Larger than life: The rise and rise of the Asian megacity

Looking out from any one of the skyscrapers that dominate Shenzhen’s central business district, it seems as though the city never ends. As far as the eye can see, there’s an almost unremitting jumble of shiny tower blocks and lower-rise offices, warehouses and arterial highways with their nose-to-tail traffic. These are the classic hallmarks of an urban landscape that, in the words of Disney’s Buzz Lightyear, seems to stretch “to infinity and beyond!”

But what’s less obvious is that this cityscape represents one of the most remarkable changes in human history – in any era. In the West, you get large cities such as London and Paris but, in Asia, witness the rise – and rise – of the megacity.

Megacities are generally defined as those with more than 10 million inhabitants. Back in the early 1950s, there were only two on Earth – New York and Tokyo; by 2010, according to United Nations figures, this number had shot up to 24 – and by 2025, the UN predicts, there will be 39 of these supersized cities. These numbers tell a remarkable story about the way we are choosing to organise our lives but, look deeper into the data, and an equally fascinating trend reveals itself: the new urban areas are growing fastest not in the traditional powerhouses of Europe and America but in Asia and the “global south”.

In 2010, just nine of the world’s megacities were located in Asia; scroll forward 15 years and 21 of the projected 39 megacities will be situated here, with the biggest growth in population expected to take place in the new or lesser-known cities in South and East Asia.

But it’s not just the rapid increase in their numbers or their sheer size that makes these megacities fascinating. They look, feel and behave differently, too.

“The word I’d use is ‘energy’ – both from a human and a commercial angle – and I especially feel this in Asia,” says Christopher Dent, professor of East Asia’s international political economy at Britain’s University of Leeds. “The physical features of these megacities are not necessarily like the classic Manhattanesque skyline: Hong Kong is high-rise and so is Singapore, but some of the new cities don’t have many skyscrapers at all. However, what they do all have are vibrant central business districts and vast amounts of human traffic that give an energy to the place.

“We’re also seeing cities grow and blend into each other all over the world but in Asia the process has happened much more quickly, so the scale and pace are more impressive here. These giant cities are born of a real entrepreneurial and commercial dynamism – and they’ve grown by attracting entrepreneurship from other parts of the country and also the world. Whenever I go to Bangkok, Manila, Tokyo, more than anything else it’s their energy that really hits me.”

Asia’s spectacular urbanisation may have been late in coming but it is unprecedented.

“If you take China as an example,” says Dent, “until relatively recently you would have classed it as a rural economy. Back in the 1960s, just 9 per cent of its population were urban and – with the hukou system regulating where you lived and worked – it was hard for people to move around.

“Now, with the loosening of those controls and a pro-urban policy, over 50 per cent of the population is classed as urban – that’s around half a billion people moving into cities in the last four or so decades. China has transformed itself – and it’s the same in Thailand, Indonesia, the Philippines, Malaysia – the list goes on.”

The explosion of Asia’s cities is being watched closely by Frank Chen, executive director of China research for real-estate multinational CBRE.

“While many countries across Asia are seeing a big move to the city, for China the growth has been phenomenal, especially since the year 2000. Then, the urban population here stood at around 35 per cent – by the end of last year, that had risen to 54 per cent. This is the largest migration to the city in history. We’ve never seen this before anywhere in the world.”

A sign of just how quickly and spectacularly urbanisation is taking place is that the term “mega” is now too small to describe the top tier of urban giants. These cities have joined an elite club known as the “metacities”. And China already has two: Beijing and Shanghai.

“Beijing, Shanghai, Guangzhou and Shenzhen are all megacities,” says Chen, “but Beijing and Shanghai are in a league of their own, with populations well over 20 million.”

So what’s pushing – or pulling – people into these behemoths?

“It’s more or less purely economic, in terms of higher incomes,” says Dent. “If you’re working on a farm or in one of the extractive industries in the countryside, you’ll be earning a lower salary than if you’re in manufacturing, so you’ll want to head to the city, where there are more factories. But there are the ‘softer’ infrastructure benefits there, too – things like better transport, better electricity and communications, along with more and higher quality health care and education, in fact more prospects in general for the family – that’s certainly the case in Asia.”

