breaking news requests: from amy : millennials reporter of beijing's open space entrepreneurial revolution
can you tell us what is Beijing's overall open space about - is it future social/sustainability development of china or what? roughly how many people are there - from every province? (is there any local news coverage - send us a link if so)
my thinking is this - you will be the only person with opportunity to translate the final report into english and with access to knowing what maryland's harrsison owen most wants to share first with whom
because of my familys view in The Economist since mid 1970s that the future sustainability of all of us is connected to future sustainability of china almost everyone i have introduced you to could gain from a personal debriefing but could we start with thinking about three
In 1977 only a few months after the fall of the gang of four, The Economist's Norman Macrae wrote - what was in store for China was an end to boring ideology and a drive for economic growth. It did not make any difference whether the man carrying out this policy was Ping or Pong or Deng. The same is true in 1995. In recent interviews Singapore's Lee Kuan ew shared this view:
The Chinese are not ordinary people you know. They are the products of a very self-conscious civiliisation. self-conscious because they know they once did it (led the world) and now they are out of the race, they must get back into the race
1 how to debrief noah and his chinese partner- do you by the way have the beijing contact point on that? remember noah said he'd like lunch with noah- if things are going well with you and harrison can you start checking diaries with ranga
2 debrief friends at central park south, windsor and songs chinese boss who is number 2 connector of iccc -what would help me is to have a top 10 challenges discussed by friday even if these are a first draft
3 rome and latino youth - given all the summits on that we have attended from the iadb to blum in berkeley and with viguria's yabt -and my need on 7 november to help bernardo at the vatican and link that back to dean rolles hbu regeneration of communities across usa something a lot of my last 5 years has been spent on reporting studnts views on as has anna and bernardo as people who had hoped ataanta nov 2015 would be the number 1 youth summit if sustainability and peace and mandela/king legacy-since yunus and mayor of atlanta messed this up i will need to revisit the club of rome (both their green and peace wings) to understand their renewed network's diary of locations
4 how to start explaining this to interested people in the world bank and millennial leaders of Preferential Option Poor - have you previously read the world bank report on future of china cities and do you know kim is working on future of health service in china
https://www.worldbank.org/content/dam/Worldbank/document/EAP/China/WEB-Urban-China.pdf what could be more relevant to sustainability goal 11
i would say the first 28 pages of this report are essential reading - it shows this report is led by jim kim; it acknowlegdeges a whos who in china who was consulted; it provides an executive summary -what would be a one page summary of innovations relevant to this report that you can uniquely report on now?
chris macrae Economistchina.net map 4 hemi- celebration 2018's anniversary 175: mediate end poverty 240 316 8157
Executive Summary Over the past three decades, China’s urbanization has supported high growth and rapid transformation of the economy, allowing people—among them some 260 million migrants—to move from agriculture to more productive activities. In the process, 500 million people were lifted out of poverty, and China managed unprecedented growth that averaged 10 percent a year for three consecutive decades. China’s cities, with abundant labor, cheap land, good infrastructure, and competition among local governments to attract industry and investment, have created an environment that has been highly conducive to growth. Growing cities that have become increasingly connected with each other and with the rest of the world have added to productivity growth through agglomeration effects, and China’s mega cities now have income levels comparable to some member countries of the Organisation for Economic Co-operation and Development (OECD). China has avoided some of the common ills of urbanization, notably urban poverty, unemployment, and squalor. But strains are starting to show. China’s growth has been increasingly driven by investment rather than productivity, and investment has become less effective in generating growth at the national as well as the city level. Urbanization has relied excessively on land conversion and land financing, which is causing inefficient urban sprawl and, on occasion, ghost towns and wasteful real estate development. Barriers to migration have kept China’s urbanization rate too low, thus underutilizing people’s potential and exacerbating urban-rural income inequality. Unequal access to public services between citizens with urban household registration (hukou) and those without, although diminishing, remains and is a barrier to mobility. At the same time, the large influx of migrants puts pressures on urban services, and urban citizens perceive an erosion of service quality. Rural-urban land conversion has been inequitable in the distribution of its gains, has added to wealth inequalities, and has fed social unrest among farmers whose land has been expropriated. Despite progress in environmental standards and policies, the cost of pollution to the nation’s health is rising as China’s population is increasingly concentrated in cities. And land-intensive urbanization has reduced the availability of farmland, is competing for scarce water