POLICY ANALYSIS pubs.acs.org/est Landscape Urbanization and Economic Growth in China: Positive Feedbacks and Sustainability Dilemmas Xuemei Bai,*,† Jing Chen,‡ and Peijun Shi ‡ †Fenner School of Environment and Society, Australian National University, Canberra, ACT 0200 Australia ‡State Key Laboratory of Earth Surface Processes and Resources Ecology, Beijing Normal University, No. 19 Xinjiekou wai street, Beijing 100875, P. R. China bS Supporting Information ABSTRACT: Accelerating urbanization has been viewed as an important instrument for economic development and reducing regional income disparity in some developing countries, including China. Recent studies (Bloom et al. 2008) indicate that demographic urbanization level has no causal eﬀect on economic growth. However, due to the varying and changing deﬁnition of urban population, the use of demographic indicators as a sole representing indicator for urbanization might be misleading. Here, we re-examine the causal relationship between urbanization and economic growth in Chinese cities and provinces in recent decades, using built-up areas as a landscape urbanization indicator. Our analysis shows that (1) larger cities, both in terms of population size and built-up area, and richer cities tend to gain more income, have larger built-up area expansion, and attract more population, than poorer cities or smaller cities; and (2) that there is a long-term bidirectional causality between urban built-up area expansion and GDP per capita at both city and provincial level, and a short-term bidirectional causality at provincial level, revealing a positive feedback between landscape urbanization and urban and regional economic growth in China. Our results suggest that urbanization, if measured by a landscape indicator, does have causal eﬀect on economic growth in China, both within the city and with spillover eﬀect to the region, and that urban land expansion is not only the consequences of economic growth in cities, but also drivers of such growth. The results also suggest that under its current economic growth model, it might be diﬃcult for China to control urban expansion without sacriﬁcing economic growth, and China’s policy to stop the loss of agricultural land, for food security, might be challenged by its policy to promote economic growth through urbanization. ’ INTRODUCTION Statistically, urbanization levels are higher in countries that have higher income, and with many studies suggesting a strong correlation between urbanization and income level, it has been a long-standing notion that urbanization promotes economic growth.1 Because of this, accelerating urbanization has been viewed as an important instrument for economic development and reducing regional income disparity in some developing countries including China.2 4 Recent studies, however, ques- tion this assumption. Bloom et al.5 showed that demographic urbanization levels, measured as the share of population living in cities, have no causal eﬀect on national wealth examined across 180 countries. Also using demographic indicators, other studies obtained similar conclusion in Africa and Asia.6,7 However, using demographic data to represent urbanization level might be inappropriate for such analysis because the varying and changing deﬁnition of the “urban population” often makes it incomparable over time and across countries.8 11 Urbanization is a multifaceted phenomenon, with profound changes in land use and the built environment, economic structure, social organizations, behavioral and consumption patterns, political and administrative arrangements.12 Even assuming the result obtained by Bloom et al.5 and other studies do establish that there is no causal linkage between demographic urbanization level and economic growth, this is not suﬃcient to establish there is no causal linkages between urbanization and economic growth, as there may be causal linkages between other aspects of urbanization and economic growth when measured by diﬀerent, and perhaps more suitable indicators. Land conversion is one of the key processes that charac- terizes urbanization,13 and many studies reveal the process, speed, magnitude, and consequences of land use change accom- panying urbanization.14 18 We use the term landscape urbani- zation to describe and diﬀerentiate this process from demo- graphic urbanization which is based on the size or share of population living in cities. A landscape urbanization indicator, such as the total built-up area in a city, may be a useful substitute for demographic urbanization indicators as it has clear and uniﬁed deﬁnition, and therefore provides new potential for Received: October 21, 2010 Accepted: November 21, 2011 Revised: October 31, 2011 Published: November 21, 2011 r 2011 American Chemical Society 132 dx.doi.org/10.1021/es202329f | Environ. Sci. Technol. 2012, 46, 132–139