On May 6, another major policy document was released.

The full text of the "Opinions" is over 7,000 words long, but upon reading it through, most of the content is indeed merely "suggestions." How exactly to implement and carry out these measures requires local authorities to plan scientifically and adjust flexibly.

Only the following provision is a nationwide, mandatory requirement—and one that is closely tied to the fate of county towns:

Establish and improve a mechanism linking fiscal transfers at the sub-provincial level to the urbanization of rural migrants, with a focus on supporting county towns that have absorbed a large number of rural migrants.

Establish and improve a mechanism linking the scale of increased urban construction land at the sub-provincial level to the number of rural migrants who have settled there, and allocate specific new construction land quotas commensurate with the number of people who have moved to the city and registered as residents.

In other words, future fiscal transfers and land allocation quotas will be tied to the number of rural migrants who have settled in urban areas. Only county towns with growing populations will receive greater financial and quota support.

How should the thousands of county-level cities interpret this document? And what steps should they take?

Serving as a bridge between cities and rural areas, county towns play a vital role

After decades of sustained development, China’s administrative, market, and social forces have all made significant strides.

Convenient highways, subways, high-speed rail, and air travel have continuously accelerated the flow of goods and talent, while innovations in information and digital technology have greatly enhanced communication efficiency.

More importantly, China has become the world’s second-largest economy, trailing only the United States. We need a group of major cities and metropolitan areas to directly confront targeted pressure from the West and fully enhance efficiency.

After all, greater scale often leads to higher efficiency.

▲ In February 2019, the National Development and Reform Commission (NDRC) issued the “Guiding Opinions on Cultivating and Developing Modern Metropolitan Areas,” clarifying that metropolitan areas are the core of urban clusters and a crucial link bridging the past and the future in urbanization.

Larger urban scales enable the efficient reuse of production factors concentrated in core cities, driving the continuous rise in metropolitan area efficiency—a development that represents the “heavens” of regional economic growth.

However, while striving for greater heights, we must not neglect the ground beneath our feet.

Without a solid foundation, even the fastest development is merely a house built on sand.

In this regard, the state has actually been making strategic arrangements for some time.

In 2017, two years before the release of the metropolitan area strategy, the state proposed the Rural Revitalization Strategy, aimed at solidifying this “foundation.”

However, we must face the reality that

The gap between "heaven" and "earth" is vast—even for rural areas within metropolitan regions, it is difficult to integrate directly into metropolitan development. Promoting integrated urban-rural development has always been fraught with challenges.

A bridge is needed between the “sky” and the “ground.”

That bridge is the county town.

Whoever captures the population captures the future

Serving as a link between major cities and small villages, county towns must not only integrate into metropolitan area development and take on the functional relocation from core cities, but also support rural areas and identify effective solutions to narrow the urban-rural gap.

In recent years, whenever policies related to “narrowing the urban-rural gap” are announced, there are always those who remain skeptical, believing it is too difficult to achieve.

However, the decision to undertake a task should not hinge on its difficulty, but rather on whether it is the right thing to do and whether it is necessary.

For example, we pushed forward with “Made in China 2025” despite pressure from the United States, and we have maintained the “dynamic zero-COVID” policy in the face of Western criticism. These are difficult tasks, but the greater the difficulty, the more it demonstrates their value.

The author believes that the Rural Revitalization Strategy must be advanced within the framework of county-level administration, with the key challenge being to address the issue of scale.

Only when a certain scale of population is concentrated in county towns will the state’s investments in infrastructure—such as municipal services, schools, hospitals, and logistics—and in modern public service systems yield multiple benefits.

This is also why, as mentioned at the outset, transfer payments and land allocation quotas must be linked to the urbanization of the rural migrant population.

We will not adopt a one-size-fits-all approach to large-scale construction in county seats, nor will we impose blanket restrictions on their development. Instead, we will adapt to population migration trends and pursue tiered development, which is the most efficient way to drive economic growth.

For example, the statement in the “Opinions” that “counties with a population of a certain scale should be supported in improving their county-level hospitals” makes this intention quite clear.

It is foreseeable that “attracting local rural residents to move to urban areas” will become the core task for all county towns—population creates asset reuse value, and reuse value ensures investment effectiveness; the core of it all is to achieve more efficient investment.

In short: He who captures the population captures the future.

Whoever succeeds in this will become the star county of the future.

Guiding the Development Direction of County Towns Through Categorization

The focus remains on industry

Therefore, county governments would do well to broaden their perspective: not only should they remove restrictions and attract residents from villages and towns within their own counties to settle in the county seat, but they should also actively join the nationwide competition for talent.

The key to attracting residents lies in employment opportunities. After all, no matter how well-designed the welfare system may be, it cannot support everyone without work.

The key to employment opportunities lies in the development of local industries.

Without industry, there are no job opportunities. Those county towns with imbalanced industrial development and severe population outflow will continue to weaken in the future and may even be gradually phased out.

The "Opinions" broadly categorize county towns into three tiers:

County seats prioritized for development

These include counties surrounding major cities and those with specialized functions.

These counties are either located within urban clusters or metropolitan areas, capable of absorbing the transfer of population, industries, and functions; or they possess resource and transportation advantages, making them suitable for developing distinctive industries.

Those that frequently appear on the list of the top 100 counties all fall into this category.

With industrial support, employment opportunities are guaranteed, so there is certainly no need to worry about these counties being marginalized or even absorbed.

However, competition will be fiercest among these counties in the future.

As economically strong counties, they all aim to attract more corporate investment, create more job opportunities, draw in more residents, secure more transfer payments and land quotas, and win the bid for major national and provincial projects—only then can a virtuous cycle be established.

