China's recent history has been marked by tremendous economic growth and dynamism as it has progressed from a modest farming society to a thriving manufacturing success in less than three decades. As China's economy continues to grow, it must now wrestle with a new emerging challenge: How will it handle the shift from a majority rural population to a majority urban one?

This question represents one of the biggest sustainability challenges of the 21st century.

The statistics speak for themselves. By 2030, at least 220 cities in China will have at least 1 million residents, dwarfing the 35 million-people cities that Europe boasts today. Many of these cities in China will be built from the ground up. Designed the right way, they will serve as a global model for the sustainable, low-carbon city of tomorrow.

But for China to play this world-leading role, it will need to overcome many of the problems that plague fast-growing cities across Asia, Latin America and Africa. In many of these countries, rapidly expanding economies and a booming middle class are increasing pressure on scarce natural resources. Air and water pollution, traffic congestion, poor housing, and overcrowding are just some of the urban environmental and social ills for which cures urgently need to be found.

For example, while many of China's cities are a testament to impressive economic progress, Beijing's smog symbolizes a significant downside to fast-paced urbanization.

Fortunately, China's leaders have recognized the pressing challenge of improving the quality of life in its cities. The 12th Five-Year Plan (2011-15), for instance, focuses heavily on sustainable urban planning and low-carbon development, promoting improved public transit systems and setting targets to increase water treatment rates. And, in 2010, the National Development and Reform Commission announced a pilot program for five low-carbon provinces and eight low-carbon cities.

How can government officials and urban planners do a better job of putting these principles and goals into practice? How can they deliver cleaner air, reliable water supplies, free-flowing traffic, energy-efficient buildings, less waste and smarter land use?

A successful approach to sustainable urbanization will depend upon several key elements:

First, it will need a holistic approach. There is no single solution to make a city sustainable; solutions must be found across sectors, such as energy, transportation, water, and infrastructure.

Second, it will require solutions to be integrated into upstream urban planning. If city planners incorporate sustainability approaches into the design of urban areas, it will help minimize costs as these cities are built.

Third, there will have to be an enabling policy environment with adequate financing. National government policies can help correct market failures and set standards for environmental challenges such as air pollution or energy intensity. Moreover, public and private financing will be needed for the upfront costs of many of these solutions.

Fourth, partnerships are essential. Municipal authorities working with provincial and central governments, businesses, non-governmental organizations, and the general public will be much more likely to solve sustainability challenges if they work together rather than on their own.

These urban sustainability solutions do not just benefit the environment and people's quality of life; they are often highly profitable from an economic standpoint. Investments in energy-efficient windows or a rapid transit bus system, for example, have short payback periods because lower-energy consumption translates to lower costs. Put simply, the benefits to society of sustainable urbanization often outweigh the costs.

By 2030, a billion Chinese will be city dwellers, many living in new cities. This presents China with a remarkable opportunity to avoid the mistakes of many 20th century cities, which are struggling to shift to new, more sustainable pathways.

By charting its own course, we believe that China can achieve its economic goals while presenting a shining example of vibrant and livable cities to the world.

Manish Bapna is Interim President of World Resources Institute, and Richard Lavin is Caterpillar Group President.