Urban construction reconsidered - China's cities : issues and solutions

This essay examines issues related to China's urban construction and financing. It argues that urban construction in China could be improved through better pricing and management of urban services, which would depend on how successfully China conducts its economic structural reforms. The present urban housing, civic infrastructure and facilities are already strained and will have difficulty accommodating any projected newcomers. China's past deliberate bias in investment, focusing on building factories and ignoring urban housing and infrastructure, has been the most obvious cause for the present strained urban services. This essay argues that a more fundamental cause has been the extremely undesirable institutional behaviors of the economic actors due to a distorted price system, which resulted from a misrepresentation of the socialist welfare theory. The solution to the current problems does not lie, however in immediately raising overall prices. For a period of time, wages and prices would have to be gradually adjusted hand-in-hand. Better urban construction in China will greatly depend on how successful China is in conducting the present economic structural reform.