Evolution of China’s Urban System and Optimization of Development Paths

Abstract

Considering the demographic polarization in China’s urban system over the past three decades, this paper develops a comprehensive quantitative spatial equilibrium model to clarify the centripetal agglomeration effects, centrifugal commuting costs, locational fundamentals, and migration frictions on urban scale and the evolution of the urban system. The findings from theoretical model deduction, structural estimation, and counterfactual simulations indicate that improving commuting conditions or reducing migration frictions will lead to sustained population growth in mega and larger cities, resulting in a more concentrated urban system distribution. The equalization of agglomeration effects significantly drives population growth in small and medium cities, encouraging the urban system distribution to evolve toward a more uniform pattern. The amenity or productivity equalization of locational fundamentals will support population growth in small and medium cities, and eliminating inter-city housing price disparities will enhance the population size of mega and larger cities. Counterfactual policy evaluations show that a uniform distribution of the urban system promotes social equity but reduces overall social output, whereas a concentrated urban system distribution increases total social output but may hinder social equity. Therefore, this paper aims to balance efficiency and equity by proposing that, in the future, China’s urban system should adopt a structural optimization path of stabilizing both ends while promoting the middle. This approach emphasizes the social equity of peripheral small and medium cities and the economic efficiency of super cities, focusing on the development of small and medium cities within metropolitan areas and urban agglomerations. It seeks to transition the urban system from a dumbbell-shaped structure to an olive-shaped structure, fostering a coordinated development pattern among large, medium, and small cities.

Keywords

urban system / urbanization path / coordinated development of large, small and medium cities / quantitative spatial equilibrium

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Higher Education Press