Rethinking China's urbanization: an institutional innovation perspective

BUILDING RESEARCH & INFORMATION (2006) 34(6), 573– 583

Rethinking China’s urbanization: an institutional innovation perspective Kaixun Sha,Tao Song, Xia Qi and Nengjun Luo Shandong Jianzhu University, 47 Heping Road, Jinan 250014, P. R.China E-mail: [email protected]

During the past two decades, China has witnessed a rapid rate of urbanization and is faced with unique problems due to the country’s natural resources, history, society, economy and culture. The role of institutions is examined as a fundamental ingredient for sustainable urbanization in a Chinese perspective. The context within which China’s urbanization is proceeding is analysed and the urbanization progress is briefly reviewed. The contradictions exposed in the urbanization progress are identified and the institutional defects behind these problems are analysed: the overreliance on gross domestic product (GDP) as an indicator, inappropriate assessment systems for local government, the urban–rural dual structure, the legal system, and building regulations. It is concluded that China’s urbanization progress is too fast to be sustainable and that accomplishing sustainable urbanization in developing countries, particularly during their transformational period, cannot be best understood in terms of technical and monetary factors. Instead, the urbanization process can be formulated within a context of institutional innovation. Essential institutional innovations at both the central and local government levels are required: improving the performance appraisal system to regulate officials’ behaviour; reforming the dual socio-economic system to cure ‘town– country syndrome’; strengthening the legal system to bring it more in line with the requirements of a market-oriented economy; and revising building codes and standards to implement green plans and programmes. The ‘scientific perspective of development’ proposed by China’s new national leadership indicates a break from an overwhelming emphasis on GDP growth, and is expected to provide a multifaceted approach giving impetus to a more sustainable approach to urbanization. Keywords: building stock, cities, governance, institutional innovation, planning, public policy, sustainable urban development, urbanization, China Au cours des deux dernie`res dećennies, la Chine a connu une urbanisation rapide; elle est aujourd’hui confronteé a` des difficulte´s uniques qui ont pour origine les ressources naturelles du pays, l’histoire, la socie´te´, l’ećonomie et la culture. Cet article examine le roˆle des institutions en tant qu’e´le´ment fondamental d’une urbanisation durable dans une perspective chinoise. L’auteur explore le contexte dans lequel la Chine s’urbanise et analyse le processus d’urbanisation. L’auteur souligne les contradictions qui marquent le progre`s de l’urbanisation et analyse les de´fauts institutionnels sous-jacents a` ces proble`mes: de´pendance trop importante du produit inte´rieur brut (PIB) en tant qu’indicateur, syste`mes d’e´valuation inapproprie´s pour les administrations locales, double structure urbaine–rurale, syste`me juridique et re´glementations concernant les baˆtiments. Il en conclut que l’urbanisation de la Chine est beaucoup trop rapide pour eˆtre durable et que l’urbanisation durable dans les pays en de´veloppement, notamment pendant leur pe´riode de transformation, ne peut eˆtre comprise en termes de facteurs techniques et mone´taires. Au lieu de cela, le processus d’urbanisation peut eˆtre formule´ dans un contexte d’innovation institutionnelle. Il faut innover au niveau des institutions, que ce soit au niveau central ou local: il faut ame´liorer le syste`me d’e´valuation des performances afin de re´gir le comportement des fonctionnaires; il faut re´former le double syste`me socio-ećonomique afin de reme´dier au syndrome de la ‘ville-e´tat’; il faut renforcer le syste`me juridique pour qu’il soit mieux aligne´ sur les exigences d’une ećonomie de marche´ et il faut re´viser les codes de la construction et les normes afin de mettre en œuvre des plans et des programmes ećologiques. La ‘perspective scientifique du de´veloppement’ proposeé par les nouvelles instances dirigeantes nationales chinoises fait apparaıˆtre une rupture due a` une importance ećrasante accordeé a` la croissance

Building Research & Information ISSN 0961-3218 print ⁄ISSN 1466-4321 online # 2006 Taylor & Francis http: ⁄ ⁄www.tandf.co.uk ⁄journals DOI: 10.1080/09613210600852730

Sha et al.

du PIB; cette perspective devrait aboutir a` une me´thode a` facettes multiples qui donnerait de l’ e´lan a` une approche plus durable de l’urbanisation. Mots cle´s: parc baˆti, villes, gouvernance, innovation institutionnelle, planification, politique publique, de´veloppement urbain durable, urbanisation, Chine