resources, and is adding to pollution that affects the quality of farm produce and food production capacity. China’s leadership is well aware of these challenges and has called for a new model of urbanization to match China’s evolving Urban china xxiii xxiv u rban china development goals and meet the emerging challenges. A new model can support more efficient growth through better allocation of land, labor, and capital; be more inclusive and share benefits of urbanization more widely than in the past; and be environmentally sustainable and safeguard China’s food security. China’s urban landscape will continue to change: the largest cities will likely become larger and boost their role as gateways to the world and centers of a diverse economy, moving increasingly into services, knowledge, and innovation. Secondary cities within metropolitan areas are likely to attract more land-intensive manufacturing, benefiting from specialization and links to markets. China’s large inland cities can compete with coastal cities if they are well connected to markets. Hinterland cities and rural towns would focus on activities with firm-level scale economies and on providing the public services that allow people to move to opportunities elsewhere. Better allocation of land, labor, and capital will accelerate the shift of industry to secondary cities, and as job opportunities open up in these areas, migration pressures in large cities are likely to moderate. As surplus labor diminishes with more rapid urbanization, the wage share in gross domestic product (GDP) will rise and urban-rural disparities will narrow. That would also promote consumption—increasingly driven by a growing middle class, whose demand will spur a more service sbased urban economy. More inclusive growth and more equitable distribution of income will reinforce the shift toward consumption, because lower-income earners consume more of their income than higher-income earners. A new model of urbanization requires a different role for government. Government should support rather than supplant market forces in shaping China’s urban landscape, allowing China’s cities to grow more organically and efficiently in response to market forces within the context of the government’s strategic development plan. Government would need to rebalance its involvement from exercising administrative control to regulating the market-based allocation of people, land, and capital across China and the provision of public services to support these allocations. At the same time, a growing number of people will be exposed to environmental hazards, and government would need to increase its effectiveness in enforcing existing legislation while enhancing market pricing to reflect environmental externalities in market transactions. The reform strategy underpinning this new role would focus on four areas: better policies on land, including creation of the institutions in which more market pricing for land can take place; removal of obstacles to people’s mobility, including reforms of the hukou system and provision of a minimum public services package across China; a fiscal and financial strategy that will make the new model of urbanization affordable; and a change in the incentives for local government officials to pursue the goals of the new urbanization model. The main benefit of reforms will be higherquality growth. The reforms proposed in this report—specifically regarding land, hukou, and fiscal system reforms, and a change in the incentives for local governments to attract investment—will make the allocation of land, capital, and labor more market based. That in turn will change the distribution of economic activities across China’s urban landscape. Accelerating the shift of industrial activities to cities where land and labor are cheaper would provide a stronger economic basis for those cities, and therefore promote small and medium-size cities. At the same time, this shift in industrial activities would also reduce migration pressures for the largest cities that would increasingly specialize in high-value services and innovation and attract higher-skilled labor rather than a lowskilled industrial workforce. Land reforms would improve the efficiency of rural and urban land use and increase the compensation rural residents receive from land conversion, thus improving the distribution of income and wealth. Land reforms will also likely lead to denser cities, which would reduce the energy intensity and car use in cities, thus improving environmental sustainability. And reduced land use for urbanization would leave more land for environmental services and agricultural production. Hukou reforms and supporting reforms in public services would increase the mobility of workers across China and added to their productivity and wages. It would also accelerate rural-urban migration, which combined with land reforms, would accelerate agricultural modernization and increase rural incomes, thereby reducing rural-urban income inequalities. More equal service delivery across China would expand the equality of opportunity for all China’s citizens. Better access to housing finance for migrants would allow them to acquire urban property and benefit from capital gains, thus reducing growing wealth disparities. Fiscal reforms would generate the revenues to finance a minimum package of services across China and reduce the need for landbased financing, while limiting the risk to the financial system resulting from unregulated borrowing by local governments. Fiscal and financial reforms would also exert more discipline on local governments, thereby reducing the wasteful development of ghost towns and empty industrial parks.
Six priorities for establishing a new urbanization model emerge from this study.
