Small town development and rural urbanization in China

A new way of urbanization has emerged in China where farmers are urbanizing the rural areas instead of migrating to the large cities. This article addresses the question of why current urbanization takes this direction in which surplus labor has been transferred from agriculture into the industrial and service sectors without leaving the rural areas. The findings indicate that continual population pressure and reform policies in post-Mao China have resulted in strategic development of small towns in the rural areas. In this development, township and village enterprises have been the locomotive of rural urbanization. Institutional constraints could be moved, created, or utilized in a way which can be conducive for social development. The rural urbanization in China could be significant for many developing countries.