Introduction Historically, urbanization has been a necessary factor for a country to realize modernization. However, urbanization can be broadly categorized into two types: one is harmonious or sustainable, and the other is discordant or non-sustainable. The former means not only an increase in the ratio of urban population, but also a balanced development across various sectors and regions, giving rise to economic growth, full employment, healthy cities and prosperous villages. The latter is characterized by metropolitan symptoms such as urban slums, traffic congestion, pollution and crime, and a widened gap between urban and rural areas with the clear implication of too many and too high economic, social and environmental costs. In the face of challenges brought about by resource depletion, climate change and globalization, the sustainability of urbanization has increasingly attracted attention. The treatment of problems with rapid urbanization has been extensive in volume but narrow in scope. The main problem of the treatment is its focus, which is mainly upon urban planning (Sjoberg, 1999; Mee, 2002), the land use system, and the impacts of urban expansion on arable land loss (Chen et al., 2003; Zhang et al., 2004). The way in which a country deals with its urbanization can mean the difference between the success and failure of its sustainable development. Economic, social and environmental pressures produced by rapid urbanization are particularly keen in developing countries in Asia, Africa and Latin America, which have become an increasing concern in recent years. That is why ‘rapid urbanization’ was taken as the theme of 14th breakout session at the 2005 World Sustainable Building (SB05Tokyo) where a number of authors, including Miranda (2005), Gomez Tagle Morales (2005), Cesar da Costa (2005), Sha (2005), Biermann (2005), Lai (2005) and Morley (2005), focused their attention on the solutions to problems of rapid populating cities in developing countries and the validity of lessons from the developed world for these cities. China, the largest developing country, experienced rapid urbanization during the past two decades. The ‘single-engine’ of industrialization has been gradually replaced by the ‘double-engine’ of urbanization and industrialization. This structural adjustment will bring the country as well as the building sector 574

enormous opportunities and, at the same time, unprecedented challenges. Taking China as a background, the present paper examines the sustainability of urbanization from the viewpoint of institutional innovation. First, the context within which China’s urbanization is proceeding is analysed and the urbanization progress briefly reviewed. The contradictions within the urbanization process are then considered and the institutional defects behind these problems are identified and analysed. It is concluded that China’s urbanization progress during the past two decades is too fast to be sustainable, that a strategic adjustment is necessary, and that institutional innovations at both the central and local government level are prerequisite, which involves the reforms in formal institution (regulations and codes) and informal institution (cultures and conventions).

Unique context The issues of China’s development could be summarized as an agricultural country pursuing industrialization with an expanding population and deficient resources (Wen, 1999). Consequently, the environment in which China implements its urbanization programme is substantially distinct from developed countries. This must be taken into account when examining China’s urbanization and seeking to import approaches from other countries. The context of China’s urbanization is noted in three points as follows: .

Large population: as the most populous country in the world, China has about a 1.3 billion population, from which two mathematical problems can be derived. One is multiplication, and the other is division. In the multiplication scenario, no matter how small and negligible an economic or social problem seems to be, once multiplied by 1.3 billion, it becomes substantial. The division scenario is no less thought-provoking. No matter how abundant are China’s financial and material resources, once divided by 1.3 billion, the percapita level will be considerably low.

.

Dual socio-economic system: over a long period China adopted a strategy that gave priority to the development of heavy industry. In order to mobilize resources and lower the costs of capital accumulation, a special household registration system, Hukou,1 was designed to keep the bulk

Rethinking China’s urbanization

of the population in rural areas and restrict migration. In consequence, a dual structure, or ‘one country, two policies for urban and rural areas’, was developed that drew agricultural revenue to support industrial development, made a wide gap between urban and rural areas, and at the same time made the progress of urbanization considerably lag behind that of industrialization. .

Dominant government: China is at a transitional stage from a planned economy to market-oriented one. Due to the immature nature of the market, the incomplete nature of legal system and backwardness of political system reform, the government is still acting in a dominant role in various situation. The progress of urbanization, therefore, is inevitably influenced by many non-market elements, including changes of development philosophy, an adjustment of development strategy and changes within the government.

It is natural that perceptions of the main elements and principles of sustainable urbanization are different in various contexts. China’s unique context requires a suitable framework to provide guidance for good practice in urbanization based on well-accepted and understood concepts and ideas. However, sustainability itself is a multifaceted concept and process, and has been examined via a diverse range of perspectives. It is argued that the experts on ‘sustainability’ are split between those favouring conservation and those advocating the meeting of human needs (Ofori, 1998). The economic ‘capital assets’ approach has led to a clear distinction between the weak sustainability (WS) and strong sustainability (SS) positions (Pearce, 2006; Turner, 2006). Various principles of sustainability have been consequently derived from often divergent perspectives and definitions. In order to set up a sound analysis framework, it is necessary to make a careful choice and trade-offs among these principles. Based on China’s actual situation and using the principles and framework developed by Hill and Bowen (1997) for reference, the basic meaning of ‘sustainable urbanization’ in the context of the present paper could be set out as follows: .

minimizing use or waste of the four generic resources used in construction: energy, water, materials and land

.

minimizing air, land and water pollution, and improving the built environment

.

constructing durable, reliable and functional structures rather than focusing on style at the expense of good function

.

coordinating the relationships between reform, development and social stabilization

.

bridging the gaps between the city and the countryside, and between different generations

.

