China could use a little US-style suburban sprawl

Atlanta

CHINA'S urbanisation push helped modernise its economy and has been a key component of its boom during the past two decades. But although the migration of hundreds of millions of workers from rural China to skyscrapers in the country's cities has been good for economic growth, it may turn out to be a weakness for the country in the future.

What China needs now, given its looming demographic crisis, is more babies, and a country built around workers crammed together in dense cities isn't the best thing for birthrates. A more suburban environment, like that in the US, may be what China needs if it's to stave off population collapse.

If you were an evil genius who wanted to crush China's birthrate, you would have done just about everything the country has done during the past 40 years.

First, when the country was still largely rural, you'd implement a one-child policy. Almost overnight, you'd make rural communities unviable by restricting the ability of agricultural workers to have large families to help work the fields. Young workers would realise they had little choice but to move to cities for work, creating the demographic demand for urban migration, which was then assisted by the state in the form of economic development and infrastructure programmes.

Because you're a still-poor, developing country, you wouldn't be able to afford the lower-density environment found in the US, with detached single-family homes, sprawling infrastructure, automobiles and parking spots.

Instead, you'd do the efficient thing, which means high-rise developments and trains. These new types of high-density communities tend to have lower birthrates with or without a policy directive. The one-child policy would change the outlook of parents and children alike. A society that values boys more than girls would choose to abort female pregnancies more often than male pregnancies, leading to a gender imbalance and lower household formation down the road.

Parents of single children would invest more in their offspring's education and career, which in the US has led to a delay in the age at which women have their first child - if they have children at all. After a few decades of the one-child policy, once signs of demographic trouble emerge and you wanted to do something about it, you'd confront a very different, more difficult set of conditions.

Rather than a rural country with families used to having lots of babies, you'd have an urban country with young people who grew up as only children. The generation first subject to the one-child policy would be getting set to retire, and in a country with a weak social safety net, those only children would find themselves juggling their careers and caring for their aging parents.

In other words, China is in a bad spot, and many of its issues aren't readily fixable. But as it seeks to catch up with the US in areas like technology, it could also consider some other ways the US has a competitive advantage.

After the Great Depression, the US shifted from an economy based on production to one more oriented around consumption. Rather than being cramped in urban apartment towers working in factories, Americans sprawled into lower-density suburbs for more space and to get away from the pollution found in cities.

At a societal level suburbs are more expensive to maintain than cities, but that's the nice thing about becoming wealthier as a country - it gives you the resources to spend on things like suburbs. That suburbanisation in America coincided with a mid-20th-century baby boom. Although US birthrates have fallen like they have in the rest of the developed world, they're still higher than in ultra-dense countries such as Japan and South Korea, especially in the suburb-iest parts of the US.

As America frets about China, one key competitive advantage the US has is the built environment. America has incredible diversity in the types of communities it has - older cities in the North-east, newer cities on the West Coast and in the South, mid-sized cities and college towns everywhere, and a smattering of thriving small towns. Someone could find themselves growing up in a suburb in the North-east, going to college on the West Coast, settling in a Sun Belt suburb and then retiring in Florida or Arizona. Although there are problems with poverty and inequality everywhere, the US offers an enviable choice of places to live.

This is what China needs to figure out if it wants to solve its demographic challenges. And there are signs the Chinese are starting to sprawl out a bit, as the housing market in its second and third-tier cities has been hot. Without changes, in a few decades, no matter what it does on the technological front, it will find itself a fading global power. BLOOMBERG