On December 4th, the China Development Institute and the National School of Development at Peking University co-hosted a policy talk on China’s economic outlook amid the COVID-19 outbreak and the new international challenges. The event was also livestreamed on multiple media outlets.
CDI and NSD scholarsshared their insights on the economic challenges faced by China in a time of global uncertainty. These panellists suggested that China needs to continue its endeavours in scientific research, technological innovation, reform of state-owned enterprises and the finance industry.
Date: December 4, 2020
Host: CDI, NSD
Theme:China’s economic outlook amid the new international challenges
Author: Cao Zhongxiong, Executive Director of New Economy Research Department of CDI
Editor’s Note:The “black swan” incident of the COVID-19 outbreak has led to the temporary shutdown of the global supply chain, making China the “gray rhino” in the world economy. To be sure, COVID-19 will not impede the process of China’s economic transformation and urbanization, but will change their development path.
The spread of the epidemic was accelerated by intense population flow, which is the characteristic of China’s “semi-urbanization”. Semi-urbanization is an incomplete state in the process of transforming rural population into urban population. This is manifested in the fact that farmers have left the countryside to work and live in cities, but cannot enjoy the same treatment as urban residents in many aspects such as labor remuneration, children’s education, social security, and housing, etc. They do not have political rights such as the right to vote and stand for election in cities, and cannot really assimilate into the urban society.
At present, some unilaterally attribute the impact of the epidemic to unconventional urbanization. This view is questionable as I see it, and should be re-examined from a deeper perspective. The spread of the epidemic in cities is not caused by urbanization per se, but by insufficient urbanization and structural problems in the urbanization process, which can be more appropriately termed “semi-urbanization”. The COVID-19 epidemic is estimated to have a profound impact on China’s urbanization. The shortage of public services, imperfections in urban governance and the lack of emergency supplies are closely related to the current state of semi-urbanization. These problems have driven the spread of the epidemic.
During the epidemic, non-natives became hidden hazards. Huge flow of people leaving and returning to cities have brought tremendous challenges to social governance. Especially when work and production is about to be resumed, the health screening, the tracking of suspected cases, and service for those in quarantine all bring pressure to social governance. The root of the huge population flow also lies in China’s traditional household registration system. To emerge from the semi-urbanization state, it is necessary to further step up reform of the household registration system, facilitate the movement of people to mega-cities, large cities and surrounding second-and third-tier cities, so as to allow them to settle and flow within city clusters. In this way, people will be able to assume a “fixed identity” in addition to their physical presence in cities, thus realizing the urbanization of people.
The epidemic requires us to reflect on urban planning. In the planning and development of cities, more small and medium-sized industrial communities are needed, with improved integration between industries and city functions, so as to reduce the ineffective flow between different urban areas. For epidemic prevention, control and follow-up measures, this will make it easier to take differentiated measures in different city areas, and resume work and production accordingly, so as to minimize the impact of the epidemic on the city.
What has happened in this epidemic points to the notion that first-class city clusters are the future of China’s development. Of course, in the future, challenges faced by the development of city clusters will come more from the coordination between regions and between cities, the integration of industrial chains, and the supply of high-quality public services required by high-intensity population flow. Only on a larger scale can we provide public services of higher quality.