First, reforming land management and institutions. More efficient land use, denser cities, modernization of agriculture, and better income and wealth distribution between rural and urban areas all require more efficient and equitable utilization of land. A critical element of reforms is the current land system, which can be improved by better protecting land rights and optimizing the use of land resources in rural and urban areas. Land rights could be better protected by: (1) legalizing the central policy of “long term without change” for farmland leases and specifying the nature of the contractual rights to farmland, including the rights to occupy, use, profit from, transfer, mortgage, and bequest land; (2) improving land title registration by enforcing written land leases, establishing a register for land titles and land transactions. Over time, a unified land registration system based on unified rules, standards, and procedures applicable to all land should be established; (3) reforming collective ownership by codifying that collective assets belong to the collective’s members, clarifying membership and qualifications for entering and terminating collective membership, and defining rights to collective assets, including the rights to occupy, use, profit, transfer, withdraw with compensation, mortgage, guarantee, and bequest an inheritance of those rights; and (4) defining “public interest” for which the government can exercise its eminent domain power, while unifying the principles and standards for rural and urban land expropriation. Rural and urban land use could be further optimized by (1) allocating rural land in a more market-driven way. In line with landuse plans and regulations, government could clarify equal market entry of collective and state construction land, while the collective construction land that has already entered into the urban market needs to be classified accordingly and integrated into urban master plans and managed according to the law; (2) integrating urban villages into the formal urban development process and allowing the use of rural collective construction land in peri-urban areas for urban development within the framework of urban master plans; (3) shifting land use from industry toward services and residential use, increasing transparency in the secondary land-market transactions, and boosting the availability of land for low-income housing from vacant government land and consolidated urban village land; and (4) pricing of industrial land in line with competing uses to improve the use of this land and strengthen local government finances.
Second, reforming the hukou system to create a mobile and versatile labor force with equal access to a common standard of public services. To achieve this, the household registration system would need to move from an origin-based to a residence-based xxvi u rban china system. The hukou system and residency system can operate in parallel. A residency registration would provide access to services such as education, health care, welfare, and affordable housing, whereas hukou could be maintained to provide land rights. As land reforms and pension reforms progress, this balance could be adjusted in the future. Central government needs to define the rules for establishing residency and a framework for extending access of new residents to urban services. Initially, local variations in levels of access and the timeframe in which new residents gain full access to services may be necessary, but standards for residency should be gradually unified across China. The first priority is to enable migrants and their families to better integrate into urban society and provide them with the social services they need— which would likely require a central fiscal subsidy to those cities that host a large share of migrants. In the medium term, reforms in social services and the public finance system could allow a nationwide common service standard, irrespective of location. Sustainability and portability of pension benefits are of particular importance and would require central administration over time. Further developing a fiscal system based on expenditure needs and revenue capacity would lay the foundation for equal access to a minimum level of public services across China.
Third, placing urban finances on a more sustainable footing while creating financial discipline for local governments. China’s fiscal system has served the country well since the major reforms of 1994, but further reforms will be required to meet the public service demands from new urban residents and lower revenues from land financing as excessive land conversion is phased out and compensation standards improve. For local governments to make optimal choices when using scarce resources, reforms in the fiscal and financial systems should impose hard budget constraints on them. There are four priorities for reforms: • Improve the revenue base of local governments by mainstreaming a property tax on housing—gradually phased in to allow people to adjust—to provide local governments with a stable, sustainable source of finance linked to land prices; charging higher prices for urban services such as water, energy, and transport to cover full costs and promote efficient use of resources; and increasing taxes and charges on motor vehicles to raise revenues and reduce congestion. China could also consider reassigning some consumption taxes to local government—possibly while maintaining central collection. Irrespective of the policy choice on local revenues, at the margin China’s cities must be financed from local taxes so that local government decisions will be scrutinized by those that pay the taxes and benefit from public services. • Improve the intergovernmental grants system. In 2013, China had some 200 different earmarked grant programs, each meeting separate objectives. Consolidating these in a limited number of sectoral block grants could make the system more effective in the short run. In the medium term, moving to a general grants system that considers revenue capacity and expenditure needs (including a measure for the number of residents) would ensure that money follows people and would enable local governments to provide a minimum level of public services for all citizens. Central government would also need to develop standards for the subprovincial fiscal system, where large fiscal inequalities remain. • Establish an explicit framework for local government borrowing. Allowing local governments to borrow requires a welldefined central government framework, which should include rules that define which local governments can borrow, from whom they can borrow, and the conditions under which they can do so, and which, at least initially, puts limits on borrowing for individual municipalities and for local governments as a whole. The regulatory framework should also include a credible no-bailout commitment by the central government and clear rules of debt workout in case a local government becomes e x e c ut i v e su mmary xxvii overindebted. Nonviable local government financing vehicles (LGFVs) should be reabsorbed within the local administration, and overindebted governments and LGFVs restructured to regain financial viability. • Reform the financial sector to enhance fiscal discipline of local governments. In other countries, market discipline alone has regularly failed to limit local borrowing, so China would need to regulate the bond market, banks, and shadow banks on equal footing to ensure local government discipline and competitive access to finance without undue risk to the financial system. For the local government bonds market to function well, local governments would have to abide by independent creditworthiness assessments and rules on disclosure of financial statements, requirements that are already common for banks and enterprises. In the short term, bank finance will remain important, however, and to ensure that local government borrowing does not risk banks’ stability, legal and regulatory limitations already in place should be enforced. These include exposure limits, which cap a bank’s loan exposure to a single client; concentration limits, which restrict a bank’s exposure to a certain type of client, such as all local governments taken together; and insider lending limits, which limit lending to the owners or co-owners of the bank. After experiencing widespread subnational defaults, countries such as Brazil banned subnational ownership of financial institutions.
