The mismatch between people and resources is a history of division — "administrative intervention distorting factor prices": capping the great cities suppressed economies of scale (E); hukou and land-quota misplacement sacrificed people's well-being and family reunion (S); empty towns, unfinished buildings and debt are the bill for misallocated resources (T) — all three values discounted at once, and the great nation never became the great city.
The remedy lies in a new connotation of money: let currency carry economic value, social value, and time value at once, transforming "people revolving around quotas" into "quotas revolving around people." When the three values are measured on one unified yardstick, the efficiency of agglomeration, the reunion of families, and the sustainability of resources are all seen on one ledger — a self-regulating virtuous cycle begins, and nation, enterprise, and individual all win.
One Formula to Understand It
E agglomeration efficiency (scale and division of labor) · S the well-being of people (employment · family · public services) · T resource sustainability (land · debt · generations)
People follow industry, services follow people — all three multiply; where they are mismatched by design, all three fall together.
When administrative power answers only to the convenience of managing E — capping cities, misallocating quotas, separating people from land —
S is sacrificed, T is squandered: an apparent balance that is a loss on both sides.
What This Book Is About
— Lu Ming · Great Nation, Great City
Origin: In 2016, Lu Ming, a professor at Shanghai Jiao Tong University, published Great Nation, Great City, dissecting with an economist's eye the deep distortions of China's urban-rural and regional development. His core judgment: people moving to the great cities is the necessity of economies of scale; the real problem is that administrative forces such as the hukou system and land quotas mismatch people with resources — people move east, quotas go west, and both sides lose.
His prescription: let the market decide where people and industry agglomerate, and let public services and land quotas "follow the people" — acknowledging the law costs less, and is fairer, than fighting it.
How the Mismatch Forms
Capping the Great Cities · Agglomeration Suppressed
Source of DivisionFormation: from "strictly controlling the population of megacities" to purchase restrictions and relocation curbs, the administrative hand held back people from agglomerating in high-productivity cities (E's efficiency discounted) — jobs are on the coast, people are barred at the gate, and economies of scale never get to unfold.
People and Land Misplaced · Well-Being Sacrificed
The Sacrificed TermFormation: people flow to the great cities while construction-land quotas lean toward small cities and villages — people cannot settle, families live apart, children are left behind (S harmed); public services do not "follow the people," and reunion and dignity are priced as costs.
Empty Towns · Resources Squandered
The Hidden CostFormation: small cities and new districts build fast and furiously, leaving empty towns, ghost cities and unfinished buildings (T's squandered resources); local debt and land dependence accumulate along with them — resources are placed where no people are, and time pays for the mistake.
Three Acts of Misplacement Observed
In the City, Yet "Outside the System"
Working in the city for years, yet schooling and medical insurance remain hurdles — the person entered the city, the identity did not.
Hukou binds public services to registration: labor creates enormous E for the city while receiving no corresponding S (education, health care, pensions); more than two hundred million migrant workers "circulate without settling," and left-behind children and elders become the price of family separation — separating people from land discounts two variables of the multiplication formula at once.
Let public services "follow the people": the place of residence provides schooling, health care and pensions (E's return realized as S's well-being) — let people settle where they create.
People Move East, Quotas Go West
Construction-land quotas lean toward the central and western regions while eastern megacities run short of land — land follows the plan, not the people.
Land quotas are allocated administratively rather than by the market: the eastern megacities lack supply → housing prices soar (E's costs rise), while the central and western regions get oversupply → empty towns and ghost cities (T's waste); people and land separate in space, neither side is "people-and-land suited," and S's residential well-being is harmed at both ends.
Land quotas "follow the people": inflow regions supply more land, outflow regions preserve ecology (a win for E and S) — let land follow people's choices, rather than making people's choices accommodate quotas.
Empty Towns on One Side, Astronomical Prices on the Other
Vacancy runs high in the new districts of the central and western regions, while first-tier city housing stays out of reach — the two faces of resource misallocation.
Administratively driven "city-building campaigns" erected vast housing in places losing population, leaving empty towns and unfinished buildings (T sunk); meanwhile, in the great cities where people flow, restricted land supply lets housing prices push the young out (S excluded) — silent waste of resources on one side, forced departure of talent on the other: the living proof of "quotas versus people's hearts."
