High rise apartments in Guiyang

About us
Mayor Monitor

Urbanization in China
Chinese urban revolution
Growing & shrinking cities
Most egalitarian cities
Habitat 2008
World's largest cities

City Mayors reports news from towns and cities around the world. Worldwide | Elections | North America | Latin America | Europe | Asia | Africa |

City Mayors ranks the world’s largest, best as well as richest cities and urban areas. It also ranks the cities in individual countries, and provides a list of the capital cities of some 200 sovereign countries. More

City Mayors profiles city leaders from around the world. More

City Mayors describes the history, architecture and politics of the greatest city halls in the world. More

Mayors from The Americas, Europe. Asia, Australia and Africa compete for the World Mayor Award. More

Mayor Monitor to rate the performance of mayors from across the world More

In your opinion: Praise Criticise. Write

City Mayors reports political events, analyses the issues and depicts the main players. More

City Mayors describes and explains the structures and workings of local government in Europe, The Americas, Asia, Australia and Africa. More

City Mayors deals with economic and investment issues affecting towns and cities. More

City Mayors describes and explains financial issues affecting local government. More

City Mayors reports urban environmental developments and examines the challenges faced by cities worldwide. More

City Mayors reports on and discusses urban development issues in developed and developing countries. More

City Mayors reports on developments in urban society and behaviour and reviews relevant research. More

City Mayors invites readers to write about the people in their cities. More

City Mayors examines city brands and marketing. More

City Mayors lists and features urban events, conferences and conventions aimed at urban decision makers and those with an interst in cities worldwide. More

City Mayors deals with urban transport issues in developed and developing countries and features the world’s greatest metro systems. More

City Mayors examines education issues and policies affecting children and adults in urban areas. More

City Mayors investigates health issues affecting urban areas with an emphasis on health in cities in developing countries. More

City Mayors reports on how business developments impact on cities and examines cooperation between cities and the private sector. More

City Mayors examines the contributions history and culture make to urban society and environment. More

City Mayors examines the importance of urban tourism to city economies. More

City Mayors questions those who govern the world’s cities and talks to men and women who contribute to urban society and environment. More

City Mayors profiles national and international organisations representing cities as well as those dealing with urban issues. More

City Mayors reports on major national and international sporting events and their impact on cities. More

City Mayors lists cities and city organisations, profiles individual mayors and provides information on hundreds of urban events. More

China’s urban transition
causes growing inequality

A report by UN-Habitat reviewed by Tann vom Hove

27 November 2008: The word transition perhaps best describes China: the world’s most populous country is transitioning from a predominantly rural society to an urban one. China’s urbanization process in the last two decades has been extraordinary: the urbanization level in the country has nearly doubled from 25 per cent in 1987 to roughly 42 per cent in 2007; it is estimated that by 2030, 60 per cent of the country’s population will be urban. While urbanization has led to unprecedented economic growth it has also caused massive inequalities.

Join the debate on world cities

China is also transitioning from a centralized planned economy to a market economy, which has led to another important transition from relative social egalitarianism to a new era of individualism and competition. All of China’s recent changes are also leading it to transition, almost within one generation, from a developing country to a developed one.

These changes have brought positive outcomes: China has experienced rapid economic growth for more than 15 years, and the country has been able to lift half a billion people out of poverty in the last 30 years – a remarkable achievement that no other nation has accomplished at the same speed or scale. The country has also improved the quality of life of hundreds of thousands of inhabitants, particularly in urban areas.

China’s transitions began with the implementation of a set of progressive policy reforms that started with the restructuring of the agricultural sector at the end of the 1970s, in a period usually referred to as the “agricultural reform” that spanned eight years. It was followed by a second period known as the “urban reform” that started in 1985 and is still continuing. This second period has been characterized by rapid industrialization, the reorganization of state enterprises, increased trade openness, enactment of subsidies and tax exemptions in the export sector, and the gradual liberalization of the country’s financial markets.

The changes in China have also had negative effects: decreases in rural-urban inequalities during the agricultural reform rose again because priority was given to coastal and urban areas. China has now attained some of the deepest disparities between rural and urban areas in the world, with urban per capita incomes three times those of rural areas. Regional inequalities are also growing, often among towns and cities within in the same region, as rural non-agricultural opportunities become concentrated in a few areas, and as some urban areas grow more rapidly than others. As a result, China’s national Gini coefficient has increased rapidly in recent decades, growing from 0.30 in 1978, the year the reforms began, to 0.38 in 1988 and 0.45 in 2002, reflecting increased inequalities between rural and urban areas and among regions. Today, China has the highest level of consumption inequality in the Asia region, higher than Pakistan (0.298), Bangladesh (0.318), India (0.325), and Indonesia (0.343), among others.

