EU-China Partnership on Sustainable Urbanisation (Originally published 05/03/12)

Having launched the EU-China partnership on urbanisation at their summit in Beijing last month, European and Chinese policymakers, business leaders and experts are now seeking to translate their noble intentions into practical action.The potential for EU-China cooperation in creating energy-efficient “eco-cities” is immense. But so are the challenges.Beijing can probably mobilise some of the domestic resources and know-how needed to tackle the massive and difficult task of coping with its “urban billion”. To ensure the success of the enterprise, however, China will need to work with Europe and other partners.The reason is simple: although the rise of mega-cities is a phenomenon across Asia, the speed and scale of China’s urban development is unprecedented in human history. China used to be a land of villages and rural communities. It is now a largely urban country.According to China’s National Bureau of Statistics, the level of urbanisation in the country crossed the highly symbolic 50 per cent threshold last year. And the trend is far from over: according to some estimates, 350 million people will be added to China’s urban population by 2030.As a 2008 report on “Preparing for China’s Urban Billion” by McKinsey Global Institute points out, by 2025, China will have 221 cities with more than one million inhabitants of which 23 cities will have more than five million people. The urban economy will generate over 90 percent of China’s GDP by 2025.

CHINA’S URBAN GROWTH SO FAR (1970-2010) In 1980 only less than a fifth of China’s population lived in cities. Urban population reached 690 million in 2011, accounting for 51.27 percent of the total population. Between 1990 and 2005, 103 million  people migrated from rural to urban areas. The total number of migrant workers in 2011 was 252.78 million, up by 4.4 percent compared to 2010.
Source: Data are from National Bureau of Statistics of the People’s Republic of China

Overall, this augurs well for China’s sustained rise. Cities have been the major drivers of China’s impressive economic growth and - not surprisingly - urbanisation is the centrepiece of China’s 12th Five Year Plan.However, this urban expansion also poses a huge challenge for local and national leaders who must find sufficient public funding to provide social services and deal with pressure on energy resources, land, water and the environment.More is at stake. Integrating rural migrants into city life will not be easy, especially since without local residence permits (hukou), they will have limited access to basic services, including health and education.As such, as Tom Miller, Managing Editor of the China Economic Quarterly at Dragonomics points out, the expansion of China’s urban population will not automatically create a new middle class of consumers.To create energy efficient cities, China will have to reform the current fiscal system under which a large slice of locally collected taxes is sent back to the central government, leaving city authorities short of cash.Europe has made great strides in greening its cities but as illustrated by a series of EU projects, including the new EU “smart cities and communities” initiative, the quest to develop integrated sustained solutions that offer clean, secure and affordable energy to citizens is far from over.Since cities account for 70 per cent of Europe’s overall energy consumption, EU plans to ensure 20 per cent energy saving by 2020 and to develop a low-carbon economy by 2050 hinge on how quickly and successfully European cities can become more resource-efficient.

CHINA’S URBANISATION FORECAST (UP TO 2025)  1 billion people, or 64 percent of China’s population, will live in cities. China will have 8 megacities with a population over 10 million and 221 cities with a population over one million. Migration will be a driving force of future urbanisation. The share of China's GDP generated by cities will rise from 75 percent today to 95 percent. Urban water demand will increase by about 70 percent compared with 2005 levels. China's cities are to build almost five million buildings from 2005 to 2025 – of which almost 30,000 would be skyscrapers – the equivalent of six New York Cities.

Source: Woetzel, Jonathan, et al., Preparing for China’s Urban Billion, McKinsey Global Institute, February 2009.

The new EU-China urbanisation partnership opens up fresh opportunities for cooperation. China and Europe can work together on building energy efficient eco-cities by sharing technology and expertise on questions like urban planning, energy supplies, energy demand management and developing “green digital cities”.Cooperation in improving the low-carbon and resource-efficient character of buildings as well as in sectors such transport and mobility, waste management as well as water and air quality is expected.Beyond such an EU-China “eco-relationship”, Europe can share its experience with China in areas such as providing pensions, health care and education for migrant workers as well as in managing rural communities.China’s urbanisation offers exporters and investors – in China, Europe and elsewhere – lucrative new markets. Europe’s green tech companies are especially well-placed to provide the technological solutions needed to tackle many of China’s urbanisation challenges.Over the years, European and Chinese mayors, architects, urban planners and industry leaders will have many opportunities to meet, identify and find solutions for common problems and priorities.The EU-China partnership on urbanisation already provides for the organisation of a first EU-China mayors’ forum this year. Other initiatives are expected.As the Shanghai Declaration published in October 2010 after the World Expo in Shanghai underlines, building “cities of harmony” requires a re-examination of the relationship between people, cities and the planet.Given the right balance, cities can be wonderlands of creativity, abundance and talent. But achieving that equilibrium will require out-of-the-box solutions and visionary global partnerships.