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Urbanization and Rural Development in the People’s Republic of China

Author

Listed:
  • Zhao Chen

    (Asian Development Bank Institute)

  • Ming Lu

    (Asian Development Bank Institute)

  • Pengtu Ni

    (Asian Development Bank Institute)

Abstract

This paper presents research findings on how urbanization enhances productivity and economic growth in both urban and rural sectors. Through agglomeration effects, employment opportunities and income levels can largely increase. In addition, the mechanisms of sharing, matching, and learning are much stronger in cities, especially large cities. However, in the People’s Republic of China (PRC), urbanization lags far behind industrialization. Institutional barriers against rural-to-urban and interregional migration, such as the hukou system, have reduced the ability of urban growth to absorb rural labor. As for rural development, urbanization has propelled agricultural productivity, rural income, and consumption levels. Moreover, agricultural productivity is driven to a large extent by capital accumulation, through capital deepening and remittance. Agricultural organizations, urbanization, and outflow of migrant workers make it possible for large-scale production and agricultural mechanization to occur.

Suggested Citation

  • Zhao Chen & Ming Lu & Pengtu Ni, 2016. "Urbanization and Rural Development in the People’s Republic of China," ADBI Working Papers 596, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:0596
    as

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    References listed on IDEAS

    as
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    5. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November.
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    More about this item

    Keywords

    Urbanization; rural development; PRC; China; hukou system; productivity; economic growth; 都市化; 農村開発;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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