THE BEIJING AND SHANGHAI governments announced last week that, for the first time since 1978, the permanent resident population of the two metropolises fell last year, Southern Metropolis Daily comments:

Though the decrease is slight, it is believed to be a turning point. Which is not necessarily a bad thing.

Currently, Beijing's permanent resident population is 21.71 million, and Shanghai's 24.18 million, leaving almost no space for further increase considering their proposed permanent resident population ceilings.
Beijing plans to keep its permanent resident population at 23 million after 2020, and Shanghai aims to keep its permanent resident population at 25 million after 2035.

Keeping the two metropolises' permanent resident populations under those limits is an urgent task for the two cities, as the population ceilings have been computed according to their practical conditions, particularly natural resources.

If their populations continued to grow as fast as the past few years, when urbanization saw a large scale migration of the rural population to the cities, the living conditions, traffic, public services, and especially the consumption of water and generation of garbage would soon become unbearable.
Other cities such as Shenzhen and Guangzhou are likely to follow suit, which means medium-and small-sized cities will have a better chance of attracting newcomers.

A handful of second-tier cities, such as Hangzhou, Chengdu and Wuhan, have already demonstrated their ability to attract new residents, especially fresh college graduates and skilled workers, by providing them with housing subsidies, and hukou, residential permits, as well as other welfare and services.

The rise of these second-tier cities will promote more balanced development among different regions.