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With growth, China population becomes more urban

The Central Business District skyline which includes Beijing's tallest building the 'China World Tower Three' in Beijing on December 9, 2011. For the first time, the urban population in China has surpassed the rural population.

Adriene Hill: China's economy grew 8.9 percent last quarter, which is better than analysts expected, but still its slowest rate in 2.5 years. The country's speedy growth has pushed millions of people to leave their homes in the countryside for better paying jobs in cities. And for the first time, according to national statistics, the number of urban dwellers has officially topped the rural population.

Joining us now to help explain why we all should care is professor Steven Tsang. He's director of the China Policy Institute at the University of Nottingham in England. Thanks for joining us.

Steven Tsang: You’re welcome.

Hill: So, what does this mean for China’s continuing economic growth? Is it going to speed things up or slow them down?

Tsang: The shift of population from the rural area to the urban area means that the population in the urban areas are exposed to higher expectations, exposed to information, and exposed to consumerism. Now that they have seen what the urban areas have to offer, they want them. It makes them demand higher wages and it also makes them demand more changes at home.

Hill: What are the economic implications of that to the rest of the world?

Tsang: Well, with the Chinese workers demanding higher wages, it means the cost of manufacturing in China is rising and the China prices may be affected. On the good side of it, we have a very imbalanced economic relationship between China and North American and Western Europe; an increase in domestic Chinese consumption should redress that. In a year -- when both Europe and American are going to be having very very slow growth -- increase in Chinese domestic consumption should also help to keep the Chinese economy growing faster.

Hill: Professor Stephen Tsang, Director of the China Policy Institute at the University of Nottingham. Thanks so much.

Tsang: You’re welcome.

About the author

Adriene Hill is the senior multimedia reporter for LearningCurve.

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