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Effective laws and market can make successful yin cities
By Dee Bruce Sun |
February 8, 2012, Wednesday
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Print Edition
Print Edition
FOR the first time in the long history of China, the number of city dwellers surpasses that of the rural people.
According to the data released on January 16 by the National Bureau of Statistics, by the end of 2011, 690.8 million (51.3 percent) of Chinese are living in urban areas, compared with 656.6 million in the countryside.
In 1949, China's urbanization was a meager 10.64 percent; in 30 years, it moved gradually to reach 19 percent in 1979; it took off along with the reforms and open-door policies thereafter, moving more than 400 million people to urban areas and raising about 250 million out of poverty. Meanwhile China's GDP has increased 90-fold.
Why did the "industrial revolution" occur only in Europe circa 1750-1800?
In theories attempting a better interpretation, urbanization and its associated labor divisions provide some convincing alternatives.
At that pivotal moment in history, redundant labor and surplus population were forced to move to cities, and urban density surpassed a critical mass.
As a consequence, abundant room was left behind, enabling application of more productive techniques for farming; and more importantly, exchanges among urban residents spawned explosively in highly dense networks. In addition to products and services rendered, novel ideas, procedures, institutions, and rules all welled up in cities to put new inventions into effective use.
Splendors originating in urban living seem to progress without limit. In a sense, city living may enable one to rename homo sapiens to be homo urbanus for this unique invention of the human race.
The foremost contribution of city life is certainly creative activities leading to novel ideas and innovative devices.
The two most important events during the 20th century are the technology development facilitated in the US, and the economic turnaround achieved in China, as argued by Joseph Stiglitz, a Nobel laureate in economics. Both accomplishments derive directly from urbanization.
Soft power
A majority of metros grew organically out of some natural advantage, primarily on the banks of large rivers or by seaports. However, some key metros have grown out of a set of man-made rules and institutions to facilitate fair and orderly exchanges among city residents.
We will dub these "cities of yin" to characterize their "soft power" in developing. Eminent examples include Shenzhen, Hong Kong, Philadelphia, and Lübeck in northern Germany, among others.
Shenzhen was established as a special economic zone (SEZ) with a set of special rules governing a piece of open land less than 2,000 square kilometers in size. In less than 30 years these rules have transformed a set of villages of no more than 50,000 farmers and fishermen into a mega-metro of 14 million people.
In contrast with Shenzhen, which resulted from an active choice embracing opportunities from the open-door policies, Hong Kong was forced to open to British colonialism after a humiliating defeat in the Opium War. Hong Kong turned out to be even more prosperous economically than the UK.
Philadelphia offers another interesting example of the city of yin. In the mid-17th century, British King Charles II granted the dominion of Pennsylvania to William Penn, a noted Quaker. Penn wrote a charter for his new colony that guaranteed all who came to live in Pennsylvania the freedom of religion. Philadelphia soon became the second largest English-speaking city in the world. The success of Penn's new formal rules and the new norms put pressure on lawmakers in neighboring colonies. The principle of separation of church and state was adopted by the framers in the following century, and eventually written into the US Constitution.
Lübeck was built almost single-handedly by the Germanic prince Henry the Lion. Henry wanted to create a business hub in the region of the lawless Baltic Sea, so he arranged to have a huge rectangular plot of land laid out at the center of Lübeck. Henry devised a charter, a set of "most honorable civic rights" for the town. The residents of Lübeck were promised fair treatment before the law and an independent mint that would shelter them from confiscatory inflation. With this bill of rights in place, Henry invited merchants near and far to migrate to Lübeck.
In less than a century, Lübeck grew to be the most populous and prosperous town in northern Europe. Ultimately Lübeck became the seat of the Hanseatic League, an economic alliance of 200 cities that lasted nearly 500 years.
People may well claim that Lübeck was the original template for special economic zones. Its success in medieval urban history is no less brilliant and marvelous than that of Shenzhen in modern times.
The author is professor of business at California State University at Long Beach. Born in Shanghai, he studied in the US in early 1980s, and got an MA in economics and PhD in management there. He has served China Construction Bank as its general manager of Investment Banking Department and the IPO Office, and Shenzhen Development Bank as CIO. He was a Fulbright Scholar to China. He has undertaken many projects and received many awards in China, published 14 books in Chinese, and become influential through his newspaper columns. He lives inn Los Angeles. (brucesunchina@gmail.com) Shanghai Daily condensed the article.
