Are Chinese Cities Oversized?

In this article, the socioeconomic determinants on urban population in China are empirically investigated with a theoretical equilibrium model for city size. While much of the research on urban size focuses on the impact of agglomeration economies based on “optimal city size” theory, this model is eschewed in our research due to its theoretical paradox in the real world, and we turn instead toward an intermediate solution proposed by Camagni, Capello, and Caragliu. This equilibrium model is estimated on a sample of 111 prefectural cities in China with multiple regression and artificial neural networks. Empirical results have shown that the model explains the variance in the data very well, and all the determinants have significant impacts on Chinese city sizes. Although sample cities have reached their equilibrium sizes as a whole, there is substantially unbalanced distribution of population within the urban system, with a strong contingent of cities that are either squarely too large or too small.