1. Overview

　　1.1 Background of the Project

　　Cities and towns are centers of politics, economy, culture, as well as science and technology for a country or a region. Cities are concentrated space of mass production, cities of a country together represent the national capacity of influence, governance, and competitiveness in the world. Level of urbanization is an important hallmark of modern civilization. Urbanization is a process of concentration of people, wealth, technology and services in a country or a region, it also represents transformation of life style, mode of production, social organization and culture. During the process of urbanization, cities congregate human wisdom and achievements on the one hand, and concentrate conflicts in the economy, society and population, resources and environment on the other hand.

　　The key of sustainable urban development is to meet the need of current generation without compromising the need of future generations, so as to achieve sustainable development of urban economy and society, based on reasonable utilization of natural resources and protection of the environment. Sustainable development as the guideline of urban construction represents the need for new direction of urban development in China.

　　The first two decades of the new century is a crucial period for China's economic and social development. Along with industrialization, urbanization is an important trend of China's economic and social development. The process of urbanization can be divided into three general stages: initiation, acceleration and stabilization. Acceleration often takes place when urbanization level, or percentage of urban population, reaches 30%. In recent years, urbanization in China has been taking off, the current urbanization level is above 40%; however, the dual structure of urban and rural is still conspicuous, and the process of urbanization falls behind the process of economic development and industrialization.

　　In the following ten to twenty years, a population of over 200 million will go into cities in China, which means rapid expansion of urban consumption, swift change in notion of consumption and life style, and rapid change of urban infrastructure, housing and public services which meet the needs of 200 million migrants as well. On the other hand, with the development of industrialization, consumption of resources will increase, environmental pollution will be worsening quickly, pressure on resources and environment will be growing fast, and the conflicts between urban area and rural area, among regions, between economic development and protection of resources and environment, and between economic development and social development are becoming more and more prominent, which has increasingly become important constraints for urban economic development and harmony of society.

　　With the rapid change of economic and social structure, various social problems such as insufficient employment position provided by cities and towns, shortage of resources, environmental degradation, urban sprawl and expansion, disconnected development between urban area and rural area, income discrepancy, backward infrastructures, transportation congestion, poor capacity for disaster prevention, shortage of housing and so on, will be continued. At the same time, scientific and technologic innovation and economic globalization tendency will bring intensified challenges of international competition while providing development opportunities. These issues have become the "bottlenecks" of China's urbanization process. Joseph E. Stiglitz, Nobel Laureate in economics considers China's urbanization and US' high-technology as two key factors influencing human development of in the 21st century.

　　Based on the three-step development strategy for China's modernization, China solved the problem of food and clothing and reached "well-off level on the whole" by 2000. The next strategic concept for development is to build well-off society all-round in 20 years, and to quadruple the GDP by comparison to 2000, and finally to realize modernization by the middle of this century.

　　The new development stage puts forward higher and more comprehensive requirements for modernization, industrialization and urbanization. In the twentieth century, countries with 15% of the world's population have realized modernization and the remaining 85% has yet to realize modernization in this century, and it is hard to sustain development with the previous pattern of modernization. In order to accomplish the objectives of building well-off society all-roundly, China decided to take a path of coordinated development of economy, society, urban and rural area, region, man and nature, and domestic and international development. The development concept of people-oriented, comprehensive, coordinated and sustainable development put forward by the Chinese government is progress and an adjustment in development strategy that is necessary for China's economic and social development in the new stage. China is in the phase of accelerating industrialization and urbanization.

　　To understand the process of urbanization and to formulate sustainable urbanization strategy in line with a scientific development concept have important implications for the realization of the objective of building well-off society all-roundly and establishing a harmonious socialist society.

　　In view of the above situation, the National Development and Reform Commission (NDRC) put forward the study of Sustainable Urbanization Strategy, and China Council for International Cooperation on Environment and Development (CCICED) approved the formation of the Task Force on Sustainable Urbanization Strategy in November 2004.

　　1.2 Objectives and Content of the Study

　　The task force aims to identify key issues related to China's urbanization, to develop creative methods to tackle these problems, and to provide the Chinese government with proposals of strategies and policies.

　　This study consists of six components: (1) Population Migration and Employment; (2) Integrated Urban-Rural Development; (3) Environment and Resources; (4) Public Participation and Urban Governance; (5) Scenario Analysis；and (6) Case Analysis for the Beijing-Tianjin Area.

　　1.3 Research Activities of the Task Force

　　The project is co-organized and implemented by the Department of Regional Economic Development of National Development and Reform Commission and the Stockholm Environment Institute in Sweden.

　　The task force analyzed situations in China, used international experience for reference and organized related experts to employ various research methods such as theoretical analysis, scenario analysis, case study, comparative analysis, statistical analysis, synthesis, and brainstorming to carry out a comprehensive, in-depth and systematic research.

　　The Task Force focused on synthesizing previous research on more than 20 cities and towns of China, conducted interviews with over 20 ministries and commissions and research institutions concerned; and held two meetings of the task force and five seminars; completed one general report and six special reports.

　　2. Progression of Urbanization in China

　　Urbanization is a process of economic and social development that consequentially emerges with industrialization and modernization, also an important hallmark of civilization and development in a country or a region. Since the founding of new China in 1949, China has carried out fruitful exploration on the way of urbanization. The level of urbanization has increased from 10.6% in 1949 to 41.8% in 2004, with a total number of cities increasing from 138 to 661 and urban non-agricultural population from 57.65 million to 542.83 million. Cities and towns play an important role in national economic and social development. As the main theme of modernization, urbanization is becoming driving force for national and regional economic growth of China.

　　2.1 Urbanization Process Since 1949

　　The founding of new China opened a new page in the history of China. Urbanization in China experienced a bumpy development road with different national guidelines and policies, as well as economic and social development levels in different stages. The process of urbanization can generally be divided into two stages with the benchmark of the reform and opening-up policy in 1978, namely the approximate 30 years from 1949 to 1978, and the 25 years from 1979 to 2004.

　　2.1.1. In the first stage, China's urbanization experienced a development from healthy development to large fluctuation.

　　During the approximate 30 years from 1949 to 1978, the urbanization level only increased from 10.64% to 17.92%, or an annual increase less than 0.25%.

　　From 1949 to 1957, China implemented the first 5-year plan of national economic and social development and carried out large-scale economic construction, which significantly pushed forward the process of urbanization. Large-scale industrial construction attracted many farmers to go into cities and towns, resulting in continuous increase of urban population. From 1949 and 1957, urban population increased from 57.65 million to 99.49 million, with an annual increase of 7%. The urbanization level increased from 10.6% in 1949 to 16.3% in 1958, with an annual increase of 0.6%. When existing cities were reconstructed, a number of newly-rising cities developed fast at the same time. By the year of 1957, the number of cities had increased to 176, adding 5 more cities each year.

　　From 1958 to 1978, China's urbanization entered into a fluctuating and wandering stage due to the impact of the Great Leap Forward and the Great Cultural Revolution. During this period of two decades, urbanization level only improved 1.6%. In 1960, urban population reached 130.73 million, accounting for 19.75% of total national population, with a net increase of over 31 million than 1957 and annual increase of 1.45%; with 33 newly built cities, the total number of cities had increased to 208, and there were 175 newly established administrative towns. Because of urbanization exceeding economic opportunities, natural disasters, and failures in economic construction, cities were overburdened and a large urban population had to move back to the rural areas.