facilitating the establishment of a conservationminded and harmonious society

Tortuous course Any country’s urbanization progress is path-dependent. Therefore, to understand fully the nature of China’s urbanization, one must go back to the mid20th century when the People’s Republic of China was founded. As shown in Figure 1, China’s urbanization process can be roughly divided into three phases. The first phase (1949 –65) witnessed a large-scale reconstruction. During this phase, the urbanization process was largely smooth, with a mean annual growth rate of 0.46%, although there was a fluctuation caused by unstable economic policies and natural calamities during 1958– 63. There was a process of adverse urbanization during the Cultural Revolution (the second phase) when a large number of the educated urban youth and urban residents were mobilized into the countryside and remote districts. The urbanization level was not improved over 13 years; on the contrary, it dropped from 17.98% in 1965 to 17.92% in 1978. The economic reform was launched in 1978, which marked the beginning of the third phase of China’s urbanization. During this phase, the annual growth rate of urbanization was 0.86% on average. According to the China Center for Town Reform and Development, Beijing, China’s urbanization rate was 37.7% in 2001. The number of cities increased from 193 in 1979 to 668 in 1999. The number of mediumsized cities has increased fairly rapidly, and that of small cities has grown the most rapidly (Jin, 2003). As shown in Figure 2, in the eastern coastal areas, city-groups or city-belts with extra-large cities as the centres have been formed, such as the urbanized areas of Bohai Bay (Beijing –Tianjin), the Yangtze River Delta (Shanghai –Hangzhou –Suzhou), and the Pearl River Delta (Guangzhou–Shenzhen –Zhuhai).

Figure 1 Urbanization process in China, 1949^ 2001. Source: http://www.stats.gov.cn/tjsj/ndsj/index.htm 575

Sha et al.

Figure 2 Three city groups in the eastern coastal areas of China

As an urbanization strategy has been placed on the agenda of governments at all levels as a critical issue, China has entered a period of fast growth in its urbanization. The urbanization rate is expected to grow from 37.7% in 2001 to 45% in 2010, to 50% in 2020, and finally to about 75% in 2050 (Jin, 2003). That is to say, within half a century China will reach an urbanization level that took developed countries three to four centuries to achieve. This means the urbanization rate should grow annually by 1.2 percentage points. One percentage point 576

increase in urbanization rate means 13 million additional urban residents, creating a series of social, economic and environmental pressures.

Multitude of contradictions Urbanization is a double-edged sword. While the urbanization process has greatly impelled China’s socio-economic development, it has also brought about unprecedented challenges. As discussed above, China’s urbanization is basically government-influenced due to


the dual socio-economic system. Therefore, it is not surprising that the urbanization-related problems in China are substantially different from those in the developed countries or even those in other developing countries. For example, it seems that the problems of the slums and informal settlements in China are less serious than those in other developing countries, while land misuse is taken as one of the most serious problems. No doubt there are numerous contradictions with rapid urbanization in China. However, given that the purpose of this paper is to find and analyse the adverse factors that hamper sustainable urbanization from the point of view of institutional innovation, the following contradictions have the precedence over the others: .

short-term saving and long-term waste

.

luxuriant form and poor function

.

developing the new and protecting the old

.

townspeople, country folk and immigrant workers

These problems should be properly treated, otherwise they will not only impair the sustainability of urbanization, but also influence the country’s modernization progress.

at highly inefficient rates. Due to poor thermal regulation, specification and performance, the energyconsumption level of most newly built dwellings is still three times as high as European standards. It was estimated that about 335 million tons of coal were lost annually in China due to the high level of building energy consumption (Sha, 2004).

Luxuriant form and poor function

The external appearance of buildings and cities in China is typically regarded as superior to its intrinsic function. This is a common problem for urban development in China. Local governments were vying with each other to build so-called ‘image projects’, often going beyond their means. As a result, a large amount of unnecessary large-scale projects were rapidly developed: oversized squares, wide boulevards and green belts, lighting for night scenes, and gimcrack buildings. A vivid example can be found in a small city with only 50 000 residents where a square large enough to accommodate 60 000 people was created. Compared with cities’ outward appearance, the effectiveness of urban functions, particularly the traffic system and inconspicuous facilities, such as water supply and sewage systems, were neglected. That is why so many cities are highly vulnerable to heavy rain that can make the traffic system breakdown instantly.

Short-term saving and long-term waste

Too much emphasis was placed on saving capital cost, while insufficient consideration was given to life cycle cost. This resulted in shortened lifetimes for buildings and other infrastructures as well as higher levels of energy consumption. Safety standards in the Chinese design code for civil engineering are generally lower than those in the developed countries. For example, the capacity load of an office building designed with the Chinese code is only about 52% of that of the US (Chen et al., 2002). An investigation conducted by the Ministry of Construction noted that the majority of industrial buildings in China will have to be overhauled 25 –30 years after their construction. The service life of buildings under adverse circumstances is only 15 –20 years. It is expected that largescale construction might continue for 20 years. This is actually ‘deconstructive’ construction because the larger is its scale, the more inferior buildings and facilities it produces. After that China would face a 20-year-long period of large-scale overhaul (Chen et al., 2002). There is little doubt that the economic and ecological costs of the overhaul will be several times over that of construction. In terms of energy consumption, the unnecessary waste is also substantial. China’s total floor area of existing building stock amounts to 40 billion m2, but the proportion of energy-efficient building is less than 4%. Furthermore, the annual area of completed buildings in recent years is about 2 billion m2. However, more than 90% of this new stock still consumes large amounts of energy

