China needs to execute a plan to urbanize and deploy a social safety net for new migrants to the cities

China needs to make a major urbanization plan work for a strong economy in 2025.

A new urban blueprint to be unveiled this year is supposed to break an urbanization logjam by guaranteeing some central-government support for such programs, according to economists who advise the government. But the exact formulas are still unclear. Granting full urban benefits to 70 percent of the population by 2025 would mean doubling the rate of those in urban welfare (healthcare, pensions, unemployment insurance and education) programs.

Success will mean that China’s per capita income would be in the range of Portugal. The overall GDP of the economy would become larger than the United States.

Urbanization and Level of Income

Projected Spending on Urban Public Services

China issues different permits to urban and rural residents. Rural residents who move to cities without city permits do not have access to public services. If the Chinese government starts to provide services to migrants, spending is projected to go up by 1.5 trillion renminbi per year, or 2.5 percent of urban G.D.P. by 2025.

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