In China, Reform and the Risks of Urbanization

Chinese cities may be swelling, but the central government is seeking to continue driving urban growth while mitigating the risks and obstacles of urbanization. To reduce some of the deep social and economic imbalances between China's urban and rural regions and coastal and interior provinces, Beijing hopes to reorient its economy away from an overreliance on exports and state-dominated investment and toward greater domestic consumption. Promoting urban growth, especially among inland cities, is a core part this effort. 

In July, the government expects to release a plan outlining its approach to urbanization. To implement its strategies and support the growth of its cities, however, China must reform long-standing institutions such as the country's household registration system, known as hukou in Chinese, as well as structural issues fiscally constraining local governments. Ultimately, Beijing will struggle to balance between competing needs for reform and control.