Can China Turn Its Border Counties into Green and Inclusive Gateways to the Greater Mekong?

China’s border counties can become regional hubs for trade, jobs and services, but infrastructure expansion must be matched by sound finance, strong public services and climate resilience. ADB calls for coordinated customs, investment, vocational training and green urban planning across the Greater Mekong Subregion to turn border corridors into inclusive communities.

China's border counties could become important centres of regional trade, jobs and sustainable urban development, but infrastructure alone will not deliver that transformation. An Asian Development Bank report on Guangxi Zhuang Autonomous Region and Yunnan Province finds that cooperation with Vietnam, the Lao People's Democratic Republic and Myanmar can strengthen local economies. However, population decline, limited public services, climate threats and weak municipal finances could undermine progress unless governments adopt a more balanced approach.

China's urbanization rate increased from 17.9% in 1978 to 65.2% in 2022, while its urban population expanded from 172 million to 921 million. This shift supported rapid economic growth, but Guangxi's urbanization rate remained at 55.7% and Yunnan's at 51.7% in 2022. The gap shows that border regions have not benefited from urban development as much as China's larger coastal and metropolitan centres.

Border Counties Could Drive the Next Urban Growth Story

County towns can reduce pressure on megacities, connect rural businesses with markets and allow workers to find opportunities closer to home. China had 296 million rural migrant workers in 2022, including around 124 million working locally rather than migrating to distant cities.

However, the population of Chinese counties declined by nearly 39 million between 2000 and 2020, while approximately 60% of border counties lost residents. Weak industries, limited employment and inferior public services remain major causes.

A gap also persists between people living in cities and those officially registered there. China's household-registration-based urbanization rate was 47.7% in 2022, compared with 65.2% based on permanent residence. This 17.5-percentage-point difference means many migrant workers still lack equal access to schools, hospitals, housing and social protection.

Governments must therefore treat urbanization as a social and economic process rather than simply an expansion of buildings and roads. Investment in people, employment and basic services will determine whether county towns can retain their populations.

Dongxing and Hekou Show the Power of Border Trade

Guangxi's eight border counties had a combined population of around 2.2 million in 2020 but produced only CNY84.7 billion in GDP in 2021, equivalent to 3.4% of the regional economy. Their average urbanization rate was 43.6%, revealing the scale of the development gap.

Dongxing provides a more positive example. Its urbanization rate exceeded 72%, while its population reached approximately 218,100 in 2021 after growing by an average of 3.8% annually since 2010. Its CNY8.1 billion economy is supported by logistics, tourism, e-commerce, finance and rosewood processing. Regular cooperation with neighbouring Mong Cai in Vietnam has helped create a closely connected cross-border economy.

Hekou in Yunnan offers similar potential. Two smart-port projects opened in 2024 reportedly doubled processing capacity and cut average customs-clearance time by 75%, from 40 minutes to 10 minutes. Water-supply coverage exceeds 96%, and urban wastewater treatment has reached 99.5%.

Cooperation also extends to public services. Hekou County People's Hospital treated approximately 7,500 Vietnamese patients in 2024, while its educational institutions host Vietnamese students. This shows that border cities can provide health care, education and vocational training alongside trade and logistics.

Big Infrastructure Brings Big Financial and Climate Risks

The report warns against building industrial parks, logistics centres and new urban districts without evidence of market demand. China's earlier land-driven development model left some local governments with underused infrastructure, lost agricultural land and rising debt.

International cases reinforce this warning. Some developments along the China–Kazakhstan and China–Mongolia borders created more capacity than the market required. At the other extreme, congestion at the El Paso–Ciudad Juárez border between the United States and Mexico reportedly causes around $2 billion in annual economic losses.

Governments should require commercial feasibility studies, climate assessments and transparent financial plans before approving major projects. Neighbouring countries must coordinate investments to avoid constructing competing facilities that duplicate capacity.

Climate risks are especially serious. Dongxing and Mong Cai face flooding, severe storms and rising sea levels, while Hekou and Lao Cai are vulnerable to flash floods, landslides and riverbank erosion. Critical infrastructure should be designed for a 50–100-year period and supported by joint early-warning and emergency-response systems.

Private investors can find opportunities in logistics, e-commerce, food processing, tourism, renewable energy, wastewater treatment, digital health and vocational education. Risks include changing border regulations, weak local demand, climate disasters and financially constrained municipalities.

A 2030 Regional Framework Can Turn Corridors into Communities

ADB proposes a Greater Mekong Subregion County-Level Urbanization 2030 Sustainable Development Framework. It would establish common goals for urban planning, infrastructure, trade, climate resilience and public services while giving county governments a stronger role in regional decisions.

Immediate measures should include single-window customs systems, paperless clearance, shared inspection data and mutually recognized standards. Cross-border industrial parks could connect supply chains and help counties move from "channel economies," where goods simply pass through, to "port economies" built around processing, manufacturing and value-added services.

Development partners can finance feasibility studies, green infrastructure, climate assessments and municipal capacity building. A regional financial platform involving ADB, the World Bank, the Asian Infrastructure Investment Bank and private financiers could expand access to green bonds, technical assistance and sustainable infrastructure loans.

The central policy message is clear: faster border crossings are valuable, but they are not enough. Successful border urbanization requires jobs, schools, hospitals, housing, environmental protection and reliable local revenues. Governments, development institutions and businesses must work together to turn transport corridors into resilient and inclusive communities.