DPA/Beijing

Yet behind the quaint English-style facades of the Shanghai suburb, finished seven years ago, up to 60% of the properties remain empty according to police estimates quoted by local media.

Thames Town is an upmarket version of the sprawling, half-empty residential compounds seen in many Chinese cities, reflecting problems of over-investment in the world’s largest urbanisation programme.

“China is experiencing urbanisation at a speed and scale that is unprecedented in human history,” Helen Clark, the head of the UN Development Programme, said in August.

Its transition to a nation with an urban majority took just 60 years, compared with 150 years in Europe and 200 years in Latin America, Clark said. Concerns have grown over the past decade that many large cities have property bubbles, but some analysts believe that regular government intervention has bolstered prices and averted any crash.

An estimated 1.46bn square metres of residential property remained unsold in China by the end of September, equivalent to the country’s expected sales volume for 10 months, said Liu Yuanchun, an economist at People’s University in Beijing.

A renewed urbanisation drive by the ruling Communist Party over the next decade is likely to prolong the property boom, said Chen Donglin, an economist with the Chinese Academy of Social Sciences, a government think-tank.

“The main conflict is between market demands and state planning,” Chen told DPA, supporting the party’s plan to give greater play to market forces.

Since President Xi Jinping became party leader in November 2012, the government has announced measures designed to reduce income inequality and raise consumption, as part of its rebalancing of the world’s second-largest economy away from its reliance on exports and investment in infrastructure.

It aims to raise incomes, promote domestic consumption through the urbanisation programme, and build a stronger social welfare system.

At a meeting in mid-December, the government promised what the influential Caixin financial magazine called “a shift in the country’s urbanisation approach from building projects that involve massive demolition to a more people-friendly and natural transition.”

The imbalance between rural and urban areas was a “major barrier” to China’s development, Xi said earlier, adding that the government will pilot reforms to allow farmers to rent out or mortgage their land rights.

Urbanisation is key to the party achieving its broad, long-term goals of building a “harmonious” and “xiao kang” (moderately well-off) society by 2020, and ultimately continuing its rule of China.

The programme is expected to spur investment demand by at least 40tn yuan ($6.5tn) over the next decade, officials said.

Provincial governments are developing hundreds of villages into new townships and expanding county towns into cities, while trying to heed the party’s call for more environmentally friendly growth.

But as they have tried to sustain growth by supporting state-led investments in major property and infrastructure projects, local governments have been amassing estimated debts of at least 10.7tn yuan ($1.7tn), according to official data.

The rising debts have helped fuel violence during forced evictions to free up land for sale to developers, the main way for local authorities to raise funds to repay debts.

China’s estimated urban population has swelled to 710mn, including some 260mn rural migrants.

Another 300mn rural residents are expected to move into towns and cities by 2030, increasing the urbanisation rate of China’s 1.35bn people from the current 53% to more than 70%.

Yet most migrants are left in limbo by a controversial household registration, or hukou, system that leaves them as “temporary residents” without access to full welfare services even decades after they move to cities.

“The key is providing urban hukou to migrant workers and improving their capability to settle down in urban areas,” the party said last month.

It plans to allow migrants greater rights to settle in smaller cities but will keep strict controls in the largest cities.

That will not be enough because “migrants for the most part have followed jobs to the large cities,” Kam Wing Chan, an expert on China’s urbanisation at the University of Washington in Seattle, wrote in Caixin recently.

Indebted local governments also “cannot afford to develop small cities and towns because the land there cannot be sold at a good price,” Chan warned.