Developing the new and protecting the old

The urban development in Beijing, the capital city of China, is a typical case to discuss the relationship between developing the new and protecting the old. The urban development and renovation of Beijing’s old city have been accelerated in recent years. The guiding principle is to demolish old and low-density buildings and erect new and high-density housing. As a result, the building area of the old city was considerably increased from 20 million m2 in the early 1950s to over 50 million m2 in 2004 (Wang, 2004). The area of the old city is 62.5 km2, about 6% of Beijing’s total planning area. However, the functions and traffic amount that the old city has to bear are, respectively, 40 and 33% of that of the whole city, which has become a puzzle that badly hampered the city’s operation efficiency. The renovation of Beijing’s old city is also a cultural issue. More attention to keep the traditional city pattern, architectural motif and city landscape should have been made. Unfortunately, many cultural relics have been destroyed since the foundation of the People’s Republic of China. In order to prevent traditional culture and valuable relics from dying out, 30 historical sectors were identified as protection areas in 2000 and 2002, making up 21% of the old city in terms of area. However, the situation is still worrying because other areas that do not belong to 577

Sha et al.

the protection areas are facing ‘legitimate’ destruction. In the old city’s renewal, the future and destiny of Siheyuan,2 a traditional Chinese architecture of quadrangle, as shown in Figure 3, has become the focus of public opinion. The tug-of-war between protecting Siheyuans and erecting high-rises, or rather between culture and capital, is far from a close game. Many Siheyuans are being torn down, and quite a large proportion of those who have enjoyed courtyard living for generations have moved to high-rise blocks in new residential areas. If Siheyuans were to disappear, Beijing’s traditional culture would be practically wiped out.

Townspeople, country folk and immigrant workers

In China, the ‘countryside’ is not only religious concept, but also a political concept. Similarly, the ‘peasant’ refers to both a professional status and a social status. The dual socio-economic system has created fast-growing cities, leaving behind backward rural areas inhabited by a colossal population. The gap of per-capita income between rural residents and urban dwellers has enlarged by a factor of 6 –7 (Chen, 2005). The inequality between the ‘agricultural’ and ‘non-agricultural’ population has induced the so-called ‘town –country syndrome’, characterized by insufficient domestic demand and a weak market, and it has become a major obstacle to harmonious development (Sha and Jiang, 2003). With the constantly rapid growth of economy, a large number of rural surplus labourers have been migrating into cities, forming a large community of immigrant workers. They work as casual labourers in cities throughout the year, but still belong to the ‘agricultural’ rather than the ‘non-agricultural’ population. They make a substantial contribution to the development and prosperity of urban areas, but cannot enjoy the same rights and treatments that urban residents receive. The majority of immigrant workers live in informal settlements; most of these are located in the outskirts of cities, forming so-called ‘villages

in the city’. With very poor living conditions, a lack of public security and a transient population, these villages in the city provide a poor quality of life, presenting a striking contrast to the downtown.

Institutional defects and institutional innovations Any development pattern is a reflection of given development philosophy. The adverse situation mentioned above indicates that there is something wrong with China’s urbanization strategy. This raises a series of questions. What is the essence of urbanization? Does it simply mean expanding the city scale or increasing the urban population? Has China been taking the right track to urbanization? Is the target rate of 75% the best choice for urbanization in China? Should China follow the same road taken by Western countries in their early stages? Obviously, solutions to these questions involve various aspects, but the most important and imperative task is to investigate the institutional defects at a strategic level and suit the remedy to the case.

Over-reliance on gross domestic product (GDP) as an indicator

A good point for beginning the consideration of the problems with China’s urbanization is by referring to the values that put undue emphasis on gross domestic product (GDP) growth and which has dominated China’s development practice over a long period. It is a stated intention that the purpose of urbanization is to create a coordinated development of economy and society, to reduce the urban –rural gap, and to harmonize the relationship between humankind and nature. However, it is clear that China’s urbanization strategy did not achieve these objectives. Instead, it brought serious deficits in terms of land, energy, water and environment, as well as widening the gaps between

