Three key challenges for the future of China’s cities

China faces unprecedented economic, social and environmental challenges – and sizeable opportunities – as it manages its transition to an increasingly urbanized economy. China can equip its fast-expanding cities for sustainable growth if city officials, industry and other stakeholders together focus on three key themes: transport planning and management, urban energy management, and sustainable industry development.

Our new report, The Future of Urban Development Initiative, comes at a time when around half of China’s population (more than 750 million people) live in cities. The country has six megacities with more than 10 million people and 103 cities with more than one million people. The China State Council estimates that urban populations will continue to grow at the rate of 1% a year.

China’s recent years of rapid economic growth have been driving more people to work and settle in cities. Traffic jams are frequent and house prices are skyrocketing. Public services have been put under intense pressure, and new arrivals from rural areas without urban residency documents often have trouble accessing them. Air and water quality have declined to the point where many cities are struggling to provide citizens with sustainable living environments.

Such is the pressure on cities that the China State Council has announced an urbanization plan – the National New-type Urbanization Plan (2014-2020). The aim is to encourage cities to embed green and low-carbon strategies in development plans, e.g. providing convenient, comfortable and efficient public transport. The plan also aims to offer better and affordable housing and utilities as well as other public services to all citizens.

The Future of Urban Development Initiative’s Champion City Strategy for the booming northern cities of Dalian and Zhangjiakou focuses on three key themes, which are relevant for many fast-growing cities across China:

1. Transportation planning and management

The initiative recommends the development of an “intelligent” transport system to maximize the efficiency of intra-city traffic. Public policy should encourage use of public transport. In cities, where road links to Beijing are under strain, it recommends creating innovative financing mechanisms for new highway construction, and systems to optimize the movement of goods between cities.

2. Urban energy management

The initiative focuses on reducing reliance on coal by working with both the supply side and the demand side of the energy equation. On the supply side, it means scaling up natural gas production and increasing renewable energy sources’ contribution to the total. On the demand side, the initiative advises improving energy efficiency, particularly in the petrochemical sector. Another recommendation is to explore opportunities to increase local consumption of wind power and collaborate with authorities beyond city boundaries on the long-distance transmission of wind-generated energy so that wind-energy production are encouraged to work at full capacity.

3. Sustainable industry development

The initiative warns against failing to tap the potential of the emerging technology sector, and encourages cities to foster the growth of small and medium-sized enterprises and innovative businesses. It also recommends making market structures more efficient. Another recommendation is to educate outlying rural areas in using mobile technology. In the case of cities seeking to raise their international profile – as with Zhangjiakou, which is planning to bid for the 2022 Winter Olympics – authorities should create a city brand identity

The two “Champion Cities” examined by the initiative, Dalian and Zhangjiakou, are unique. Yet, at the same time, their challenges are representative in many ways of other Chinese cities. So, the solutions that meet their needs could be scaled and applied to other cities across the country.

Author: Olivier Schwab, Executive Director, China, World Economic Forum Beijing Representative Office

Image: People walk along a busy street at Pudong financial district in Shanghai. REUTERS/Carlos Barria