China issues action plan to speed up urbanization to boost domestic demand

Tourists visit Songzhuang Village in Songyang County, east China's Zhejiang Province, July 17, 2024. Nestled in the mountains, Songzhuang Village of Songyang County boasts a history of over 600 years and preserves many traditional residences. In recent years, the local government has renovated old houses and ancient paths and introduced new business forms to attract young talents to start their businesses there. (Photo: Xinhua)

China's State Council, the cabinet, on Wednesday issued a five-year action plan for urbanization, relaxing restrictions on household registrations in major cities and increasing housing support for new urban residents, as part of efforts to accelerate urbanization and boost domestic demand.

Noting that urbanization is an important starting point for expanding domestic demand and promoting industrial upgrades, the action plan said that after five years, the urbanization rate of the permanent population will have increased to nearly 70 percent, better supporting high-quality economic and social development.

Among the major measures, restrictions on household registrations in major cities will be lifted, except in certain extra-large cities. Specifically, such restrictions will be removed in cities with a permanent urban population of fewer than 3 million, and the requirements for household registrations in cities with a permanent population of between 3 million and 5 million will be comprehensively relaxed, according to the action plan.

Also, to boost urbanization, support measures will be offered to help new urban residents in areas such as education and housing. Central fiscal support for affordable rental housing will be increased, along with fiscal support for urban infrastructure upgrading, the action plan said.

The action plan carries great significance, as China aims to accelerate urbanization, expand domestic demand, and improve people's livelihoods, experts said.

"Coming at such a time, the action plan is quite significant, in terms of boosting internal demand, supporting stable economic growth, and improving people's living standards," Li Changan, a professor at the Academy of China Open Economy Studies of the University of International Business and Economic, told the Global Times on Wednesday.

The action plan came after the 20th Central Committee of the Communist Party of China concluded its third plenary session, which drew up a sweeping blueprint for China's reform and opening-up for the coming years. The communique released after the session also put an emphasis on urbanization.

"We will improve the institutions and mechanisms for advancing new urbanization; consolidate and improve the basic rural operation system; improve support systems to strengthen agriculture, benefit farmers, and enrich rural areas, and deepen reform of the land system," the communique said.

Li said that the key to urbanization is addressing challenges faced by new urban residents, including their children's education and household registration issues, and both the action plan and the third plenary sessions offered concrete measures to address these concerns.

"The potential for domestic consumption is huge, if rural residents' spending power is increased to the level of urban residents by accelerating urbanization," Li said.

Expanding domestic demand has become a top priority, as China moves swiftly to boost economic growth. An executive meeting of the State Council on Tuesday also called for more substantial breakthroughs in areas such as expanding domestic demand, cultivating and strengthening emerging industries and future industries, and promoting high-level opening-up to the outside world.