الفهرس 
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Abstract
1. Introduction
The industrial revolution in the 19th and 20th century, in Europe and North America marked the beginning of urbanization, when labor migrated from rural to urban areas lifting the agricultural sector or any other discipline like, art and crafts to gain higher wages and higher standards of living.
from 1980 to 2010, the world urban population increased from 1.6 billion to 3.3 billion, and it is expected to increase by another 2 billion by 2040, which means that the world is urbanizing rapidly. Most of this urbanization takes place in the developing countries. This demographic transition helps in economic development, where all the economic activities are geographically concentrated, and is called urbanization which is a structural change that takes place in developing countries to increase incomes and standard of living. However, this caused increasing slums with inadequate sanitation, water, transport, and health services, also as poverty increased crime and informal economies increased rather than increasing formal employment. Some developing countries started to manage urbanization in a way to achieve economic development, the most recognized country is China. People migrate to get a better standard of life, earn higher incomes, get access to better schooling and social services, cities get better infrastructure than rural areas, such as education, and health.
Urbanization is seen from two aspects; first, the growth of cities, which concentrates all economic activities and population in the city industrial productivity. Second, the percent of country’s population that lives in urban areas through non-market incentives or competition in the market.
Before the industrial revolution in the 18th century, there was no structural change or it slightly happened, because the world economy grew very slowly, but now the economic growth must be followed by changes in the economic structure. Structural change is when an economy develops and moves from the traditional agricultural sector in rural areas to modern non-agricultural sector in urban areas such as manufacturing. The improvement in the agricultural productivity is a necessity for structural change and economic growth, this takes place when urbanization is found, because the development of agriculture sector needs technology that is developed in cities.
Urbanization may cause some social and economic problems, such as the uneven distribution of population between rural and urban areas, as well as the unequal distribution of income, increasing poverty, and unemployment in urban areas, which forces labors to engage in informal activities, such as
minimum paid jobs or low paid daily work because they are unskilled and unproductive workers. Consequently, with this minimum wage and no improvement in their skills, this labor will affect the urban areas and will not lead to development and growth.
Developed and developing countries have two different paths of urbanization, as developed countries experience the parallel-urbanization, where both industrial growth and urbanization grow together when urbanization and economic development are merged together, but on the other side developing countries face the two phenomena over and under-urbanization. Therefore, China is considered a unique case among cities because it has the two characteristics of developed and developing countries.
China’s urban population great expansion was from 1978 to 2010, 170 million to 670 million, where the urban share of total population rose from 18% to 50%, most of the overpopulation in China was due to the peasant workers migration and urbanization of land (Guan, Wei, Lu, Dai, & Su, 2018).
China’s experience in urban transformation since 1978 reform has increased incomes, raised living standards, and made China the world’s largest manufacturer and exporter, real per capita incomes increased sixteen times from 1978 to 2012, labor productivity increased as well. Therefore, investments increased and real output per worker increased and this caused a sectoral transformation from agriculture to industry and services. In 1978, nearly 70 million people were employed in the secondary industry, and by 2011, the number had risen to 225 million, with an annual growth of 3.6 %. Employment in the service industry increased from 49 million people to 273 million people, for average annual growth of 5.3%. These two transformations—the spatial and the sectoral—are two sides of the same coin, at the beginning of urbanization, productivity increase came from shifting resources from lower productivity rural activities to the more productive urban based sector (WorldBank, 2014).
Egypt is number one with the biggest population size within the Arab world, it grew in population from 35 million in 1970 to 72.5 million in 2006, to 94.7 million in 2016, to about 100 million in 2017. Population growth and changes in its characteristics show the existence of urbanization (Seddeek, 2018).
Urbanization grew differently through years in Egypt, from 1950 to 1980 urbanization doubled from 21.2 million to 42.6 million, respectively,
and doubled again to reach 81.7 million in 2008, although urban population was growing with higher speed than population growth until the 1980’s, in the mid 80’s this growth slowed down due to some economic failures and sociopolitical instabilities (Zinkina & Korotayev, 2013).