Fourth, reforming urban planning and design. Global experience shows that urbanization has led to a diversity of viable and livable cities, different in size, location, and population density, but well connected at the national level and clustered at the local and regional levels. Rather than prescribing city size, policies that create a level playing field can encourage scale and agglomeration economies across cities to emerge. China would benefit from replacing the current standards-driven master planning with more dynamic approaches based on sound economic strategies for cities. Within cities, flexible zoning that promotes smaller plots and greater mixed-land use would allow for denser and more efficient development. China could make better use of existing urban land by rezoning excess industrial land into commercial and residential land; raising floor area ratios (the ratio of a building’s floor area to the land on which it sits); integrating urban villages into urban planning; and linking transport infrastructure with urban centers. Finally, promoting coordination among cities in metropolitan areas and city clusters would enhance agglomeration benefits and encourage better management of congestion and pollution.
Fifth, managing environmental pressures. China already has an impressive set of environmental laws, regulations, and standards, and many technical solutions to address pollution and increase resource use efficiency have been piloted and some mainstreamed for many years. Improvements will therefore come with a strengthening of the institutions, incentives, and instruments that enable effective enforcement across sectors and at an appropriate geographic scale. An intergovernmental transfer mechanism to compensate for environmental compensation could be considered. Management of water and air quality, the latter especially in large urban clusters, would be most effectively conducted at a regional scale. An improved data collection system with wider information dissemination would promote monitoring and compliance and allow greater public participation in holding polluters to account. The legal system could be better leveraged to complement government enforcement by expanding and formalizing current experiments with environmental courts. Furthermore, rebalancing environmental policy instruments toward more market-based tools such as taxes and trading systems for carbon, air, and water pollution, and energy use would create a greener urban environment.
Sixth, improving governance at the local level. The performance evaluation system of local officials could be adjusted to give greater weight to variables that will drive a more efficient, inclusive, and sustainable urbanization. Local governments’ incentives to attract industries would need to be moderated by national rules to ensure that local actions promote national goals. Improving local government financial management and transparency could contribute to more efficient and sustainable urbanization through the introduction of a medium-term expenditure framework, comprehensive budgets that include all government fiscal funds, and disclosure of full financial accounts including a local government balance sheet. Establishment of a chief financial officer for each local government would ensure clear accountability for financial management and local borrowing.
Finally, new governance structures for metropolitan areas could realize agglomeration benefits and manage externalities. Many administrative models exist in other countries and could be tested in China. They range from loose organization, with objectives restricted to one sector or fully integrated across all local government planning and services to more formal arrangements, such as the Kreis in Germany or the metropolitan area councils in a variety of countries. Timing, sequencing, and monitoring. The policy agenda proposed in this report is a comprehensive one, and authorities will need to set priorities. Perhaps the most urgent is the land agenda: once cities have expanded in an inefficient way, it is hard to reverse. While government prepares for stronger property rights for farmers, it may wish to tighten land conversion and make more efficient use of existing urban land. Second, government would need to focus on local borrowing of all kinds, first and foremost to assess whether the situation requires urgent action, as has already been done through the recently completed audit of local debt by the National Audit Office. Rules for debt resolution will have to be issued and applied, especially regarding instituting a system of property taxation, a source of stable revenue. Formal access to borrowing will have to wait until a full regulatory framework is in place, and preferably after local government revenue sources have been strengthened. A decision on a temporary fiscal subsidy for integrating migrants would accelerate the implementation of a residency system and could be made early on. Finally, market-based conversion from rural to urban land is likely to require more experimentation before it can be mainstreamed nationwide. Other systemic changes in the policy areas discussed could come later, but presenting a comprehensive plan for implementing the agenda and establishing a monitoring mechanism for followup would lend credibility to the urbanization agenda.