According to the data released on January 16 by the National Bureau of Statistics, by the end of 2011, 690.8 million (51.3 percent) of Chinese are living in urban areas, compared with 656.6 million in the countryside.
In 1949, China's urbanization was a meager 10.64 percent; in 30 years, it moved gradually to reach 19 percent in 1979; it took off along with the reforms and open-door policies thereafter, moving more than 400 million people to urban areas and raising about 250 million out of poverty. Meanwhile China's GDP has increased 90-fold.
Why did the "industrial revolution" occur only in Europe circa 1750-1800?
In theories attempting a better interpretation, urbanization and its associated labor divisions provide some convincing alternatives.
At that pivotal moment in history, redundant labor and surplus population were forced to move to cities, and urban density surpassed a critical mass.
As a consequence, abundant room was left behind, enabling application of more productive techniques for farming; and more importantly, exchanges among urban residents spawned explosively in highly dense networks. In addition to products and services rendered, novel ideas, procedures, institutions, and rules all welled up in cities to put new inventions into effective use.
Splendors originating in urban living seem to progress without limit. In a sense, city living may enable one to rename homo sapiens to be homo urbanus for this unique invention of the human race.
The foremost contribution of city life is certainly creative activities leading to novel ideas and innovative devices.
The two most important events during the 20th century are the technology development facilitated in the US, and the economic turnaround achieved in China, as argued by Joseph Stiglitz, a Nobel laureate in economics. Both accomplishments derive directly from urbanization.
Soft power
A majority of metros grew organically out of some natural advantage, primarily on the banks of large rivers or by seaports. However, some key metros have grown out of a set of man-made rules and institutions to facilitate fair and orderly exchanges among city residents.
We will dub these "cities of yin" to characterize their "soft power" in developing. Eminent examples include Shenzhen, Hong Kong, Philadelphia, and Lübeck in northern Germany, among others.
Shenzhen was established as a special economic zone (SEZ) with a set of special rules governing a piece of open land less than 2,000 square kilometers in size. In less than 30 years these rules have transformed a set of villages of no more than 50,000 farmers and fishermen into a mega-metro of 14 million people.
In contrast with Shenzhen, which resulted from an active choice embracing opportunities from the open-door policies, Hong Kong was forced to open to British colonialism after a humiliating defeat in the Opium War. Hong Kong turned out to be even more prosperous economically than the UK.
Philadelphia offers another interesting example of the city of yin. In the mid-17th century, British King Charles II granted the dominion of Pennsylvania to William Penn, a noted Quaker. Penn wrote a charter for his new colony that guaranteed all who came to live in Pennsylvania the freedom of religion. Philadelphia soon became the second largest English-speaking city in the world. The success of Penn's new formal rules and the new norms put pressure on lawmakers in neighboring colonies. The principle of separation of church and state was adopted by the framers in the following century, and eventually written into the US Constitution.
Lübeck was built almost single-handedly by the Germanic prince Henry the Lion. Henry wanted to create a business hub in the region of the lawless Baltic Sea, so he arranged to have a huge rectangular plot of land laid out at the center of Lübeck. Henry devised a charter, a set of "most honorable civic rights" for the town. The residents of Lübeck were promised fair treatment before the law and an independent mint that would shelter them from confiscatory inflation. With this bill of rights in place, Henry invited merchants near and far to migrate to Lübeck.
In less than a century, Lübeck grew to be the most populous and prosperous town in northern Europe. Ultimately Lübeck became the seat of the Hanseatic League, an economic alliance of 200 cities that lasted nearly 500 years.
People may well claim that Lübeck was the original template for special economic zones. Its success in medieval urban history is no less brilliant and marvelous than that of Shenzhen in modern times.
The author is professor of business at California State University at Long Beach. Born in Shanghai, he studied in the US in early 1980s, and got an MA in economics and PhD in management there. He has served China Construction Bank as its general manager of Investment Banking Department and the IPO Office, and Shenzhen Development Bank as CIO. He was a Fulbright Scholar to China. He has undertaken many projects and received many awards in China, published 14 books in Chinese, and become influential through his newspaper columns. He lives inn Los Angeles. (brucesunchina@gmail.com) Shanghai Daily condensed the article.
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