Supersized cities
China’s 13 megalopolises
Economist Intelligence Unit
July 2012
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macroeconomic information on 187 countries
Today’s Presenters
Liu Qian
Deputy Director, China Forecasting Services
Economist Intelligence Unit
Duncan Innes-Ker
Regional Editor
Economist Intelligence Unit
Access China
Analysis
 Analysis of regional trends in China
 31 provinces + 287 prefectures
Data

National Bureau of Statistics
 Data cleaning
Forecasts
 State-of-the-art econometric framework—dynamic time series
 Out to 2020
4
China’s growth prospects
•
2012 has been rockier
than anticipated
•
But longer-term
fundamentals remain
the same
•
China’s development
still has far to go—
watch the regional
story
The rise of the Chinese
megalopolis
How many millions?
• What is a megalopolis?

Megacity or megacity grouping with
metropolitan population over 10m
 Part of broader government moves to
integrate larger urban areas to achieve
economies of scale
 Also results from spread of economic growth
inland
• Why does it matter?

One-third of the urban population will live in
one of these megalopolises by 2020
 In most of them the majority of their
populations will reach middle-class status
How many millions?
From three..
•
First three
megalopolises are
well known
•
Richer, and continued
draw for the educated
•
Will continue to see
population growth
faster than the
national average in
2010-20.
….to thirteen.
•
The seven emerging in
this decade (2010-20)
will be poorer and
younger
•
Driven by intraprovincial migration…
•
…which is in turn driven
by improving local
economic opportunities
The young and the restless
•
•
Migrants are young
But the megalopolises are starting to mature rapidly
The young and the restless
•
Not all the megalopolises will develop, and therefore age, in the same
way.
From zero to 50
•
Wider development of the
middle class is central to
China’s consumption story
•
Urban disposable income of
Rmb30,000 (nearly
US$5,000) used as
benchmark
•
Megalopolises that
emerged earlier are
reaching the point where
more than 50% of their
populations are middleclass earners…
From zero to 50
•
…but not all the megalopolises will hit the 50% mark by 2020.
Incomes? Shades of grey
•
Income tends to be
understated in official
household surveys.
•
EIU’s estimates show
large discrepancy.
•
Official figures say
12% of Chinese
households earned
more than Rmb80,000
a year in 2010.
•
When adjusted for grey
incomes, this reaches
32%.
Impact on business
Education
• Megalopolises provide weak
access to education in
comparison with smaller cities
• Population growth outstripped
the rise in the number of
schools and teachers needed to
educate them
• Southern China clusters fare
particularly poorly
People’s Daily Online
Retail—the case of Chengdu
• Regional shopping centre for
the wealthy in neighbouring
provinces
• Local government has set a
goal of bringing 20 top
international brands to the
city every year in the period
up to 2015
• City’s entertainment offerings
to expand
People’s Daily Online
Healthcare
• Strain set to increase
significantly

Range of resources needed
to treat ailments associated
with urban living
 Several of the
megalopolises are already
starting to age
 They are not yet fully
equipped to care for the
population boom
 Not all of them have the
same health needs
Xinhua
What next?
What to watch out for
• The rise of China’s megalopolises is sustainable, but subject to
risks
• Mismanagement of hukou reform
• Energy and water supplies
• Financial capacity of local governments
• Social unrest
• But these urban agglomerations will be central drivers in China’s
rebalancing towards consumption
What next?
Questions?
EIU reports on China
• Download our free report on China’s megalopolises:
http://www.eiu.com/megalopolis
• You can also download other recent white papers from the EIU by
visiting the Special Reports section on our website:
http://www.eiu.com/landing/special_reports
Thank you.
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Senior Marketing Manager
Economist Intelligence Unit
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