CHINA KEEP GROWING!

CHINA KEEP GROWING! BUT NOT LIKE THAT! I DON’T MEAN STOP! HURRY UP ALREADY! ONLY BETTER!

1. CHINA KEEP GROWING!

We’re in the midst of a global twister. America is on its knees begging for cash injections; banks are creaking, prices falling, and container ships bumping emptily against the docks. Yet China — one of the world’s most globalized nations — has explicitly stated that its “greatest contribution” to global stability will be to keep its own economy running smoothly. Essentially, when seas are high, it will look to home.

There is good reason to believe this actually is in the world’s best interests. With the slowdown in the West, the global economy is increasingly reliant on China for maintaining some show of growth; and were China now to fall into a slump, it could roll the entire world off into a downward spiral. Fortunately though, the world is well assured. China’s growth, it is widely assumed, is dependable because it is not based on a single finite resource, such as oil (as in Russia), but on the continuing productivity gains of the Chinese workers. And why would they stop working, and gaining?

A little more scrutiny however reveals a markedly more fragile picture. Over the last two decades, Chinese economic growth has been driven by a twin-burn engine, fueled on either side by urbanization and exports. Exports are now drying up. Against a fifteen year trend of 26% annual export growth, recession in the West has led in 2008 to a 2% fall in exports. Thus exports have become a drag, not a driver. At the same time, central government has become increasingly concerned about urban land acquisition. The last fifteen years have seen cities across China mushrooming to two and half times their size. Now fear of further loss of arable capacity has led to a stipulated minimum of 120 million hectares of farmland. Seeing as this is just about as much as there is now, cities are left with precious little room to grow into.

The sudden drop off of exports and of urban expansion, taken together, constitutes a terrible double blow for the growth wave. The rapid urbanization model, formerly so dominant in transforming the physical and social landscapes of China, is now gagging on the prospect of no new land to develop, no investment capital with which to develop it, and no foreign markets to sell to once development is complete. It turns out that China’s growth, far from being resource-independent, was in fact heavily reliant upon two distinct resources — resources which until recently people somehow assumed to be infinite. These were the affluence of the Western consumer, and the vastness of the Chinese nation. Right now, right when the world needs them most, they’re both looking disconcertingly exhausted.

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2. BUT NOT LIKE THAT!

In truth, this should have long been apparent given the fundamental unsustainability of the rapid-urbanization-export-maximizing attitude. Firstly, exports, in the greater scheme of things, ultimately have to balance. Over the last ten years and more China has been running a huge trade surplus with the US, exporting far more than it was importing, and stashing the dollar proceeds. The effect of this was to flood the US with cheap credit, thereby sustaining the boom, but only through supplying debt. And as any shopkeeper knows, you can’t keep on lending to your customers so that they can keep on buying your products. The current global financial crisis is in no small way an expression of precisely this — the necessary unwinding of impossible global imbalances.

Secondly, imbalances were equally at work within China through the rapid urbanization component of the growth model. Again starting in the early nineties, central policies were introduced which incentivized local officials to boost GDP by acting entrepreneurially. This sparked a multi-scalar urban rush. The best means to grow local GDP was to stimulate urbanization, and the best way for local officials to raise the necessary capital to urbanize was to start selling the thing they had most of: land. Officials at every level across China acquired land, stripped it, and resold it in the form of use-rights to urban developers, using the cash to lay down promised infrastructure, and elaborate slick downtown masterplans. According to the principal of market reform, these operations were left largely to play themselves out, and assessed chiefly on the basis of reported GDP figures. The result was a chaotically atomized pan-China construction boom, with thousands of small and mid-sized cities exploding horizontally — or even summoning themselves into existence out of previously rural areas — competing frenetically for investment. Given the fiercely appetitive climate that was developing, fledgling cities entered into internecine undercutting wars, with land being offered to industry at cheaper and cheaper rates, with more and more favorable tax packaging, and with fewer and fewer regulatory constraints. What followed was exorbitant land consumption in largely unstructured patterns, notwithstanding more stringent regulations, planning and building quality remains dire.

Protected by sweetheart deals with local officials, factory bosses were able to run amok, largely unbeholden either to central planning schemes or to market realities. Sure enough they produced cheap exports, but the resultant macrostructures were characterized by local protectionism, and riddled with land abuses. A stark demonstration of this comes from the people who formerly held the land themselves. In 2007 80,000 large-scale protests were officially recorded across China: more than 10x the figure for 1992. Over half of these were directly related to land issues. Things couldn’t just continue.

