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Urbanization is backbone of the booming economy

Updated: 2013-01-17 15:16
By Huang Ying ( China Daily)

Urban rail development, and medical and other services are likely to lead the Chinese economy in 2013, which is almost certain to be a year of greater growth than 2012 was.

They reflect the stronger-than-ever momentum in the drive for urbanization, and the government's intention to use it as the economy's main powerhouse in the coming decades.

All industries that have something to do with the development of cities and city-based services are poised to grow faster.

Urbanization is backbone of the booming economy

A boring machine begins to tunnel at a construction site for subway Line 3 in Wuhan, capital of Hubei province, on Sept 11. As the city's first subway line linking Hankou and Hanyang, two key areas of the city, the first stage project of the line is expected to open to traffic in 2015. [Photo / China Daily] 

 

So are the companies in these industries - so long as they deliver quality goods and services and stay away from corruption and regulatory offenses.

Urbanization has been a main factor driving the Chinese stock market, as read by the Shanghai Composite Index, to rise more than 18 percent from early December to Wednesday.

In a number of government conferences, Vice-Premier Li Keqiang said he pins high hopes on the potential of urbanization in China.

Urbanization is backbone of the booming economy

Many economists argue that urbanization will be the theme of China's change in its business and social horizon over the next decade and beyond, instead of the export-oriented industry, which no longer suffices to generate new growth due to the sluggish global market demand in the post-recession era.

In 2011, the urbanization rate, the proportion of the people living in cities, just passed 50 percent. By 2020, the government aims to have this figure at 60 percent.

In comparison, developed economies in Europe and the United States have an urbanization rate of about 80 percent.

According to a research report by BOC International (China) Ltd, the railway industry will see many new opportunities in the development of high-speed and intercity train services.

Analysts predict the demand for railway construction will occur in the eastern part of the country before it does in the western and central regions.

Demand for transportation facilities will first emerge in first-tier cities, as they have stronger economies and are capable of launching large-scale infrastructure projects, according to CEBM Group Ltd, an independent investment advisory firm.

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