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China’s latest central planning target is ambitious. It plans to limit the population of Shanghai—a global financial hub and the most populous city proper in the world—to 25 million by 2035. For perspective, the city’s population was less than a million shy of that target back in 2014. And in September, the government had decided that Beijing’s population shouldn’t exceed 23 million by 2020; in 2014, the city’s inhabitants numbered 21.5 million.

Urban centres are hubs of economic activity, innovation and consequently, growth, because of economies of scale and positive externalities. But past a certain size and density, negative externalities such as pollution and congestion start reaching critical mass. China’s urban targets are meant to combat this—what the government has termed “big city disease".

China has attempted population engineering on this scale before with the hukou system. But the inequality and resentment the system caused eventually forced reforms. It will be interesting to see how these new targets are implemented—and what the unintended economic and political effects are.

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