Arrival Cities in China, and Globalization at the Crossroads

Around the world, people are on the move. Across the United States and Japan, through the 1800s and 1900s, millions moved from farms and rural villages to the edges of fast-growing cities. China’s economic transformation turns on the hundreds of millions who have and are still migrating to China’s dozens of megacities and hundreds of large and mid-size cities and adjacent manufacturing regions.

There are now forty Chinese cities with over one million people, and fifteen have populations greater than ten million. The U.S. has no cities with over ten million, though New York City is close with over eight million. The U.S. lists ten cities with populations over one million.

Taiwan has one “megacity,” Taipei with nearly eight million, and South Korea has Seoul with nearly ten million, and three cities with two and a half to three and a half million (Daegu, Incheon, and Busan). Japan has Tokyo with nearly nine million, eight cities with one to two million people, and three larger cities, Nagoya, Osaka, and Kanagawa with 2.3, 2.7, and 3.7 million.

Far more people live in China (1.4 billion) than in the U.S. ((320 million), Japan (127), South Korea (50), and Taiwan (23) combined, so perhaps it is no surprise that China has far more megacities (near and over ten million), and cities with over one million, than the U.S., Japan, South Korea, and Taiwan combined.

The main economic difference is the “when” each economy was opened to international trade and investment. The U.S. was founded with open trade, though closed partially to trade with the passage of the Smoot-Hawley Tariff in June, 1930 (which raised to record levels tariffs (taxes) on twenty thousand imported goods). U.S. and world tariff and other trade barriers have been gradually lowered since the 1950s through a series of unilateral and multilateral trade agreements.

Japan was opened to international trade and investment under the threat of force by Commodore Perry in 1854. After the 1868 Meiji Restoration, Japan shifted rapidly from a feudalistic to partially market economy, and millions moved to cities for employment in new textile and other manufacturing firms.

Development came later for Taiwan and South Korea, as foreign direct investment through the 1960s and 1970s in and around cities added to domestic savings to fund vibrant export-based economies. A glimpse of this history is given in the first minutes of Hernando de Soto’s Globalization at the Crossroads, which streams online.

A central economic reality in China, India, Africa, and Latin America, are the millions migrating to cities to join the exchange economy of world cities where they produce and consume goods and services exported to and imported from around the world. The U.S. and Japan had their migration a century ago, South Korea and Taiwan a few decades ago, and China’s migration over the last two decades and still a work in process.

The Globalization at the Crossroads narrator introduces the story:

Millions of people are living longer and better lives today than their grandparents ever dreamed. … Poor people are migrating to cities in astounding numbers, embracing globalization despite the risks. And when the laws they encounter don’t work for them, they create their own. Their quest is no different than that of millions of Americans, Europeans, and Japanese over the past two hundred years. They too migrated by the millions, broke the back of the Old Order with new legal systems to launch the industrial revolution that became globalization. 

Hernando de Soto notes that the world economic transformation from tribal and feudal societies to modern market economies is unfinished. Again, from Globalization at the Crossroads:

Despite its critics, globalization has increased prosperity around the globe. Yet billions remain in poverty. “Two-thirds of the world’s population, four billion people, are locked out of globalization….”

Why “locked out”? Because migrants to these fast growing cities face regulatory barriers that lock them out of the formal legal system. They can’t get permits for the enterprises they start, and can’t get title for the property they develop into homes or apartments. But still life goes on in these arrival, or start-up, or informal cities.  It is a complex story, but endlessly fascinating for development economists.  Again, Globalization at the Crossroads is online, along with other similar documentaries from FreetoChoose.tv

Doug Saunder’s Arrival City includes Chinese cities, along with better known cities like Istanbul, Los Angeles, and London. The Arrival City webpage includes a video narrative of Liu Gong Li, “a sleepy village on the distant edge of Chongqing” in the mid-1990s. (How many live in and around Chongqing now? “…estimated 2013 population of 27,753,063, which includes the greater area. The city proper has an estimated population of about 9 million.”)

Much like the migration to Lima, Peru a few decades ago, or the vast migration from rural Turkey to the distant edges of Istanbul, expanding it to Europe’s largest city, Liu Gong Li appeared:  “And then people began arriving here from other villages much further away to gain access to jobs in the city. They built houses here, they started businesses, none of it legal.”

INSIDE A CHINESE ARRIVAL CITY
In this multimedia presentation, Doug Saunders and photographer Sun Shaoguang take you inside Liu Gong Li, the haphazard, improvised neighbourhood on the edge of Chongqing that opens the first chapter of Arrival City, and introduce you to some of the book’s personalities.

Access to consumers in the United States and Europe have been the key drivers for foreign direct investment into enterprises in China’s established and arrival cities. Over the last couple decades hundreds of millions of Chinese have worked long hours each day to lift themselves out of poverty.

[There is much more to write… But maybe this is enough for one post. Hope everyone is as amazed as I am by these glimpses of the ongoing world migration. Astounding!]