms: the equivalent of all thepeople in the United States plus three Britains.Li Keqiang, who took over as prime minister in 2013, seesfurther urbanisation as critical to China’s economic success. Hehas called it a “gigantic engine” for growth. Mr Li and other officialsare fond of quoting Joseph Stiglitz, a Nobel prize-winningAmerican economist, who said that technological innovation inAmerica and urbanisation in China would be “two keys” tomankind’s development in the 21st century.A new grand plan for China’s cities, overseen by the primeminister and published last month, admits to a number of problems,such as worsening pollution, urban sprawl and congestionas well as growingsocial tensions. It also points out that China’surbanisation lags behind that of other countries at similarlevels of development (typically around 60%), and that there remains“quite a lot ofroom” for further urban growth.Getting cities right will help China to keep growing fast foryears to come. Getting them wrong would be disastrous, bringingworsening inequality (which the World Bank says has approached“Latin American levels”, although Chinese officials insistit has recently been improving), the spread of slums, theacceleration ofglobal climate change (citiesconsume three-quartersof China’s energy, which comes mainly from coal) and increasingsocial unrest.After more than a decade of spectacular growth in China,much of it in double digits, doubts are setting in both at homeand abroad about the sustainability of the “Chinese model”.Growth is slowing. Lavish spending by local governments haspiled up huge debts. Increasing numbers of middle-class Chineseare looking for boltholes abroad for themselves, their familiesand their assets. Scandals involving senior officials have revealedcorruption on a gargantuan scale. Censors generallysucceed in preventing anti-party messages from spreading widely,but microbloggers with thousands of followers still boldly relaydamning critiques.MrXi describesthe country’sproblemsand hisapproach tosolvingthem in colourful terms. Reforms, he says, have entered a“deep-water area”. China must “venture along dangerous pathsto breakthrough barriers to reform”. In tackling corruption it willneed the resolve of a man who must “cut off his own snake-bittenhand to save his life”. At a plenum of the Central Committeein November the party declared that market forces must play a“decisive role”, the strongest support it has ever expressed for themarket. This seems all the more stirring after years of vacillationunder Mr Xi’s predecessor, Hu Jintao, who retreated from reformin the face ofpowerful resistance by vested interests, above all localgovernments, huge state-owned enterprises and, ironically,the new middle class, which would rather not share the fruits ofgrowth with rural migrants.Why cities matterAll the most important reforms that Mr Xi needs to tackleinvolve the movement to China’s cities. He must give farmers thesame property rights as urban residents so they can sell theirhomes (which is currently all but impossible) and leave the landwith cash in hand. He must sort out the mess of local-governmentfinances, which depend heavily on grabbing land fromfarmers and selling it to developers. He must loosen the grip ofstate-owned enterprises on the commanding heights of theeconomy and make them hand over more of their profits to thegovernment. He must move faster to clean up the urban environment,especially its noxious air, and prevent the growth of China’scities from exacerbating climate change. And he must start14 The Economist April 19th 2014