Development of Characteristic Towns in ChinaJanuary 08,2025

Development of characteristic towns in China

Author: Yuzhe Wu, Yuxuan Chen (Department of Land Management, Zhejiang University, Hangzhou, PR China), Xiaoying Deng(School of Public Economics and Administration, Shanghai University of Finance and Economics, Shanghai, PR China), Eddie C.M. Hui (Department of Building and Real Estate, The Hong Kong Polytechnic University, Hong Kong)

  Highlight

   • We focus on the principles of “agglomeration” and “livability” of China's characteristic towns, in socioeconomic and cultural contexts.

   • In the short term, identifying characteristics is the core element in the development.

   • In the long term, a comprehensive integration of industrial policy and land use policy is needed to ensure continuous capital investment and revenue generation.

   • This study is exemplified by a case study of Zhejiang's version of characteristic towns.

Abstract

China is experiencing rapid progress in industrialization and urbanization. Characteristic towns (Tese Xiaozhen) are one of the important drivers for China's urbanization, industrialization and agricultural modernization in the 21st century. Each of the towns has its own characteristics. At present, however, it is unclear for them about (i) what characteristics should be promoted, (ii) how urban land should be planned and (iii) which industry should be focused on. The public infrastructure and services in towns are usually under-developed, compared to cities. This paper first explores the designation of a brand-new type of new towns in China, i.e. “characteristic towns”, to meet the need of the current urbanization in China. The paper focuses on the principles of “agglomeration” and “livability”, in socioeconomic and cultural contexts. This is exemplified by a case study of Zhejiang's version of characteristic towns. The findings suggest that the success of cultivation of towns is closely associated with agglomeration and livability. In the short term, identifying characteristics is the core element in the development. For the longer term, a comprehensive integration of industrial policy and land use policy is needed to ensure continuous capital investment and revenue generation.

Introduction

Characteristic towns (Tese Xiaozhen) are one of the important drivers for China's urbanization, industrialization and agricultural modernization in the 21st century. In 2016, China's urbanization level reached a record high of 57.53%, with per capita GDP at 53,980 RMB (about 7800 US dollars).1 Meanwhile, only 41.2% of the population are registered urban residents. That means 223 million migrant workers and their families are unqualified urban residents. The Hukou registration system in China makes these migrants unable to have equal access to public services and welfare in urban, such as housing, education, medical care, and social insurance. The rapid urbanization has further made China the world factory with numerous industrial parks, resulting in excess production capacity in raw materials like crude steel. Characteristic towns in China is an innovative platform integrating characteristic industries, culture, tourism and community functions, which is different from other administrative districts as detailed in Table 1. Unlike the rural-urban fringe zones, which are often located in the suburban areas (Wu, 2001a, Wu, 2001b), characteristic towns are located in a variety of places.

With more than a decade of spectacular growth, some had cast doubt on the sustainability of the “Chinese economic model”. By the fourth quarter of 2016, China's GDP growth rate was 6.7%, the lowest growth rate since the global financial crisis in 2008. It is evident that the traditional engines of economic growth, such as manufacturing and real estate, have been weakened. China needs a new growth engine that can transform these ever-prosperous areas into ones that feature growth quality instead of quantity, agglomeration instead of simple concentration, livability instead of congestion, sustainability instead of pollution, and innovation instead of imitation. Meanwhile, China's rapid urbanization has created an enabling environment for the rapid economic development with abundant labor, low-cost land and good infrastructure (the State Council Development Research Center and the World Bank Joint Research Group, 2014). According to National New Urbanization Plan (2014–2020) released in 2014, China's urbanization level in 2020 will reach the benchmark of 60%. In other words, another 100 million rural population will become new urban residents. Meanwhile, the worsening pollution, urban sprawl and congestion make megacities and large cities no longer feasible to absorb surplus rural population with urbanization advancing. The growing urban population has brought housing tension and urban environmental pollution (Wu, Luo, Zhang, & Skitmore, 2016). On the other hand, the lagging development of infrastructure has been the bottleneck of China's rural economic development (Ju & Pang, 2005).

