With China’s economy having experienced a rise that is second to none, the government often boasts about having lifted hundreds of millions out of poverty. What is often forgotten is that this has also led to one of the greatest migration movements in human history.

China booms, but it does not do so everywhere. While the overwhelming majority of industrial enterprises are concentrated on the eastern seaboard and neighboring regions, the rural hinterland still waits for development. This has led to massive eastward migration movement. According to Kam Wang Chan from the University of Washington, who is an expert on the field, China’s urban population has grown by 440 million to 662 million from 1979 to 2009. By a very conservative estimate, migration might attribute to this rise with 170 million people. That would likely make it the biggest migration movement in human history over such a short period of time.

What kind of implications does this have? Well firstly in means a massive rise in demand for urban infrastructure. Urban dwellers need public transportation, they need education facilities for their children, shopping opportunities and after a while they also start to demand leisure facilities. This new wave of urbanization entails enormous potential for Chinese as well as western firms. McKinsey estimated in 2009 that 325 million Chinese will still move to urban areas until 2025, making the amount of city dwellers living in China reach a full billion. The consulting agency recommends concentrating on urban productivity and the service industry in these centers, instead of the current focus on heavy industry and the manufacturing sector in general. This may allow the communist leadership to maintain a high GDP growth with lower investments and would cut emissions and pollution. The urbanization also bears potential for western economies: the growing demand of urban consumers might bring back their industries back on track.

But there are also risks. And these risks mostly have to do with the nature of the communist system in China, the very same system that induced this massive migration. Since the days of Mao, the Great Chairman, the Chinese government tries to control inter-provincial migration by the so called Hukou system. This system controls the access to basic services such as basic healthcare, primary education and other public services. By birth residents are assigned to a certain Hukou-category: either rural residents or urban dwellers. It takes an immense bureaucratic effort to change from one category to another and children are assigned to the same category as their parents, no matter where they actually live. As a consequence, hundreds of thousands of migrant workers living in Chinese cities cannot be officially registered in these municipalities. They have no access to healthcare, education for their children, sometimes not even to the energy grid. Their children are often sent back to their parent’s home provinces for education. There, away from parental supervision they often drop out of school and lose their perspective. So the Hukou system, originally designed to steer migration within China, is now arguably the biggest obstacle to it. Ultimately, the system might hinder China from effectively preparing its abundant workforce for the more challenging tasks of the future.

And if you are a Chinese communist leader urbanization has another scary site to it. Throughout history urban centers have been the favorite place for political debates, discussions and even revolutions to start. In the cities; where people have more access to outside information and live in a less traditionalistic environment people find it easier to  organize protest and dissent. With one billion Chinese living in the cities by 2025 it will become a lot harder to control these populations.

Sure, it is still too early to say how China’s urbanization will play out internally and internationally. What we can note, however, is that the Chinese leadership urgently needs to address the problems related to this process, if its immense potential shall not be jeopardized.

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