The Sustainable Economic Growth, Urbanization and Environmental Protection in China

By Chen, Qi | Forum on Public Policy: A Journal of the Oxford Round Table, Spring 2012 | Go to article overview

The Sustainable Economic Growth, Urbanization and Environmental Protection in China


Chen, Qi, Forum on Public Policy: A Journal of the Oxford Round Table


I. Introduction

China has developed tremendously after the country launched its reforms and adopted its open door policy in 1978. For three decades, China has gained a two-digit annual growth rate on average when it gradually deviated away from the traditional doctrines of a central-planned economy and put into practice the market oriented economy. With the rapid economic development, cities, as centers for economic activities, have been expanding at an unprecedented speed. Though urbanization plays a huge role in stimulating growth, it has imposed serious environmental problems, such as pollution of air, water and solid waste, land use and resources allocation, which have become an obstacle to sustainable economic growth. The Chinese now have an urgent need to face the increasingly important issue of environmental protection and adhere to the principles of sustainable economic growth.

The paper examines the relationship between rapid economic growth and vast expansion of urban areas in China, and explains that, though urbanization has fueled the growth and become the "engine of development", it has resulted in serious environmental problems, which demand immediate solutions. The paper proposes a series of effective options to tackle the environmental issues, including privatization of environment related industries, such as garbage disposal, decreeing law and regulations to, first of all, mitigate or minimize pollution, then guarantee a systematic way to clear up pollution if it does happen and also calls for increasing the environmental awareness of the whole society so that it will adopt the principle of sustainable economic growth.

The paper is structured as follows: Section II describes the relationship between economic development and urbanization: economic growth leading to urbanization and then urbanization driving economic growth. Section III identifies the major environmental problems associated with urbanization in China and posits their negative consequences. Section IV offers some possible options for tackling the environmental problems and demands for the sustainable economic growth. Section V summarizes and presents a conclusion.

II. Urbanization and Economic Growth 2. 1 Economic Growth Leads to Urbanization

Following the initiation of the reform and opening policy in 1978, China began to make major reforms to its economy, deviating gradually from its traditional path of socialism and adopting aspects of a market-orientated economic system. In the subsequent years, China emphasized raising personal income and consumption and introducing new management systems to help increase productivity, the living standard, and technological quality without exacerbating inflation, unemployment, and budget deficits. Reform began in the agricultural, industrial, fiscal, financial, banking, regulatory and labor systems.

The decision to allow direct foreign investment was extremely successful in attracting foreign capital to China, initially in several small "special economic zones" along the coast, then spreading to 14 coastal cities and 3 coastal regions as the designated "open area". The inflow of international capital greatly stimulated Chinese economic growth, particularly in the areas of international trade, the infrastructure, the transfer of technology and managerial know-how, human resources, and the increase in personal incomes.

The introduction of the Household Responsibility System marked the beginning of agricultural reform, which allowed peasants to lease land from the collective for a fixed period provided they delivered to the collective a minimum quota of produce, usually basic grain. Once they had met the quota, they could sell any surplus they produced. This was the first step in breaking away from organized communes and allowing peasants to produce on their own, and sanctioned the sale of surplus production and other cash crops in newly freed markets. …

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