　　During 1961 and 1963, urban population was reduced to 260 million, an annual reduction of 17.6% from 1962 to 1965; and consequently the administrative organization of a number of cities and administrative towns had to be adjusted. In 1965, the total number of cities in China reduced by 8 compared with 1957 and administrative towns reduced nearly by half, which resulted in a drop of urbanization level from 15.4% in 1957 to 13.6% in 1965. A large portion of urban population migrated out due to Educated Youth's Rustication Movement (the campaign for dismissing youth from cities) from 1966 to 1978 and the Household Registration System strictly prohibited farmers from entering cities, China's urbanization process stagnated. During this period, China's urban population increased from 133.13 million to 172.45 million, with an annual increase of 3.27 million, namely 2.2% each year; the urbanization level only increased from 17.86% to 17.92%, increasing 0.06% in 12 years.

　　2.1.2. Rapid urbanization in the second stage.

　　Since China's reform and opening-up in 1978, the process of China's urbanization has gradually got onto a continuous, rapid and healthy development; with the accelerated social and economic development. From 1978 to 2004, the urbanization level increased from 17.86% to 41.8%, with an annual increase of 0.92%; the number of cities is increasing continuously from 193 to 661. From 1978 to 1998, the number of cities increased from 193 to 668; administrative towns increased from 2,173 to 18,800; the total urban population increased from 170 million to 380 million; and the urbanization level increased from 17.92% to 30.4%, increasing 0.63% annually. China's urbanization level in 2000 was 36.1%, 18.3% higher than that of 1978, which was obviously faster than the urbanization process before reform and opening-up.

　　2.2 Current Urbanization in China

　　2.2.1 Urbanization is accelerating and the urbanization level is increasing steadily.

　　By the end of 2004, China had 661 cities and 19,892 administrative towns, with an urban population of 542.83 million and urbanization rate of 41.8%. Since 2000, China's urbanization level has been increasing at an annual increase of 1.44% , and it took only 22 years for urbanization level to increase from 20% to 40%. The accelerating of urbanization process and urban economic development attracted the surplus labor in rural areas to transfer to cities and non-agriculture industries. The total number of migrant workers is now about 102.6 million, an increase of 4.5%.

　　2.2.2 The urban industrial structure is continuously optimized and economy is further strengthened.

　　The service industry has become the pillar industry of central cities and in 2004 the value-added service industry in Beijing, Guangzhou and Shanghai accounted respectively for 60%, 54% and 48% of GDP. The proportion of service industry in central cities such as Chongqing, Shenyang, Wuhan, Shenzhen, Xiamen Qingdao has exceeded already 40%. Cities provide 70% of national GDP, 80% of national revenue, 85% of value-added of the tertiary industry and over 90% of universities and scientific research institutions. GDP of 81 cities has exceeded 20 billion RMB and 18 of which exceeded 100 billion RMB. These cities include Shanghai, Beijing, Guangzhou, Shenzhen, Tianjin, Wuhan, Hangzhou, Shenyang, Nanjing, Foshan, Dalian, Chongqing, Chengdu, Wuxi, Suzhou, Daqing, Jinan and Ningbo.

　　The whole local budget revenue of all cities accounts for 37% of total national financial revenue, among which there are 13 cities with a general local budget revenue of over 10 billion RMB, such as Shanghai, Beijing, Shenzhen, Guangzhou, Tianjin, Nanjing, Chongqing, Hangzhou, Dalian, Ningbo, Qingdao, Wuxi and Suzhou. The economic capacity of small towns is strengthened, which has become an important carrier to rejuvenate and prosper rural economy. The number of towns that have financial revenue of over 100 million RMB is multiplying every year, reaching 538 in 2004.

　　2.2.3 The urban infrastructure construction is continuously strengthened and urban function is further improved.

　　The scale of fixed-assets investment for urban construction maintains a fast growth. In 2004, China invested 553.2 billion RMB in fixed-assets for urban construction, an increase of 25%, and there was 270.5 billion RMB of newly increased fixed-assets, and the rate of fixed-assets transferred and in use reached 49%. The effective supply of urban municipal public facilities increases with a rising coverage for all. In 2004, the rate of access to tap water in cities had reached 92.5% and general percentage of population with access to gas has reached 82%; the mileage of urban roads reached 215,000 kilometers, with per capita area of roads of nearly 10 square meters. The construction of facilities for sewage disposal and garbage treatment has been strengthened; in 2004, the proportion of urban sewage treated reached 44%, and the proportion of daily harmless disposal of urban living garbage reached nearly 60%; the urban public green areas reached 240, 000 hectares and urban public green areas per capita was over 7 square meters.

　　Major cities such as Shanghai, Beijing, Tianjin and Guangzhou, continuously improve their service functions in the aspect of finance, information, trade, technology, education and culture, and play radiating and exemplary role as regional centers.

　　2.2.4 The large, medium and small cities have been developing in harmony and urban systems have been further improved.

　　In 2004, there are 45 super large cities with a population of over 1 million for each, 64 large cities with a population between 0.5 million and 1 million for each, 225 medium cities with a population between 200,000 and 500,000 for each, and 326 small cities with a population less than 200,000 for each; and all the large, medium and small cities are maintaining a good momentum of harmonious development. At the same time, urban development showed a trend of regional concentration, city-concentrated regions, urban agglomerations or metropolitan areas gradually formed and developed.

　　The Yangtze River Delta, Pearl River Delta and Beijing-Tianjin-Hebei region in the coastal areas of the east have formed primary urban agglomeration or metropolitan areas, becoming powerful regions that spur China's economic development and regions with the most favorable conditions for modernization. The economy of central cities such as Shanghai, Guangzhou and Beijing has been further upgraded, the degree of modernization and internationalization has been obviously improved and urban comprehensive function has been significantly strengthened.

　　The trend of urban agglomeration becomes more and more evident in the following areas: central and southern parts of Liaoning, Shandong Peninsular, central and western areas such as Wuhan, Zhongyuan, Guanzhong and Chengdu-Chongqing, etc. The medium and small-sized cities are accelerating their development, with population increase and urbanization focus inclining to them. Small towns are developing healthily, urban scale is continuously expanding and non-agricultural employment proportion is increasing.

　　3. Major Issues in China's Urbanization

　　3.1 Relative Shortage of Resources and Deterioration of Ecological Environment

　　3.1.1 Decrease in area of cultivated land.

　　China has a population of nearly 1.3 billion, while the cultivated land area is only 95 million hectares, namely 1.43 mu per capita, less than 40% of the average level in the world. There are 666 counties that have an area of cultivated land per capita below the red line of 0.05 hectare stipulated by the Food and Agriculture Organization of the United Nations; central cities such as Beijing, Tianjin and Shanghai have an area of cultivated land per capita below the red line of 0.8 mu (15 mu = 1 hectare).

　　Land is the most fundamental resource for urban development. With scarcity of land resource in China, the increase of land taken for urban construction is faster than the increase of urban population, but the efficiency and benefits of land use are comparatively low. The contradiction of land use in eastern coastal areas is prominent, and the expansion coefficient of urban construction-use land in eastern, central and western areas has exceeded the bottom line. The land for public service facilities and infrastructures and ecological environment is insufficient, while the land for urban development areas is increasing excessively, and the structure of urban land use is unreasonable. The increasing land demand for urban expansion is in great contradiction with the shortage of cultivated land resource.

　　3.1.2 Decrease in secured energy supply.

　　Energy is the primary resource for urbanization. Urban expansion depends on sustainable supply of energy. Shortage of energy resources has become the binding constraint for China's urbanization. China's reserves of important resources per capita such as oil and gas are respectively 11% and 4.5% of the average level in the world. The domestic resource supply is insufficient and the degree of dependence on import has been rising rapidly. In 2003, almost 34% of crude oil was imported and the supply situation was rather severe. As the demand of economic development for energy resource increases, the shortage situation of energy resource will be aggravated.

