Abstract: Today China is faced with a very important issue: whether to develop continuously China’s coastal areas at the present stage or to introduce large amounts of resources into the development of the central and west regions of China through the approach of government-led resource allocation? This issue is critical, because it will involve a lot of major national policies, including land policy, the household registration policy, transfer payments policy, fiscal policies and so on, which can affect China’s future population distribution. Therefore, the focus of China’s urban development should be on the two issues: first, to develop big cities or small towns? second, to develop the eastern region or the western region? The analysis shows that China should pursue effective economic growth and balanced regional per capita GDP by free movement of labor across regions, so as to meet the needs of the unified currency area.

Key words: great nation development; urbanization; economic aggregates; Europeanization