Policies for Inclusive Urbanisation in China

Urbanisation in China has long been held back by various restrictions on land and internal migrationbut has taken off since the 1990s, as these impediments started to be gradually relaxed. People have movedin large numbers to richer cities, where productivity is higher and has increased further thanks toagglomeration effects. In the process, the rural-urban income differential has narrowed. Urbanisation alsoentails costs, however, notably in the form of congestion, all the more so as public transport provision hasnot kept up. Demand for living space is set to continue to increase as living standards improve, puttingpressure on land prices. This can be offset by relaxing the very stringent restrictions on the use ofagricultural land for building. For migrants to better integrate in the cities where they work, their accessand that of their families to education, health and other social services must continue to improve, inparticular via further changes to the registration system, coupled with more market-based rules on landownership and use.