　　The ever-increasing urban consumption of energy for housing, popularized household automobile and diversified household appliances, puts forward more demands for energy consumption. High intensity of energy consumption and low efficiency of energy use co-exist in the process of urban development. Currently, China's comprehensive energy use efficiency is about 33%, 10% lower than that of developed countries; energy consumption per unit of main products is 40% higher than the level of developed countries.

　　3.1.3 Serious water shortage in northern areas and cities.

　　China's water resources per capita is only 1/4 of the international average level. With the fast development of economy, the rapid increase of urban population exerts great pressure on water resource supply. The severe shortage of water resource has become the greatest obstacle in the process of urbanization. Water shortage problems exists in 440 of the total 661 cities, among which 110 are experiencing severe water shortage, lacking 16 million cubic meters daily or 6 billion cubic meters annually. Furthermore, environmental pollution further intensifies the shortage of urban water resource, causing water quality crisis in the cities with abundant water and increasing number of cities with pollution-led water shortage problem.

　　Water shortage and water pollution combined, becomes a big restriction factor in the northern parts of China and some cities. In addition, serious water waste phenomena, low efficiency of water use and improper management of urban water resources have become the urgent issues to be solved in the sustainable urbanization process. With the acceleration of urbanization, cities and towns in China will face three major issues: water resource shortage, wastewater treatment and water environment management.

　　3.1.4 Increasing pressure on the environment.

　　The city is the focal point of economic activities, which inevitably lead to environmental problems. In recent years, China has made certain achievements in protection of urban environments. Worsening trends of environmental quality have been generally halted, and some cities have made great improvement in environmental quality. However, the urban environmental quality is still not adequate and urbanization faces increasing environment pressure.

　　(1) The total emission of main urban pollutants still remains at a comparatively high level, much higher than environmental carrying capacity, which makes the reduction of total emission of regular pollutants a tough job.

　　(2) Main river basins and river systems are badly polluted, pollution of urban river reach is prominent, and 78% of the rivers flowing through urban areas are not suitable as drinking water source, freshwater lakes are affected by eutrophication, many cities in developed areas have been facing severe water shortage crises due to bad water quality, and the water quality of nearly 50% water source of urban drinking water cannot meet the standards; the rate of urban sewage treatment is only about 20%.

　　(3) Urban air quality still remains at a comparatively highly-polluted level. Sixteen of the world's 20 most polluted cities are in China. Over half of cities are above Class II of national ambient air quality standard.

　　(4) The disposal issue of urban solid waste is huge and the treatment level is low, and the ratio of harmless disposal of urban household garbage that meets requirements of environment protection is comparatively low, resulting in severe secondary pollution. In 2002, the household garbage produced in 660 cities in China reached 136 million tons, with a concentrated disposal rate of 54%, leaving 62 million tons untreated. The monitoring data shows that the rate of harmless disposal of garbage is less than 20%.

　　(5) Such issues as poisonous and harmful organic pollution, electromagnetic radiation pollution and hazardous waste pollution are increasingly severe, and various types of pollution have spread from cities to small towns and rural area.

　　3.2 Dual Urban-Rural Economic Structure

　　3.2.1 Dual urban-rural economic structure still exists.

　　Dual urban-rural economic structure is the major problem in China's industrialization and modernization process. China pushed forward its industrialization rapidly under the special historical circumstances, and implemented the guideline of giving priority to heavy industry and policy of urban-rural segregation. These factors resulted in slowed social transition due to the previous planned economic system and dual urban-rural economic structure.

　　During the period from 1952 to 1978, the proportion of agriculture in gross social output value decreased from 45.4% to 20.4%, while at the same time, the proportion of the rural labor force in gross social labor force only decreased from 83.5% to 73.8%, indicating that a large amount of labor force was kept in agriculture sector; the consumption level of rural residents only increased by 57.5% in the past 30 years, equal to half that of non-rural residents in the same period.

　　Since the reform and opening-up, with the development of market economy and deepening of reform, the scope and scale of factors exchange between urban and rural areas are increasingly expanding. At present, almost 200 million of the rural labor force has found employment in non-agriculture sectors and urban areas. During the period from 1978 to 2004, the proportion of population employed in primary industries has decreased from 70.5% to 46.9%. Yet so far much of this surplus labor force remains in rural areas, and the actual income gap between urban and rural residents has further expanded to 5:1 to 6:1. The basic approach to change the dual urban-rural economic structure is industrialization and urbanization. The transformation from dual urban-rural economic structure to a more modern social and economic structure is a difficult task that will take a long time to be accomplished.

　　3.2.2 Urbanization lags behind industrialization.

　　According to international experience, with industrialization and economic development accelerating in the transitional period from early stage of industrialization to mid-stage, the speed of urbanization will accelerate as well, even higher than that of industrialization. The urbanization level in this period is generally higher than the industrialization level. At present, although China has entered into the mid-stage of industrialization, urbanization level is about 20% lower than that of countries of equal industrialization level. Examined from the perspectives of technology, manufacturing industry and the proportion of value-added in industry to the total value-added in industry and agriculture, China has exceeded the level of developed countries when they basically completed industrialization, but the urbanization level equals only that of theUK in 1850 (37%), North America in 1910 (41%) and Japan in 1950 (38%).

　　Urbanization lags behind industrialization, and economic development further constrains economic development and social progress and brings at least three adverse impacts such as:

　　(1) A large amount of labor force remains in rural areas, causing severe unemployment and low labor productivity, and hinders optimized deployment of resources between urban and rural areas and reasonable flow of productive elements;

　　(2) It directly influences the expansion of market capacity, forms continuous consumption fault between urban and rural areas, constrains the growth of consumption demand, and further influences sustainability of the economic growth;

　　(3) It intensifies the deterioration of ecological environment in urban and rural areas.

　　3.2.3 The imbalanced size structure of urban systems.

　　China has long encouraged development of small towns, but sprawling of large cities are yet under control due to the interests of developers and city governments. Among the 200 million rural people flowing into cities, only 10% moved into cities of medium and small sizes, causing further structural imbalance of urban systems. Only a few large cities enjoy the economy of scale. Numerous small towns do not have radiating effect of urban system on the rural economy.

　　Three major metropolitan areas have been developed in the coastal areas of eastern China; The Central zone of China have also had relatively rapid urbanization, due to the resource-oriented industrial base and the development and opening–up along roads and the Yangtze River. In western areas, however, the process of urbanization is slow, due to poor economic and social development, and vulnerable ecosystems and the environment. The spatial heterogeneity of urban development among eastern, central and western areas is a prominent feature, and still growing.

　　In 2003, the urbanization level in eastern, central and western area was 44.6%、33.5% and 27.7%, respectively, an increase of 24%, 14.3% and 11.7% over that of 1980. The density of cities is respectively 2.24, 0.74 and 0.27 per 10,000 square kilometers. In many cities, there appears false height and homogenous industrial structure, and a reasonable system for collaboration has not yet formed among large, medium and small cities. Even though the population scale and regional space of extra large cities almost equal those of developed countries, the economic structural level, overall capacity and efficiency index are much lower. For example, the GDP of Shanghai is only about 1/4 of Hong Kong and 1/20 of Tokyo.

　　3.3 Huge Pressure on Urban Employment

　　3.3.1 The oversupply of labor force is hard to change.

　　Employment is the essential factor of people's livelihood and national stabilization. Employment directly influences the urbanization process, people's living and social stability. China has a large population and rapidly-increasing labor resource, which results in a continuous pressure on employment. China has an employment population of 750 million in both urban and rural areas, over 200 million more than that of the total developed countries, and increasing over 10 million annually. Besides, China is in the dual transitional stage of economic system reform and economic structural adjustment. Disguised unemployment becomes visible, the organic composition of capital shows a trend of obvious increasing, and every 1% increase of GDP that once stimulated 0.32% of employment increase in 1980s could only stimulates less than 0.1% of employment increase now. Therefore, China will face great pressures from employment demands for a long time.

