China’s Urbanization and the World Economy

China’s Urbanization and the World Economy

Fan Zhang

This innovative book places China’s urbanization within a broader global context, including a detailed estimate of China’s total domestic market and its impact on the world economy.

Chapter 3: Industrialization and urban development

Fan Zhang

Subjects: asian studies, asian geography, asian urban and regional studies, economics and finance, international economics, urban economics, law - academic, asian law, urban and regional studies, urban economics


Industrialization and urbanization progress together in modern world history. They are highly correlated in most countries. Three stages are usually included in the process. In the first stage, industrialization leads to urbanization, when the development of industries absorbs large amounts of labor into cities. In the second stage, industrialization and urbanization progress step by step, simultaneously. Finally, the growth of cities surpasses that of the manufacturing industries, when the service industries grow faster than the manufacturing industries in the cities. China roughly follows this pattern, but its urbanization lags far behind its industrialization, and its service industries lag far behind the development of manufacturing industries (see Table 3.1). This process is also a market creation process. In the beginning, manufacturing produces for a market outside its own city. As population concentrates and personal income goes up, the city itself can become a market for its own manufacturing industries.

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