From Urban–Rural Division to Urban–Rural Integration: A Systematic Cost Explanation and Chengdu's Experience

• Author: Shurong Yao,Qian Lu
• DOI: http://doi.org/10.1111/cwe.12230
• Date: 01 January 2018
• Published date: 01 January 2018

©2018 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 86–105, Vol. 26, No. 1, 2018

86

*Qian Lu, Assistant Professor, School of Economics, Central University of Finance and Economics,

China. Email: luqian0807@163.com; Shurong Yao (corresponding author), Associate Professor, School of

Economics, Sichuan University, China. Email: shurongyao@scu.edu.cn. This research was supported by the

Key Project of the Ministry of Education of China (No. 16jzd024).

From Urban–Rural Division to Urban–Rural

Integration: A Systematic Cost Explanation

and Chengdu’s Experience

Qian Lu, Shurong Yao*

Abstract

There is a considerable urban–rural divide in economic wellbeing in China. Since it

was established as an urban–rural reform zone in 2007, Chengdu has seen signicant

reduction in the disparity in its urban and rural household incomes. From 2007 to 2010,

Chengdu adopted urban–rural coordination policy by defining rural land property

rights and establishing a rural land market. After 2010, Chengdu adopted an urban–

rural integration strategy and allowed villager and business enterprises to participate in

land consolidation. The transition from urban–rural division to urban–rural integration

involves reducing systematic costs. The degree of urban–rural integration depends on

the extent of the reduction in systematic costs.

Key words: Chengdu reform, land property rights, systematic cost, urban–rural

coordination, urban–rural integration

JEL codes: P21, P23, P25, P26

I. Introduction

The sustained urban–rural disparity is a major problem in China. In 2015, the average

national urban household property income per capita was RMB3042, whereas the

average rural household property income per capita was RMB252, only 1/12 of urban

residents’ income (NBS, 2016). The huge disparity pushes residents to depart from rural

areas (Jia et al., 2017).

To reduce the disparity in incomes, China adopted an urban–rural coordination

strategy in 2003. In 2007, Chengdu was authorized as a national urban–rural reform

zone. With the implementation of the program, the urban–rural income ratio in

©2018 Institute of World Economics and Politics, Chinese Academy of Social Sciences

From Urban–Rural Division to Urban–Rural Integration 87

Chengdu fell from 2.64 in 2003 to 1.89 in 2015. This ratio was lower than those in other

metropolitan cities with populations over 10 million, such as Beijing, Shanghai and

Chongqing (Table 1).1

Table 1. Urban–Rural Household Income Ratio

Area 2003 2008 2013 2014 2015

National level 3.20 3.33 2.81 2.75 2.73

Beijing 2.14 2.30 2.61 2.57 2.57

Tianjin 1.76 2.04 1.89 1.85 1.85

Shanghai 2.23 2.34 2.34 2.30 2.28

Chongqing 3.65 3.48 2.71 2.65 2.59

Chengdu 2.64 2.61 2.31 2.26 1.89

Sources: The data at the national level as well as for Beijing, Tianjin, Shanghai and Chongqing come from

the NBS (2004, 2009, 2014, 2015 and 2016). The data for Chengdu come from the Chengdu Bureau of

Statistics (2004, 2009, 2014, 2015 and 2016).

Notes: The ratios are calculated by dividing per capita income of urban households by per capita income of

urban households.

When rural residents’ property incomes rise, urban–rural disparity decreases. In 2015,

urban residents’ property income per capita in Chengdu was RMB3655, which was

smaller than in Beijing (RMB8492) and Shanghai (RMB7915). Comparatively, for rural

residents, property income per capita was RMB1692 in Chengdu, which was 40 percent

larger than in Beijing (RMB1204) and around seven times the national average (RMB272).

In Chengdu, rural residents’ property incomes have increased substantially while those

of urban residents have remained approximately the same. As a result, Chengdu’s urban–

rural property income ratio fell to 2.16, much lower compared to the national ratio of 12,

and the ratios in other big cities (Table 2).

Table 2. Residents’ Property Income per Capita (2015)

Area Urban Rural Urban–Rural ratio

National 3042 252 12.07

Beijing 8492 1204 7.05

Tianjin 3400 775 4.39

Shanghai 7915 775 10.21

Chongqing 2175 278 7.82

Chengdu 3655 1692 2.16

Sources: The data for per capita property income of urban and rural households at the national level, as well

as for Beijing, Tianjin, Shanghai and Chongqing come from the NBS (2016). The data for Chengdu come

from the Chengdu Bureau of Statistics.

1According to Chengdu Statistical Yearbook (2016), Chengdu’s population was 14.7 million in 2015.