Chen, who is based in Shanghai, has no doubt: “It’s jobs! Most of the best jobs are in the major cities. Just look at the figures: Shanghai has 493 of the Fortune 500 companies while Beijing is home to 480 of them – and along with these jobs come business opportunities and greater availability of resources like education and health care.”

And he should know.

“I moved from the countryside to the city [Guangzhou] when I was young as there were better job opportunities there and – like most young people – I was aspirational for a better life. And it’s true – you do get more opportunities in the megacities, even with all the problems of congestion and pollution. For me, and most other people, it was still worthwhile.”

Yin Jingjing, a 27-year-old pursuing an MA in language and intercultural studies in Shenzhen, has a story that is typical of many of the new Asian urbanites.

“My family moved to Shenzhen in 1995 in search of a better life. The reform policy of Deng Xiaoping was a big part of that decision – Shenzhen had been designated the first special economic zone [in 1980] and was growing fast, with lots of jobs in the new industries locating there. Before we moved, my parents worked in an electricity plant in Jiangxi, but this was one of the least developed provinces in China and my parents wanted a better future for me, so, when a friend’s son told us how he had moved to Shenzhen and about all the opportunities there, my parents moved, too.

“I was about eight years old when I first saw Shenzhen and I remember my first impressions were that it was a really big and busy city, and everyone seemed so young! In the 80s and early 90s, there were lots of factories that attracted 18- and 19-year-olds from the countryside without much education, but now those plants have moved outside the city and Shenzhen has upgraded its industry so the workers tend to be older – but even now, you seldom see elderly people out on the streets.

“The Shenzhen local media did a survey two years ago that showed the average age of Shenzhen’s population was 28 years old and now it’s about 33 years old – but that’s still really, really young.”

Yin is clearly a fan of her adoptive home.

“Although it doesn’t have much of a history, like Beijing or Shanghai, the up-side is that Shenzhen feels like a very vibrant and exciting city, so the lack of history here has been turned to an advantage and is now part of Shenzhen’s identity as a very creative place.

“It’s also much smaller than the other two cities, of course, but that means you spend less time on buses and trains trying to get around. I live about 15km from my work so I only have to travel about half an hour by bus – that’s not bad and certainly not unbearable, though the traffic is worse out in the suburbs.”

Even the ubiquitous pollution doesn’t bother her.

“It’s really not that bad. In fact, the air quality here is among the top 20 cities in China as Shenzhen is now focusing on hi-tech, so most of the heavy industries have moved to Dongguan.”

In fact, the only criticism Yin has concerns the woefully inadequate drainage system.

“The piping system for the city is really bad. When you get big storms, you can sit in your apartment and it’s like you have a sea view! There’s water everywhere you look down below. Now, I could accept that from an old, historic city but not from Shenzhen – it’s far too new.”

Just 35 years, this urban expanse was a small fishing village. Today it ranks as one of China’s fastest growing megacities, with a population – according to the last census – of more than 10 million people. But official figures are notoriously unreliable and have little chance of keeping up with the human influx. A more realistic figure is widely regarded to be closer to 15 million – and unofficial figures have the megacity’s population as high as 19 million.

But far from worrying Yin, she welcomes the expansion.

“The speed at which the buildings are constructed is impressive: entire floors of the Guomao mall were apparently built in three days! That’s a record – but it’s a typical example of how the city has developed over the past few decades. It’s inevitable that Shenzhen will get bigger and include more of the surrounding areas. There are lots of new districts planned and some of these will effectively join Shenzhen up with Hong Kong. I think it’s a good thing – we’ll have more foreign companies and better communications with Hong Kong, so we can visit without a visa.”

What started with Deng continues apace under Premier Li Keqiang: he describes urbanisation as one of the key drivers for economic growth, ensuring that China’s future will continue to be in the cities.

“If you look at where economic development has been happening in China, since the 80s most of the benefits of reform have been going to the cities rather than the countryside,” says Chen. “The more the cities benefit, the more rural people will migrate there. If you look at every major city in China, they’ve all grown rapidly in the last two to three decades.”