At the urban level, income inequalities are growing as a result of a combination of factors: increases in manufacturing activity, and growth in the service industry and high tech sectors, bringing disproportionate rewards to the most skilled workers; the adoption of capitalintensive industrial development that is creating a limited number of well-paid new jobs; and the emergence of real estate, insurance and communication sectors that are creating highly remunerated jobs. At the same time, the decline of state-owned enterprises has resulted in layoffs and an increase in the number of unemployed people, who, together with informal workers and rural residents, are facing serious problems in joining the new urban labour market. Cities with high levels of income inequality include Shenzhen (0.49), Zhuhai (0.45), Yichan (0.42), Daquin (0.41), and above all, Hong Kong, a Special Administrative Region of China, which has the highest Gini coefficient not only in China, but in all of Asia (0.53). In general, however, urban inequalities within Chinese cities tend to be relatively low compared with rural areas and with other cities in Asia.

In modern China, lack of full-time employment means not only the loss of a job and income; in many cases, it also means exclusion from social services, such as education, health, retirement benefits and social security. Less than 15 years ago, social services were provided free of charge by the state or at highly subsidized rates, but now the government is abandoning work-protective policies that are impacting vulnerable populations. For instance, the state paid 66 per cent of all individual health-care costs in 1988; in 2002, the state paid just 22 per cent. The allocation of social housing has also been dramatically reduced. As a consequence, the proportion of expenditures related to education and health has more than doubled for both mean-income households and the poorest 20 per cent of households.

China’s new economic reality impacts both income and social inequality throughout the country. In China, urban incomes do not accurately reflect levels of inequality, as urban residents have access to a variety of services that are not as easily accessible to rural residents.78 In Shanghai, for example, salary-based income accounted only for 65 per cent of the city’s total income, while 25 per cent was drawn from subsidies in housing, health care and education, and 10 per cent from irregular economic benefits such as second jobs, business sidelines and illegal forms of income. The opportunities for rent seeking, or gray income, widen the gap between the privileged and underprivileged and erode the resource base of the state welfare distribution. In addition, new mechanisms of housing allocation through real estate companies are creating new forms of spatial or area-based marginalization that further accentuate income and social inequalities.

Most studies on income inequality in China also include only those urban populations that are registered under the Hukou household registration system, which excludes rural migrants (commonly referred to as “floating populations”) who only have temporary residential status in cities The migrant population in China is roughly 150 million, and is considered not only the biggest migrant population in the world, but also the most mobile. Most migrants come to cities in search of jobs, which are often unstable, and live under temporary and inadequate housing conditions.

Ignoring migrants in the studies of overall income distribution therefore distorts levels of urban inequality in China. For instance, a study in the capital city of Beijing – a key destination in recent domestic migration flows – shows that the migrant population increased from 0.32 million in 1985 to 1 million in 1995 and 3.3 million in 2003, representing approximately one-third of the capital’s total population. One of the few studies of the Gini coefficient in Beijing found that the coefficient values increase from 0.22 to 0.33 when migrants are included. Similar variances of approximately 12 points are found in other cities that are destinations of recent domestic migrations, with the Gini coefficient increasing from 0.402 to 0.418 when rural migrants are included. In these cities, the migrant population accounts for some 12 per cent of all urban employees and represents nearly one-fifth of the urban population.

Rural-urban and intra-city disparities, are therefore, emerging as consequences of China’s urban and economic transition.

Comment & Debate
City Mayors is inviting its readers to engage in a debate on the issues raised in the article on this page. Please post your comments below. Your comments should deal with the topics of this article and must be legal and ethical. You may also reply to and/or challenge comments of other readers. While we endeavour to publish all relevant comments, we reserve the right to edit them and to reject unsuitable contributions.

Please add your comment
Title of article
Your comment relates to the article on this page:

Your name
Please provide your name as you wish it to be published. It can be your full name, first name, initials or a nickname. (Impersonating someone else is unacceptable.)

Your city and country
Please provide the city and country you live in. (Example: Paris, France)

Your email address
Please provide your email address. (Your email address will NOT be published)

Your comment
If possible, please provide your comment in English, using upper and lower cases. Please mention if you refer to a comment of another reader.

World Mayor 2023