Identifying the Determinants of Urbanization in Prefecture-Level Cities in China: A Quantitative Analysis Based on Spatial Production Theory

China’s urbanization has attracted considerable academic attention. However, more work is required to understand and examine the driving mechanisms of urbanization, especially within the context of the transition from socialism. We used a regression model and a geographical detector technique to determine the direction and strength of factors influencing urbanization in prefecture-level cities in China. We found that China’s urbanization development model has two characteristics: administrative hierarchy and spatial agglomeration. Based on our conceptual framework, we identified the positive effect exerted by the real estate investment and per capita fiscal expenditure on urbanization, as well as the negative impact exerted by the urban–rural income ratio. The results revealed that China’s urbanization is a hybrid process: the forces from power and capital contribute to high levels of urbanization. When comparing the strength of the factors influencing urbanization between coastal and inland cities, we found that real estate investment and per capita fiscal expenditure in coastal cities have a greater impact on urbanization than in inland cities. In contrast, the impact of the urban–rural income ratio on urbanization is larger in inland cities than in coastal cities. A close examination on the factors influencing China’s rapid urbanization is the key to further advancing our understanding of the dynamic mechanisms of China’s urbanization. Our findings can help Chinese policy makers formulate more detailed urbanization strategies with consideration of regional characteristics.