China's Biggest Farming Province Is Now Majority Urban

(Bloomberg) -- China’s drive to transform itself into a developed economy has passed a significant milestone -- it’s biggest agricultural province is now more than half urban.

Henan, in central China, had 50.2 percent of its 96 million residents in cities or towns at the end of last year, from 48.5 percent in 2016, according to local government data. The third-most-populous province, it produces about a tenth of the country’s food and surpassed the majority urban milestone six years after China as a whole.

The shift is being lauded by state media as a sign of progress for Henan.

“The employment market, civilization level and social welfare system will change fundamentally when urbanization is over 50 percent,” Wei Houkai, head of the Rural Development Institute at the Chinese Academy of Social Sciences, told the official Xinhua News Agency this week.

Home to almost 1.4 billion people, China is morphing from a land of villages and farming plots to one dominated by mega cities and rapidly growing towns. Overall urbanization stands at 59 percent, according to the National Bureau of Statistics, with Guangdong -- the most-populous of China’s 22 provinces -- the most citified: it’s urban ratio is 70 percent. The world’s No. 2 economy is still behind the U.S., at 82 percent, and Russia, which has an urban ratio of 74 percent, but is ahead of India at 34 percent, U.S. government data shows.

Just 13 years ago, Henan’s urban ratio was 31 percent, versus 43 percent nationwide and 61 percent in Guangdong, which is adjacent to Hong Kong. The transformation is all the more remarkable because of Henan’s agricultural heritage. A prolific producer of grain, cotton, cooking oil and meat, it’s sometimes referred to as “the granary of China.”

The shift mirrors the change nationwide, with millions of China’s farmers moving to cities over the past two decades to seek jobs in manufacturing and other industrial sectors. While many voluntarily migrated, others were forced out as local governments sought to turn rural land into urban developments to boost economic growth.

To boost growth and manage migration from rural areas, China will look into rural land use and ownership issues according to the government work report Prime Minister Li Keqiang presented at the annual legislative meeting that got under way in Beijing this week.

“Agricultural Henan crossing the threshold to become mainly urban is a reminder that China’s growth-boosting urban shift still has further to run,” said Qian Wan, a provincial research specialist for Bloomberg Economics in Beijing. “Major developed economies are 80 percent urban or above.”

©2018 Bloomberg L.P.

With assistance from Lee Miller

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