Figure 3 Beijing’s Siheyuan: a bird’s-eye view (left) and the entrance (right). Source: http://www.chinadaily.com.cn 578


urban and rural areas, and between coastal and inland regions (Zhang, 2005). It is the ‘GDP-first’ values that made the urbanization drive deviate its original intention. Governed by a system that rewards the GDPfirst values, people were willing to comply by undertaking activities to boost local GDP figures. To many government officials urbanization is narrowly interpreted as the expansion of cities, and managing cities is narrowly interpreted as managing land. Requisitioning land at a low price and selling it at a high price has become a quick way for some local governments to increase fiscal revenue and political achievements (Lan, 2003).3 Furthermore, ambitious plans for urban development were rapidly made without coordination or feedback. For example, of China’s total of 660-odd cities, more than 100 were aiming to transform themselves into international metropolises. In contrast to these unrealistic objectives, many important issues that determine the success or failure of sustainable urbanization strategy, such as employment, environmental protection and the bearing capacity of natural resources were underestimated. The disadvantage of the GDP-first values has recently become an increasing concern in China. A growing number of people are recognizing that the country’s continued prosperity will depend on expanding its focus from one that solely concentrates on GDP growth to one that upholds harmonious and sustainable development. The ‘scientific perspective of development’ proposed by the new national leadership in 2003 indicates a break from the GDP-first values. The new thinking distinguishes itself not only for its people-first approach, but also for a fresh understanding of the relationship between humankind and nature. The new concept entailing a green GDP gives the impression that society is seriously rethinking the way of development, and is expected to give great impetus to sustainable urbanization. While the people-centred style of development appears more attractive, ethical and appropriate for the future, the sustainability of urbanization depends on the institutional context in which China’s urbanization is proceeding. Essential institutional innovations at both the central and local government level are as follows:

.

improving the performance appraisal system to regulate officials’ behaviour

.

reforming the dual socio-economic system to cure ‘town– country syndrome’

.

strengthening the legal system to accommodate the requirements of a market-oriented economy

.

revising building codes and standards to implement green plans and programmes

.

providing market and non-market incentives for slower and ‘greener’ growth

.

improving the knowledge base and capabilities for implementing sustainable urban development in the construction, property and planning professions

Institutional assessment

The current assessment system for local governments and officials is a logical outcome of the GDP-first values. Under this system, GDP growth is taken as the critical indicator to measure officials’ performance and, ultimately, making the difference between their promotion and demotion. In order to reveal the institutional defects of the system, Zhou (2004) develops a model that describes the political rivalry between local officials, exploring the effect of promotion incentives of local officials on the competition and cooperation between regions. The analysis shows that the political competition is a zero-sum game in which one participant’s gain is exactly another one’s loss. In other words, one official’s promotion implies his or her counterpart’s failure. As a result, individuals’ rational choices result in collective irrationality, landing the interested parties in a so-called prisoner’s dilemma. Under this system of rivalry, local officials have little room for cooperation but much more room for improper competition. This has created a deep-rooted mind-set favouring short- over long-term interests, outward image over practical function, the city over the countryside, and new development over protecting/maintaining the old. To change a kind of behaviour, one must begin by changing the institutional circumstances that induced this behaviour. Given that the existing performance assessment system created a situation in which people were eager for quick success and instant benefit, it is essential to reform thoroughly the unreasonable indicator system and assessment system, and thereby to create an institutional environment in which various factors, including general and local interests, longand short-term interests, could be taken into consideration holistically. Guided by the new objective of ‘scientific perspective of development’, the reform has obtained some initial results. Many ‘image projects’ or ‘administrative-performance projects’ have been cancelled. During a press conference held in 2003 by the State Council Information Office, Qiu Baoxing, Vice Minister of Construction, said that the government had cancelled half of the 6000-odd economic development zones across China in the past six months. However, it is unrealistic to cancel a system that lasted for a decade in one day. Therefore, it will take time to change thoroughly officials’ ideal and behaviour. 579

Sha et al.

Urban^rural dual structure

Generally speaking, the wider is the gap between urban and rural areas, the more complex and acute are the contradictions with urbanization progress, and vice versa. On the one hand, a robust and sustainable urban development depends on agricultural production and the maintenance of natural resources from countryside to maintain the cities. On the other hand, the rate of urbanization depends on both the surplus agricultural labour and the belief that quality of life is better in the city than in the countryside. In fact, it is the poorly performing agricultural sector that has slowed China’s urbanization as more workers are needed in agricultural production. China’s agricultural productivity is so poor that every rural labourer can only feed three to four people, while this figure is 160 in Denmark, 112 in the Netherlands, 90 in Israel, 75 in the US and 67 in Germany (Lan, 2005). Human resources in the agricultural sector are also worrying. Of the people engaged in agricultural production, fewer than 1% have a university degree and about 20% are either illiterate or semi-illiterate. That is why there are about 120– 150 million surplus rural labourers on the one hand, while the transition of rural labourers to the non-agricultural sectors is difficult to realize on the other hand. As an intangible barrier between urban and rural areas, the Hukou system must be thoroughly reformed. The key to the reform lies in removing inappropriate functions annexed to Hukou, so that both rural and urban citizens can enjoy the same rights and opportunities in terms of employment, education and social welfare. Since 1997 the Hukou system reform has been tested in some cities by lowering the threshold for entering the city. At present, however, those who have benefited from the reform are mainly the talented and the propertied rather than farmers and immigrant workers. In order to achieve nominal or pseudo-urbanization, some local governments have simply changed farmers’ agricultural Hukou to a non-agricultural one, without the benefits accompanying the newly acquired Hukou. As a result, these new migrants enjoy neither a minimum living allowance that was granted to original urban residents, nor preferential policies that the state provided for farmers. That is why some new migrants prefer to be restored to their original status rather than keep the vain status of a ‘city dweller’. Reform should be a gradual course rather than a sudden one because it is a formidable task for cities to develop an adequate infrastructure, facilities and dwellings, and to provide enough employment opportunities and basic social guarantees to incoming migrants. This is vividly illustrated in Zhengzhou city, the capital city of Henan province. Zhengzhou started the Hukou system reform in November 2001 and took in 100 000 people within a year. In August 2003 the city went even further and 580