　　The labor force is still increasing rapidly in China, in addition to the large number of laid-off and unemployed people. Yet the annual new employment opportunities are limited, and the gap between labor force supply and demand is huge. In 2004, the supply of urban labor force still remains at a level of 24 million, including 10 million newly increased labor force and about 14 million laid-off and unemployed people. Calculated according to goal of anticipated economic growth and employment flexibility coefficient, the employment opportunities provided by new demands for urban labor force and by turnover of workers total about 10 million. This means the gap between labor force supply and demand will reach 14 million per year.

　　3.3.2 The contradiction between urban areas' limited ability to accommodate additional labor force and continuous increase of surplus agricultural labor is increasingly prominent.

　　The rural labor force in China is in a severe surplus situation, with a total number of 150 million rural surplus laborers. It is extremely difficult to solve the employment problem of a great number of surplus rural laborers. It is hard for farmers to increase income and there exists the urban poverty problem, which to a great extent is the issue of employment. A one percent increase of annual speed in China's urbanization means a transfer of 13 million rural people, among which about 8 million need to seek jobs in urban areas. The solution for surplus rural labor depends on industrialization, urbanization, and the increase of numbers of cities and administrative towns, and the expansion of urban population scale.

　　China is at the mid-stage of urbanization, but it is hard for the heavy industries of capital-intensity, technology-intensity and intelligence-intensity to absorb large increases in labor force. The flexibility of urban employment to economic growth is further decreased, aggravating severe employment contradiction. In urban agglomerations with dense population and advanced industry and agriculture, such as Yangtze River Delta, Pearl River Delta Region, Jiaodong Peninsula, Beijing-Tianjin-Tangshan region and Liaodong Peninsula, the contradiction between large population and limited land, and the issue of labor surplus is particularly striking.

　　3.4 Poor Level of Urban Infrastructure

　　3.4.1 The issue of urban infrastructure aging is becoming increasingly obvious.

　　In recent years, China has accelerated the construction of urban infrastructure. Cities are under great change and urban functions are being improved. However, due to historical factors, huge demand for capital, long construction period and low operational efficiency, urban infrastructure still cannot meet the requirements of economic and social development, and the facilities are gradually aging. Infrastructure in old cities has been overloaded for a long time and is gradually deteriorating.

　　The scale, density and pipe diameter of networks for urban water can hardly meet the requirements for continuously increasing scale of water supply. The number of independently-operated wells remains at a high level, and the leakage and damage of pipe networks are horrible. The construction of in-city transportation facilities is especially short of capital, and large numbers of urban dead-end roads, T-shaped road junctions and bottleneck roads urgently require upgrade. Central cities lack public transportation featuring large-capacity, high speed and convenience, and most cities are short of ancillary transportation facilities such as parking lots. The drainage facilities and capacity for sewage treatment are insufficient, and waste collection system, transportation system and disposal system are far from perfection The medium and small cities are surrounded by garbage dumps. Urban energy structure is single, concentrated heat supply area is small and air pollution from a combination of soot and vehicle emissions is showing an increasing trend. Urban afforestation is insufficient.

　　3.4.2 Insufficient abilities to deal with disaster incidents, disaster prevention and damage reduction.

　　In China, more than 70% of the cities and towns, over half of the population and more than 75% of agriculture and industries has spread into areas ravaged by severe natural disasters, such as floodwater, and earthquakes. However, the cities and towns have limited abilities to resist these disaster events, and the damages caused by disasters are rather severe. Cities often focus on disaster response only, instead of disaster prevention. The ability to handle severe natural disasters, accidents and public security incidents, etc., needs to be improved urgently. Furthermore, the socialization and commercial operation of disaster safeguard networks is left behind the actual demand for post-disaster rescue and construction.

　　3.4.3 Disorderly urban construction and loss of local characteristics.

　　Cities in China have rich historical and cultural backgrounds, plus magic natural scenery, forming urban landscapes with regional characteristics. Yet the extensive construction of recent years badly destroyed these historical civilization features, natural landscapes, with national culture characteristics and regional characteristics gradually disappearing. As the construction patterns of large, medium and small cities are basically the same, from street of European architecture to large-scale use of lawns, from clusters of skyscrapers to development of new areas, the "clone" phenomena becomes apparent. The fear is that the universal "one thousand cities with the same face" will reduce distinctive urban identities.

　　3.5 Imperfect Systems and Mechanisms

　　3.5.1 Urban-rural planning and regional planning lacking legal guarantee.

　　Although China has made relatively complete laws and regulations concerning urban planning, regional planning is lacking legal guarantee and authority. In some regions, the contradictions between urban and neighboring areas resulted from unharmonious planning between the urban area and the whole region. At the same time, the formulation, implementation and supervision system of urban planning and construction policy are not perfect. Public participation is low, and the decision-making lacks scientific process and democratization. Various divergences exist between actual construction and planning objectives. Due to the lack of effective supervision of the restraint and responsibility claim system, problems such as loose implementation of urban planning, arbitrary expansion of scale, alterations in the nature of construction and content without authorization happen from time to time in the process of urban infrastructure construction.

　　Some formulations of urban planning lack a scientific basis and sufficient research and demonstration, resulting in digression between planning and actual development and between urban construction and planning. Together these problems have caused acute conflicts between economic development and land use. Thus the fundamental role infrastructure should play in overall urban planning and long-term development cannot be played out well.

　　3.5.2 Incomplete reform of the system that caused urban-rural segmentation.

　　(1) The reform of household registration system has certain limitations. Although small towns have loosened Hukou settlement requirements, it is not attractive enough for farmers due to limited economic scale and employment opportunities. Large numbers of rural surplus labor flows into large and medium cities and eastern urban areas. But the threshold of household registration is still relatively high, since the Hukou settlement limitation is only relaxed for those people with higher technological skills and investment capacities, while those migrant workers that have worked in cities for many years and have stable income still could not become urban residents.

　　(2) The social security problem for migrant rural workers has not been fundamentally solved. Incorporating industrial injury insurance and medical insurance of migrant rural workers and merchants into the scope of social security is just beginning, while their pension has not been incorporated into the urban pension program yet. When rural collective-owned land is expropriated, most farmers that lose their land cannot get reliable compensation for employment and social security.

　　3.5.3 Reform of urban infrastructure, construction management and operational systems requiring standardization.

　　Due to the restrictions of the traditional system, most infrastructure, especially municipal facilities are still considered as public goods, whose construction and operation are mainly undertaken by government. As social fund participation is rather low, the financial burden on urban government is growing heavier and heavier, and it is difficult to sustain maintenance investment. As the pricing system of municipal public goods and services has not been put in order, the cost of some facilities and the price of operation are reversed. Sewage treatment and waste disposal lack the capacity to be self-supporting. This constrains the development of urban infrastructure and improvement of urban function.

　　Without providing for adequate supervision, some cities have opened to the private sector opportunities for the development and operation of heating networks, gas pipeline networks and water supply and drainage networks before the condition for doing so is mature, thus causing potential hazards to the supply of these public goods. At the same time, there are no integrated policies and regulations to govern the participation of the private sector in the construction of municipal public facilities.

　　The government does not have integrated policies and regulations for professions related to urban infrastructure and public services; nor does it have specific rules to apply for policy making, pricing mechanism, levy rate, market access qualification, operation procedure, supervision measures, etc. The supply of private capital to the urban infrastructure is far lower than actual demand.

