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Thoughts on Overseas Travels：Perspectives on Urbanization in America

 

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PCC Program on Chinese Cities – Thoughts on Overseas Travels Series

Authors

Xiaohe Ma, Researcher, Former Vice Dean at the Macroeconomic Research Institute, Development and Reform Commission of China, and visiting scholar in the Department of Regional and City Planning at the University of North Carolina.

1. The Second Industrial Revolution was the Catalyst for America’s Emergence

From 1860 to 1913, the total economic output and per capita GDP of the United States surpassed those of the UK, positioning it as the world’s foremost economic power for over a century, an unshakable position. Here, the author observes and studies the economic and social structural changes in America from the perspectives of urbanization and economic growth, seeking insights applicable to China.

Table comparing GDP growth between the U.S. and the UK from 1820 to 1950
Table 1: Comparison of GDP Growth Between the U.S. and the UK. Data source: Reference [2]

In 1820, the U.S. per capita GDP was only 73.6% of Britain’s; by 1870 it had risen to 76.6%; and by 1913, the U.S. per capita GDP exceeded Britain, at 1.08 times Britain’s level.

Table showing early comparison of per capita GDP between the U.S. and the UK in 1990 international dollars
Table 2: Early Comparison of Per Capita GDP Between the U.S. and the UK (Unit: 1990 International Dollars). Data source: References [2-3]

The U.S. GDP in 1820 (calculated in 1990 international dollars) was only 34.6% of Britain’s; by 1913, it had reached 1.08 times that of Britain. By 1920, the U.S. GDP had reached $88.393 billion, over four times that of Britain.

Chart illustrating nominal GDP growth in the U.S. since 1790
Table 3: Nominal GDP Growth in the U.S. Since 1790. Note: The economic growth rate in the table is based on 1952 as 100, with the current index compared to the base period index. Data source: January 2016 U.S. Department of Commerce Economic Analysis Report

From Table 3, it can be seen that from 1820 to 1900, the U.S. economy experienced a period of rapid growth, laying the foundation for surpassing Britain to become a global superpower.

2. The Fastest Period of Economic Growth Coincided with Rapid Urbanization

The rapid development of U.S. manufacturing and the progress of industrialization accelerated urbanization. Unlike agricultural development, industrial, especially manufacturing, development requires the geographical concentration of capital, labor, land, energy, and other resources, leading to population agglomeration and promoting urbanization.

Graph showing urbanization rate in the U.S. since 1790
Table 4: Urbanization Rate in the U.S. Since 1790 (Unit: %). Data source: Based on the World Bank database and Reference [4]

After completing industrialization and becoming a developed economy, the U.S. urbanization process did not stop but slowed down. From 1920 to 1970, the U.S. urbanization rate increased from 51.2% to 73.6%, and by 2017, it further increased to 82.06%.

3. Characteristics of U.S. Urbanization

3.1 U.S. Urbanization is Highly Coordinated with Industrialization

U.S. urbanization follows industrialization under the leadership of a free market economy and synchronizes with each stage of industrial transformation to promote population aggregation in towns.

Table comparing urbanization rates and per capita GDP between high-income, upper-middle-income countries, the U.S., and Brazil
Table 5: Comparison of Urbanization Rates and Per Capita GDP Between High-Income, Upper-Middle-Income Countries, the U.S., and Brazil. Data source: World Bank database

3.2 From the Early Development of Small Towns to Large Cities, Then to Urban Agglomerations, Later Advocating “Smart Growth” for Cities

Data in Table 6 shows that in the early stages of economic development, U.S. small towns developed quickly, with larger cities developing only after the 1850s.

Table showing urbanization situation in the U.S. since 1790
Table 6: Urbanization Situation in the U.S. Since 1790 (Number, %). Data source: Reference [4]

After World War II, with improvements in transportation, communications, and other infrastructure, as well as an increase in household car ownership and adjustments to the industrial structure of urban areas, a new urban development pattern emerged.

3.3 Balanced Development of Infrastructure and Public Services is a Necessary Condition for Urbanization Development

In the process of advancing urbanization, the U.S. system does not restrict population mobility, and thus the balanced development of infrastructure and public services plays a key role in facilitating population movement.

4. Lessons from U.S. Urbanization for China

4.1 Seriously Address the Issues of Uncoordinated Urbanization and Industrialization, and Lagging Urbanization Development

From the level of economic development, China’s actual per capita GDP has reached $9,377, the level of a typical upper-middle-income country. However, as of 2017, the average urbanization rate of upper-middle-income countries had reached 65.45%, while China’s permanent resident urbanization rate was 58.52%.

4.2 Accelerate Solving the Problem of Imbalances in Infrastructure and Public Services Between Regions, Urban and Rural Areas, and Towns

Another major obstacle to China’s urbanization is the huge gap in infrastructure construction and public services between different regions, cities, towns, and rural areas under the existing fiscal and tax system arrangements.

4.3 For Resource-Scarce China, the Best Choice is to Initiate an Early “Smart Growth” Plan for Towns

In 1998, when China’s per capita GDP reached the World Bank’s lower-middle-income country standard, the government supported urbanization, which was still less than 35%, with investment-driven and government-led support for the primary land market. Since then, many cities have purchased large amounts of land at low prices, relying on old city renovation and new city development, widening roads, expanding urban squares, creating city parks, constructing industrial parks, planning and constructing city landmarks, etc., expanding city boundaries in a “pancake” style, resulting in land urbanization far outpacing population urbanization.

However, like Japan and South Korea, China is also an East Asian country with a large population, scarce resources, and high ecological pressure. Blindly promoting “pancake” style urban expansion will lead to a massive waste of land resources and environmental disasters. In the future, the government should support local implementation of “smart growth” plans for towns, scientifically plan urban spaces, set urban development boundaries, promote green public transportation, implement resource-saving sharing actions, and focus on the urbanization of agricultural transfer populations to develop compact urbanization.

References

  1. Graham Allison. Destined for War: Can America and China Escape Thucydides’s Trap? Shanghai: Shanghai People’s Publishing House, 2018: 32.
  2. Cai Yumei. “Economic Development and Arable Land Change in Typical Industrialized Countries” in Proceedings of the Scientific Development Forum by Lawful and Reasonable Land Use. China Land Society 625 Forum—The Sixteenth National “Land Day”, 2006.
  3. Angus Maddison. The World Economy: A Millennial Perspective. Wu Xiaoying, Xu Xianchun, Ye Yanfei, et al., trans. Peking University Press, 2003.
  4. Wang Xu. Urban Development Models in the United States. Beijing: Tsinghua University Press, 2006.
  5. Song Yan, Ding Chengri. “The Decline of American Urban Centers.” China Urban Economy, 2005(12): 12-17.
  6. Zhang Wen. “The U.S.’s ‘Smart Growth’ Development Plan.” Modern Urban Research, 2001(5): 19-22.
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