Urbanization in China - Essay Example

Urbanization in China Introduction There is no doubt that urbanization and growth go hand-in-hand: there is no country in the world that has ever attained its middle income without a considerable shift in population to the urban centers. For country’s sustainability development, urbanization is very important because it yields many benefits. However, managing this shift to urban cities is very important so as to nurture effective growth and minimize heavy costs to the country. Essentially, urbanization occupies a questionable position in terms of growth and development theory. Urbanization may affect the development process of the country either by boosting it or degrading it depending on the type of persons that move to cities (Chen, 2013). Urbanization of the middle class has significant effects on the economic development of the country. China, for instance, is one of the most populous countries in the world with many people living in urban areas. Most of the people in those urban areas are the learned, trading in various businesses. Taking advantage of the country’s first growing economy and modernization, the country has recorded a significant growth. There is a tentative exchange of ideas, which is an essential tool for development. Nevertheless, China has made use of urbanization to achieve modernization. On the other hand, modernization helps in developing urban centers (Commission on Growth and Development, 2008). Since the rise of modernization since the industrial revolution, there has been a shift of people to urban areas to work in the industries and open up new businesses. However not all the people go, but only the learned, skilled and experienced. This is mainly the middle class group, leaving behind the old, young and the disabled (Barton et al., 2013). Although the country gained from this drift, it has continuously faced many challenges. Irrespective of the challenges, urbanization has done better than harm. Benefits of urbanization Increase in consumer market Increased number of people in the urban cities creates markets for readily available products and services. Essentially, middle class people are the average people whose consumption levels are significantly higher than the aged and the young. These people are active members of the consuming classes, with sufficient income to purchase the basic needs and spare some for other luxuries. This implies that this increase in consumer classes drives a drastic growth in demand for several goods and services to meet their rising demands. To balance this demand, businesses have to sprout up to supply the required products and services to satisfy the customers. When Shanghai Company was established, its market was entirely dependent on the locals since most of the actively consuming population was in rural areas. As the population grew, several people moved to the urban areas for employment and business. There was a shift of consumerism since the company could now get a ready market. According Fay & Charlotte (2000), the company recorded double sales at the time the country the highest number of people in urban centers. This implies that the population in the cities provided ready market for the company’s products. Growth of cities and industries Urbanization in China resulted to the emergence of new cities. The country has over 100 cities as a result of rampant population growth and urbanization. Following several years of positive growth, the country has strongly developed itself as the world’s best manufacturing center. From the report from the China National Bureau of Statistics, it can be deduced that most these cities came in as a result of the migrant population, urban growth, economic growth and retail businesses. These cities offer a lot of competitive advantages to China’s business activities. With an established infrastructure, middle class people can easily maneuver from one town to another. This increases city consumption power (CCP) and promote business operations. The more the number of towns in the country, the higher the CPP thus promoting the country’s GDP. Mathematically, CPP is the product of urban population and urban Per Capita consumption power (Commission on Growth and Development, 2008). When the CPP is high, there is a significant increase in the consumption of the products and services. Business sustainability depends on the population and its consumption power. Therefore, increase in urban population and the respective PCP increase the CPP, which the country depends for its economic development (Gill & Homi, 2007). Growth of investors Most of the industries in China have developed due to increased population and ready market for their products. This has been a competitive place for business activities both within and outside the country. As a result, several investors have gained a lot of interests in the country. They have invested in major towns and industries due to ready markets for their products and services. Several western multinational corporations have heavily invested in various sectors. McDonald’s companies, for instance, have increased their stores by 50% to meet the rising demands (Linn, 2002). Growth in investment promotes the country’s income and foreign exchange. This helps the country to stabilize and open new opportunities. As a result, several people will be employed in those sectors. This reduces unemployment and crimes within the country. According to the China National Bureau of Statistics, there has been a redundancy in unemployment rates since the industrial revolution. Shanghai, one of the best industries in China, doubled its profits due to heavy investment by the foreign investors. As a result, its production increased substantially, while several people were employed. Education and technology As the most productive people move to the urban centers, and find well-paying jobs, their income increases significantly. This allows them to invest in education sector for their siblings, which enables them get better education for entrance to better classes (Gill & Homi, 2007). Quality education encourages innovation and creativity due to advanced understanding. People will be informed and innovative to develop very unique products and services which capture both local and international markets. Technology, which is a product of education, has promoted China’s growing industries. It has made the country the best manufacturing industry in the world. Industries invent new products yearly to make it distinct from other competitors. This is because the country has invested in education. Most of the middle class afford the basic education since the country has invested a lot that it is affordable to everybody. This is because people went to urban centers to seek employment and open up businesses. Growth of quality infrastructure Growth of industries due to urbanization has brought forth the establishment of infrastructure (Chen, 2013). Chinese are well known for their expertise in technology where they develop unique products and services. In one case, a Chinese construction company was awarded a multibillion project to construct roads along the city of Nairobi, Kenya. The project was exceptionally perfect due to the level of performance it was given. Most of the roads in China are perfectly constructed to last for centuries. Business navigation from one point to another have been made easier due to very good networks. Communication has been enhanced for easy business transactions. Almost all businesses in the entire country have quality feeder roads linking them, electricity and communication lines. This infrastructure has enabled the active population to move freely, such that new enterprises position themselves along these lines for strategic customer satisfaction (Linn, 2002). Share of ideas Towns and other busy