　　3.5.4 The lack of a system and mechanism for harmonious urban development.

　　At present, relations among various cities and towns in certain regions are not close. The urban government seldom takes harmonious development with neighboring urban areas into consideration. In many countries of the world, the more developed a region's economy is, the higher it demands a coordinated development among cities within the region; in many developed countries, metropolitan areas, in reality, represent a mutually related and coordinated development among cities and towns. Moreover, within Chinese cities, urban community management is not perfected. The community decision-making lacks public participation mechanisms, and community service networks are far from being perfect, not meeting the requirements of either old or new residents for basic social services.

　　4. Sustainable Urbanization Strategy in China

　　4.1 Scenarios

　　Many international and domestic research institutions and scholars have made forecasts of the urbanization level of China in the following 20 to 30 years. According to these forecasts, we can outline the urbanization situation in China in 2020 on the basis of four different levels of annual rate of urban growth: 0.6%, 0.8%, 1.0% and 1.2%, as noted in the table.

　　Urbanization Level in China, 2020

　　From January to July in 2005, urban areas have arranged employment for 6.65 million people, and if that level of job growth could be maintained, it is feasible to achieve an annual average increase of urbanization level of 1.0 percent. Concerning annual required land area, land shortage is a tough issue for all four scenarios. As the total urban built area reached 19.8 thousand square kilometers in 2002, urban construction still needs a total land area of 20 thousand square kilometers in the coming 15 years, even if the annual increase rate of urbanization is only 0.6 percent.

　　4.2 Resource and environment demand analysis of urbanization

　　4.2.1 Forecast on demand for energy resource.

　　With continuous economic development and accelerating urbanization, the supply of finite energy sources such as oil and gas tends to be insufficient, and energy resource availability will become one of the key factors that hinder economic development. The gap between oil supply and demand becomes increasingly sharp. According to forecasts, by 2020, 50% of oil and gas resources will be obtained though foreign import or exploitation of foreign oil and gas resources. Although China's energy consumption per GDP will continuously decline, there still will be significant increases in the energy consumption per capita and total energy demand. There remains comparatively big differences between supply and demand in the energy balance among regions and types of energy.

　　4.2.2 Forecast on demand for water resources.

　　With the development of urbanization, the proportion of urban water consumption will significantly multiply. Water shortage problems in urban area will persist and be exacerbated. According to forecasts, in 2010 and 2030, urban population will be 550 million and 750 million respectively, and the corresponding water demand will increase to 91 billion m3 and 132 billion m3 respectively. New sources of increase in 21st Century water consumption will be concentrated in urban areas. By 2030, it is predicted that urban industrial water consumption will increase from the current level of 37 billion m3 to 66 billion m3, and urban household water consumption will increase from current 26 billion m3 to 66 billion m3. Thus total national urban water consumption will increase to 132 billion m3, with an increase of approximate 70 billion m3.

　　4.2.3 Forecast on demand for land resources.

　　Under the general trend of gradual improvement of urban regional service functions, great improvement of urban opening degree, continuous improvement of urban transportation systems, and increasing rate of access to automobile, the bigger the city scale is, a higher proportion of available land will be needed for transportation use. Along with the improvement of people's quality of life, there comes the higher requirement for urban green areas and ecological buffering belts. According to the forecast of the China Academy of Urban Planning and Design, when China reaches the level of mid-ranking developed countries, the preferred indices of land-use scale for meeting the requirements of sustainable urban development will be: 30-35 m2 of residential land per capita, 20-25 m2 of industrial land per capita, 15-20 m2 of urban road per capita, 8-15 m2 of public facilities per capita, 7-12 m2 for green space per capita, 5-8 m2 for municipal public facilities per capita, 5-10 m2 for storage per capita and the total land per capita shall be 90-120 m2.

　　4.2.4 Forecast on environment capacity.

　　The formulation of urbanization development strategy and urban plan in China should take into consideration urban resource carrying capacity and environmental capacity, especially the land capacity and water resource capacity. Within the limits of resource and environmental sustainable use, urban spatial formation should be reasonably planned and effectively controlled, in order to realize the urban structure with optimized urban system and well coordinated economy, society, resources and environment.

　　4.3. Strategic Analysis and Options

　　4.3.1 China is in the stage of accelerating urbanization and urbanization level will continuously increase.

　　Since reform and opening-up, China has successfully found an urbanization road of Chinese characteristics after 26 years' exploration and practice, which creates favorable conditions for the continuous, rapid, harmonious and healthy development of national economy.

　　From the perspective of economic tendency, the rapid development of China's economy and continuous deepening of reform will further promote the urbanization process. International and domestic urbanization experience shows that economic development and urbanization mutually promote and supplement each other and the speed of urbanization in one period depends on the condition of economic growth. In the first 20 years of the 21st Century, China's national economy will enter into a new stage of rapid development with the characteristics of accelerating industrialization, trying to increase the GDP of 2000 fourfold by 2020.

　　With China's dual urban-rural structure gradually changing and breakthrough in system innovation, such as a breakthrough in the household registration system, elimination of systematic barriers for rural population going into cities, a huge urbanization potential will be released and urbanization speed will be continuously improved.

　　China's urbanization is in the stage of accelerating development from early stage of urbanization to mid-stage. According to international experience, when urbanization level reaches 30%, urbanization will enter into the accelerating stage. In this period, urbanization level increases 1% annually. Therefore we can predict that, the future period is a crucial period of China's accelerating urbanization, and China's urbanization will further speed up and enters into the new stage of accelerating urbanization development.

　　In the future, China is likely to further speed up its urbanization. The annual increase speed of urbanization in the coming 10 years might reach or exceed 1%. According to existing urban population statistical standard, the urbanization level will reach 45% to 50% in 2015, equal to average international urbanization level in the middle of 1980s, and the gap with international level is expected to decrease. According to calculations, the total population in China is about 1.48 billion in 2015, with an urban population from 666 million to 740 million, increasing 186 million to 260 million from the forecast number of 480 million in 2005 and 18.6 million to 26 million annually in 10 years. If we take rural surplus population that flows in urban area or "disguised urban population" into consideration, China's urbanization level in 2015 will exceed 50%.

　　If urbanization can be smoothly promoted, the urban population is about 800 million in 2020 and 1 billion in 2050. China's economic power and technological power will be significantly improved and international influence obviously strengthened. Urbanization is absolutely not simply migration from rural area into urban area, but the fundamental change of hundreds of millions of people's production style and life style, which significantly improves the civilization level of the whole nation.

　　4.3.2 China will form urban systems with different types, different scales and various characteristics in the next 15 years.

　　(1) The number of extra large cities that have a population over 1 million per each is increasing, while their urban population is not increasing rapidly, but a large number of medium and small cities and small towns will take shape surrounding some extra large cities, forming dense urban agglomerations and urban zone. According to the current development trend, five urban agglomerations or metropolitan areas will be formed: Pearl River Delta urban cluster-of-cities with centers of Guangzhou and Hong Kong; Yangtze River Delta urban cluster-of-cities with the center of Shanghai; Shangdong Peninsular urban cluster-of-cities with centers of Jinan and Qingdao; Jing-Jin-Ji urban cluster-of-cities with centers of Beijing and Tianjin; and Liaodong Peninsular urban agglomeration with centers of Shenyang and Dalian. The five urban cluster-of-cities will be the regions with the most rapid future economic growth and population increase in China.

　　(2) The number of large cities with a population from 0.5 million to 1 million per each will be significantly increasing, in which population will be increasing rapidly.

　　(3) The small cities and towns will grow from an increase in numbers to development of scale and maturity. A number of counties and administrative towns with good development prospects and development conditions will grow to small cities with a population of less than 200,000, some even to medium cities with a population less than 500,000.

