The scale and pace of China's urbanization promises to continue at an unprecedented rate. If current trends hold, China's urban population will expand from 572 million in 2005 to 926 million in 2025 and hit the one billion mark by 2030. In 20 years, China's cities will have added 350 million people—more than the entire population of the United States today. By 2025, China will have 219 cities with more than one million inhabitants—compared with 35 in Europe today—and 24 cities with more than five million people.
For companies—in China and around the world—the scale of China's urbanization promises substantial new markets and investment opportunities. At the same time the expansion of China's cities will represent a huge challenge for local and national leaders. Of the slightly more than 350 million people that China will add to its urban population by 2025, more than 240 million will be migrants. This growth will imply major pressure points for many cities including the challenge of managing these expanding populations, securing sufficient public funding for the provision of social services, and dealing with demand and supply pressures on land, energy, water, and the environment.
The policy choices that China's leaders make at national and local levels can alter the shape of urbanization significantly. MGI finds that an urgent shift in focus from solely driving GDP growth to an agenda of boosting urban productivity—achieving the same or better economic results with fewer resources—is not only an opportunity but a necessity.
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