China’s new consumer class will be concentrated in megalopolises – cities or clusters of cities with a population of over 10m
The ongoing movement of China’s people to the cities will lead to the rise of immense urban agglomerations as the population shifts towards key focus points across the country.
The number of these new urban nerve centres will rise from three in 2000 to 13 by 2020, representing over one-third of the urban population by the end of the decade.
Supersized cities: China’s 13 megalopolises is a special report from the Economist Intelligence Unit’s Access China team that uses the EIU’s city-level income and population forecasts to outline the trajectory of development for China’s urban centres and the impact key changes will have on several core sectors, including healthcare and education.
The report examines the prospects of the megalopolises with regards to the development of their middle classes. The megalopolises that will emerge over the coming decade will be poorer and younger than those that have already reached dominance, and their distinct demographic and income profiles mean that investors need flexibility in their approach to the Chinese market.
Key findings of the report include:
• While population expansion has ground to a halt in the rest of the country, the megalopolises will continue to see their populations grow. Falling fertility rates in China, largely owing to a combination of birth-control measures and the prohibitive costs associated with bringing up children, have brought population growth practically to a halt. Nevertheless, the populations of these megalopolises have risen sharply in recent years.
• The differing timeframe and pace of migration will translate into markedly different demographic profiles for these megalopolises. By 2020 trends will become more pronounced as the working-age populations of several city clusters peak in size.
• Not all of the megalopolises will have a majority of their populations reach middle-class status by 2020. The proportion of the population earning more than Rmb30,000—our benchmark for middle-class status—now averages above 40% in greater Beijing, greater Shanghai and Shenzhen. By 2020 the 50% milestone will be reached by most of the megacity clusters. But greater Zhengzhou, greater Shenyang and Chongqing will maintain the smallest proportions of middle-income earners, and fail to reach the 50% mark by 2020.
“The urbanisation of China has already been extensively covered; however the number and scale of the megacities that will emerge by the end of this decade will provide a new context for China’s urban growth story,” says Victoria Lai, an analyst for Access China. “Chengdu’s development trajectory to 2020 will differ from that taken by Shenzhen in the previous decade. The potential is clear—each of these megacities is the size of a small country. But these newly emerging giants are still relatively poor, and the varying pace and character of their development will make regional sub-strategies essential.”
Snapshot of megalopolises
Sub-cities Population* (m) GDP** (Rmb bn)
Chang-Zhu-Tan Changsha, Zhuzhou, Xiangtan 8.3 320
Chengdu Chengdu 8.4 313
Chongqing Chongqing 9.2 489
Greater Beijing Beijing, Tianjin 23.3 1,900
Greater Shanghai Shanghai, Suzhou 18.2 1,787
Greater Xi'an Xi'an, Xianyang 7.9 264
Greater Zhengzhou Zhengzhou, Kaifeng 7.6 162
Greater Guangzhou Guangzhou, Foshan, Zhaoqing 10.8 1,356
Hefei economic circle Hefei, Lu'an, Huainan, Chaohu 7.2 222
Shandong peninsula Qingdao, Yantai, Weihai, Rizhao, Weifang, Jinan, Binzhou, Dongying, Zibo 17.9 1,227
Greater Shenyang Shenyang, Anshan, Fushun, Yingkou, Benxi, Liaoyang, Tieling 11.0 668
Shenzhen Shenzhen 11.1 820
Wuhan Wuhan 8.3 389
Source: Economist Intelligence Unit, National Bureau of Statistics.
*2010 estimates, metropolitan area
*2009 figures, metropolitan area
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