One of the effects of urbanization in Egypt is the formation of informal settlements, were in 2006, 12 million of the total population lived in informal settlements, and in Cairo 60% of population lived in informal settlements and most of them are on agricultural land (WorldBank, 2012).
2. Research Problem
Developing countries are facing the challenge of rapid urbanization, before 1950, 17.8% of the developing countries population lived in cities; after 1950, 40% of the population lived in cities, and it is expected to increase over 60 % by 2030. Therefore, it is of great concern to study urbanization and its effect on Egypt’s GDP, as one of the developing countries.
Egypt is a developing country, which has always been an agricultural country that its production and exports depend mainly on agricultural products such as, wheat, cotton, and sugar. After the 1952 revolution, Egypt followed the industrialization policy by building huge factories for heavy industries, at that time, internal migration started to be obvious as migrants were searching for jobs.
Urbanization rate started to increase reaching 43% of the total population in 2015, the unemployment rate increased to 13% in 2015 as well, which means that urbanization adds to the unemployment rates in urban areas. Also, there was no addition to the country’s GDP growth rate where it reached 2% in 2015.
The main reasons of migration from urban to rural areas are searching for jobs, finding better wages, and increasing the living standards of migrants, which mean that migrants travel from one area to another with higher GDP per capita and higher wages. Due to this unplanned migration, urban population in Egypt lives in slum households lacking clean water, unimproved sanitation, inadequate construction, and infrastructure. Cairo, the capital of Egypt, is the city that attracts most migrants, due to the concentration of the governmental services, private sector services, and it is the main center of modern manufacturing, Cairo contributes by half of the country’s GDP.
Hence, the research problem can be summarized in the following points:
• The differences in income are the main motivation of migration from rural areas to urban ones.
• Increasing population and slums, as a result of migration from rural areas to urban areas, lead to violence, crime, unemployment, bad infrastructure, increasing poverty and pollution in Egypt.
• The degradation of agricultural land which is the main source of income for Egyptians.
• Migrants are uneducated and engage in the informal sector which does not add to the country’s GDP or decrease unemployment.
• Increasing Co2 emissions due to concentrated factories in some industrial zones, which increases air pollution.
Most of the countries’ services are concentrated in the capital which forces some labor to migrate.
3. Research Importance
The importance of this research lies in the deductive methodology used to compare the case of Egypt urbanization to China’s urbanization experience, using annual time series data analysis to compare the changes occurred in data through years from 1975 to 2018 in both countries, and how China used urbanization as a tool to increase its economic growth, and so how Egypt can benefit from China’s strategies to face urbanization due to the existing similarity between the two countries in having a huge human capital and agricultural background.
Urbanization has two faces either it develops a country, or it harms its social and economic welfare. Therefore, the importance of this research lies in distinguishing between those two faces and trying to take advantage of the development of Egypt by its human capital and resources, to avoid urbanization disadvantages on the country’s economy.
Egypt is facing the challenge of urbanization, where the population reached almost 100 million in 2017, and is expected to increase through the coming generations, which will put the government under a challenge of creating jobs for over 700,000 employees to the labor market yearly. In addition, urban slums will need to be developed into good housing conditions, qualified infrastructure, and public services. Therefore, through this research the author will try to recommend certain actions to the Egyptian
government to try to control urbanization disadvantages and get the best benefit of it and take the advantage of the Chinese experience through the comparative and econometric study.
4. Research Objectives
• Indicating reasons of internal migration in Egypt and China.
• Knowing the consequences of urbanization on both countries’ economic growth.
• Indicating the effect of urbanization on industry and economic growth.
• Building up a model to know the relation between dependent and independent variables.
5. Research Limitations
• Place limits
Urbanization in Egypt and comparing it to the case of China.
• Time limits
Annual Time series data from 1975 to 2018 using data from the World Bank, CAPMAS, Central Bank of Egypt, Central Bank of China, and National Bureau of Statistics in China. The main reason of indicating this time period, in Egypt because after the 1973 war the economy started to be more stable than before the war; and in China because the economy started to be more stable after 1970’s reforms made by the Chinese government, so the data is reliable and efficient for economic analysis.