　　(4) Most small cities and towns will become mature with distinctive function and operating facilities representing a clear responsibility distribution.

　　(5) Market towns will tend to decrease and some may be upgraded to administrative towns and some may be merged during the process of development. Their population increase is limited and there may be net outflow of population in some market towns with poor development condition.

　　4.3.3 Implement sustainable urbanization strategy and promote healthy development of China's urbanization.

　　Sustainable development is "to meet the demands of this generation without sacrificing the demands of future generations", which represents the principles of justice, continuity, consistence and harmony. Sustainable urban development is a brand-new urban development concept, as well as an action standard of promotion of urban progress. Sustainable urban development focuses on promoting urban economic growth, while paying more attention to the improvement of urban quality, adjustment of economic structure, and transformation of growth approaches, so as to accomplish harmonious development of urban economy, society, population, resources and environment.

　　China is promoting urbanization under the circumstance of large population, extremely limited cultivated land and weak overall carrying capacity of resources and environment. From the aspect of resource per capita, China is comparatively short of some major resources. The utilization of resources is not reasonably managed, with severe waste of and destruction to the resources, a low level of utilization efficiency, and poor resource protection. Thus urbanization faces a more and more severe resource situation. Therefore, it is important to choose an urbanization pattern that takes into consideration the situation of the country in terms of efficient use of land and energy, ecological protection, and easy clustering of industry and population in those cities and towns.

　　To take requirements of social development and carrying capacity of resources and ecological environment into consideration, we need to follow a path of sustainable urbanization of conservation and high efficiency, harmonizing the process of urbanization with population, resources and environment.

　　4.3.4 A needed sustainable urbanization strategy is to coordinate the relations between urban growth and various factors that support urban development nationally or regionally.

　　Included are four aspects as follow:

　　(1) Construct sustainable cities and towns. As the center of population and industrial activities, cities and towns play an extremely important role in national economy and social development. The core content for implementation of a sustainable urbanization strategy is to maintain urban sustainability, and to improve urban carrying capacity for population, resources and environment.

　　(2) Provide overall coordination of urban and rural economic and social development. City, town and region are an organic unit. Properly protect urban regions, especially the surrounding ecological environment, and improve resource and ecological environment carrying capacity of the urban region in order to enable sustainable urban development. We need to promote orderly urbanization of rural population, according to the employment abilities of the rural labor force, the urban comprehensive absorptive capacity and through a systematic social safety network.

　　At the same time, with a view of the next generation of farmers to promote urbanization in the long run, we should make the most of the next generation of labor force in rural areas through development of professional education and skill training so that they can become modern industrial workers with high-quality skills and specialization, or professional staff in the service industry and settle down in cities.

　　(3) Choose suitable urbanization form. We should take urban agglomeration as the main form to promote urbanization and establish sustainable regional urban networks. Urban agglomeration has characteristics of creating more employment opportunities and strong ability of factor agglomeration, which effectively prevents "city disease" caused by excessive sprawling of a single city, as well as avoiding land waste caused by scattered urbanization. In order to avoid excessive congestion phenomena in the scope of whole region due to the congregation of population and industrial activities, which causes regional ecological environment deterioration, it is necessary to strengthen functional collaboration among cities and towns, to set up ecological corridors and ecological protection areas and make it a regional urban network of ecological sustainability.

　　(4) Develop network city with multi-centers. The population and industrial activities of some large cities in China are highly concentrated in small crowded areas. In order to fundamentally solve the issue of congestion in large cities, on one hand, we should control population in large cities and general industrial growth and prevent excessive sprawling of large cities; on the other hand, we should improve spatial structure of large cities, develop network city with multi-centers and promote carrying capacity of urban resources and environment.

　　5 Policy Suggestions for Sustainable Urbanization

　　5.1 Scientific Planning and Legal Management

　　5.1.1 Formulate and improve urban planning that meets the requirements of accelerating development and sustainable development for cities.

　　In the next 20 years, China's economy will grow continuously and rapidly. Cities and towns, as economic centres, will be at a critical stage of accelerating urbanization. At the same time, it is clearly seen that China has entered a "bottleneck" with deteriorating problems with resources and environment. The conflict between shortage of resources, worsening ecological environment and social and economic development has become more and more acute. Urban planning should meet the objectively determined requirements of urban development, giving sufficient consideration to new situations and problems, applying scientific development concepts, placing emphasis on accelerating the transformation of the economic growth mode, improving urban economic benefits, protecting and rational using resources, protecting ecological environments and historical cultural heritage, etc., so as to achieve sustainable urban planning to guide urban development in a scientific and reasonable manner.

　　5.1.2 Formulate scientific urban development plans based on urban environmental capacity and resource carrying capacity.

　　Sustainable urbanization should be realized on the basis of harmonious urban development with respect to resources and environment. Urban planning should guide urban sustainable development, speed up the adjustment of economic structure, transform economic growth style, and promote the transformation of urban development from extensive growth to intensive growth according to resource and environment conditions. At the same time, we should carry out population development trends, focus on analysis of population quality and composition, and carry out forecast for natural disasters. On this basis, we can study the relations between indexes per capita and urban scale from the aspects of resource and environment carrying capacity and regional urban systematic layout.

　　5.1.3 Strengthen regional planning and control, and promote scientific function specialization and collaboration among cities and towns.

　　Regional planning and regional urban system planning should play the role of guiding and controlling urban development. We should research and formulate Regional Planning Law as soon as possible. To meet the requirements of overall urban and rural development, we should consider optimized deployment of industry, population and resources from a larger regional scope, and solve the problems of industrial development, water resource shortage, environment deterioration and risk of disasters, so as to realize sustainable urbanization. We should strengthen regional urban systematic planning to guide the development of urban cluster of cities and exert better guiding and promoting effect of cities and towns on regional economic development.

　　5.1.4 Strict implementation of compulsory components of planning, to regulate and legalize urban construction and development.

　　We should establish effective planning implementation management and supervision mechanisms to guarantee the implementation of urban planning, and safeguard the consistency and authority of the planning. We should accelerate the process for urban planning revision and approval, and supervise local governments to formulate detailed planning of central urban areas and important sites. Each city should organize urban development stage by stage with emphasis based on urban functions stipulated in the planning.

　　5.1.5 Strengthen urban planning, design, construction and management; achieve distinctive city styles and raise management quality

　　(1) Strengthen overall coordination and develop an operating mechanism for cooperation and coordination among relevant government departments. Problems regarding systems, law and regulation, policies, capital, planning and management should be dealt with in a common context. Urbanization issues concerning the household registration system, adjustment to administrative regions, criteria for establishing cities and town, land use for urban construction, urban area layout and financial and taxation systems, etc. should be considered as a whole. Overall planning for urbanization, regional economy, infrastructure networks, trans-regional water distribution and ecological environment construction should be promoted. The ratios between "population urbanization" and "land urbanization" should be coordinated.

　　(2) Improve overall urban quality, strengthen the concept of government services, and improve overall management quality in urban land, urban landscape, tourist sites, road and transportation, social public security, community management and urban disaster prevention and reduction.

　　5.2 Improve System and Rationalize Arrangements.

　　5.2.1 Further improve urban system.

　　Economic development and levels of market maturity differ significantly in various regions. Urbanization should be promoted in accordance with objective principles, suitable for levels of economic development and market maturity, and adopt a diversified urbanization method good for coordinated development among cities of all sizes and agreeable to China's real situation, so as to gradually develop a sound urban system. Therefore, we should identify priorities in developing small towns, actively develop medium and small cities, improve functions of regional major cities, and give play to large cities for their outreaching functions in order to guide the development of urban city clusters in an orderly way.

