China at the Limits of Growth

After years of expanding at breakneck pace, Shanghai and Beijing have stopped—but not on their own.

A diptych of Shanghai's streets and Beijing's skyline.
Photo illustration by Slate. Photos by Thana Gu/Unsplash, Feng Li/Getty Images.

As a shorthand for the staggering size of Shanghai, China’s largest city, consider this: Most cities strive to extend a subway to the airport, positioned out at the edge of the urban fringe. In Shanghai, Hongqiao Airport (built in the 1920s, when the city was a fraction of its current size) is where the city’s newest transit line begins. The latest addition to the world’s longest subway system runs 30 miles west of the city center, past skyscrapers and rice paddies.

Megacities like this one are the symbol of China’s rise and its instrument: This is where the money is being made. The boom has been made possible by the largest human migration in history, from the countryside to the city, and its physical footprint is awe-inspiring. In China, more than 20 metro systems and more than 100 lines have been built just since 2008. On a recent trip sponsored by the China–United States Exchange Foundation, the urban highways were lined with so many glassy office buildings that I wondered, like a kid confronting the adult world, just what all these people could possibly do all day. Skylines filled with cranes gave the impression that these places will never stop growing.

If you believe the Chinese government’s public statistics, though, they already have. Last year, for the first time in memory, the country’s two largest cities, Beijing and Shanghai, officially got smaller. They are not falling out of fashion: Prices are as high as ever, and economic growth in each metropolis is more than 6 percent. Rather, they are being constrained by government directives to contain “big city diseases”—the pollution, congestion, and resource competition (for apartments, schools, medical care, and, in Beijing’s case, water) that plague fast-growing agglomerations. Each city has set a population growth cap.

With streets lined with sports cars and malls full of international fashion houses, these cities also conspicuously display China’s economic inequality. Including Shenzhen and Guangzhou in the Pearl River Delta megalopolis, the country’s four largest cities account for just 5 percent of the population but 12 percent of economic output. Per capita GDP in the megacities is twice the national average. Letting their growth continue unabated seems certain to exacerbate the differences between the country’s prosperous and middling areas. For all the talk of big city diseases, China is also trying an experiment: Can limiting the growth of cities spread prosperity more evenly?

This divide between a few thriving cities and the rest might sound familiar. The United States is in the midst of a similar schism, in which a handful of economically high-performing regions are lifting away from the rest of the country. Measured by wages, education, housing prices, or life expectancy, the nation’s poorer areas more closely resemble other countries than they do the productive centers of the Northeast Corridor or Silicon Valley. But Americans have been much less likely to migrate to these richer areas, which are hardly growing at all, despite their excellent economic opportunities. The conundrum confronting most American economists is: How can we get people to move to these places?

In China, by contrast, the government is working to stop migration. One way it can do this is by putting the brakes on new housing growth on the periphery of the megacities, slowing the sprawl. Another is by relocating jobs. In 2015, as Beijing’s pollution crisis worsened, Chinese officials announced plans to move the city’s government from near the Forbidden City to a satellite town, Tongzhou, outside the city. In February of last year, the mayor of Beijing said unnecessary functions would be removed from the capital “like peeling off cabbage leaves.”

The idea is to turn the whole Beijing region into one of the country’s 19 clusters, little groups of cities linked to each other and to other clusters by high-speed rail.

When I asked one government official in Beijing about the Tongzhou moves, he made the case that decentralization is an attractive proposition—who wouldn’t want to keep their job but escape the dirty, expensive metropolis? In theory, at least, the country’s new rail network is compressing distances between cities. In Hong Kong, officials are urging residents to leave for elsewhere in the region, despite their reservations. “That distance … will no longer be a problem once they have learned about the latest progress of our growing transport infrastructure links with the Bay Area,” the Hong Kong chief secretary wrote on his blog in May. “These projects, coupled with the on-going enhancement of the inter-city transport grid in the Bay Area, will develop the Bay Area into a ‘one-hour sphere of life.’ ”

Mostly, though, urban growth will be reined in through the Chinese residency-permit system known as hukou. Many rural arrivals to China’s biggest cities are still registered in their home provinces, which remain the only places they are eligible for schooling or health care. In cities like Beijing, they live a precarious existence. In November, the Chinese government began a campaign to evict tens of thousands of migrants without local permits from Beijing and other cities. Many of those migrants are blue-collar workers, but as many as 30 percent are college graduates drawn to the opportunities of the big city. The latter group shares bunk beds in “ant tribes,” overstuffed apartments on the periphery of the big city. Clamping down on these rentals has also been a municipal priority.

There are cultural signs, too, that the era of unfettered urban growth is coming to an end. Zhang Xin, CEO of the real estate company SOHO China, brought international attention to design in China through her partnership with the late Pritzker-winning architect Zaha Hadid. Her soon-to-be-completed latest collaboration with Zaha Hadid Architects, a twisting skyscraper in southwest Beijing that will contain the world’s largest atrium, had to be toned down after a decree from President Xi Jinping to stop building “weird” buildings. Architectural preservation is on the rise, including the restoration of Shanghai’s historic shikumen. In Beijing, a polished-looking hutong at the center of the city turns out to be the annex of the Waldorf Astoria. In other words, a process is at work that will be familiar from some American cities: If you can’t expand the housing stock quickly enough, the center will gentrify.