Urban development policies provide general guidelines for sustainable urban development and establish the direction and overall framework of urban development. Urban development rules dictate that urban development policies change alongside different urban development phases, hence, cities in various stages need compatible policies to guide their development. Here, we review the evolution of Chinese urban development policy and its impact over the past 60 years. Limitations of current Chinese urban development policy were identified, including incompatibility between existing policies and the reality of urban development; a lack of basic elaboration of urban agglomeration in key urbanization regions; unreasonable standards for classifying large, medium and small cities; and the inharmonious situation between urban system hierarchies and administrative divisions. Following our review and identification of current issues, several adjustments to existing urban deployment policy are proposed. For example, a new standard should be applied to classify cities into six different scales of megacity behemoth (urban population ≥ 10 million), mega city (urban population 5-10 million), large city (urban population of 1-5 million), medium-sized city (urban population of 0.5-1 million), small city (urban population of 0.1-0.5 million), and small town (urban population < 0.1 million). Under a new context for China's development and urbanization, overall policy should guide the development of urban agglomerations, control the sprawl of megacity behemoths and mega cities, promote the development of large cities, encourage the development of medium-sized cities, and foster the development of small-sized cities and small towns. Under this new system, a six-layer national urban hierarchy with 20 urban agglomerations, 10 megacity behemoths, 20 mega cities, 150 large cities, 240 medium-sized cities, 350 small cities and 19000 small towns could be established by the year 2020. Reconstructing the system of establishing designated cities and the possibility of building different national autonomous cities are also discussed. Fostering the development of small cities and small towns that would become the first choice for the urbanization of the agricultural population would improve the overall quality of urbanization and townships across China.
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