China has formally issued documents calling for greater efforts
in the development of small towns, making them the focus of
the country's urbanization strategy.
But experts have
warned that many problems, in developing small towns, have
yet to be tackled properly.
Currently only
30 percent of Chinese people live in cities, much lower than
the world average of 42 percent. And the slow urbanization
process is a burden on the economy. The country is striving
to develop small towns to encourage rural dwellers to come
to urban areas and thus boost economic development.
In June, the government
issued a document on the healthy development of small towns.
And in its draft 10th Five-Year Plan (2001-05) published in
October, while it mentioned the coordinated development of
small towns, medium-sized cities and large cities in its urbanization
strategy, it stressed again the development of small towns.
Under such circumstances,
experts worry that local leaders will rush to establish small
towns, regardless of local conditions and the relevant laws.
"I am afraid
that too many small towns may spring up too quickly in the
coming years," said Hu Xuwei, a researcher from the Institute
of Geophysics under the Chinese Academy of Sciences at a recent
forum held by the Beijing-based Unirule Institute of Economics.
A prerequisite
for the creation of a town or city is the convergence of a
certain amount of resources, such as people and capital, urbanologists
said.
"If too many
small towns spring up in a short period, the resources allocated
to them will be insufficient for their growth and they may
die young," Hu said.
Furthermore a rapid
increase in small towns puts pressure on land resources.
Statistics show
the per capita use of land in small towns is about 149 square
meters, 27.6 percent and 40.9 percent more than that in medium-size
and big cities respectively.
"The government
should pay special attention to this problem and curb the
blind establishment of small towns," urged Liu Fuyuan,
an urbanologist from the Macro-economic Institute under the
State Development Planning Commission.
"Otherwise,
the huge amounts of capital put into the development of small
towns would only be a waste of resources," he said.
Their worry is
not unfounded. China has witnessed a rapid increase in small
towns in recent years.
In 1992 alone,
2,253 towns were established, 226 more than the total established
in the preceding five years. From 1993 to 1998, 4,925 more
towns sprang up.
"Many of the
towns only have a population of 2,000 to 3,000, which can
not enable them to sustain their growth," Liu said.
Generally, a population
of 30,000 is the bottom line for a town to sustain development
and prosper, experts agree.
For this reason,
the development of small towns should be a selective process.
County seats, which have plentiful resources and a good economic
situation, should be selected for the urban development strategy,
Hu said.
Many local governments
have drawn up policies to restrict the movement of farmers
from rural to urban areas, experts said.
"Since China
carried out its reform and opening up policy, its domicile
system has been relaxed somewhat. But the process is still
going too slow and domicile is still a barrier to the growth
of small towns," said Fang Jun, a researcher from the
Central Working Committee of Finance of the Communist Party
of China.
"In some small
towns, new-comers are required to build a new house before
they can move in," said Yao Yang from the Economic Research
Center of Peking University.
This involves an
exceptionally large investment from farmers. To boost the
growth of towns, standards should be lowered. As long as they
have a house to live in and can find a job, newcomers should
be allowed to move into towns, Yao suggested.
With more people
arriving, more resources will be introduced and towns will
gradually grow. A number of local governments have realized
this mistake and are redressing the situation.
In Yongchuan, in
Southwest China's Chongqing city, people once had to pay up
to 100,000 yuan (US$12,000) to get a residence permit. Now
four yuan (US$0.5) will buy you your permit providing you
have a home, a source of income or a college diploma.
It seems that loosening
domicile restrictions should be easy for local authorities.
But that is not always the case. A weak fiscal environment
is a constant headache for local officials trying to expand
their economy.
"Under the
current fiscal situation, a large part of revenue in some
towns has to be handed over to the county governments,"
said Zhang Xuedan, a researcher from the Institute of Financial
Sciences under the Ministry of Finance.
This has resulted
in financial straits for some towns, he said. To solve the
problem, more authority over fiscal matters should be granted
to towns to aid their further development. And the proportion
of income handed over to the upper fiscal department should
not be set too high, he added.
More attention
should be paid to the development of local rural enterprises,
which contribute hugely to the development of towns in terms
of cash turnover.
"Local governments
should help enterprises reform their property rights system
and introduce a share-holding system to boost their growth,"
Zhang said.
In the past, many
rural enterprises were collectively owned. However, after
more than a decade of rapid development, the unclear ownership
situation has become a barrier to future growth.
To channel in more
money for public finance, local governments should choose
high-quality assets, such as the infrastructure and well-managed
enterprises, as a basis from which to issue asset-backed securities
to pool money, Fang Jun said.
By so doing, they
can attract more private investors to raise money for the
construction of small towns, he added.
(China Daily 11/27/2000)
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