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Frontiers of Economics in China

Front. Econ. China    2013, Vol. 8 Issue (4) : 516-534
Orginal Article
Which Type of Urbanization Better Matches China’s Factor Endowment: A Comparison of Population-Intensive Old Puxi and Land-Capital-Intensive New Pudong
Guanzhong James Wen1(),Jinwu Xiong2()
1. Institute for Advanced Research, Shanghai University of Finance and Economics, Shanghai 200433, China; Department of Economics, Trinity College, Hartford, CT 06106, USA
2. Center for Market and Society, and School of Social Sciences, Tsinghua University, Beijing 100084, China
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Based on a comparative study of New-Pudong (East Shanghai) and Old-Puxi (West Shanghai) in their respective ability to absorb rural migrants, the very essence of urbanization, this paper finds that, constrained by the current hukou (household registration) system and land tenure system, although New-Pudong has emerged as one of the most modernized urban areas in the world, it did so under an urbanization model that is government-dominant and characterized by high land-intensity and capital-intensity. This model represents a serious mismatch in terms of China’s factor endowment that is characterized with a large but relatively poor rural population. In sharp contrast, guided by the market mechanism under private land ownership and free migration, Old-Puxi emerged as an urbanization model that was very adaptable to China’s factor endowment and stage of development. Therefore, as a model of endogenous urbanization, Old-Puxi is more efficient and inclusive, at the same time more sustainable economically and environmentally, and for this reason more applicable to China at a time when China needs to urbanize most of its rural population urgently to avoid the further worsening of the rural/urban divide and income disparity.

Keywords migrants      urbanization      New-Pudong      population-intensive      landcapital- intensive     
Issue Date: 05 December 2013
 Cite this article:   
Guanzhong James Wen,Jinwu Xiong. Which Type of Urbanization Better Matches China’s Factor Endowment: A Comparison of Population-Intensive Old Puxi and Land-Capital-Intensive New Pudong[J]. Front. Econ. China, 2013, 8(4): 516-534.
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