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China to allocate $162bn on urbanization program

The government of China plans to spend more than $162 billion in 2014 on redeveloping over 4.75m households in shantytowns thus boosting urbanization. The move is aimed at promoting economic growth.

The program includes transport communications expansion, construction of new houses, allowance for local authorities to issue bonds directly and also simplification of residence-registration rules, says Bloomberg. China will help 100 million people, including migrant workers, get status as urban residents by 2020.

China plans to set up a transparent financing mechanism for urban construction, allowing local governments to issue municipal bonds.

Leaders plan to use urbanization as an engine for sustainable and healthy economic development and a powerful instrument to achieve 7.5 percent GDP growth this year. Urbanization will become another step towards domestic consumption and will give markets a bigger role in the world’s second largest economy.

China is targeting to have 60 percent of the population urbanized by 2020. Figures show 53.7 percent in 2013 and about 50 percent in 2010. In comparison the US proportion was 82 percent in 2011, while in Japan the figure stood at 91 percent, according to the World Bank and Development Research Center of the State Council.

Tens of millions of people still live in shantytowns, the areas of dilapidated housing where poor factory workers often live.

In order to stimulate urbanization, China will speed up the construction of transport links such as railways, expressways and airports.

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