China’s leaders will welcome in the new year with a self-confident swagger. Nothing is more central to the modern Chinese psyche than being the biggest and best, and the past three years seem to have proved this. The country emerged from the global financial crisis as the world’s biggest exporter, with the world’s second-biggest economy, and with the world’s biggest-ever stash of foreign exchange.
It is now a truism that power is seeping from West to East. Historian Niall Ferguson declared in a recent article entitled “In China’s orbit” that China’s biggest city, Shanghai, already sits atop the ranks of the world’s megacities, with Mumbai right behind; no American city comes close.”
Ferguson knows a lot about financial history, but he doesn’t appear to be well informed on China’s cities. In no meaningful sense is Shanghai a megacity in a different league from, say, New York.
Almost everything written about the mind-boggling size of China’s so-called megacities is ill-informed and misleading, and Ferguson falls straight into that trap. Sure, China has plenty of big cities – more large cities, inevitably, than any other country. But it is not yet top of the urban league table.
Perhaps Ferguson had seen the latest report by HSBC’s (HBC.NYSE, HSBA.LSE, HSB.Euronext, 0005.HK) China research team, which claims that the country has eight megacities with populations of more than 10 million – Chongqing, Shanghai, Beijing, Chengdu, Zhoukou, Nanyang, Baoding and Linyi.
Where, I hear you splutter, are Zhoukou, Nanyang, Baoding and Linyi? The reason you haven’t heard of them is because they are small, local cities with no international profile. The real population of these cities is only one or two million.
HSBC’s research team, which frankly ought to know better, made the simple mistake of listing China’s largest urban-centered administrative units as if they were proper cities. These units typically encompass an urban core surrounded by several smaller cities, dozens of towns and hundreds of villages. Only the urban core is a “city” in the true sense of the word.
China’s city population numbers reflect the country’s unique administrative system; they do not tell you how many people live in a single urban area. They are further complicated by migrant flows and periodic adjustments to administrative boundaries and counting methods.
Take Chongqing, which HSBC’s report claims has a population of over 30 million. The idea that the administrative unit of Chongqing, which is roughly the size of Austria, is a “city” is the purest fantasy.
According to Chongqing’s own statistics, the municipality had a registered population of 32.6 million in 2008, and a resident population of 28.4 million, once you subtract the rural migrants who don’t live there for most of the year. But the urban core and suburbs – or what locals know as Chongqing City – had a registered population of six million.
The vast majority of Chongqing’s residents don’t live in the city proper at all – in much the same way that not all Austrians live in Vienna.
All this statistical talk may sound rather anal – but it matters, because businesses investing in Linyi need to know that the city’s true population is 1.5 million, not 11 million. And before Ferguson continues his pontificating about a new Asian century, someone should point out that New York City sits at the heart of a continuous urban area considerably larger than any Chinese city – Shanghai included.