　　5.2.2 Guide reasonable urban development and arrangement.

　　(1) We should improve and modify existing city clusters with emphasis on planning and designing for new city clusters, and reasonably developing a number of major cities and medium and small cities. In natural protected areas, with the exception of tourism and tourist services, local people who are engaged in other types of economic activities should be encouraged to gradually move out of the area.

　　(2) We should improve spatial planning within cities, in the process of which we should guarantee ecological land-use such as green areas and wetlands, and protect historical and cultural heritage sites, so as to form a harmonious interactive mechanism between man and nature, and to meet the requirements of sustainable development. We should integrate various development parks, university science parks, new urban district and satellite towns; improve urban functions and promote energy-saving practice.

　　5.2.3 Accelerate regional urbanization.

　　(1) In Eastern areas, focus should be made on strengthening coastal urban city clusters in the Yangtze River and Pearl River Delta Regions, and Beijing-Tianjin-Hebei region, further improving functions of major cities, developing medium cities rationally and small cities and towns vigorously, forming a complete urban system so as to effectively avoid problems due to over-sprawling of large cities in the process of moving surplus labour force from rural areas and urbanization, and to let large cities play the role of economic centre and take the lead in urban and rural harmonious development.

　　(2) In Central areas, focus should be laid on developing regional and provincial major cities, improving city functions and outreaching capacity. Priorities should be given to developing medium cities with sound foundation and improving quality of small towns; and meanwhile, conditions must be made to promote the development of Wuhan city cluster, Zhongyuan city cluster, and township-intensive regions like Chang-Zhu-Tan and Ha-Da-Qi areas.

　　(3) In Western areas, emphasis should be put on the transformation of existing major cities and developing new economic centres with priority laid on large regional major cities like Chongqing, Chengdu, Xi'an and Lanzhou; and provincial medium major cities like Guiyang, Kunming, Lhasa , Yinchuan, Xining and Urumchi; and to strengthening economic power and improving city functions, so that these places will become important "strongholds" in the Western Development for promoting urbanization. In the Guanzhong and Chengyu regions where the condition for urbanization is mature, emphasis should be laid on developing township clusters to achieve rapid township urbanization in those regions. Small towns should be built in selected areas with major natural resources. Rural residents in ecologically fragile and sensitive areas should move into towns, with urbanization promoted along with the protection and treatment of ecological environment.

　　5.2.4 Strengthen urban infrastructure construction.

　　Efforts should be made to create a favorable living environment for residents, to strengthen urban ecological construction and comprehensive treatment of pollution, to improve the functions for housing, public and community services, and to improve urban environment. At present, attention should be paid to the auxiliary facility construction for urban infrastructure, and to the building of sound infrastructures including road, water and electricity, communication, municipal maintenance, environment protection, education, healthcare, culture and entertainment facilities, laying a solid foundation for the long-term urban development.

　　5.3 Integrate and Coordinate Urban-Rural Development.

　　5.3.1 Develop urban economy and improve urban employment capacity.

　　We should choose urban industrial development strategy that creates employment opportunities, and adopt policies of harmonious development of tertiary industries for growth in employment. We should continuously support the growth of traditional service industry, pay attention to service industry serving production, high-tech, and high-level services such as science, education, culture, healthcare, finance, insurance, securities and consultancy, and provide employment opportunities for new quality labor force. We should adjust policies on investment, financing, taxation and market access; positively develop labor-intensive industries, medium and small enterprises and private economy; continuously use labor-intensive, multi-service industries and development of medium and small enterprises as the main channel for solving employment problems, especial the employment of migrant workers. According to local conditions, work opportunities should be created in areas of resource development, ecological conservation (construction), public infrastructure construction, etc., which on the one hand meet the needs for economic and social development, and on the other hand absorb large numbers of workers. New jobs should be created in public health, city environment protection, resident medicare as well as community and household services, etc

　　5.3.2 Establish integrated urban-rural ecological industrial systems and strengthen ecological environment construction.

　　China has a large population, with relatively poor resources, and a vulnerable ecological environment. If the current mode of development pattern of high consumption, high energy consumption and high pollution continues, it will cause greater waste and destruction to current resources and ecological environment, severely hindering the process of modernization. We should upgrade urban and rural traditional industries with "green technology".

　　(1) For cities and townships depending on resource exploration, we should foster new substitute industries, and transfer local labor force, so as to realize resource protection and improve environment through industry transformation, gradually integrating ecological conservation (construction) and enterprise operation, reducing and eliminating dependence of economic development and population on resources, in order to achieve sustainable development. At the same time, the development of ecological industry should be encouraged. To the enterprises and industries featuring forestry and mining, their responsibilities and obligations in the protection of resources and ecological environment should be identified; development should be pursued through rational planning, scientific production and protection. Resources and ecological environment should not be sacrificed for short-term economic benefits.

　　(2) We should develop ecological agriculture, and apply modern science and technology to build an agricultural ecological system according to local conditions. In regions with rare natural resources and a vulnerable ecological environment, migrants should be encouraged to move out of the region in order to protect the environment and resources. In regions with relatively sound conditions for agriculture, strategies on ecological agriculture should be carried out, coordination between urban and rural areas should be strengthened, traditional agriculture should be transformed with "green technology", increasing the role of townships in pushing rural development and making industry help feed agriculture through the production of green food.

　　5.3.3 Establish unified urban-rural labor force markets and eliminate various discriminative employment policies towards migrant workers.

　　We should break up industrial monopoly and regional barriers, encouraging labour force to flow between urban and rural areas, regions, occupations and other economic entities in a reasonable and orderly fashion. We should complete and improve employment service system, raise overall employment service level and form a mechanism that allows workers to choose work under the guidance of market forces with government support.

　　We should clean up and cancel discriminative policies and unreasonable charges, improve employment environment for migrant workers, and develop equal employment system between urban and rural labor. We should help unemployed farmers by finding jobs for them and supporting their lives. We need to change the common concept of employment, encourage self-employment and flexible employment.

　　5.3.4 Strengthen employment service system for transferring rural labourers and improve their employability.

　　We need to strengthen basic education in less-developed and rural areas, promote development of vocational education, accelerate training for people with specific skills that are short in supply. We should focus on secondary vocational education and vocational training, in order to improve rural workers employability in cities, providing high quality workers for urban economic development.

　　5.3.5 Integrate public service resources to meet the requirements of migrant workers and their family members for basic public service.

　　We should take migrant workers' requirements into consideration in urban planning, housing construction, public service and community management, solve their problems of housing, children's education, healthcare and basic social public service, and gradually reduce the gap between migrant workers and urban residents in using basic public services.

　　5.4 Efficient Resource Use and Strengthen Environmental Protection

　　5.4.1 Promote urbanization that is resource-saving and environmentally-friendly.

　　Urban development should be carried out in a controlled, orderly and compensative manner according to resources and environmental capacity. We should actively advocate efficient use of energy, water, materials, land and resources; reduce the consumption of resources and waste generation; recycle regenerated resources; and mitigate the contradiction between resources supply and demand; and at the same time educate the public to adapt to a new lifestyle and consumption behavior in order to build resource-saving cities and towns. We should insist on prevention as the primary target, and use comprehensive treatment to strengthen environment protection for environmentally-friendly cities and towns.

　　5.4.2 Implement the Action Guideline for Sustainable Development in the Beginning of 21st Century in China in the process of urbanization.

　　（1）Strengthen public awareness education.

　　（2）Implement pilot demonstration projects, and according to the target for sustainable development formulate a comprehensive demonstration integrating technology, management, policies, and mechanism. Different types of sustainable urbanization development models should be explored and extended nationwide.

　　（3）The sustainable development strategy for urban development planning should be incorporated into the "11th Five-Year Plan", to ensure an overall implementation of the Guideline.

