Urban agglomerations demonstrate resilience of Chinese economy
Published: Apr 23, 2024 10:52 PM
A snapshot of Shenzhen, South China's Guangdong Province 
Photo: VCG

A snapshot of Shenzhen, South China's Guangdong Province Photo: VCG

There is a clear contradiction in the Western slander and disparaging of the Chinese economy. On one hand, they hype unnecessary concern and even slander toward China's rapid development in industries such as new-energy vehicles, solar cells and lithium-ion battery products. On the other hand, they concoct new narratives to disparage the Chinese economy, such as the "China peak" rhetoric.

However, ongoing Western criticism does not seem to have a significant impact on the international perception of China. Rational observers around the world recognize the resilience and vitality of the Chinese economy, and they continue to have confidence in China's economic development due to its range of clearly evident advantages.

One of the key advantages of China's economic development is the coordinated development of large-, medium- and small-sized cities by leveraging city clusters and metropolitan areas.

First, urban agglomeration can enhance economic vitality. The formation of a unified market within a city cluster gathers consumer demand on a larger scale, allowing businesses to face a larger market, making it easier to find suppliers and customers, shorten the supply chain and improve transaction efficiency.

Within the city cluster, each city is closely connected through transportation and communication, achieving a high degree of urbanization and integration, allowing resources to flow freely within a larger range and achieve optimal allocation.

The specialization of division of labor within the urban agglomeration allows similar or related industrial entities to cluster together, leading to the establishment of high-tech development zones, innovative industry clusters and industry-university-research integration bases. This will further promote the development of new and advanced industries.

Second, urban agglomeration can help reduce the development gap between cities and regions. With the parallel development of post-industrialization and the service industry, the internal structure of urban agglomerations continues to be optimized and improved. Large-, medium-, and small-sized cities are closely linked while also forming differentiated patterns of high-end manufacturing and productive service industry layouts.

Through inter-regional input-output linkages or technological linkages, the urban agglomeration increases the positive spillover effects, driving the surrounding areas and small- and medium-sized cities to integrate into the industrial network of the central city, realizing a structural transformation from single-center to multi-center agglomeration, and promoting the coordinated development of regional economy.

The development of urban agglomerations can effectively promote urban-rural integration. The urban agglomerations can spread to rural areas through layouts along transportation arteries and industrial chains, promoting the upgrading of rural industries and driving integrated urban-rural development. Unified and coordinated development planning within urban agglomerations helps promote the integration of urban and rural markets, enhance the competitiveness of agricultural products.

China's national-level city clusters have been given their own unique strategic positioning to fully leverage their respective strengths. Based on different geographical locations, economic foundations, development levels and future potential, unique development models for city clusters are determined to create differentiated layouts, laying a solid foundation for the formation of a unified national market and the realization of domestic circulation.

The agglomeration effect of urban clusters has brought high-quality development across the regional economy, living standards and ecology. For the country's regional economy, urban clusters enhance productivity and promote innovation-driven development, achieving higher quality and efficiency in economic growth. In terms of living standards, urban clusters provide more complete infrastructure, helping improve the quality of residents' lives. In terms of ecology, urban clusters ensure consistency in environmental protection policies among cities and maintain a good ecological environment.

City clusters enhance the vitality of the Chinese economy and improve the quality of development through economies of scale and agglomeration effects. They coordinate local characteristics with a global perspective, which helps achieve regional coordinated development and provides strong support for the sustained and stable development of the Chinese economy. 

The author is an associate professor at the School of Applied Economics, Renmin University of China.

Lu Angdi Photo: Courtesy of Lu Angdi

Lu Angdi Photo: Courtesy of Lu Angdi