▲ What are the distinctive county-level industries in the three provinces of East China, where economically strong counties are concentrated?

If investment promotion is neglected, corporate vitality will wane, job opportunities will diminish, and population outflow will result in the loss of land quotas and development opportunities, trapping the county in a vicious cycle of continuous contraction.

However, in this process, homogenized competition must be avoided.

To meet economic targets, many localities are engaging in benchmarking and imitation. County towns are building skyscrapers just like cities, competing for the same industries, and low-level duplication of construction leads to severe waste.

For example, the overlap in the electronics and information technology industries within the Yangtze River Delta is extremely high, and companies frequently poach talent from one another, driving up labor costs.

Such county towns must align with the development plans of their respective metropolitan areas, identify their own industrial positioning, and leverage their comparative advantages to develop distinctive industries. They should not attempt to cover every aspect, as this is impossible.

▲ In 2022, GuChuan United facilitated the establishment of Deco China—a brand under Sika Group, a Fortune 500 foreign-invested enterprise—in Qihe County, Dezhou City, Shandong Province, to invest in and construct a new materials production project.

At the same time, they must seize opportunities to offer suggestions during planning and discussions regarding major urban projects, highlighting their comparative advantages to secure infrastructure development—such as railways, highways, hospitals, and schools—that significantly boosts economic growth and attracts population.

Rational Development of County Towns

For example, county seats in major agricultural production areas or ecological functional zones.

These types of county seats have special missions, such as ensuring food security and maintaining ecological balance; their primary focus is often not on economic development, and their value cannot be measured by GDP.

Take Foping County, for example—the county with the smallest population in Shaanxi Province.

According to statistics, in 2019, Foping County had a permanent resident population of 30,200, local fiscal revenue of 36.61 million yuan, general public budget expenditures of 865 million yuan, and over 6,000 government-salaried employees.

Last year, a member of the National Committee of the Chinese People’s Political Consultative Conference cited Foping County as an example, suggesting pilot mergers of small counties to reduce waste of administrative resources.

What she did not realize is that Foping County has a forest coverage rate as high as 90.3%, is home to more than 130 wild giant pandas, serves as a crucial water conservation area for the National South-to-North Water Diversion Project, and is a key water diversion point for the “Diverting the Han to Aid the Wei” project, bearing a significant mission of ecological protection.

Why does 20% of Foping County’s workforce hold government positions? Because they must shoulder responsibilities that enterprises cannot bear.

Although such counties are small, they truly cannot be abolished.

During the 2021 China International Import Expo, I had the opportunity to speak with the county magistrate of Foping. She explained that while Foping is rich in mineral resources, the county has resolutely rejected the establishment of “three-high” (high energy consumption, high pollution, high emissions) projects to protect the ecological environment, turning away multiple investment projects worth over 100 million yuan.

However, this does not mean that Foping County intends to completely abandon economic development.

With bans on pesticides and noise pollution, such a utopian paradise is naturally unsuitable for large-scale agricultural or industrial development—yet it is a natural tourist and resort destination.

Let’s think outside the box: wouldn’t such a tranquil natural environment be ideal for researchers in certain fields to immerse themselves in their work?

Given the temperament of most researchers, bustling metropolises may not be where their hearts truly lie. A small county like Foping, on the other hand, is actually more conducive to their concentration and the production of research outcomes.

This is not mere wishful thinking on my part; these ideas are explicitly reflected in the 2022 Foping County Government Work Report—

For example: “Make every effort to develop the ‘tourism+’ and ‘+tourism’ models to enhance supporting tourism services” and “Innovate investment promotion concepts and working mechanisms to establish a number of expert workstations and university-affiliated workstations.”

A County Struggling with Population Decline

are precisely the areas hardest hit by population outflow.

The document imposes numerous restrictions on such counties, such as “strictly controlling the increase in urban construction land and revitalizing existing stock,” and “orderly guiding population migration to neighboring regions with economic advantages.”

The good news is that some autonomy has been preserved, specifically through the provision to “support eligible resource-depleted county towns in cultivating successor and alternative industries.”

Whether they can successfully transition depends on their determination to attract investment.

▲ In 2021, GuChuan United helped secure a 540 million yuan biodegradable new materials project in Bolai County, Qitaihe City, Heilongjiang Province (a resource-depleted city).

The author has previously discussed commissioned investment promotion partnerships with several resource-depleted county-level cities. Many local authorities were reluctant to accept the “upfront fee plus intermediary incentive” cooperation model, and these discussions ultimately came to nothing.

However, for these counties, their own investment promotion teams are simply insufficient. They must bring in “strong reinforcements” to broaden investment channels and seize every opportunity—only then can they break free from their current predicament.

Acting swiftly can still secure a head start. Being slow to react and lagging behind at every turn may indeed lead to the county being dissolved.

China is such a vast country; it must be a constellation of shining stars. If only a few stars shine particularly brightly, they will sooner or later be swallowed up by the overall gloom.

Many people leave their hometowns to make a living in big cities, yet their hearts yearn for the green mountains and clear waters of home—it’s just that their hometowns lack suitable job opportunities.

If staying in a county town offered job opportunities and living standards comparable to those in the city—even if income were slightly lower—the improved living environment would eventually allow for a standard of living on par with the city. Why would anyone need to rush to the big cities then?

I hope China can develop a network of robust economic hubs, allowing the prosperity of major cities to complement the vitality of small county towns. Only such development can be more balanced and sustainable.

I also hope that the process of concentrating rural populations in county towns will be guided more by market forces rather than relying solely on administrative directives.