6. Research Hypotheses
• There is a significant positive relationship between urbanization and economic growth in China.
• Industrialization is highly correlated with urbanization in Egypt.
7. Research Methodology
Estimating urbanization rate using the deductive methodology and its impact on economic growth through using some statistical equations and using annual time series data analysis from 1975 to 2018, using data from the World Bank and CAPMAS, Central Bank of Egypt, Central Bank of China and National Bureau of Statistics in China. Co-integration approach will be used to determine the short- and long-run relationship, using Engle-Granger-Two Step Co-integration model.
8. Research Outline
The thesis is divided into five chapters excluding the introduction. These chapters are as follow:
Chapter 2 discusses the driving forces of urbanization from a theoretical perspective. The hierarchy of the chapter will start with types of urbanization, then urbanization evolution, factors behind internal migration, migration impact on rural areas, urban growth reasons, internal migration theories, and urbanization theories are discussed, as well as the consequences of urbanization and benefits of urbanization, structural change and industrialization dimensions and the modernization theory impact on urbanization. Finally, a summary is drawn in the last section.
Chapter 3 deals with the urbanization dynamics in China. The hierarchy of the chapter will start with structural change in the Chinese economy, then China geographical location, reasons of migration from rural to urban areas, afterwards internal migration disadvantages, evolution of policies to restrict urbanization, the Chinese urbanization evolution, urbanization impact on the economy and challenges facing urbanization in China are discussed, and China’s actions towards urbanization. Finally, the summary comes at the last section.
Chapter 4 addresses the urbanization dynamics in Egypt. The hierarchy of the chapter will start with Egypt Geographical location, then characteristics of Egyptian economy including economic growth and industrial sector, reasons of internal migration, afterwards internal migration disadvantages, evolution of policies to restrict internal migration, the Egyptian urbanization evolution, urbanization impact on the economy, and challenges facing urbanization in Egypt were discussed. Finally, the summary comes at the last section.
Chapter 5 discusses estimating the impact of urbanization on economic growth and industry. The hierarchy of this chapter will start with econometric methodology, then data, afterwards econometric model. Finally, the summary of the results comes in the last section.
Chapter 6 presents the conclusion. The hierarchy of the chapter will start with main findings and proving the hypothesis, then findings on the urbanization dynamics are discussed through chapters, afterwards findings on the comparative evaluation of the urbanization experience, Egypt gains from the Chinese experience. Finally, the recommendations come in the last section.
9. Findings
Migration is a key instrument to promote economic welfare, as mentioned by economic growth and development theories; and it is the migration of labor from one sector which is less productive like agriculture to another sector which is more productive like manufacturing, as well as labor and capital transformation are factors to achieve higher level of economic development by most trade theories.
China depends on non-agricultural employment opportunities that are created by the private sector, and economic growth mainly depends on the private sector. China’s case in urbanization is unique because it avoided urban unemployment, poverty, and squalor
China’s experience in urban transformation since 1978 reform has increased incomes, raised living standards, and has made China the world’s largest manufacturer and exporter. The real per capita incomes increased sixteen times from 1978 to 2012, labor productivity increased as well, therefore investments increased and real output per worker increased and this caused a sectoral transformation from agriculture to industry and services. In 1978, nearly 70 million people were employed in the secondary industry, and by 2011, the number had risen to 225 million, with an annual growth of 3.6 %. Employment in the service industry increased from 49 million people to 273 million people, for average annual growth of 5.3%. These two transformations—the spatial and the sectoral—are two sides of the same coin, at the beginning of urbanization productivity increases came from
shifting resources from lower productivity rural activities to a more productive urban based sector.
Egypt is number one with the biggest population size within the Arab world. Egypt grew in population from 35 million in 1970, to 72.5 million in 2006, to 94.7 million in 2016, to about 100 million in 2017. Population growth and changes in its characteristics show the existence of urbanization.
The First Hypothesis
“There is a significant positive relationship between urbanization and economic growth in China.”
It is proved and accepted through the econometric model that there is a significant positive relationship between economic growth and urbanization in China in the short- and the long-run.
The Second Hypothesis
“Industrialization is highly correlated with urbanization in Egypt.”
