Urbanization and industrialization have been at the core of modernization throughout world history. They have altered the industrial structure and urban-rural formation of human society, laying economic and social foundations for modern production and life. Chinese modernization is likewise centered around urbanization and industrialization, among other processes, but it has displayed features different from modernization in other countries. Some of these features rest on phenomena in the process while some are permanent and essential.

At present, the processes of urbanization and industrialization in China are still underway. Many formations will undergo dramatic changes. Therefore, it is necessary to recognize those essential features, neither making dogmatic judgment in light of Western modernization theory nor simply regarding some unique phenomena, formations, and features as the essence of Chinese modernization. 

Integrated urban-rural development involves urbanization and industrialization with salient Chinese characteristics. During rapid development over the past more than four decades since reform and opening up, urban and rural areas have consistently engaged in a complicated integrated development relationship, with agriculture, rural areas, and farmers as the foundation and main force of industrialization and urbanization. Meanwhile, cities and industry nurture and rely on the countryside. Generally, the urban-rural relationship in Chinese modernization differs greatly from that in Western modernization, which is prone to oppositions, conflict, and supersession.

Key role of county-level economy

Since reform and opening up, the waves of industrialization and urbanization can be traced back to rural enterprises and townships, resulting from special historical and institutional conditions. With the advancement of industrialization and urbanization, the role of the county-level economy has not declined remarkably, but remains significant in the national economy, particularly in eastern coastal areas.

According to the China County Statistical Yearbook, in east China’s most developed provinces of Guangdong, Fujian, Zhejiang, Jiangsu, and Shandong, manufacturing output at the county level maintained a sizable portion of provincial manufacturing in the two decades from 2000 to 2020. Among the five provinces, Guangdong had the lowest output in terms of county-level manufacturing, accounting for around one third of provincial output, which was inseparable from adjustments to the province’s administrative division. The portions in the other four provinces were generally above 50%. In recent years, Zhejiang Province hit 66% approximately, while Jiangsu saw an increased share of 70%. 

In academia, it is universally believed that following the decline of rural enterprises, Chinese manufacturing tended to concentrate in big coastal cities. In reality, the concentration was factual, yet to a limited degree. A large proportion of manufacturing and labor-intensive industries was retained within counties.

This was first attributed to regional competition initiated by local governments in order to attract investment and develop the economy. After their decline and restructuring, many rural enterprises left the countryside and clustered in township- and county-level industrial parks, instead of cities above the county level. Retaining promising enterprises was vital in the horizontal competition between local governments. 

Second, industry-related enterprises in cities were inclined to split some of their production links and parts, and outsource them to local enterprises, rather than build giant corporations. The “split and outsourcing” model is part of the industrial labor division system with Chinese characteristics which crosses urban and rural areas. The headquarters and R&D departments of these enterprises were stationed in central cities, while crucial parts or peripheral industrial chains extended to counties, townships, and villages. Many labor-intensive industrial links were distributed in areas between cities and the countryside. Most peripheral links, such as processing of incoming materials, were allotted to rural residents’ homes and family workshops through the putting-out system. In many places, counties, townships, villages, and rural people’s homes were production bases of those enterprises, whose industrial plants and headquarters were invisible.

The relationship between county-level society and China’s industrial economy has long been a subject of discussion. Based on research outcomes on rural enterprises, most foreign scholars ascribe the rural enterprises’ prosperity to the market and external environment. In contrast, Chinese scholars, especially sociological case studies of rural enterprises at Peking University, suggest local factors are instrumental. 

In other words, rural enterprises’ property rights, and their internal and external operational models, highly align with rural society’s conditions. After rural enterprises were restructured, local society became a better fit for privately owned enterprises. The match was dubbed by some sociologists as “xiangyuan,” or hometown bond. The hometown bond consists of kinship, geographical, industrial, and administrative relations with strong traditional Chinese culture features. Replacing “institutional trust” with the uniquely Chinese “relational trust” shortened the time it takes to build trust, which could lower trading costs under certain circumstances.

