Urbanization expected to fuel China's economy

Accelerated urbanization can keep the country's economy on the fast track for another 15 to 20 years, as more than half of its population will live in cities and towns by 2015, a top Chinese think tank said on Thursday.

The country's urbanization rate will hit 52 percent in 2015 and grow to 65 percent by 2030, the annual report on urban development by the Chinese Academy of Social Sciences (CASS) showed.

By the end of last year, the urbanization rate already hit 46.6 percent, with 620 million people living in cities and towns, the CASS reported.

"The growth potential of the vast middle and western regions, together with the rapid development of small cities and towns, could keep the economy on the fast track for at least 15 to 20 years," Wei Houkai, director of the center for China's regional development at the CASS, told China Daily.

The urbanization rate during the country's 12th Five-Year Plan period (2011-2015) will grow by 0.8 to 1.0 percent each year, the academy reported.

That means more than 10 million rural residents will move to cities and towns annually - a process that is expected to contribute 4 percentage points to the country's GDP growth each year.

Out of the 4 percentage points, 3.6 percentage points will come from newly added housing demand of 1.2 trillion yuan ($177 billion) and 0.4 percentage points is expected to come from people's improved income of 120 billion yuan.

By Hu Yuanyuan, China Daily
【1】 【2】