IDEAS home Printed from https://ideas.repec.org/p/ags/pugtwp/332361.html
   My bibliography  Save this paper

Rapid urbanization in China and its impact on the world economy

Author

Listed:
  • Zhang, James Xiaohe

Abstract

As the most populous economy in the world, China has experienced an unprecedented pace of urbanization since the start of its economic reforms in the late 1970s. The rapid urbanization was accompanied by large flows of rural to urban migration and a growing demand for a clearer specification of the rural land ownership. Since the 2000s, when the conventional restrictions on rural to urban migration were partially removed, rural to urban migration made dominant contributions to China’s urban population growth. An accelerate urbanization will require for a clearer specification of rural land ownership and free mobility of rural labor force across different sectors and regions, which in turn will have a significant impact on production, employment and international trade patterns in both China and the rest of the world, particularly in agricultural and capital intensive industries. This will result in a large-scale restructuring of the world economy in line with regional specialization and comparative advantage. Specifically, the natural resource based and capital intensive industries benefit and labor intensive industries suffer from China’s labor market liberalization, but these impacts will be offset somewhat by the land market reforms. This paper examines the impact of reforms in both China’s rural land and labor markets on the aggregate economic welfare in China and the rest of the world. Propositions derived from a theoretical model include that while the labor market liberalization generates unambiguous gains, the land reform may have some impact on income distribution. When the labor intensive industries gain, the capital intensive industries suffer in China. The impact on the rest of the world varies across different regions. The hypotheses are tested by running simulations on an applied general equilibrium model (the GTAP Model). Several different modeling scenarios including 1) an accelerated urbanization as a result of free mobility of the rural labor; 2) a de facto privatization of the rural land ownership and 3) a combination of both privatization of the rural land and free mobility of labor are specified for the purpose of separating out the effects of each simulation as well as capturing different market environments. Policy implications are developed based on the simulation results. Paper prepared for the 16th Annual Conference on Global Economic Analysis "New Challenges for Global Trade in a Rapidly Changing World", Shanghai Institute of Foreign Trade, June 12-14, 2013. Shanghai, China.

