China urbanization cost could top $106 billion a year: think-tank

BEIJING Tue Jul 30, 2013 7:20am EDT

A man rides an escalator near Shanghai Tower (R, under construction), Jin Mao Tower (C) and the Shanghai World Financial Center (L) at the Pudong financial district in Shanghai July 4, 2013. REUTERS/Carlos Barria

A man rides an escalator near Shanghai Tower (R, under construction), Jin Mao Tower (C) and the Shanghai World Financial Center (L) at the Pudong financial district in Shanghai July 4, 2013.

Credit: Reuters/Carlos Barria

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BEIJING (Reuters) - The cost of settling China's rural workers into city life in the government's urbanization drive could be about 650 billion yuan ($106 billion) a year, the equivalent of 5.5 percent of fiscal revenue last year, a government think-tank said on Tuesday.

The figure is based on the assumption that 25 million people a year settle in cities, with the government spending the money on making sure they enjoy the same benefits in healthcare, housing and schools that city residents have, the Chinese Academy of Social Sciences(CASS) said.

"I think the biggest obstacle for turning rural migrant workers into urban citizens is the cost issue," Wei Houkai, a researcher at CASS, told a news conference, adding that to achieve equality of treatment could take until 2025.

Millions of migrant workers from the countryside and smaller towns work in China's big cities, often in low-paid manual work, but lack access to education, health and other services tied to the country's strict household registration - or hukou - system.

China sees the urbanization drive as pushing domestic consumption, which it wants to make the main engine of growth for the economy, replacing exports and manufacturing and investment.

Rural migrant laborers only earned an average 2,049 yuan a month in 2011, or 59 percent of average urban workers' salary, CASS added.

But they need to pay about 18,000 yuan annually per capita to be able to live in cities and another 100,000 yuan on average for housing, it said.

(Reporting By Xiaoyi Shao and Jonathan Standing; Editing by Robert Birsel)

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Comments (3)
Regular wrote:
This country is going to be a another economic failure in a decade like Soviet Union.

Jul 30, 2013 7:31am EDT  --  Report as abuse
Oro_Invictus wrote:
That there is increasing evidence that the majority of economic gains associated with urbanization are actually what causes urbanization, not an effect of urbanization, is increasingly making this “great hope” for economic revitalization in the PRC look quite questionable.

http://www.scmp.com/business/article/1292923/chinas-urbanisation-policy-based-flawed-thinking

Jul 30, 2013 11:23am EDT  --  Report as abuse
CountryPride wrote:
China isn’t worried so much because they are buying up US businesses and land.

Look at Smithfield, Shanghai’s Greenland Holdings Group acquired a site in downtown Los Angeles from a California teachers’ pension fund on Friday to build a $1 billion project that will include a hotel, office units and residences. China Vanke Co, announced a $620 million luxury high-rise condominium project in San Francisco. Xinyuan Real Estate entered the US market in October with a $54.2 million residential-land purchase in Brooklyn, New York.
Or battery maker A123 Systems, which filed for bankruptcy last year despite receiving $132 million of $249 million in federal grants.
Or Guizhou Gouchuang Energy Holdings Group who spent 616 million dollars to acquire Triple H Coal Co. and is mining in Jacksboro, Tennessee.
Or Colorado: Cnooc gained a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming in a $1.27 billion pact with Chesapeake Energy Corp.
Louisiana: Sinopec has a one-third interest in 265,000 acres in the Tuscaloosa Marine Shale after a broader $2.5-billion deal with Devon Energy.
Michigan: Sinopec gained a one-third interest in 350,000 acres in a larger $2.5 billion deal with Devon Energy.
Ohio: Sinopec acquired a one-third stake in Devon Energy’s 235,000 Utica Shale acres in a larger $2.5 billion deal.
Oklahoma: Sinopec has a one-third interest in 215,000 acres in a broader $2.5 billion deal with Devon Energy.
Texas: Cnooc acquired a one-third interest in Chesapeake Energy’s 600,000 acres in the Eagle Ford Shale in a $2.16-billion deal.
Wyoming: Cnooc has a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming after a $1.27 billion pact with Chesapeake Energy. Sinopec gained a one-third interest in Devon Energy’s 320,000 acres as part of a larger $2.5 billion deal.
Gulf of Mexico: Cnooc Ltd. separately acquired minority stakes in some of Statoil ASA’s leases as well as six of Nexen Inc.’s deep-water wells.

There are hundreds maybe thousands more examples like this just from China buying up the US. It is us Americans who are stupid and are selling our country away to foreigners meanwhile we trying to feel better about ourselves because China has a few problems. Americans need to band together and stop the foreign invasion of this country!

Jul 30, 2013 11:13pm EDT  --  Report as abuse
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