China is undergoing an urbanization the scale of which the world has never seen. By 2025, China will have added 350 million urban residents to its population (more than the entire population of the U.S. today), and five years later will have a total city population of more than 1 billion. That will boost the portion of its gross domestic product produced by cities from 75% today to around 95%, estimates the McKinsey Global Institute (MGI).
To house all those new urban residents (240 million of whom will be migrants from the countryside), China will pave 5 billion square meters of road, add up to 170 mass transit systems, and build 40 billion square meters of floor space. All told, China will have 221 cities with more than 1 million residents, and eight megacities, each with a population of more than 10 million. The Chinese government is hoping to pull off the unprecedented urban transformation with a special emphasis on ensuring stable and equitable cities, said delegates at the World Urban Forum held in early November by U.N. Habitat in Nanjing. "Building harmonious cities is our vision," said Jiang Hongkun, the mayor of Nanjing.
Beijing
Population: 16.33 million
Blessed with the country's top two universities, Peking University and Tsinghua University, Beijing, China's capital city, has been able to attract the country's best and brightest minds. Many of them have chosen to stay after graduation to work in the the high-tech industry, financial-services industry, and government. Beijing's rapid urbanization is straining the city's water resources and infrastructure. Shortly before hosting the Summer Olympics this year, Beijing completed the world's largest airport terminal. The city's subway system is expected to overtake London as the world's longest by 2020.
Shanghai
Population: 18.58 million
Even though Shanghai did not start its economic reforms until a decade after the southern province of Guangdong, the city has managed to catch up quickly by attracting foreign investment from the likes of Volkswagen (VOWG.DE), HSBC (HBC), and Intel (INTC). Shanghai overtook Hong Kong last year to become the world's second-largest container port and is expected to overtake Singapore to become the world's largest container port this year. The rapid influx of Chinese migrants as well as expatriates is putting pressure on Shanghai's limits. The government is now building nine new satellite cities capable of housing more than a million people by 2020.
Tianjin
Population: 11.15 million
While the port city of Tianjin has managed to get foreign investors such as Motorola (MOT), Airbus, and Toyota (TM) to set up factories, its economic growth has lagged behind Beijing, Shanghai, and Guangzhou. Under the leadership of Tianjin native Premier Wen Jiabao, the central government has been trying to reestablish Tianjin as a financial center to service northern China. Technocrats also hope to leverage the proximity to Beijing to help ease the Chinese capital's overcrowding problem. The two cities opened a high-speed train link in August that cuts commutes to a half-hour. Since the high-speed railway was announced, more than 2,000 Beijing companies have relocated to Tianjin.
Shenzhen
Population: 8.62 million
Perhaps no Chinese city has benefited from the late Communist leader Deng Xiaoping's economic reforms more than Shenzhen, which was one of the four original special economic zones. Nearly all of Shenzhen's people have migrated from other parts of China. Not content to manufacture toys, textiles, and shoes, Shenzhen has aspirations of becoming a high-tech hub. With homegrown tech companies Huawei Technologies and ZTE based in Shenzhen, that may not be a pipe dream.
Wuhan
At the crossroads of central China lies Wuhan. Known for tourist sites such as the Yellow Crane Tower, the city has several of China's best universities, including Wuhan University and Huazhong University of Science & Technology. To keep college graduates from moving to Beijing, Shanghai, and Shenzhen after graduation, Wuhan has been building up its high-tech optical, bioengineering, and auto industries. Nissan (NSANY), PSA Peugeot Citroën (PEUP.PA), and local heavyweight Dongfeng Motor have set up factories in Wuhan. The city is building a new railway station, a new port, and a second airport terminal to help facilitate transportation from Wuhan's factories to the coastal regions.
Chongqing
Population: 28.16 million
In 1996, the Chinese government carved Chongqing out of Sichuan province and designated it a municipality answerable directly to the central government. Chongqing has traditionally been a grimy industrial city, churning out automobiles, motorcycles, and steel. For the past decade or so, Beijing has been trying to develop China's western region, where economic growth lags behind the wealthier coastal regions. Located upstream on the Yangtze River, Chongqing is well-positioned to benefit from the growth of western China.
Chengdu
Population: 12.58 million
For decades, migrant workers have been leaving Sichuan to find work in the wealthier coastal regions. But as the provincial capital, Chengdu, gradually built up its high-tech industry and attracted investment from Intel, AMD (AMD), and Semiconductor Manufacturing International (SMI), more and more Sichuan natives have started to return. That trickle turned into a flood in May, when a 7.9-magnitude earthquake struck 50 miles northwest of Chengdu. The central government is spending hundreds of millions of dollars to help speed post-earthquake reconstruction.
Guangzhou
Population: 10.05 million
At the heart of the Pearl River Delta, where many of China's factories are located, is Guangzhou. The per capita income of Guangzhou now exceeds $10,000, making the capital of Guangdong province one of the very first Chinese cities to reach developed city status. Guangzhou has traditionally relied on its auto, petrochemical, and electronics industries to power its economic growth. However, the rising costs of labor and oil, as well as the stronger yuan, have recently forced many factories around Guangzhou out of business. The provincial government has been pushing Guangzhou to shift to other industries, such as media, finance, and logistics. Federal Express (FDX) has already agreed to open its Asia-Pacific logistics hub in Guangzhou's Baiyun airport.