Suggested Citation

  • Zhang, James Xiaohe, 2013. "Rapid urbanization in China and its impact on the world economy," Conference papers 332361, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332361
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/332361/files/6310.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thomas Vendryes, 2010. "Land Rights in Rural China since 1978. Reforms, Successes, and Shortcomings," PSE-Ecole d'économie de Paris (Postprint) hal-00813066, HAL.
    2. Whalley, John & Zhang, Shunming, 2007. "A numerical simulation analysis of (Hukou) labour mobility restrictions in China," Journal of Development Economics, Elsevier, vol. 83(2), pages 392-410, July.
    3. Sachs, J.D. & Woo, W.T., 1994. "Structural Factors in the Economic Reforms of China, Eastern Europe and the Former Soviet Union," Papers 94-01, California Davis - Institute of Governmental Affairs.
    4. Selden, Mark & You, Laiyin, 1997. "The reform of social welfare in China," World Development, Elsevier, vol. 25(10), pages 1657-1668, October.
    5. Thomas Vendryes, 2010. "Land Rights in Rural China since 1978. Reforms, Successes, and Shortcomings," Post-Print hal-00813066, HAL.
    6. Thomas Vendryes, 2010. "Land Rights in Rural China since 1978. Reforms, Successes, and Shortcomings," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00813066, HAL.
    7. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
    8. Bhattacharyya, Arunava & Parker, Elliott, 1999. "Labor productivity and migration in Chinese agriculture A stochastic frontier approach," China Economic Review, Elsevier, vol. 10(1), pages 59-74.
    9. Wang, Xiaobing & Huang, Jikun & Zhang, Linxiu & Rozelle, Scott, 2011. "The rise of migration and the fall of self employment in rural China's labor market," China Economic Review, Elsevier, vol. 22(4), pages 573-584.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xianlei Ma & Justus Wesseler & Nico Heerink & Futian Qu, 2013. "Land Tenure Reforms and Land Conservation Investments in China ¨C What Does Real Option Value Theory Tell Us?," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 19-33, August.
    2. Wenjing Han & Zhengfeng Zhang & Xiaoling Zhang & Li He, 2021. "Farmland Rental Participation, Agricultural Productivity, and Household Income: Evidence from Rural China," Land, MDPI, vol. 10(9), pages 1-22, August.
    3. Li, Shi & Vendryes, Thomas, 2018. "Real estate activity, democracy and land rights in rural China," China Economic Review, Elsevier, vol. 52(C), pages 54-79.
    4. Bu, Di & Liao, Yin, 2022. "Land property rights and rural enterprise growth: Evidence from land titling reform in China," Journal of Development Economics, Elsevier, vol. 157(C).
    5. Xiaobing Wang & Futoshi Yamauchi & Jikun Huang, 2016. "Rising wages, mechanization, and the substitution between capital and labor: evidence from small scale farm system in China," Agricultural Economics, International Association of Agricultural Economists, vol. 47(3), pages 309-317, May.
    6. Swinnen, Johan F.M., 2005. "Agricultural transformation: Lessons from experience," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 44(1), pages 1-20, March.
    7. Zhang, Yumei & Diao, Xinshen, 2020. "The changing role of agriculture with economic structural change – The case of China," China Economic Review, Elsevier, vol. 62(C).
    8. Tao Wu & Yuelong Wang, 2015. "Did the Establishment of Poyang Lake Eco-Economic Zone Increase Agricultural Labor Productivity in Jiangxi Province, China?," Sustainability, MDPI, vol. 8(1), pages 1-11, December.
    9. Lawrence J. Lau & Yingyi Qian & Gerard Roland, 2000. "Reform without Losers: An Interpretation of China's Dual-Track Approach to Transition," Journal of Political Economy, University of Chicago Press, vol. 108(1), pages 120-143, February.
    10. Shang-Jin Wei & Zhuan Xie & Xiaobo Zhang, 2017. "From "Made in China" to "Innovated in China": Necessity, Prospect, and Challenges," Journal of Economic Perspectives, American Economic Association, vol. 31(1), pages 49-70, Winter.
    11. Mario Biggeri & Danilo Gambelli & Christine Phillips, 1999. "Small and medium enterprise theory: evidence for Chinese TVEs," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(2), pages 197-219.
    12. Wang, Xiaobing & Yamauchi, Futoshi & Otsuka, Keijiro & Huang, Jikun, 2016. "Wage Growth, Landholding, and Mechanization in Chinese Agriculture," World Development, Elsevier, vol. 86(C), pages 30-45.
    13. Robert W. Mead, 2003. "A Revisionist View Of Chinese Agricultural Productivity?," Contemporary Economic Policy, Western Economic Association International, vol. 21(1), pages 117-131, January.
    14. Alan de Brauw & Jikun Huang & Scott Rozelle, "undated". "Sequencing and the Success of Gradualism: Empirical Evidence from China's Agricultural Reform," Center for Development Economics 173, Department of Economics, Williams College.
    15. Min, Shi & Liu, Min & Huang, Jikun, 2020. "Does the application of ICTs facilitate rural economic transformation in China? Empirical evidence from the use of smartphones among farmers," Journal of Asian Economics, Elsevier, vol. 70(C).
    16. Justin Yifu Lin & Fang Cai & Zhou Li, 1994. "China's economic reforms : pointers for other economies in transition?," Policy Research Working Paper Series 1310, The World Bank.
    17. Macours, Karen & Swinnen, Johan F.M., 2000. "Agrarian Transitions and Productivity Patterns: Synthesis of Experiences in Eastern Europe, the former Soviet Union and East Asia," 2000 Conference, August 13-18, 2000, Berlin, Germany 197196, International Association of Agricultural Economists.
    18. Macours, Karen & Swinnen, Johan F. M., 2000. "Causes of Output Decline in Economic Transition: The Case of Central and Eastern European Agriculture," Journal of Comparative Economics, Elsevier, vol. 28(1), pages 172-206, March.
    19. Mark Colas & Suqin Ge, 2019. "Transformations in China’s Internal Labor Migration and Hukou System," Journal of Labor Research, Springer, vol. 40(3), pages 296-331, September.
    20. Deininger, Klaus & Jin, Songqing & Xia, Fang & Huang, Jikun, 2014. "Moving Off the Farm: Land Institutions to Facilitate Structural Transformation and Agricultural Productivity Growth in China," World Development, Elsevier, vol. 59(C), pages 505-520.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:pugtwp:332361. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/gtpurus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.