II. The Economic Imperatives Chan 1992, Kirkby 1985

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II. The Economic ImperativesChan (1992), Kirkby
(1985)

• Industrialization the overriding concern of the
  new socialist state
• Need to defend national integrity both external
  and internal threats
• Maintain manageability of cities without heavy
  investment in urban infrastructures
• Joint maximization of industrialization and
  minimization of urbanization

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Chans application of the economic base model

•  Q/UP Q/Li Li/UP
•   where Q industrial output quantity
• UP Urban Population
• Li Industrial Employment
•  
• Equivalently, r (Q/UP) r (Q/Li) r (Li/UP)
•   where r rate of growth
•  
• Li/UP is the reciprocal of the urban
  multiplier.

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r (Q/UP) r (Q/Li) r (Li/UP)

• To increase r (Q/UP), or to accelerate the
  increase in per capita (non-agriculture or
  industrial) output level, one can either
•   (i) Raise r (Q/Li), rate of increase in labour
  productivity, or
•   (ii) Raise r (Li/UP), or, equivalently, reduce
  the growth rate of the urban multiplier.

4
Strategies to increase in labour productivity
(Q/Li) in the industrial sector include

• Maximum output growth through high accumulation
  (in general more than 30)
•  Selected growth based on heavy industry
•  Discriminatory policies against agriculture, so
  as to channel funds for industrial investment
• Price discrimination
• Collectivization and Peoples Commune raise
  agricultural production on the cheap
• Resulted in widening gap between labour
  productivity in the agricultural sector and the
  industrial sector.

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Strategies to reduce the urban multiplier 

• The urban multiplier can be broken down into
  three components, using the identity
•  
• UP/Li s u e
•  
• where s Ln(industrialservice employment)/Li
  service employment multiplier (1)
• e TP(Total non-agricultural population)/Ln
  non-working population multiplier (1)
• u Ln living in towns and cities (

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Thus, in order to reduce the urban multiplier,
one can

• Minimize the non-productive or service activities
  (and employment) in urban areas in order to
  reduce s housing shortage, under-provision of
  urban services and urban infrastructures,
  dilapidated state of the cities
• Fuller utilization of the urban labour force to
  reduce e high labour participation rate in
  cities
• Increase non-urban industrial output (i.e.,
  rural industrialization) to reduce u

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• Recruitment of temporary workers from the rural
  area (officially remaining rural) so as to both
  reduce u and reduce e
• Restraints on labour mobility over space via
  hukou system, as
• The cost of labour reproduction is much lower in
  rural areas (difference in cost per capita about
  5 times)
• Retain population in the countryside and
  resettlement of urban residents in the
  countryside

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Result

• Sixfold increase in the Q/UP ratio between 1952
  and 1982.
• Of this, increase in the Q/Li ratio accounted for
  35 and
• Increase in the inverse of UP/Li (urban
  multiplier) ratio accounted for the rest

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Critique of the Chan-Kirkby approach (Tang, 1997)

• Economic determinism
• Gross over-generalization, lacking reference to
• Ideological factors is it true that the
  ideological predispositions of Mao and the CCP
  have little to do with the spatial organization
  of society in China?
• Cultural considerations e.g., attitude towards
  the urban intellectual class and attitude towards
  individualism
•            

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Tangs Critique

• Variations over space and time
• There were times in which urbanization proceeded
  at relatively rapid pace (e.g. in the 1950s).
• New cities sprang up in formerly remote and
  overwhelmingly agricultural regions of the
  country.
• Moreover, economic resources and decision making
  powers tended to concentrate in the largest
  cities, especially the provincial capital.

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• States control over space
• Institutions such the household registration
  system which divides the country into the urban
  and the rural are there to facilitate control
  (not economizing urbanization costs).
• Need to consider peculiarities of China such as
  large geographical extent and varied physical and
  cultural landscapes, the countrys huge
  population, the lack of industrial tradition, etc

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A Resolution of the Above Views Struggle between
ContradictionsKwok (1988)

• Contradiction between Socialist Ideology and
  Economic Policy Affect appropriate forms of
  urbanization
• And between Productive and Non-productive
  activities Impinges on the function of cities

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Is China today still characterized by rapid
industrialization and slow urbanization?