It is proved and accepted through the literature review and empirical study that industrialization is the main source of internal migration, to search for jobs and a better living standard, causing urbanization and are highly correlated in Egypt through the phase studied in the research.
10. Recommendations
It is recommended to start by rural areas development, and urbanization by building nearby industrial cities to attract the rural residence and increase the quality of social services to those areas, such as, education, health, and infrastructure by providing potable clean water, building good sanitation services, electricity, … etc; following the Chinese urbanization progress: rural industrialization, development of the local economy, foreign direct capital, self-development and expansion of big and middle cities, and state planned investment. Thus, this section will be divided into recommendations concerning the rural areas, followed by recommendations taking a wider look at the whole country
• Encourage agricultural development that will help in supplying desired products, capital, and resources for the industrialization development that will lead to gathering population, industry, and resources in rural areas.
• Expansion in agricultural production scale increases division of labor direct communication, and transportation cost, which will lead to an industry chain in rural areas.
• The development of rural industries to encourage farmers to stay near to their home countries, as well they will help in the busy seasons of farming because they have enough experience.
• Industrialization can improve urbanization levels through industrial and employment structures. This structure change happens when we promote the first industry and it causes changes to income then opening the second and the third industry giving labor chances to move along different industries to increase their income; therefore, the industry and employment structure change are of the industries that will be in the agricultural products that will increase urbanization through industrialization.
• To achieve the best results of urbanization and economic development; political, economic institutions and market instruments must be developed.
• To achieve manufacturing development, there must be political transparency, macroeconomic stability, quality of infrastructure, and factor prices relative to other countries at a similar GDP per capita.
• To achieve efficiency in urbanization, there must be continuous improvement in systems, reducing transaction costs and improving the division of labor efficiency.
The comparative evaluation of the Egyptian and Chinese experience shows that China has been able to benefit from the successful approach to reform that has been followed by China since the late 1970s compared to Egypt, as well the differences in the Chinese social and political context should be taken into consideration while evaluating the applicability of the Chinese experience to the Egyptian case.
1. Introduction
The industrial revolution in the 19th and 20th century, in Europe and North America marked the beginning of urbanization, when labor migrated from rural to urban areas lifting the agricultural sector or any other discipline like, art and crafts to gain higher wages and higher standards of living.
from 1980 to 2010, the world urban population increased from 1.6 billion to 3.3 billion, and it is expected to increase by another 2 billion by 2040, which means that the world is urbanizing rapidly. Most of this urbanization takes place in the developing countries. This demographic transition helps in economic development, where all the economic activities are geographically concentrated, and is called urbanization which is a structural change that takes place in developing countries to increase incomes and standard of living. However, this caused increasing slums with inadequate sanitation, water, transport, and health services, also as poverty increased crime and informal economies increased rather than increasing formal employment. Some developing countries started to manage urbanization in a way to achieve economic development, the most recognized country is China. People migrate to get a better standard of life, earn higher incomes, get access to better schooling and social services, cities get better infrastructure than rural areas, such as education, and health.
Urbanization is seen from two aspects; first, the growth of cities, which concentrates all economic activities and population in the city industrial productivity. Second, the percent of country’s population that lives in urban areas through non-market incentives or competition in the market.
Before the industrial revolution in the 18th century, there was no structural change or it slightly happened, because the world economy grew very slowly, but now the economic growth must be followed by changes in the economic structure. Structural change is when an economy develops and moves from the traditional agricultural sector in rural areas to modern non-agricultural sector in urban areas such as manufacturing. The improvement in the agricultural productivity is a necessity for structural change and economic growth, this takes place when urbanization is found, because the development of agriculture sector needs technology that is developed in cities.
Urbanization may cause some social and economic problems, such as the uneven distribution of population between rural and urban areas, as well as the unequal distribution of income, increasing poverty, and unemployment in urban areas, which forces labors to engage in informal activities, such as
minimum paid jobs or low paid daily work because they are unskilled and unproductive workers. Consequently, with this minimum wage and no improvement in their skills, this labor will affect the urban areas and will not lead to development and growth.
