Urbanization plan will live on: NDRC official

China's top economic planner is still working on its massive urbanization plan, and media reports claiming it is dead in the water are untrue, a source with direct knowledge of the matter told the Global Times Sunday.

"The truth is that our agency is still in the process of completing the urbanization plan draft," an official with the National Development and Reform Commission (NDRC) told the Global Times Sunday on condition of anonymity, noting that the plan will not be unveiled until the appropriate time.

Reuters released a report on Friday that cited sources close to the government as saying the urbanization plan, which was expected to require an investment of 40 trillion yuan ($6.52 trillion), was "running into snags" due to top leaders' concerns that a spending-oriented plan might escalate local debts and fuel an economic bubble.

The official said the authority cannot kill the plan, as it is not finished yet, and added that the current draft does not include an investment estimation.

Some local governments have received quota orders from their superiors to move rural people to urban areas within a specified time frame, Chen Yao, secretary general of the China Regional Economy Society, told the Global Times Sunday.

According to official statistics earlier this year, 52.57 percent of the population was living in urban areas by the end of last year, but only 35 percent had urban hukou (household registration).

That means nearly 18 percent people living in urban areas are unable to be real city people, said Chen.

He stressed that a series of reforms, including hukou, social insurance and industry development, should be part of the urbanization plan so as to foster a long-term economic development.

"And an investment-­oriented urbanization will surely drive some local governments to borrow large quantities of money to construct infrastructure, which may cause a bubble," said Chen, noting that during a slowing economy, improving public services for city newcomers is necessary in addition to pure investment.

China's GDP growth stayed at 7.7 percent year-on-year in the first quarter of 2013, its slowest rate since 1999.

Cao Jianhai, director of the Institute of Industrial Economics of the Chinese Academy of Social Sciences, told the Global Times in an earlier interview that some local government officials have strong motivation from the NDRC to invest because investment "can push up local GDP, a crucial indicator in assessing their performances, and their future promotions as well."

"There is massive corruption involved in construction subcontracting, if local governments get the green light for major investment projects," said Cao.