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3. I’M NOT SAYING STOP!

Yet what makes the atomized urbanization model so essentially ill-suited to post-Olympic China is a fundamental structural confusion. At the same time that policies encouraged ubiquitous local-level bureaucratic entrepreneurialism, there was an inherent bias toward the megacities. The Shanghai-model of the urbanizing ‘90s, pioneered by former Shanghai bosses Jiang Zemin and Zhu Rongji, inevitably favored the coastal Special Economic Zones (SEZs). These areas were able to use their peculiar export and import status, as well as their superior level of global recognition, to leverage more foreign investment, and thus outpace the brawling rabble of interior cities. A further structural advantage was awarded the megacities in their ability to attract human capital, both from within China’s pool of freshly mobile graduates, and even internationally as the megacities became global cosmopolitan centers.

It is on this issue of migration that urban incoherencies become most apparent. The continuing existence, if under terms of somewhat mitigated relaxation, of the hukou system, ensured the continuing restriction of rural to urban migration. Thus while national growth efforts favored the urban poles, urbanizing migrants were encouraged to leave the village but not the countryside, creating to high levels of intraprovincial migration, and a massive pool of floating migrants. Existing in a regulatory grey area, the floating migrants remain urbanites of the least stable kind — a rolling component within the population, who greatly contribute to the city, yet are barred from integrating into its essential fabric.

Unstable migration of this kind has deleterious effects upon city growth in two key ways. Firstly, necessarily uncommitted to the temporary situation in which they find themselves, temporary migrants exhibit much lower levels of personal or financial investment in their immediate surroundings. Without committed residents, local environments tend to degenerate toward substandard living conditions, which are more readily tolerated as they are regarded as short-term. Crucially however, while they are short-term for the floating migrant, they are on the ground realities for the growing city. And thus the city suffers. Secondly, the financial investments which floating migrants are not making into the urban environment are instead being diverted, in the form of remittances, to places which are regarded as more permanent — i.e. the migrants’ point of origin. The result of this is that capital generated through urban productivity is leaking out of the city, rather than funding its growth, and flowing into the village. Thus the place most deserving of investment (i.e. where money is actually being made, and therefore where more money should go to further development) is starved of cash. Not only is this backwards conceptually, but it is made all the more desperate by the fact that migration levels, far from slackening, are set to accelerate over the coming period. While previously the urban population was significantly swollen by the physical act of cities swelling, and thus engulfing formerly rural populations, future city growth is likely to come primarily from a rural influx. Mid-size cities can expect 40–50% of their future populations to comprise of migrants. Can these all have such temporary expectations? What would it mean for a city to have up to half of its population regarding itself as not truly living there at all?

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4. HURRY UP ALREADY!

The oncoming wave of migrants constitutes for China its greatest challenge yet: graduating from the rampant ad hocism of the pre-Olympic urban boom, to a more sophisticated and sustainable post-Olympic urban society. This perforce will be less space extensive. It will also be more people intensive — with more people traveling into cities, arriving with greater expectations, and forming a larger incontrovertible presence. China’s grand contribution to the world of keeping its own economy running smoothly will center upon its ability to manage this influx, and reorientate its growth. These are the two things it has to do. And fast.

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5. ONLY GROW BETTER!

The urbanization of the recent era (i.e. atomized development driven by rampant land acquisition and temporary populations) can be characterized as driving forward on five wheels. It was urbanizing everywhere all at once. This is exactly the form of unidirectional irrational exuberance that the global financial crisis has wiped out at a stroke. China’s 4.2 trillion RMB stimulus package however represents an end to such approaches. It is an explicit acknowledgement on the part of the central government that, if left to themselves, the five wheels would probably come off, and the whole barouche crashes into the ditch. The package is a guiding hand taking up the reins.

Notably, the largest single component of the stimulus is investment in national infrastructure. The configuration of new road, rail and airport networks will inevitably enforce a rationalization of the tiering of cities according to their varying levels of connectivity. Even more significant will be the development of the national power grid, which will dictate the shape and weighting of future urban growth. Heavy industry may follow the route of on-site generation, locating itself ever further from the city at the end of a coal-truck road. Urban centers however, as they become more sophisticated and I.T. dependent, will increasingly be strung together and suspended from the cross-weave of power lines. Central engagement in the distribution of these lines and power stations will to a large extent assume the hitherto missing role of national and regional planning.