Developed and developing countries have two different paths of urbanization, as developed countries experience the parallel-urbanization, where both industrial growth and urbanization grow together when urbanization and economic development are merged together, but on the other side developing countries face the two phenomena over and under-urbanization. Therefore, China is considered a unique case among cities because it has the two characteristics of developed and developing countries.
China’s urban population great expansion was from 1978 to 2010, 170 million to 670 million, where the urban share of total population rose from 18% to 50%, most of the overpopulation in China was due to the peasant workers migration and urbanization of land (Guan, Wei, Lu, Dai, & Su, 2018).
China’s experience in urban transformation since 1978 reform has increased incomes, raised living standards, and made China the world’s largest manufacturer and exporter, real per capita incomes increased sixteen times from 1978 to 2012, labor productivity increased as well. Therefore, investments increased and real output per worker increased and this caused a sectoral transformation from agriculture to industry and services. In 1978, nearly 70 million people were employed in the secondary industry, and by 2011, the number had risen to 225 million, with an annual growth of 3.6 %. Employment in the service industry increased from 49 million people to 273 million people, for average annual growth of 5.3%. These two transformations—the spatial and the sectoral—are two sides of the same coin, at the beginning of urbanization, productivity increase came from shifting resources from lower productivity rural activities to the more productive urban based sector (WorldBank, 2014).
Egypt is number one with the biggest population size within the Arab world, it grew in population from 35 million in 1970 to 72.5 million in 2006, to 94.7 million in 2016, to about 100 million in 2017. Population growth and changes in its characteristics show the existence of urbanization (Seddeek, 2018).
Urbanization grew differently through years in Egypt, from 1950 to 1980 urbanization doubled from 21.2 million to 42.6 million, respectively,
and doubled again to reach 81.7 million in 2008, although urban population was growing with higher speed than population growth until the 1980’s, in the mid 80’s this growth slowed down due to some economic failures and sociopolitical instabilities (Zinkina & Korotayev, 2013).
One of the effects of urbanization in Egypt is the formation of informal settlements, were in 2006, 12 million of the total population lived in informal settlements, and in Cairo 60% of population lived in informal settlements and most of them are on agricultural land (WorldBank, 2012).
2. Research Problem
Developing countries are facing the challenge of rapid urbanization, before 1950, 17.8% of the developing countries population lived in cities; after 1950, 40% of the population lived in cities, and it is expected to increase over 60 % by 2030. Therefore, it is of great concern to study urbanization and its effect on Egypt’s GDP, as one of the developing countries.
Egypt is a developing country, which has always been an agricultural country that its production and exports depend mainly on agricultural products such as, wheat, cotton, and sugar. After the 1952 revolution, Egypt followed the industrialization policy by building huge factories for heavy industries, at that time, internal migration started to be obvious as migrants were searching for jobs.
Urbanization rate started to increase reaching 43% of the total population in 2015, the unemployment rate increased to 13% in 2015 as well, which means that urbanization adds to the unemployment rates in urban areas. Also, there was no addition to the country’s GDP growth rate where it reached 2% in 2015.
The main reasons of migration from urban to rural areas are searching for jobs, finding better wages, and increasing the living standards of migrants, which mean that migrants travel from one area to another with higher GDP per capita and higher wages. Due to this unplanned migration, urban population in Egypt lives in slum households lacking clean water, unimproved sanitation, inadequate construction, and infrastructure. Cairo, the capital of Egypt, is the city that attracts most migrants, due to the concentration of the governmental services, private sector services, and it is the main center of modern manufacturing, Cairo contributes by half of the country’s GDP.
Hence, the research problem can be summarized in the following points:
• The differences in income are the main motivation of migration from rural areas to urban ones.
• Increasing population and slums, as a result of migration from rural areas to urban areas, lead to violence, crime, unemployment, bad infrastructure, increasing poverty and pollution in Egypt.
• The degradation of agricultural land which is the main source of income for Egyptians.
• Migrants are uneducated and engage in the informal sector which does not add to the country’s GDP or decrease unemployment.
• Increasing Co2 emissions due to concentrated factories in some industrial zones, which increases air pollution.