loosened the restraints on obtaining local urban Hukou; as a result, another 150 000 people surged into the city in less a year. The pressures caused by an unexpected rapid rise in the population were so large that the city had to call a halt to its ambitious reform in August 2004 (Chen, 2005). Given that rural people account for two-thirds of the country’s overall population and that the gap between urban and rural areas is so wide, it will be impossible for China to solve its rural problems through urbanization in the short-term. The solution to China’s puzzle of a dual urban –rural structure lies in the balanced development of the agricultural sector and the non-agricultural sectors. It is argued that to achieve sustainable development, China needs to slow its urbanization process and, at the same time, attach equal importance to both urban and rural development. In practice, this will mean creating more rights and opportunities for rural dwellers to make a living in the countryside an attractive, desirable proposition. An appropriate annual growth rate of urbanization may be 0.6 –0.8% rather than 1.0 –1.2% as originally expected (Zhang, 2005).

Legal system

The rule of law symbolizes the progress of human civilization and serves as an important means to safeguard social justice and legitimate rights and interests of citizens. A robust legal system means that there must be a clear set of laws, that the laws must be strictly observed and enforced, and that law-breakers must be prosecuted. This is of particular significance to regulate various stakeholders’ behaviour and to terminate the disordered situation in rapid urbanization. China’s heavy historical burden of more than 2000 years of feudal history has made an arduous task of creating public awareness of the law. Moreover, the sustainable development is still a relatively new issue in both China’s legislative and judiciary fields. Therefore, it is not at all surprising that China’s legal system is far from suitable for accomplishing sustainable urbanization. China’s efforts to build the rule of law have made laudable progress in the past 26 years since the initiation of reform and the ‘opening-up’ drive, bringing the legal system more in line with the requirements of a market-oriented economy and international practice. It is expected that a relatively sound framework for the legal system with Chinese characteristics will be established by 2010. As such, China has the opportunity to legislate in an integrated way. Using the experiences of the developed countries for reference, the new legal system will contain the items concerning economic growth, social justice and environmental protection in a holistic way. As regards sustainable urbanization, laws or regulations relating to land use: urban planning, environmental protection and cultural


heritage production, are of particular significance and should be taken into account in the first place. This could produce a favourable shift toward more sustainable practices. Strict measures are being taken by central government to curb the practice of violent land enclosure because unlawful land enclosure has seriously infringed upon farmers’ interests and imperilled grain production and supply.

Building and planning regulations

Many problems with rapid urbanization arise from poor urban planning and design; therefore, better regulations could contribute significantly to reducing waste, increase the durability of buildings and their components, increase the understanding and acceptability of sustainable urbanization, and form planning policy based on sustainable land use. Any given building code or standard represents the development level of a given country in terms of natural and economic resources, science and technology. The Chinese building codes, including the guidance of urban planning, safety standards, thermal performance and the lifetime of buildings, are generally lower than those in developed countries. The majority of existing building codes and standards lag behind technological advances. Furthermore, some building codes developed by different institutions contradict each other, creating confusion and conflicts in urban planning, design, construction and operation. To respond to the ‘scientific perspective of development’, a programme of ‘energy-efficient, land-saving and environment-friendly building initiation’ has been proposed by the Ministry of Construction. In order to implement this programme, China’s building sector has taken measures to revise existing codes and standards and develop new building regulations in some categories. For example, those for the passive solar energy heating of buildings and for innovation in walling materials have been revised. In addition, a revised Building Code for Dwellings has been issued recently, the principles of performance-based building being adopted. Generally speaking, however, this is an arduous task because it deals with a wide range of problems, including economic and technological issues. It is still desired that building regulations be advanced in terms of technology, natural resources, life cycle economics and environmental issues. However, it may be neither rational nor possible for China’s building sector to attain the internationally advanced level in one step by indiscriminately copying the experience of developed countries. The key to the question is to make a ‘trade-off’ between the costs and the benefits, and to establish acceptable parameters for compromise, taking account of both current conditions and future development.

It has been proved by the developed countries’ practices that building environment assessment is a crucial mechanism to promote sustainable construction and urbanization. Cole (2004, p. 100) suggested that: Building environment assessment methods are voluntary in their application and current success (both in terms of the amount of total new construction floor area being assessed and of practitioner acceptance) can be either taken as a measure of how proactive the building industry is in creating positive change or its responsiveness to market demand. Unfortunately, China’s building, property and planning sectors have not attached enough importance to the development and application of building environment assessment methods, revealing the country’s poor institutional environment and weakness in terms of innovation capability. Nevertheless, academic institutions and professionals are duty-bound to introduce, research, develop, and demonstrate these methods and their viability. In addition, academic and professional institutions have an important role in improving the knowledge and capabilities of practitioners. The general public’s awareness of green building is to a great extent a function of their education level. Therefore, it is essential to raise people’s education level and to provide demonstration projects so that the sustainable concept and practices can be better understood and accepted.