At the lower level, engaging users with the emerging urban property market will be the principle route to improved urban integration. The atomization model encouraged fervid competition among cities, with all the concomitant volatility and shortsightedness of a new market. However, given the level of control exercised by local officials and state-owned banks over the actual land deals and investment structures involved, the market within cities, from the point of view of the urban resident, was in fact excessively constrained. Shifting the emphasis of where market freedoms take place from competition among urban nodes to competition for urban space, will bring the consumer into play, and form a second, this time “invisible”, guiding hand. Rather than a market composed of local officials flogging GDP area-figures, the real competition in post-Olympic urban China will take place among actual apartments, shops, offices, recreational and cultural spaces etc. On this floor, the key actors become the people living in the city, and buying the program. Restructuring urban growth to be more demand-aligned will protect against future bubbles, and simultaneously capture more residential investment capital.

An important move in this direction, and again part of the new measures, is to reduce mortgage down payment requirements from 30 to 20%. The more accessible the property entry level becomes, the greater the user response to urban development, and the lesser the role of the speculator (though too low and speculation rises again, as does risk of negative equity). A further and equally stimulating implication of this shift is to put more money into the pockets of consumers themselves. Cash formerly constrained within housing is freed up for urban retail, which is the one true bull market left unravaged by the global crisis.

While Chinese exports are contracting, domestic consumption is strongly on the rise, with retail sales growing by 22% in 2008. This is all more encouraging for the fact that the Chinese consumer is a relatively small contributor to overall GDP (less than one quarter, against almost three quarters in the US), offering tantalizing room for significant further expansion. Indeed, it is the newly cash-flush consumer, fresh into the city which he now feels is his home, and in which he plans to spend his paycheck, who will carry the growth wave through. Getting him there is all that’s needed to shift growth from collapsing state-led export-orientated operations to consumer-led domestic-orientated sales.

As the global twister sweeps its way east, the Chinese middle class urban shopper — with bags in one hand, and a real estate brochure in the other — stands right in its eye, staring up.

Adrian Hornsby
08.01.09

中国，中国，继续成长吧！但不能这样！不是叫你停！快快快！得更好！
CHINA KEEP GROWING! BUT NOT LIKE THAT! I DON’T MEAN STOP! HURRY UP ALREADY! ONLY BETTER!文/ Adrian HORNSBY

1.中国，中国，继续成长吧！（CHINA KEEP GROWING!）

我们正身处全球风暴之中。美国卑躬屈膝地祈求外界注入现金；银行惨淡经营，价格下跌，货柜船空载到岸。而中国――世界上最全球化的国家之一――已明确表示：它为全球稳定所做的“最大贡献”将是对自身经济平稳运行的勉力维持。根本上说，风高浪急之时，一切只能指望自己。

有充分理由相信，这将符合全世界的最大利益。西方经济放缓之时，全球经济逐渐转向依赖中国来维持某种增长的表象；若中国现在也陷入衰退，这将把整个世界卷入螺旋式下滑的轨道。所幸的是，全球仍然信心十足。普遍认为，中国的经济增长相当可靠，因为它并非建立在某种单一、有限的资源之上，比如石油（如俄罗斯），而是以中国工人不断提升的生产效率为基础。他们有什么原因要停止工作、停止赚钱呢？

然而，稍微仔细观察就能发现一副更脆弱的图景。过去二十年间，中国经济的增长由双引擎驱动，城市化和商品出口在两侧助燃。目前出口渐趋减少。相对于十五年来持续为２６％的年出口增长态势，西方的衰退已在2008年导致了2％的下滑。因此，出口已成一大阻力而非动力。与此同时，中央政府愈来愈关心城市土地征购问题。过去十五年中国的城市面积急遽膨胀了2.5倍。如今，由于担心耕种能力将持续丧失，政府规定至少需保留一亿两千万公顷的农业用地。这就是目前所剩无几的面积，而可供城市发展的
空间就更稀少而宝贵了。

商品出口与城市扩张的陡然下滑，齐齐袭来成为两股吹向增长浪潮的强风。过去曾主导中国物质与社会景观转型的快速城市化模式，现在却被现实前景哽住呼吸：没有用于发展的新土地，没有发展所需的资本投资，也没有令发展圆满的最后一个环节即销售所需的国外市场。事实证明，中国的增长远远不是所谓的资源独立型，事实上它严重依赖于两大截然不同的资源，而直到最近人们依然预设它们无限无穷。这两者分别是西方消费者的财富，以及中国本身的大国之大。然而，在世界如此需要它们的此时此刻，它们却双双显出令人不安的疲惫之态。

