In nowadays China, on one hand, the outstanding economic performance of a settlement can upgrade its administrative status in the city hierarchy. On the other hand artificial force can also directly alter the administrative status of a settlement. By designating a settlement as a city, usually favorable policies and larger development potential are assigned to that city. In China under central government, the constitution provides three de jure administrative levels including provinces, counties and townships. However in practices, two more administrative levels were inserted. Under provinces there are prefectures and under townships there are villages. So in total there are five de facto administrative levels under central government. Among all the administrative levels, prefectures and counties have the qualification to establish cities. In addition to prefecture-level cities and county-level cities, there are also four municipalities (Beijing, Shanghai, Tianjin and Chongqing) whose administrative statuses are equivalent to provinces. To become a city, a settlement has to reach certain require...
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...cities with population size below 0.5 million is out of the range of optimal population scale thus cannot generate enough economic attractiveness to realize scale economy and agglomeration effects to support their sustainable development. The continuous adjustment of urbanization strategy during the whole reform period proves that the government gradually withdrew administrative interference and demise allocating power to market force. Lobar began to enjoy more freedom to move between cities of different scale. Under a relatively free mechanism large cities (from here onwards larger cities refer to cities with population over 0.5 million) demonstrate their competitiveness. This is partially because they can enjoy positive externalities brought by their population scale and density and partially influenced by China’s urban development strategy and opening-up policy.
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