Recently, Lu Ming, Distinguished Professor of Antai College of Economics and Management, Shanghai Jiao Tong University and Executive Dean of the China Development Research Institute, launched The Power of Space (Third Edition), focusing on the issues of urbanization, agglomeration and balance in China.
What is the current trend of Chinese population mobility? What progress has been made in human urbanization, and what institutional obstacles still need to be reformed? With the development of the service industry, what are the current household registration and land systems that are not adaptable?
Focusing on these issues, the 21st Century Business Herald reporter interviewed Professor Lu Ming. In his view, the trend of population agglomeration on the mainland is still strengthening, and in the new stage of development of globalization and modernization, the comparative advantages of China's various regions will be further differentiated, forming a development gradient from the coastal areas to the inland and from the central cities to the periphery, presenting a new pattern of regional development of "dual center and periphery".
Lu Ming believes that the flow and agglomeration of the population is conducive to balanced development, and more emphasis should be placed on the balance of per capita rather than the balance of the total amount. At present, the reform of the hukou system in the mainland has accelerated, but with the gradual slowdown of the mainland's economic growth and the increasing proportion of the service industry, the reform of the land and hukou system needs to be accelerated to adapt to the trend of concentration of employment, consumption and flow in the central urban area in the post-industrialization stage.
Lu Ming. Data map
"Dual Center-Periphery" mode
21st Century: In the latest edition of The Power of Space, you have given a specific discussion on the regional pattern of "dual center-periphery", what are the characteristics of population mobility trends in the past 10 years, and how can relevant data support this discussion?
Lu Ming: In terms of the direction and quantity of population flows, these two dimensions are very much in line with the "dual center-periphery" model I mentioned, and the ethnic minority areas west of the Hu Huanyong Line in the northwest region have also seen some population growth, but the population of these places accounts for only 6% of the total population of the country. On the southeast side of the Hu Huanyong Line, 94% of China's population flows to the coast or around large cities in the Chinese mainland. (Hu Huanyong's line is the contrast line proposed by the Chinese geographer Hu Huanyong in 1935 to divide the density of Chinese mouth)
At the city or district level, the growth of the Chinese population is mainly caused by population movement. According to our team's research, the closer you are to the coastal, regional megacities, the more the population grows. On the other hand, areas far from the coast and away from the big cities will have a slower population growth at first, followed by negative population growth, first at the overall urban level, followed by positive population growth in the central urban area, and further, in cities farther away from the coastal and large cities, there will also be negative population growth in the central urban area.
The most representative of these is the Northeast, which lost 10 million in the last census cycle (2010-2020), and only three cities are growing in population: Changchun, Shenyang and Dalian.
The pattern is very clear across the country, and the trend towards population agglomeration is still intensifying, not easing. In the last census cycle (2010-2020) compared to the previous census cycle (2000-2010), the population of areas with positive population growth increased even more, the negative population growth in areas with negative population growth intensified, and the number of cities with negative population growth increased.
21st Century: At present, how can cities with more concentrated economies give full play to their comparative advantages, and what role will they play in the regional economy?
Lu Ming: The positive and negative population growth of a place is related to its geographical location, and it is also related to the comparative advantage of the industry in the geographical location, the closer to the coast and the big city, the more conducive its industrial comparative advantage is to increase the employment of manufacturing and service industries, especially the service industry.
On the whole, among China's primary, secondary and tertiary industries, only the tertiary industries are still growing positively in terms of employment. Therefore, if a place has a large population agglomeration, it will endogenously develop a comparative advantage in the development of the service industry.
From this point of view, some central cities with large populations, especially first-tier cities and some strong second-tier cities, including some provincial capitals, have an increasingly concentrated industrial structure in the producer service industry and consumer service industry. Relatively speaking, the manufacturing industry is gradually moving to the outskirts of these large cities, as well as some areas along the coast or close to the central city in the better geographical location.
Some remote areas that are more remote and far away from big cities will be more and more inclined to assume the function of ensuring national food security, ecological security and national defense security in terms of economic functions, and the manufacturing industry in these areas will also increasingly rely on local resources rather than large-scale industrial agglomeration. Some areas with remote geographical locations but rich ecological and tourism resources mainly emphasize ecological protection and transformation of tourism resources, bringing some opportunities for the development of the tourism industry.
In such an interrelated pattern of industries and spaces, it is possible to realize the division of labor and cooperation between regions and regions, between cities and between cities, and between centers and periphery, and the development pattern of complementary advantages.
Population flow and agglomeration are conducive to balanced development
21st Century: What is the current situation of the reform of the hukou system in mainland China?
Lu Ming: Recently, the reform of the hukou system in the mainland has accelerated, especially since July 2023, under the leadership of the state, some megacities and megacities have accelerated the reform of the hukou system and increased the number of places to settle in the big cities.
At this juncture, looking back on the past, why was we hesitant to reform the household registration system? There are three main reasons: First, ideologically, we have not had a good understanding of the flow of people across urban and rural areas and across regions for quite a long time, and all sectors of society have rather one-sidedly understood balanced development as follows: The agglomeration of people is not conducive to balanced development, and we have neglected that balanced development should emphasize more on the balance of per capita rather than the balance of aggregates.
Second, even if we conceptually understand the trend of population growth and population flow, objectively we are not prepared for population flow. For example, even though the hukou system has been reformed to a large extent, schools, hospitals, nursing homes, and transportation infrastructure in areas with a large influx of people are not yet fully prepared.