But Chen sees subtle changes in the type of migration taking place.

“In past decades, local governments would offer foreign multinational companies tax and rent incentives to locate in their cities. But while winning an elite Fortune 500 company is still seen as a huge coup, our own domestic companies are growing in both size and importance, so there’s less pressure to go chasing foreign companies. What’s more, the governments along the coastal areas are keen to attract high value-added companies to upgrade their industry structure.”

So what does all this mean for the property markets?

“Basically, in Beijing at least, it’s a story of shortage of supply,” explains Chen. “There, office rents doubled between 2009 and 2012, making the costs of office occupancy on Finance Street the third or fourth most expensive in the world, behind London’s West End and Hong Kong’s Central.”

With the stakes so high, it’s little wonder that the megacity model is changing the very nature of the city.

“Instead of expanding outwards, it’s certainly very, very common here to see existing cities reinventing themselves with two or even three new central business districts being developed within their existing curtilage. It’s not an easy process to shift an entire CBD but this is exactly what’s happening: Tianjin has gained three new ones, in Binhai New Area, Xiangluowan and Yujiapu. Local governments are enthusiastic about developing a new CBD in the suburbs as land values rise sharply, making the process extremely lucrative. Some local governments have generated more than 50 per cent of their income from land sales – so land sales can be considered a prime driver for this change but, on the other hand, some cities need new CBDs as the old ones are run down.”

In Hong Kong, where there is limited space for outward development, this type of “polycentric” model of development is also being actively pursued. Chen’s colleague Marcos Chan, head of research for Hong Kong, Macau and Taiwan, has been following its growth closely.

“If you ask how can Hong Kong expand as a megacity,” he says, “in terms of commercial real estate, at least, the answer is the strategic development of ‘CBD2′ in Kowloon East. It’s a process that’s been happening over the past 10 to 15 years, whereby the historical industrial areas of Kwun Tong and Kowloon Bay – with their derelict factories and warehouses – have been rezoned by the government to facilitate more commercial development. I have no doubt that Central will remain the No1 CBD in Hong Kong but you can see that Kowloon East will become the most important office supply contributor within the SAR. We’ve already seen some of the larger banks splitting their operations – keeping their client-facing and business-generating functions in Central, where they’re close to the stock exchange, government headquarters and many of their clients, but moving their back-office operations to Kowloon East, where land rents are relatively lower and there’s more contiguous space.”

But behind the headlines, this relentless development in the megacities of Asia inevitably brings costs as well as rewards. For Dent, the biggest problem is the environmental challenge: how do they “do” energy?

“Many of these cities get electricity from power stations hundreds of miles away yet urbanisation at this scale is a very energy-intensive process, creating not just local problems in terms of supply and pollution but also related global issues. Of course, there are the arguments that it’s more efficient to live in a big city with public transport and high-density buildings – but urban populations have a materially intensive lifestyle; they’re hugely consumptive in a way the rural areas just aren’t. In China, these problems are particularly acute to the point that there’s also an expat migration crisis – foreigners just don’t want to work in places like Beijing, with its smog and yellow sands, and Beijing knows this must be addressed, not just for the sake of foreign capital but for the domestic population, too.

“In March this year the Chinese government launched a ‘war’ on air pollution – but they’ve also pledged to bring ‘power to the people’, so it’s a tricky balance,” says Dent. “Pollution is now killing more people in China than smoking. Add to this the concerns with corruption and the growing gap between rich and poor, and the social tensions of the megacity suddenly become very real indeed.”

However, for the young and educated, the megacities promise the chance of a better life, at least for now.

“Actually, I love Shenzhen,” says Yin. “I have a real sense of belonging here. It’s so full of opportunities – and because of all the young people here, it’s also really good socially. In the next few years, I’d like to get a job with one of the big international companies but I’d still want that to be in Shenzhen. This city just meets most of the demands you could have for a good quality of life. Everything I need is here, with efficient government and convenient living.

“Why would I want to go anywhere else?”

 

Next week, part two of the series will cover the social, environmental and logistical issues facing megacities.

 

Larger than life: The rise and rise of the Asian megacity