2．但不能这样！（BUT NOT LIKE THAT!）

其次，借助增长模式中的快速城市化，不平衡的问题同样出现在中国国内。同样也是90年代初，鼓励地方官员以企业家的方式提升GDP的中央政策开始实施。这引发了一场多层次的城市化热潮。发展地方GDP的最佳手段莫过于刺激城市化，而地方官员为城市化筹集必需资金的最佳方法¬——莫过于出售手里最多的东西：土地。中国各地各级别的官员纷纷收购土地，拆除干净，并以出售使用权的方式转售给城市开发商，再用现金去履行基础设施建设的承诺，全力打造光鲜亮丽的市中心蓝图。根据市场改革的原则，这些程序应该留待它们自己实现，并根据公报的GDP数据对其进行评估。结果是一场混乱无序、原子化的、泛滥全中国的建设狂潮，数以千计的中小城市同时迅速扩大――甚至扩张到过去属于农村的地区――疯狂地为招商引资而竞争。在竞争白热化的大气候中， 羽翼未丰的发展中城市纷纷加入这场杀气浓的削价战，提供给产业发展的土地越来越便宜，税收政策越来越宽松，监管越来越少。接踵而至的是无组织的土地过度消费，而规章制度、规划和施工质量的缺乏更为严峻。

事实上，这应该早就是显而易见的事情，如果能考虑到“快速城市化－出口最大化”的态度在本质上就不可持续。首先，在更大的规划安排中，出口始终需要保持平衡。过去十多年来，中国一直维持着巨大的对美贸易顺差，出口远大于进口，以美元储备了大量贸易收益。结果是美国国内低息信贷泛滥，这维持了经济繁荣，但却创造了巨量债务。任何一家商店老板都知道，你不能总是通过借贷给客户来让他们继续购买你的产品。当下的全球金融危机清楚表明：解决积重难返的全球不平衡问题已经迫在眉睫。

而在与地方上暗箱交易的保护下，工厂老板横行无阻，几乎不受中央规划或市场现实的约束。他们固然生产了廉价的出口商品，但宏观结构却被打上了地方保护主义的烙印，而土地滥用更令其千疮百孔。前土地所有者的公然示威说明了这一问题。2007年，官方纪录了8万起发生在中国各地的大规模抗议活动：这一数字是1992年数字的10倍。其中一半以上都直接与土地问题相关。事情真不能这么继续下去了。

3．不是叫你停！（I’M NOT SAYING STOP!）

然而，本质性结构混乱却令原子城市化模式能够适应后奥运时代的中国。与此同时，政策纵容了无处不在的地方官僚的政绩创业精神，以及对超大城市的固有偏好。在城市化全面启动的90年代，由前任领导人江泽民和朱镕基开拓的上海模式，必然对沿海的经济特区（SEZ）有所偏爱。这些区域可以利用其独特的进出口地位和它们高水准的国际知名度，吸引更多外资，从而超越了喧嚣的内陆城市。深层的结构性优势使超大城市更容易吸引人力资本，有的来自国内的毕业生群体，更有来自异国的人才，因为此时这些超大城市已成为了面向世界的国际中心。

移民问题将城市的不连贯性表现得最为明显。即使在某些条件下有所松缓，但户口制度的继续存在就意味着从农村到城市的人口迁徙将继续受到限制。因此，当国家经济增长的成果偏向城市，城市化的移民则被鼓励离开村庄而不是离开农村，这创造了高水平的省内人口迁移和流动人口规模。身处被管理的灰色地带，流动人口一直是最不稳定的城市居民――人口组成中波动最大的部分，他们为城市鞠躬尽瘁，但却被禁止融入城市的基本结构。

这种不稳定的人口迁徙对城市发展有两大危害。首先，与所处的临时环境之间没有归属关系，临时移民对周围环境的个人或财务投资水平都较低。没有固定居民，当地环境就会恶化到标准之下，但这些都欣然得到了容忍，因为它们被视为了短期问题。关键在于，对于流动人口来说，这些的确是短期问题，但对成长中的城市来说却是严峻的现实。城市正备受煎熬。其次，财务投资没有被流动人口注入城市环境，而是以汇款的形式转向流出，流向那些被认为是更稳定、更长久的地方，比如移民出发的地方。其结果导致了城市生产创造的资本流出了城市，流入农村而不是为城市的发展提供资金支持。因此，最需要投资的地方（换言之，钱从何处产生就应该投入这里的下一步发展）却现金短缺。这种倒退并非停留在概念上，移民规模将在未来一段时期内加剧，这一事实令情况更加严峻。以前，城市规模和面积的膨胀导致了城市人口的大幅增加，且因此并入了过去的农村人口，而未来的城市增长则很可能大部分来自农村人口的涌入。中型城市未来将有40至50 ％ 的人口是移民。但难道他们都只抱有某种临时的期望吗？如果在一个城市中，过半数的人口并不认为自己真正住在这里，这将意味着什么呢？