Most of the countries’ services are concentrated in the capital which forces some labor to migrate.
3. Research Importance
The importance of this research lies in the deductive methodology used to compare the case of Egypt urbanization to China’s urbanization experience, using annual time series data analysis to compare the changes occurred in data through years from 1975 to 2018 in both countries, and how China used urbanization as a tool to increase its economic growth, and so how Egypt can benefit from China’s strategies to face urbanization due to the existing similarity between the two countries in having a huge human capital and agricultural background.
Urbanization has two faces either it develops a country, or it harms its social and economic welfare. Therefore, the importance of this research lies in distinguishing between those two faces and trying to take advantage of the development of Egypt by its human capital and resources, to avoid urbanization disadvantages on the country’s economy.
Egypt is facing the challenge of urbanization, where the population reached almost 100 million in 2017, and is expected to increase through the coming generations, which will put the government under a challenge of creating jobs for over 700,000 employees to the labor market yearly. In addition, urban slums will need to be developed into good housing conditions, qualified infrastructure, and public services. Therefore, through this research the author will try to recommend certain actions to the Egyptian
government to try to control urbanization disadvantages and get the best benefit of it and take the advantage of the Chinese experience through the comparative and econometric study.
4. Research Objectives
• Indicating reasons of internal migration in Egypt and China.
• Knowing the consequences of urbanization on both countries’ economic growth.
• Indicating the effect of urbanization on industry and economic growth.
• Building up a model to know the relation between dependent and independent variables.
5. Research Limitations
• Place limits
Urbanization in Egypt and comparing it to the case of China.
• Time limits
Annual Time series data from 1975 to 2018 using data from the World Bank, CAPMAS, Central Bank of Egypt, Central Bank of China, and National Bureau of Statistics in China. The main reason of indicating this time period, in Egypt because after the 1973 war the economy started to be more stable than before the war; and in China because the economy started to be more stable after 1970’s reforms made by the Chinese government, so the data is reliable and efficient for economic analysis.
6. Research Hypotheses
• There is a significant positive relationship between urbanization and economic growth in China.
• Industrialization is highly correlated with urbanization in Egypt.
7. Research Methodology
Estimating urbanization rate using the deductive methodology and its impact on economic growth through using some statistical equations and using annual time series data analysis from 1975 to 2018, using data from the World Bank and CAPMAS, Central Bank of Egypt, Central Bank of China and National Bureau of Statistics in China. Co-integration approach will be used to determine the short- and long-run relationship, using Engle-Granger-Two Step Co-integration model.
8. Research Outline
The thesis is divided into five chapters excluding the introduction. These chapters are as follow:
Chapter 2 discusses the driving forces of urbanization from a theoretical perspective. The hierarchy of the chapter will start with types of urbanization, then urbanization evolution, factors behind internal migration, migration impact on rural areas, urban growth reasons, internal migration theories, and urbanization theories are discussed, as well as the consequences of urbanization and benefits of urbanization, structural change and industrialization dimensions and the modernization theory impact on urbanization. Finally, a summary is drawn in the last section.
Chapter 3 deals with the urbanization dynamics in China. The hierarchy of the chapter will start with structural change in the Chinese economy, then China geographical location, reasons of migration from rural to urban areas, afterwards internal migration disadvantages, evolution of policies to restrict urbanization, the Chinese urbanization evolution, urbanization impact on the economy and challenges facing urbanization in China are discussed, and China’s actions towards urbanization. Finally, the summary comes at the last section.
Chapter 4 addresses the urbanization dynamics in Egypt. The hierarchy of the chapter will start with Egypt Geographical location, then characteristics of Egyptian economy including economic growth and industrial sector, reasons of internal migration, afterwards internal migration disadvantages, evolution of policies to restrict internal migration, the Egyptian urbanization evolution, urbanization impact on the economy, and challenges facing urbanization in Egypt were discussed. Finally, the summary comes at the last section.
Chapter 5 discusses estimating the impact of urbanization on economic growth and industry. The hierarchy of this chapter will start with econometric methodology, then data, afterwards econometric model. Finally, the summary of the results comes in the last section.