Third, the situation of economic growth has changed; when the situation of economic growth was relatively good, people had not yet realized the importance of relaxing the control of population movement; now, as the driving force of economic growth has slowed down and the population, especially the working-age population, has shown negative growth, it is all the more necessary to emphasize the more effective allocation of population and labor resources between different regions, especially between rural and urban areas, so as to improve the driving force of economic growth. Effective resource allocation is actually based on a more free movement of population.
21st Century: Specifically, how to understand the relationship between agglomeration and balance, and what preconceived notions need to be updated and clarified?
Lu Ming: From the perspective of data and theoretical analysis, the flow and agglomeration of population is conducive to narrowing the per capita GDP gap between urban and rural areas, between regions, between north and south, between eastern, central and western regions, and between different cities in the province. There is a view that negative population growth is a kind of decay in some places, but it is not seen that the income level and per capita GDP growth in those places is actually very fast.
There is also a view that the inflow and growth of the population in large cities has brought about an increase in urban housing prices, and in fact, the increase in housing prices in some areas of the mainland is mainly caused by insufficient supply, and the supply of housing has not adapted to the trend of population growth.
There are also reasons for fairness. For a long time, because our household registration system has not been effectively reformed, in fact, about one-third of the population in the cities, especially in some mega and mega cities, has no way to enjoy local public services equally, especially in terms of the residence of the floating population and the education of their children, it is difficult for the floating population to enjoy local low-rent housing and public rental housing, and their children cannot receive education in the city, and these social problems also urgently need to be improved through the reform of the household registration system.
21st Century: What are the phased lessons learned in terms of free movement of population and narrowing regional disparities?
Lu Ming: Another very important function of the free flow of population is to narrow the income gap between urban and rural areas and between regions, even if the current reform of the household registration system has been relaxed, the income gap between urban and rural areas is still 2.5 times that of per capita, and the gap between the highest and lowest per capita GDP between regions in China is still more than four times.
Without the reform of the hukou system to achieve free movement of people, it will be difficult to effectively alleviate the income gap. At present, there is a growing consensus on the liberalization of the hukou system, whether in terms of economic efficiency, growth momentum, or fairness.
The development of the service industry urgently needs the reform of the household registration system
21st Century: With the increasing proportion of the service sector in the mainland economy, should the hukou system be further reformed to adapt to this situation?
Lu Ming: At present, China's economic development level is constantly improving, and we are about to cross the per capita GDP standard from a middle-income country to a high-income country by international standards. At this stage, the economy will gradually take on the characteristics of so-called post-industrialization, and the proportion of the service industry will continue to rise.
What is the significance of this for the current discussion of the reform of the hukou and land system? The service industry needs to face each other with supply and demand, and the production and consumption of the service industry cannot be separated in time and space, which leads to the development of the service industry, especially the service industry that needs to have a strong population scale as the basis for economies of scale, and its development needs to depend on the local population size, population density, and population flow.
Large cities are more conducive to increasing people's demand for diverse lives and quality of services, and because of this, if we look at it from the perspective of job creation, the continuous concentration of population in large cities is precisely because the jobs created by the service sector are in large cities. Within large cities, the population tends to concentrate in the central urban area due to the larger population size, population density and population flow in the central urban area. However, the hukou system hinders the movement of people between cities, which has an adverse impact on adapting to the development trend of the service industry.
21st Century: What is the urgency of deepening the reform of the hukou system corresponding to the development of the service industry in mainland China?
Lu Ming: At present, the urgency of deepening reform mainly comes from the fact that the service industry has further increased its requirements for people, and the service industry needs people to deal with people, and a lot of knowledge and skills need to be gradually accumulated in life.
One of our studies found that for migrants, moving to the city earlier than later is more conducive to entering the service industry and gaining experience of living in the city, which is very important for obtaining employment opportunities and income improvement in the service industry.
Therefore, if our hukou system can be reformed as soon as possible, and the urbanization of the migrant population can occur as soon as possible, so that their children can go to the city to stay with their parents as soon as possible, they will be able to integrate into urban life as soon as possible in their youth and even childhood, which will be more conducive to them finding jobs in the service industry and increasing their income in the future.
"21st Century": From the perspective of the reform of the household registration system, what measures can be taken for the inflow of population and the outflow of population?
Lu Ming: At present, the most important relevant reform is to make the investment of service resources, especially public service resources, consistent with the direction of population flow, the most important of which is medical care and education, especially education, with the reform of the household registration system, the floating population will gradually settle down in the population inflow area, but the current primary and secondary schools, especially high schools, are very unprepared for the population inflow.
In the future, fiscal transfers for health care and education should be more in line with the direction of population flows, or such fiscal transfers should be turned into a kind of resource that migrants can carry, and they can increase financial investment wherever they live.
As for the inflow of people, there is currently a shortage of medical and educational resources, including insufficient infrastructure and housing, and it is necessary to give full play to market forces to increase supply and make full use of private funds.
For the areas of population outflow, especially in some places where there is a significant negative population growth at present, it is necessary to make scientific judgments on the future population trend decline and the population decline in different spatial locations, so as to avoid the waste of today's investment. With regard to the existing public services, especially medical care, education, and old-age care, it is necessary to adapt to the changes in the spatial distribution of the population, appropriately concentrate the population in the areas of population outflow to the central urban areas, and improve the efficiency and quality of public services.
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