4．快快快！（HURRY UP ALREADY!）

即将到来的移民潮构成了中国最大的挑战：由风行“即兴主义”（ad hocism）的前奥运城市潮，进步到更成熟、更具可持续性的后奥运城市社会。这一必然过程在空间上也许并不普遍，但却会牵涉到更多的人――将有更多的人进入城市，带着更大的期望，成为更庞大且不容质疑的存在。中国通过维持自身经济平稳运行为世界做出巨大贡献，其重点将是管理涌入的大潮及重新引导增长能力。以上两事，势在必行。且需争分夺秒。

5.只能变得更好！（ONLY GROW BETTER!）

近期城市化（即猖獗的土地征购和大量临时人口所推动的原子化发展态势）的特点可说是五轮齐动向前飞驰。也就是让各地同时城市化。这是种单向度、非理性的膨胀，全球金融危机轻而易举就将之击溃。但中国4.2万亿人民币经济刺激方案的出台却代表了这种做法的终结。它是对中央政府职能的明确认知，如果放任自流，五个轮子将会脱链，而整架马车将滚进水沟。该经济刺激方案就是那只掌控缰绳的操纵之手。

显然，经济刺激方案最大的组成部分是国家级基础设施建设。铺设新道路、铁路和机场网络，必然导致各城市根据各自贯通程度而合理化地分层。重中之重将是国家电网的发展，它将决定未来城市增长的形与量。重工业可以遵循分布式发电系统，而设置在城外运煤车的终点附近。城市中心将变得更高端并更依赖IT产业，逐渐串连并挂靠在交织的供电线路上。中央在供电线路和发电厂方面的投入，很大程度上将承担起国家和区域规划迄今为止依然未尽的责任。

从较低的层面看，积极的业主与新兴的城市房地产市场将成为改善城市整合进程的原则路径。原子化模式鼓励了城市间白炙化的竞争，以及随之而来的波动与市场的短视行为。然而，若地方官员有了一定管制力度，国有银行对实际土地交易和相关投资结构也有所掌控，从城市居民的角度来看，城市内的市场事实上是被限制过头了。将对市场自由的关注从节点转移到空间上的竞争，这将调动起消费者的积极性，成为第二只――这回是“看不见”的――操纵之手。较之官方鞭策的GDP面积与数据所组成的市场，后奥运时代中国城市的真正竞争发生在真正的公寓、商店、办公室、休闲和文化空间等地方。在此，主角变成住在城中、购买项目的人们。重构城市增长使之更紧贴需求，这将有效防御可能出现的泡沫，并同时攫取更多住宅投资资本。

朝着这个方向迈出的重要一步，同时也是新措施的一部分，就是按揭贷款的首期付款降低20％至30％。置产的门槛越低，业主对城市开发的反应就越热烈，开发商的影响就越小（但首付过低又会导致投机现象再次激增，负资产的风险也会增大）。这个转向蕴含的更深但同样刺激性的暗示，是它将令更多的钱落入消费者自己的口袋。原本局限在住房上的现金得到释放并进入城市零售领域，这是真正未被世界性危机破坏的牛市。

当中国的出口贸易开始紧缩，国内的消费却强劲攀升，2008年零售额增长了22 ％ 。这无疑是个鼓舞人心的消息，尤其考虑到中国的消费者还只是总体GDP较小的贡献者（不到四分之一，而美国则达到了四分之三），它为未来扩张留下的巨大空间令人遐想。事实上，是新贵消费者涌入他已安居的城市，计划如何花掉薪水，推动并完成这股增长潮。只有将“他”置于其位，才能将增长点从逐渐瓦解的国家主控、出口导向的运作转移至由消费者主控、以国内消费为主导的销售。

随着全球风暴的东徙，中国中产阶层的都市购物者――一手拎着大包小包，另一手握着房地产广告画册――站在风暴眼中，仰头凝望。