China’s urbanisation push cushions its growth slowdown

Significance

The plan aims to boost the proportion of urban household residency holders from just over 66% of the population in 2023 to around 70% by 2028, equivalent to roughly 52 million new urban residents. The State Council announced new fiscal resources, including unspecified central government construction funds, to support cities in settling more urban residents.

Impacts

• Consumer-facing companies will profit from growing urban consumer bases creating new demand for their products.
• The property market will benefit from urbanisation as new residents help purchase unsold housing stock.
• Spending on supporting infrastructure for new residents will rise, but there is a risk of cities with limited budgets being overwhelmed.
• Coastal trading areas such as Shanghai, Jiangsu and Guangdong will attract the most migrants and have the highest urbanisation rates.
• Smaller cities in inland regions will receive proportionately more policy support to settle urban residents.