Conclusion Demographic changes, resource depletion, climate change, globalization, technological advances, and worldwide political and economic reform are making the world increasingly chaotic, volatile, and crisesprone. This situation requires a completely new mind-set of development. In such an environment, both the developed and developing countries around the world are increasingly accepting the need for a sustainable approach to development and urbanization. During the past two decades China experienced rapid urbanization at an unusual rate. However, the urbanization process proved far from sustainable, being characterized by resource deficits, environment pollution, and a widened gap between urban and rural areas. Due to China’s large population, its dual socioeconomic system and a dominative government, accomplishing sustainable urbanization in the country will be a challenging task. Urbanization is the process of transiting the population from the countryside to the city, from the agricultural sector to nonagricultural sectors. As such, urban development should be treated as a horizontal slice cutting across various sectors rather than as a vertical sector in 581

Sha et al.

itself. The sustainability of the process requires a welldeveloped agricultural sector to support an urban culture, robust migrants with skills and capabilities suited to urban life, and well-equipped cities that have enough capacity to accommodate incoming migrants. Unfortunately, meeting these requirements in a short time has proved difficult. Therefore, it is necessary for China to slow its steps toward urbanization, otherwise the consequences in terms of natural resources, environmental protection and socio-economic development might be ‘disastrous’. Urbanization is an extremely complex process with widespread social, political, economic, technical, and cultural implications involving conflicting interests between various stakeholders in the city and the countryside, and between different generations. In essence, the term ‘sustainability’ implies a commitment of the present generation to later generations, while the focus of the market society is typically oriented towards only the immediate. All too often the government also has an immediate focus and fails to provide the long-term view. The majority of problems and contradictions with rapid urbanization arose from China’s institutional defects rather than a lack of advanced technology and financial strength. Therefore, accomplishing sustainable urbanization in the developing countries, particularly during their transformational period, can be best understood not in terms of technical and monetary factors, but rather in terms of institutional innovation. It is institutions, and informal institutions in particular, that are a fundamental force for promoting sustainable urban development. Given that so-called ‘market failure’ and ‘government failure’ exist side by side, institutional innovations require an approach to facilitate the coordination and interactions between market and non-market factors. Unfortunately, while sustainable urbanization demands the thoughtful and far-sighted attitudes that inspire people to implement urbanization in a sustainable way, the current institutional environment does encourage short-termism and mediocrity. The political rivalry between local officials reveals the defects of current assessment system. The dual urban –rural structure is also the underlying cause of the adverse situation. Building and planning regulations that are relatively technologically advanced, economically feasible, and environmentally robust, and, in particular, suitable to China’s conditions, have potential to make a significant contribution to promoting the sustainable urbanization. It is little doubt that reforms relating to assessment system, dual urban–rural structure and regulatory system will play a crucial role in creating a favourable institutional environment, and enhancing the sustainability of China’s urbanization. Although great efforts have been made to reconstruct a favourable institutional environment, this progress can 582

be lengthy and arduous, and is likely to be influenced by how well the spectre of the GDP-first values is eliminated. The importance of a development philosophy cannot be overstated, because once it is grasped, everything falls into place. The ‘scientific perspective of development’ challenges the powerful GDP-first values that currently pervade the society and shape people’s behaviour, and is expected to bring significant changes in the mode of thinking and institutional environment, and finally give great impetus to China’s sustainable urbanization.

Acknowledgement The research reported was supported by the Ministry of Construction (Grant No. 03-1-38) and Natural Science Foundation of Shandong Province (Grant No. Y2005H03). The authors would like to thank Mr Lu¨ Zhenhua for his constructive amendments to the first draft of this paper. The authors are grateful for the comments from anonymous referees and the Editor on a previous version of this paper. Of course, the responsibility for text is solely with the authors.