This kind of trust existed not only between entrepreneurs, but also between enterprises and workers, between enterprises and cadres of local governments, and between enterprises and financial institutions. 

As an interpersonal platform, trust facilitates the coordination of various resources. It is an excellent cultural and social resource. Despite some drawbacks, it has led to strong compatibility between Chinese industrialization and local social resources, which is probably one of the defining elements of Chinese modernization.

Longitudinally, this resource is richest at and below the county level. This appears to be the primary reason why the county-level economy has maintained its vitality. Horizontally, the degree of industrial development in a region is also related to the concentration and accumulation of the resource, yet in a more complex fashion. 

Urban-rural integration

Based on the historical process of urbanization in world history, massive and continuous population flow is one of the most striking features of Chinese urbanization. China’s internal migrant population grew from millions, or tens of millions, in the 1990s to more than 300 million in 2020, an unprecedented phenomenon in world history.

From the perspective of Western modernization theory, the growing migrant population would result in instability, but Chinese practices have shown that this is not only a factor for maintaining economic vitality, but has also led to social stability, and the trend will continue for a longer historical period. 

Migrants go to work in cities exactly as urbanites go out to work. It is simply a matter of extension into space and time. After more than 30 years of development, with changes in the life trajectory of migrant family members and the life cycle of migrant families, a pattern of migration marked by orderly flow and regular movements has presented itself, revealing some temporal and spatial rules.

Internal migration is facilitated by relational factors in Chinese society like the hometown bond, which remains a force for organizing and stabilizing migration. Many of those working in cities still participate in weddings, funerals, or other relational events in their home villages. Like a kite connected to a long string, they keep in close touch with their hometown, even if it is far away. 

From the family’s point of view, these rules are associated with marriage, childrearing, schooling, and elderly care of each family. Many migrant workers leave their home villages at an early age and return when they retire from the workforce. When they return, their home is not necessarily in the village, but within the county, like in the county seat.

The meaning of “home” is very complicated to migrants. They shuttle back and forth between their home village, county seat, and the locality where they work. Their home is stretched between urban and rural areas. This will affect the urban and rural formations of future China and shape important features of Chinese modernization. The migrant population is most reflective of a defining feature of Chinese modernization, known as “the modernization of the people.” 

Life and work equally important

Integrated urban-rural development within counties aims exactly to create a future homeland for migrants, predominantly with desirable living and working environments. This also determines the future direction of the path to urbanization with Chinese characteristics.

Where the path of integrated urban-rural development should head depends on how the defining features of Chinese modernization are understood, specifically, the status quo and regularity of the migrant population. 

In central and western regions, migrants go back home usually for family duties, such as childrearing, nursing, and elderly care, and not necessarily because there are better job opportunities in the hometown. If there are attractive industries within the county of their hometown, the county could meet both their living and working needs.

In these regions, a vigorous atmosphere is vital to the economic development of counties. The key to cultivating vigor might not be developing high-tech industries and advanced manufacturing, but to construct better infrastructure and public facilities. It concerns education, medical care, transportation, housing, and industries suited to local conditions. 

The relationship between livability and desirable working environments is sophisticated. A vigorous atmosphere will spur industrial development and attract investment. To the migrant population, returning home in their old age remains a mainstream option. When they are young, workers prefer to live and work outside of their hometown, but with age, most people tend to try their best to return home.

The county-level economy is both the home front and base of Chinese modernization, so economic development in counties is about building the homeland. If ordinary people construct their own homes by building, buying, and decorating houses, then the county-level economy should construct and decorate spaces for big families, big houses, and big communities. Thus, the development of the zones between urban and rural areas, through urban-rural integration and by creating good living and working environments, holds the key to opening up a feasible path to Chinese urbanization and fostering Chinese characteristics for the path. 

In conclusion, integrated urban-rural development is an epitome of Chinese modernization from the angle of urbanization. It will play a critical role in the common prosperity, and material and cultural-ethical advancement of China’s huge population.

Zhou Feizhou is a professor from the Department of Sociology at Peking University.