What factors have driven urbanization in China?

Urbanization is an important engine of modernization and economic growth, and appears to be an inevitable trend during the development of human society. We combined economic, population, and land urbanization factors to develop a comprehensive indicator, the comprehensive level of urbanization (CLU). We then used 10 sub-indicators from four dimensions (economic, political, social, and resource endowment) and panel data from 30 Chinese provinces from 2000 to 2018 to conduct panel quantile regressions that accounted for the heterogeneity of the data and a contribution analysis to determine the key factors that are driving CLU. We found that the industrial structure and marketization (the development of market mechanisms) were important factors that increased CLU, and the contribution of marketization increased with increasing quantile, whereas China's land finance model (in which provinces raise operating funds through land sales) decreased CLU in regions where urbanization had progressed most. Therefore, accelerating market development, reducing the government's reliance on the land finance model as urbanization matured, and improving the industrial structure by promoting industrial transformation through improved education and technology will be the keys to achieving high-quality urbanization in the future. The successes and failures of China's urbanization process will provide lessons for other developing countries.