Treat migration as a "vote": where people create, allocate resources (E's efficiency); where people live, build public services (S's fairness) — let city size be decided by people, not by the planner's imagination.
Mirrors in Today's World
After years in Beijing or Shanghai, hukou and housing remain the "ceiling" — contributing E, unable to hold S.
Parents work in the cities while children stay behind — f(m) rises, family reunion f(h) is discounted.
The talent you want cannot enter the city or cannot stay — talent misplacement is an enterprise's hidden loss.
County new districts become empty towns, old homes sit vacant — resources invested where nobody goes is T's sunk cost.
What the Books Confirm
A great nation needs great cities: agglomeration is the law, misplacement is the policy; let the market decide agglomeration, let government secure livelihoods — people and land each in their place, and the three values multiply.
The nature of the city is "centripetal" — agglomeration is not a disease but the natural expression of economies of scale; govern the city by channeling the centripetal force, not by walling it off.
People and land between city and countryside are the core of the reform's second half: letting people move freely and letting land follow people releases E, repairs S, and straightens T in one act.
The Remedy: A New Connotation of Money
— The Law of Value Conservation · The Way Out
Escaping the people-land mismatch is not about abandoning planning, but about making planning serve three values: agglomeration shifts from "being restricted" to "being acknowledged" — let the market decide the spatial distribution of people and industry (multiplication of E); people's well-being shifts from "being priced away" to "being secured" — public services follow the people (multiplication of S); resources shift from "misplaced" to "returned to place" — land, debt and investment follow the population (multiplication of T).
The new connotation of money — let currency carry three values at once:
· Economic value E: every yuan corresponds to real goods and services created, ending "printing without producing";
· Social value S: currency circulates on trust — rewarding those who create jobs, reunite families, and settle people in homes;
· Time value T: money is a promise across generations — education, innovation, green growth and continuity are measured, so that we never "eat our children's rice."
When money measures E, S and T at once, the efficiency of agglomeration, the reunion of families, and the sustainability of resources are all seen on one ledger — the division formula loses its ground, the multiplication formula begins to self-regulate, and the virtuous cycle is triggered.
The Virtuous Cycle: Three-Way Win
| Player | The Virtuous Cycle under the New Connotation of Money | Values |
|---|---|---|
| Nation | People and land each in place, agglomeration more efficient → balanced regions, strong domestic demand → the great nation as great city | E + T |
| Enterprise | Talent converges, markets large enough → scale and innovation both achieved → a lasting business | E + S + T |
| Individual | Settling in the city, reunion secured → daring to move, daring to make a home → a multiplied life | All three |
Twin-Blossom Insights
Migration is "voting with your feet" — where people flow is the signal of value; allocating resources against the signal is an expensive stubbornness.
A city is not merely a container of GDP, but the place where millions of families reunite — letting parents no longer leave their children behind, and letting strivers settle in homes, is the deepest warmth of development.
The individual's f(m)×f(h)×f(t) and the nation's E×S×T are one and the same thing: only when the three values grow together is the growth real — people and land each in their place, and wealth and well-being blossom as twins.
The fortune of a great nation lies in its great cities; the making of great cities lies in people coming to their place.
Agglomeration with speed, reunion with warmth, resources with continuity — all three above 1 at once is the formula of the great nation and the great city;
creation, trust, continuity — three values measured together, is the underlying code of the three-way win for nation, enterprise and individual.
Frequently Asked Questions
Q: What is the core argument of Lu Ming's book?
A: People moving to the great cities is the necessity of economies of scale, not a "metropolitan disease." The real problem is that administrative forces such as hukou and land quotas mismatch people with resources — let the market decide agglomeration, and let public services and land follow the people.
Q: Why do "empty towns" and "sky-high housing prices" coexist?
A: Land quotas are allocated administratively rather than by the market — the great cities where people flow lack supply (high prices), while places losing population get oversupply (empty towns). People and land misplaced: the direct cause of E, S and T all falling together.
Q: What does the "new connotation of money" mean for ordinary people?
A: It lets money measure economic, social and time value at once. At the personal level this is the micro formula — do not let the chase for income drain your health, your relationships, or your long-term accumulation; keep f(h) and f(t), and your life earns compound interest.