Chapter 6 presents the conclusion. The hierarchy of the chapter will start with main findings and proving the hypothesis, then findings on the urbanization dynamics are discussed through chapters, afterwards findings on the comparative evaluation of the urbanization experience, Egypt gains from the Chinese experience. Finally, the recommendations come in the last section.
9. Findings
Migration is a key instrument to promote economic welfare, as mentioned by economic growth and development theories; and it is the migration of labor from one sector which is less productive like agriculture to another sector which is more productive like manufacturing, as well as labor and capital transformation are factors to achieve higher level of economic development by most trade theories.
China depends on non-agricultural employment opportunities that are created by the private sector, and economic growth mainly depends on the private sector. China’s case in urbanization is unique because it avoided urban unemployment, poverty, and squalor
China’s experience in urban transformation since 1978 reform has increased incomes, raised living standards, and has made China the world’s largest manufacturer and exporter. The real per capita incomes increased sixteen times from 1978 to 2012, labor productivity increased as well, therefore investments increased and real output per worker increased and this caused a sectoral transformation from agriculture to industry and services. In 1978, nearly 70 million people were employed in the secondary industry, and by 2011, the number had risen to 225 million, with an annual growth of 3.6 %. Employment in the service industry increased from 49 million people to 273 million people, for average annual growth of 5.3%. These two transformations—the spatial and the sectoral—are two sides of the same coin, at the beginning of urbanization productivity increases came from
shifting resources from lower productivity rural activities to a more productive urban based sector.
Egypt is number one with the biggest population size within the Arab world. Egypt grew in population from 35 million in 1970, to 72.5 million in 2006, to 94.7 million in 2016, to about 100 million in 2017. Population growth and changes in its characteristics show the existence of urbanization.
The First Hypothesis
“There is a significant positive relationship between urbanization and economic growth in China.”
It is proved and accepted through the econometric model that there is a significant positive relationship between economic growth and urbanization in China in the short- and the long-run.
The Second Hypothesis
“Industrialization is highly correlated with urbanization in Egypt.”
It is proved and accepted through the literature review and empirical study that industrialization is the main source of internal migration, to search for jobs and a better living standard, causing urbanization and are highly correlated in Egypt through the phase studied in the research.
10. Recommendations
It is recommended to start by rural areas development, and urbanization by building nearby industrial cities to attract the rural residence and increase the quality of social services to those areas, such as, education, health, and infrastructure by providing potable clean water, building good sanitation services, electricity, … etc; following the Chinese urbanization progress: rural industrialization, development of the local economy, foreign direct capital, self-development and expansion of big and middle cities, and state planned investment. Thus, this section will be divided into recommendations concerning the rural areas, followed by recommendations taking a wider look at the whole country
• Encourage agricultural development that will help in supplying desired products, capital, and resources for the industrialization development that will lead to gathering population, industry, and resources in rural areas.
• Expansion in agricultural production scale increases division of labor direct communication, and transportation cost, which will lead to an industry chain in rural areas.
• The development of rural industries to encourage farmers to stay near to their home countries, as well they will help in the busy seasons of farming because they have enough experience.
• Industrialization can improve urbanization levels through industrial and employment structures. This structure change happens when we promote the first industry and it causes changes to income then opening the second and the third industry giving labor chances to move along different industries to increase their income; therefore, the industry and employment structure change are of the industries that will be in the agricultural products that will increase urbanization through industrialization.
• To achieve the best results of urbanization and economic development; political, economic institutions and market instruments must be developed.
• To achieve manufacturing development, there must be political transparency, macroeconomic stability, quality of infrastructure, and factor prices relative to other countries at a similar GDP per capita.
• To achieve efficiency in urbanization, there must be continuous improvement in systems, reducing transaction costs and improving the division of labor efficiency.
The comparative evaluation of the Egyptian and Chinese experience shows that China has been able to benefit from the successful approach to reform that has been followed by China since the late 1970s compared to Egypt, as well the differences in the Chinese social and political context should be taken into consideration while evaluating the applicability of the Chinese experience to the Egyptian case.