The Paradox of China's Growing Under-Urbanization

Posted: 11 Apr 2006

See all articles by Gene Hsin Chang

Gene Hsin Chang

University of Toledo

Josef C. Brada

Arizona State University (ASU) - Economics Department


It is commonly believed that China began the socialist era as a very under-urbanized country relative to its level of development and that it has been eliminating this urbanization gap during the post-1978 period as a result of its economic reforms. Our reexamination of the relationship between per capita income and urbanization that underpins the conventional view suggests that China was not under-urbanized before or during the early period of the reform. Actually, China's urbanization gap appeared and grew in the late period of reform despite mass migration from rural to urban areas. This growing urbanization lag is mainly due to the slow pace in eliminating restrictions on rural-urban migration during a period of rapid economic growth. We call attention to this emerging urbanization lag as it entails significant economic costs in employment and retards economic growth.

Keywords: China, Urbanization, Migration, Development

JEL Classification: O11, O15, O18, P25, R23

Suggested Citation

Chang, Gene Hsin and Brada, Josef C., The Paradox of China's Growing Under-Urbanization. Economic Systems, Vol. 30, No. 1, pp. 24-40, March 2006, Available at SSRN:

Gene Hsin Chang

University of Toledo ( email )

Department of Economics
Toledo, OH 43606
United States
419-530-4677 (Phone)
419-530-7844 (Fax)

Josef C. Brada (Contact Author)

Arizona State University (ASU) - Economics Department ( email )

Box 873806
Tempe, AZ 85287-3806
United States
602-965-6524 (Phone)
602-965-0748 (Fax)


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