　　（4）Information on environment, ecology, and natural resources in various cities should be incorporated, so as to improve the public management capacity in sustainable urbanization development.

　　5.4.3 Promote efficient use of energy, water, materials, land, and comprehensive utilization of resources in China to facilitate sustainable urban development.

　　（1）We should actively promote efficient use of energy and improve the efficiency for resources utilization in urban areas. We should carry out the certification of energy-saving products, improve standard system for product energy consumption, set energy consumption standard for main equipments, accelerate upgrade of energy-saving technology and promote application of new technology and new products.

　　（2）We should promote water-saving cities, support efficient use of water in industries with high water consumption, reuse and recycle treated waste water, and, in coastal regions suffering water shortage, support seawater desalting, direct utilization of seawater and the construction of industrial water-saving demonstration parks.

　　（3）We should promote the comprehensive utilization of important resources and facilitate sustainable utilization of resources. We should encourage the elimination of solid clay bricks and use new wall material with the focus on recycling discarded household appliances and electronic products, make use of coal clinkers and coal dust, and use wood products efficiently as well as wood substitutes.

　　（4）We should implement strict land management system according to laws, apply tight control over land use change from agriculture to construction, restrain the scale of urban construction, and improve the standard of land use for construction, so as to promote the intensive utilization of land.

　　（5）We should develop circular economy and facilitate the transformation of economic growth mode. We should carry out circular economy demonstrations in selected cities and industrial parks, and establish a circular economy evaluation index system within the basic framework of measurement in resource productivity, energy consumption, resource recycling, recycled resource utilization and ultimate waste disposal.

　　（6）We should improve pricing reform, especially overall water pricing reform, establish water pricing mechanism with the emphasis on sustainable use of water resources, raise the efficiency of water utilization. We should establish a compensation system for rare resources, build and improve a levy collection system for waste water treatment, garbage disposal, solid waste disposal, hazardous waste disposal, etc., so as to promote circular use of resources and environmental protection.

　　5.4.4 Enforce environmental pollution prevention and improve urban ecological environments.

　　（1）We should strictly control new pollution, implement national policies and environmental protection laws and regulations for industry, and implement policies for eliminating new potential pollution sources.

　　（2）We should transform economic growth mode, encourage clean production technology and equipments, utilize resources reasonably, in order to increase production without increasing pollution or even with reduced pollution.

　　（3）We should take further steps to strengthen structural adjustment, continue to formulate and release national lists for forbidden industries and products, strictly restrain the development of the industries with high resource consumption and serious pollution, and improve access standard and system for industrial environmental protection.

　　（4）We should continue to carry out pollution prevention in major industries such as metallurgy, nonferrous metal, coal, electric power, petro-chemical and chemical industries, construction material and light industry, so as to solve "structural pollution."

　　（5）We should promote the treatment pollution source in key fields, pay more attention to water treatment in the "Three Gorges" areas, sulfur dioxide in "two control areas", and industrial hazardous waste pollution such as industrial waste water and chromium residue in the water diversion projects both in the East and the Central regions.

　　（6）We should strengthen the comprehensive treatment of the key areas such as the "three rivers and three lakes", Bohai Sea, Three Gorges reservoir and areas affected by the water diversion projects. We should gradually carry out the treatment of water pollution in Songhuajiang, Yangtze and Yellow river basins. We should control the pollution from large-scale livestock, birds and fishery breeding farms. We should carry out clean agricultural production and develop ecological agriculture, organic agriculture and water-saving agriculture.

　　（7）We should carry out clean production, encourage the application of clean manufacturing processing techniques and technology, eliminate and close down out-of-date manufacturing techniques, equipments and enterprises. Meanwhile, we should actively promote the development of environmental protection industries.

　　（8）We should develop small cities and towns, focus on the treatment of increasing amount of "three wastes" pollution in the township and village enterprises, and construct and protect green space in small cities and towns.

　　(9) We should strengthen disaster mitigation capacity and emergency response management in large cities.

　　5.4.5 Establish and improve a comprehensive decision-making mechanism for environmental protection.

　　Analysis of environmental situation should be strengthened and objectives and measures for environmental protection should be put forward to match the current stage of urbanization so as to provide support for comprehensive decision making. We should study and establish an urban environmental protection mechanism in line with the need of market economy, and identify responsibilities and obligations of the government, society and enterprises respectively. We should reinforce the function of joint meetings for inter-department and inter-city discussions of important issues such as environment policies in order to solve severe environmental problems between cities, cities and towns, areas, river systems, etc.

　　5.5 Innovate Mechanisms and Improve Systems

　　5.5.1 Further reform the planning system.

　　We should abandon the way of promoting urbanization based on administrative regions, integrate planning system and establish planning systems with clear function and better coordination so as to exert the influence of planning in the process of urbanization. We should clarify the relationship between planning of various levels and kinds, especially the relationship between economic and social development planning, urbanization planning and land-use planning. We should strengthen spatial planning in line with economic and social development, identify main functions and spatial distribution for major regions in order to provide a basis for regional planning. Regional planning should be strengthened, giving guidance for a sound spatial planning in urban systems, important infrastructure network, major industry cluster areas, ecological protection areas, etc., so as to provide a basis for the formulation of urban planning. The urban planning should focus on improving urban development capacity, urban expansion as well as the identification of functional land use in new and old cities for residence, industry, commercial use, green areas, etc., and the location planning for infrastructure.

　　5.5.2 Accelerate the reform of current household registration system, social security system and land system.

　　In large and medium cities, we should accelerate the reform of the household registration system, loosen step by step the restriction for farmers to work and settle in cities, allowing more migrant workers to obtain urban resident status and eventually establish a population registration system that enables residents to choose their place of residence freely. We should expand the scope of the social security system, explore ways to incorporate migrant workers into the urban social security system, gradually establish a national social security system covering both the urban and rural areas for cross-region migration of labor force. We should improve the land use system, especially land ownership system, promote standard transference of rural land contracting right and explore a mechanism for farmers to get social security compensation in return for their contracting rights.

　　5.5.3 Deepen system reform for urban infrastructure management.

　　We should regulate construction and operations markets for urban infrastructure, establish an authorized operation system with government planning, competitive bidding, enterprise investment, authorized operation and government supervision; forming a mechanism for urban infrastructure building with multiple players. We should open the construction market for urban infrastructure in an orderly way, regulate market access system for public utility, and attract extensive private investment in the construction of urban infrastructures though various means such as auctioning, leasing, depositing, franchises, assets securitization, etc. We should make use of market function in operating urban infrastructure such as roads, bridges; and the commercial operation with extended authorization right for public utilities. We should formulate regulations for the supervision of public utility authorization, modifying standard for service quality and product quality, and evaluation system; and improve the mechanism for supervising service and quality of public utility.

　　5.5.4 Improve scientific decision-making mechanism of urban planning and construction.

　　We should encourage organizations and the public to participate in the urban management, and. establish a mechanism which enables the public to participate in the process of urbanization. We should adopt a system for urban planning, development and construction project announcement, and collecting feedback from the public extensively. It is necessary to reform the formulation planning and approval system in urban planning, establish two-way information exchange between public and urban planning authorities, improve public hearing system, exert influence of professional associations, agencies and experts, in order to ensure the public participation in the whole process of urban planning and management, and to improve scientific and openness level of the planning formulation.

　　5.5.5 Strengthen urban community management.

　　We should develop service organizations in communities, improve urban community service system, enhance public participation and awareness so as to urge residents to participate in public affairs in the community, and improve ability to undertake community-based management. Meanwhile, we should build safe communities, integrate and efficiently use healthcare resources and improve the public healthcare network.