References Biermann, S. (2005) A cost–benefit approach to the identification of well-located land in rapidly urbanizing regions. Paper presented at the World Sustainable Building Conference (SB05Tokyo), Tokyo, Japan, 27–29 September. Cesar da Costa, R.M. (2005) Discussion of a common community participation platform for slum upgrading projects in Brazil. Paper presented at the World Sustainable Building Conference (SB05Tokyo), Tokyo, Japan, 27–29 September. Chen, W. (2005) In search of equality. Beijing Review, 48(49), 22–25. Chen, Z.J., Chen, W., Shi, P.J. and Tamura, M. (2003) An IHSbased change detection approach for assessment of urban expansion impact on arable land loss in China. Remote Sensing, 24(6) 1352–1360. Chen, Z.Y., Xu, Y.L. and Qian, J.R. (2002) Safety and durability of structural works in civil engineering. Construction Technology, 33(4), 248–253. Cole, R.J. (2004) Changing context for environmental knowledge. Building Research & Information, 32(2), 91–109. Gomez Tagle Morales, J.M. (2005) A comparative study on hyper density developments in densely inhabited districts of Mexico City. Paper presented at the World Sustainable Building Conference (SB05Tokyo), Tokyo, Japan, 27–29 September. Hill, R.C. and Bowen, P.A. (1997) Sustainable construction: principles and a framework for attainment. Construction Management and Economics, 15(3), 223 –239. Jin, R. (2003) Urbanization on fast track. Beijing Review, 46(42), 27–28. Lai, T.Y. (2005) Planning strategies for urban sustainability in the age of globalization. Paper presented at the World Sustainable Building Conference (SB05Tokyo), Tokyo, Japan, 27–29 September. Lan, X.Z. (2003) Don’t fence me in. Beijing Review, 46(51), 10–13. Lan, X.Z. (2005) Agriculture: the key to China’s growth. Beijing Review, 48(40), 18–21.


Mee, K.N. (2002) Sustainable urban development Issues in Chinese transitional cities: Hong Kong and Shenzhen. International Planning Studies, 7(1), 7– 36. Miranda, L. (2005) Capacity building for agenda 21 and sustainable construction, the cities for life forum experience in Peru. Paper presented at the World Sustainable Building Conference (SB05Tokyo), Tokyo, Japan, 27– 29 September. Morley, I. (2005), Death and life in industrial settlements: the British model of dealing with urban development from the 1830s to 1914. Paper presented at the World Sustainable Building Conference (SB05Tokyo), Tokyo, Japan, 27–29 September. Ofori, G. (1998) Sustainable construction: principles and a framework for attainment – comment, Construction Management and Economics, 16(2), 141 –145. Pearce, D. (2006) Is the construction sector sustainable?: definitions and reflections. Building Research & Information, 34(3), 201 –207. Sha, K.X. (2004) The new outlook on development and sustainable development of China’s construction industry. Construction Economy, no. 7, 17–20. Sha, K.X. (2005) Institutional innovation and sustainability of urbanization: a Chinese perspective. Paper presented at the World Sustainable Building Conference (SB05Tokyo), Tokyo, Japan, 27–29 September. Sha, K.X. and Jiang, Z.J. (2003) Improving rural laborers’ status in China’s construction industry. Building Research & Information, 31(6), 464–473. Sjoberg, O. (1999) Shortage, priority and urban growth: towards a theory of urbanization under central planning. Urban Studies, 36(13), 2217–2236. Turner, R.K. (2006) Sustainability auditing and assessment challenges. Building Research & Information, 34(3), 197– 200. Wang, J. (2004) New puzzle for Beijing. Outlook Weekly, no. 28, 28–31. Wen, T.J. (1999) The problems of agriculture, rural areas and farmers: a review at the end of the century, Dushu (Reading), no. 12, 3–11. Zhang, X.B., Mount, T.D. and Boisvert, R.N. (2004) Industrialization, urbanization and land use in China. Chinese Economic and Business Studies, 2(3), 207–24. Zhang, Z.Y. (2005) To deepen reform and push a development mode change: from extensive to economical. Economic Research Journal, 40(11), 4– 9.

Zhou, L.A. (2004) The incentive and cooperation of government officials in the political tournaments: an interpretation of the protectionism and duplicative investments in China. Economic Research Journal, 39(6), 33–40.

Endnotes 1 On 9 January 1958 the Chinese government enacted the first household registration regulation, establishing a relatively complete household registration system. This system classified Chinese citizens into rural and urban residents. Under this system urban residents enjoyed substantially different treatment from rural dwellers in many aspects, involving employment, housing, education, medical treatment, taxation and social welfare; the migration from rural to urban areas, or from small cities to big or medium-sized cities, was strictly restrained. 2

The Siheyuan (family house) is a typical form of traditional Chinese architecture, especially in the north of China. This is an enclosed courtyard with houses on four sides and inward-facing to protect occupants from the harsh winter winds and the dust storms of spring. Appropriately sized square courtyards help absorb sunshine in the wintertime. Siheyuans line the small lanes, or Hutongs, making up most of the central part of old Beijing. They still house many of the city’s residents within the second ring road, which marks the boundary of old Beijing. As a result of the housing shortage, one Siheyuan now often houses several families and many courtyards have been filled with additional rooms; very few have private toilets or washrooms. There are some grand Siheyuans in Beijing that have been preserved in all their former glory. Most of them were built for nobles and high officials a century ago, and some have been turned into museums. 3 Driven by a performance-purchasing motive, many economic zones were set up without normal planning. In some localities more than 35% of fiscal revenue came from land transactions. By the end of 2002 enclosed land under the name of development zones had exceeded 30 000 km2, which is the equivalent to the total area of the Chinese cities, forcing many farmers to give up farming. However, most of enclosed land remained idle because of a lack of financial capacity.

583