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China has huge potential to advance its urbanization given that a half of its populationstill lives in rural areas. Currently， the country's urbanization ratio is about 51 percentsome experts estimate the country's real urbanization ratio is 35 percent if those who havesettled in cities but failed to gain a hukou in them are taken into account-such a ratio isfar below that of some developing countries at a similar development stage， not to mentiondeveloped countries， where the urbanization ratio is more than 70 percent. However， thismeans China still has huge potential to raise its urbanization ratio in the years ahead.
According to some experts' estimates， China's urbanization ratio will riseby onepercentage point every year during the next 20 years. This would mean the countrywould have 65 percent of its population living in urban areas by 2025. Together withthe estimated 200 million living in cities without an urban hukou， this would mean anadditional 400 million urban residents in the next 10 years. According to the calculationthat there is 100，000 yuan （$16，000） of investment in infrastructure and public services foreach urban resident， China would need to invest an additional 40 trillion yuan as a resultof urbanization in the coming decade， which is equivalent to its gross domestic product in2011. Such a colossal investment is sure to have a positive and widespread influence on thenational economy.
Aside from the huge investment potential it will create， urbanization will alsoplay a positive role in boosting domestic demand. Statistics show that urban residents'consumption capacity is usually three times that of their rural counterparts， This meansthat an increase in the country's urbanization ratio of one percentage point will result inan additional 1.4 percent increase in the volume of consumer goods sold. The increasedconsumption  resulting from a raised urbanization ratio will undoubtedly help change longrunning imbalances in Chinas economic structure.

NEW POLITICAL ERA
Xi offers hope of clarity 2
New leaders confident in fulfilling responsibilities 5
The seven who will run China 7
Hu's vision for development highlights the modem path 13
Small， but essential step 16
Resolve to fight corruption 19
Not a very smooth ride ahead 21
Sticking to reform 24
Four dreams and a vision 26
Plain talk and people first style 29
ECONOMY
China can produce. Can it create？ 34
Finding a dynamic balance 38
What path will economy take 41
Aircraft carrier a feasible choice 44
China should adopt a new growth model 47
On the 'long march' of science 50
Accelerating rural reforms 53
Reform test for the new leadership 56
Income distribution is the key 59
Priority for further reform 63
Paying for public services 66
Changing trade structure 69
Tackle challenges in fanning sector 72
An answer to financial crisis 74
Independent and impartial 80
SOCIAL DEVELOPMENT
Officials must learn image management 82
Internet and governance in China 85
Does Beijing love or hate the Net？ 89
Building a better society 92
Progress of cultural reform 94
New media improves transparency 96
Right to housing： Who can grant it？ 100
What do the Chinese people believe？ 103
Future driver of growth 107
The genie of wealth disparity 110
Finding future demographic balance 113
Demographic trends and economic reality 118
Decentralize and diversify 121
SUSTAINABLE GROWTH
CHINA AND THE WORLD
 

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