Measurement and Analysis of Urban Infrastructure and Its Effects on Urbanization in China

Abstract

This paper studies urbanization in China using composite indices of urban infrastructure. It has two objectives. First, it computes a multidimensional composite index of urban infrastructure for ranking 31 provinces and six regions in China by their level of urbanization and infrastructure development during the period 2005–2014. The infrastructure index is composed of 15 components: consumption, culture, economic, education, employment, environment, finance, human development, health, housing, social security, social services, technology, transport, and utilities. Second, the paper estimates the effects of the aggregate urban infrastructure index and its underlying components on urbanization levels. Our empirical results suggest that provincial and regional disparities are significant and allocations for urban infrastructure are not balanced between the different provinces and regions. Guangdong and Tibet have the highest and lowest values of urban infrastructure respectively while the Eastern and Southeastern regions have the highest and lowest urbanized populations, respectively. One policy implication of these results is that each province should implement a different urbanization plan based on its own characteristics and the resources available. The central government should improve the allocation of resources and the location of key industries between poor and rich provinces. Our estimation results indicate that the economics, employment, human development, health, housing, security, utilities, and technology components of urban infrastructure had positive and significant effects on China’s urbanization. We suggest that the government should guide investments to more efficient transportation systems that include all age cohorts. After discussing the findings and how they are reached, this paper concludes by providing policy recommendations for city planners and policymakers.