Given the existing regional imbalance in China, Prime Minister Li Keqiang has revealed that further urbanization is not only critical to China's economic success, but also a fundamental way to reduce regional disparities. In this regard, the development of characteristic towns aims to address issues associated with the rapid urbanization, such as the imbalance between urban and rural areas, urban amenity and economic transitions mentioned above. Since economic reforms started from 1978, industrial clusters and regions with characteristic industries have prospered in China, especially in the eastern coast, alongside the needs of urbanization.

The cultivation of characteristic towns affirmed by the central government has become one of the national initiatives. China's traditional economic model is resource and labor oriented, which is incompatible with the rising trend for sustainable growth. To increase the competitiveness in the wave of globalization, it is critical to upgrade the industry, integrating big data, artificial intelligence and other high-end technologies. The development of characteristic towns aims to enhance the regional competiveness, while help to alleviate the congestion and pollution brought by the traditional mode. In 2016, the Ministry of Housing decided that 127 towns in 32 provinces and cities were the piloting characteristic towns, with a goal to cultivate about 1000 (accounting for about 5% of the total number of towns) distinctive, vibrant characteristic towns by the end of 2020. China's New Urbanization Plan (2014–2020) further revealed the strategic objectives of the new urbanization “to speed up the cultivation of small cities and small towns” by accelerating urban development transformation.

Zhejiang's version of characteristic towns has drawn its inspiration from abroad. Distinguished characteristic towns, such as Greenwich Hedge Fund Town in the US, Davos of Swiss, and Provence of France, have served a piloting model for China's new-type urbanization and spreading national-wide. However, lack of theoretical guidance, it is unclear about (i) what characteristics should be promoted, (ii) how urban land should be planned and (iii) which industry should be focused on. This paper aims to fill the gap. By exploiting the issues arising in the development of characteristic towns, the paper helps answer how such towns should go along well with their unique advantageous industries, special culture, and well-preserved ecology to optimize its productivity pattern as well as provides guidance for advancing China's new type urbanization and sustainable development.

Characteristic towns

Western countries have developed small towns as the reservoir of urban population outflow in the process of urbanization, to resolve the imbalance between megacities and rural areas (Bajracharya, 1995), some of which gradually evolved into an industry-based “characteristic town”. Central place theory proposes that the development of towns should be coordinated with the development of the interlinked urban and rural areas (Xu & Zhang, 2004), as to form a unified metropolitan area (Wang, 2010).

Characteristic towns development and urban growth management: key literature

The two major issues regarding characteristic towns development and their impact on economic growth are agglomeration and livability.

Agglomeration means economies of scale and agglomeration effects, contributing to industry agglomeration and population agglomeration. With the further development of the service sector, urban infrastructure and public amenities, city size grows. Changes in productivity, amenity, and frictions will increase the spatial inequality in population concentration.

Model of characteristic towns: integrating with agglomeration and livability

In essence, the development of the characteristic town depends on a characteristic industry along with the characteristic factors, such as regional characteristics, ecological environment and cultural heritage. The town is an integration with clear industrial position, cultural connotation, tourism characteristics and community function. As an ecosystem which combines nature, society and industrial production, the characteristic town becomes a new urbanization model for urban and rural areas.

Case study

The development of characteristic towns provides a new growth engine for urbanization in terms of economic growth and industry transition in China. The towns exhibit a great regional disparity, first introduced and prospered in eastern China. Originated from Zhejiang, this new pattern has attracted wide attention as a new mode of relationship between the government and the market, serving as a strategic choice of regional innovation and development (Li, 2017).

Findings

This study investigates how the industry and population agglomeration make China's characteristic towns livable. We find that agglomeration and livability need be considered into the development process of the characteristic town detailed in Fig. 8. Agglomeration and livability complements each other. Compared with Fig. 1, it further shows that industry agglomeration can be achieved either through strengthening traditional industries or cultivating new industries.

Conclusion

China is experiencing rapid progress in industrialization and urbanization. Characteristic towns (Tese Xiaozhen) are important drivers for China's urbanization, industrialization and agricultural modernization in the 21st century, serving as a strategic choice of regional innovation and development. On the one hand, characteristic towns help to gather entrepreneurial innovation elements, optimize supply system, and accelerate economic transformation and upgrading.

Source：  https://www.sciencedirect.com/science/article/abs/pii/S0197397517309475