Sustainable growth formula eludes many China cities

BEIJING (Reuters) - Some Chinese cities are failing to meet the challenge of sustainable development, posing a risk to Beijing's strategy of relying on mass urbanization to drive economic growth, according to a study released on Sunday.

Sustaining urban growth without exhausting an already degraded environment is critical for China. More than 1 billion people are likely to be living in cities by 2030, compared with 600 million in 2008 and 380 million in 1990.

The Urban China Institute, a new think tank, found that a number of cities are making rapid progress in the right direction, but others are in serious danger of falling behind.

"Without strenuous efforts to improve performance, this gap will only grow, with serious implications for the country's overall living standards and the environment," its report said.

The institute examined data between 2004 and 2008 from 112 cities to assess their progress toward sustainable development according to 18 criteria, such as access to safe water, waste recycling and efficiency in using resources.

China's cities have made strides, especially in providing basic needs such as healthcare and education. But they are still well behind the developed world in areas where the tradeoffs between income and environment are starker.

The report described the cleanliness of China's environment as woefully behind the West's. Air pollution and sulphur dioxide emissions are far from meeting World Health Organization norms.

Part of the policy conundrum is that economic history offers few models of sustainable development during the early and middle stages of urbanization, according to the think tank.

The sheer pressure and pace of urban development make the task even harder in the case of China, said Jonathan Woetzel, a director at consultants McKinsey & Co in Shanghai.

"Each and every year there is a need to accommodate a new set of migrants and to demonstrate rapid economic progress," he said.

McKinsey is a founder of the Urban China Institute along with Columbia University's Global Center for East Asia and Tsinghua University's School of Public Policy, which are both in Beijing.

Planners, especially in smaller cities, often simply do not have the skills and resources to ensure sustainable development, Woetzel told Reuters.

On the positive side of the ledger, Chinese cities are relatively dense, which makes it more attractive for governments to invest in better public transport and smart grid technologies.

The study also found that three-quarters of the cities examined spent more on environmental protection from 2005-2008.

"The logic, which is well understood by government, is that it's a lot cheaper to fix these problems now than to deal with them later," Woetzel said.

The study paints a mixed picture, but he said it was encouraging that 33 out of the 112 cities had managed to grow faster than their peers while doing better on sustainability.

The report singled out Shenyang, Tianjin, Nanning and, especially, the eastern port city of Qingdao for diversifying their economies away from urban industry toward services, increasing energy and resource efficiency in the process.

"There will be companies and investors who choose to base themselves in those locations because of their superior quality of life," Woetzel said.

(Reporting by Alan Wheatley, Global Economics Correspondent; Editing by Sanjeev Miglani)