places encourage people of different needs to meet and share ideas. Business people meet in market and commercial places to share their products and services. In the same way, urban centers house people of different needs, occupations and ideas. When these people interact, they share their ideas. Such information sharing is very important in generating other new ideas for better development (Leman, 2005). For instance, an employee from Shanghai company, interacting with one from the transport industry, may give a clue to his collogue how to improve efficiency at the work place without infringing the rights of the others. Such information may be used to increase productivity. Share of ideas has helped China develop new ideas day-in day-out and remain at the top. Improved quality of living Urban centers have their own standards of living far much better than the rural life. The lifestyles of city dwellers reflect their technological advancement. Essentially, there are challenges the city inhabitants handle comfortably that the rural people cannot manage. Ideally, these advancements are reflected in their operations and daily activities due to a lot of exposure (Barton et al., 2013). Businesswise, they are better managers and have a wider knowledge of thought. Therefore, they are better adapted to various conditions. Although urbanization has contributed significantly towards the economic development in China, it still faces a lot of kick-backs. Challenges facing urbanization and expansion of middle class Environmental issues Congestion in urban centers, in China has been a critical issue. This has raised a lot of concern on environmental pollution. The sprout of several industries in cities has caused a lot of pollutions: air, water and soil. Industries develop because of ready markets and cheap labor of the middle class without the concern of their health. For instance, most of the cities in China have been raised up for scale and speed rather than their efficiency. Therefore, on average, their buildings require thrice as much energy as for heating or cooling as compared to other countries like US (Chen, 2013). As a result, there is need for extra power plants to be raised up thus creating more pollution. This is worst in all concentrated towns, in the country. With such a trend, human health is at risk. Water, soil and other living plants have been exposed due to risks due to wastes in dump sites. Businesses have been forced to done away from the industrial areas due to high pollution. As a result, investors have been limited by a concern for their health. Increase in crimes and Housing problems Urbanization has resulted to insufficient housing in major towns due to congestion. China is one of the most populous countries in the world with the majority being the middle class who move to towns to look for sources of income (Linn, 2002). There is a high possibility of imbalance of housing to accommodate the fast growing population. The limited housing facilities are very expensive for the average people making most of them engage in crimes and other immoralities for their sustenance. Business activities are affected most since there is high burglary in such commercial places. In fact, some businesses are forced to close earlier in the day or fail to open completely for fear of invasions. According Barton et al. (2013), Shanghai company was invaded by armed thugs sometimes back in an attempt to raid the company’s property. Even though it was not a successful plan, it was evident that it was a plan between the staff and the robbers. When suspects were reined in court, it was clear that it was due to unemployment and lack of a stable source of income. From this case, it is evident that although urbanization is good, businesses are at risk of being invaded. Therefore, people may fear to open their businesses in such places. Difficulty in creating new and significant urban employment The country is facing the challenge of giving the urban migrants quality employment due to notorious high population. Several middle class people have put a lot of trust on the government for quality jobs due to their level of education and experience. However, the government has not been able to solve the issue due to high pressure on the high population. The industries provide the same opportunities for their employees with limited opportunities for other workers. Between 2010 and 2012, the national bureau of statistics released a report about the government’s employment rates in its parastatals (Barton et al., 2013). Surprisingly, the report indicated insignificant increase in the number of people being recruited. This shows that the government has little room for new recruits to occupy various positions due to high urban migration. Coincidentally, businesses depend on the income of the people. Constant number of people in employment limits expansions of businesses. This will in turn deteriorate the business growth. Imbalance of economic development As Linn, (2002) and Fay & Charlotte (2000) point out, competitive opportunities have attracted the middle class people to urban areas leaving the rural areas unattended. Most of the middle class people in China are the young and energetic who are strong enough to assume the responsibilities. When this group moves to urban centers, they leave the old, young and the disabled helpless in the rural areas. Agricultural activities are left unattended fully. Businesses do not establish due to low investments and purchasing powers. Several urban inhabitants have invested in towns leaving the rural areas. Schools, for instance, are incomparable. Urban schools are performing well leaving the village schools tailing. If such trend persists, there will be economic gap between rich and the poor in urban and rural areas. However, the urban centers are facing food challenge since little is done on agriculturally productive lands. This will affect the food industries and their production may reduce forcing them to retrench the workers. Conclusion Having all said and done, China’s quickly growing middle class is changing the whole nation and will continue doing so for years to come. The urbanization tension, as well as structural shifts in creates, gives a clue why some country’s policy makers do no conform to the rapid urbanization (Chen, 2013). However, since time in memorial, urbanization is very important for attaining high incomes and high growth. In its initial stage, it may be very beneficial, but if managed poorly, end result may be painful. China has attained stable economy because of its favorable policies for urbanization. Being the best manufacturing industry in the world, it has greatly been contributed by its welcome to urbanization. Irrespective of its population, urbanization has been under control. Reference list Barton, D., Chen, Y. & Jin, A., 2013. Mapping China’s Middle Class: Generational change and the rising prosperity of inland cities will power consumption for years to come. McKinsey. Chen, J., 2013. Middle Class Without Democracy: Economic Growth and the Prospects for Democratization in China. Oxford University: Oxford University Press. Commission on Growth and Development, 2008. The Growth Report: Strategies for Sustained Growth and Inclusive Development. Washington, DC: World Bank. Fay, M. & Charlotte, O., 2000. Urbanization without Growth. Washington, DC: World Bank. Gill, I. & Homi, K., 2007. Gill, Indermit, and Homi Kharas. 2007. An East Asian Renaissance: Ideas for Education. New Delhi: Sage. Leman, E., 2005. Metropolitan Regions: New Challenges for an Urbanizing China. Urban Research Symposium. Brasilia: World Bank Paper prepared for the World Bank and Institute of Applied Economic Research. Linn, J., 2002. The Costs of Urbanization in Developing Countries. Economic Development and Cultural Change, 30(3), p.625–48. Read More