Case | HBS Case Collection | 2012

Urbanizing China

by Lakshmi Iyer and G.A. Donovan

Abstract

In 2012, China attained a historic development milestone with more Chinese citizens living in cities than in the countryside. China's rapid urbanization, and the accompanying conversion of agricultural land to non-agricultural uses, raised a number of economic, social, and political concerns. Could China maintain its food security in view of the sharply rising demand for land for urban development? How could it ensure the sustainability of local government finances? Was the growing number of land protests the harbinger of major changes in China's political institutions? How would the challenges of urbanization affect the business environment for private firms? The success and viability of China's overall growth strategy depended crucially on managing a successful urban transition.

Keywords: China; urbanization; industrialization; property rights; local government finance; social protest; business environment; food security; Safety; Change Management; Food; Urban Development; Social Issues; Growth and Development Strategy; Public Administration Industry; Agriculture and Agribusiness Industry; China;

Language: English

Format: Print

23 pages

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Citation:

Iyer, Lakshmi, and G.A. Donovan. "Urbanizing China." Harvard Business School Case 713-037, October 2012.

This case examines the challenges and opportunities of doing business in China. It highlights China's remarkable economic transformation in the decades leading up to 2012 in the context of its history, culture, and political. The case summarizes the main obstacles faced by businesses operating in the country—rising costs, human resource constraints, and increasing competition—with examples provided by HBS alumni working in Greater China. These lessons are brought home in the experience of one alumnus who is looking to expand his cosmetics company in China's rapidly changing business environment. Among other pressures he must manage intense competition, restrictions on access to capital, and product safety and quality concerns.

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