China’s rural-urban balancing act
By Jamil Anderlini | Financial Times,
BEIJING — At the teeming central railway station in downtown Beijing, the world’s largest annual human migration is underway, as millions of workers head back to their ancestral towns and villages to celebrate the Chinese New Year festival.
These are the people who have provided the muscle for China’s decades-long economic boom, and that collective decision to seek a better life in the country’s cities is expected to drive growth for decades to come.
The problem is that most of these people are merely temporary urban residents. When they lose their job in a factory or on a construction site, or can no longer bear the stress of city life, their enduring ties to the countryside inevitably draw them back to their rural birthplaces.
The incoming administration of Xi Jinping has identified continued large-scale urbanization as the most powerful potential driver of China’s economy — yet it is actually a partially reversible phenomenon built on shaky foundations.
“There are some 200 million people who have entered cities but have not yet become [permanent] urban residents,” Chen Xiwen, head of the Communist Party office on rural policy and deputy head of the party’s office of financial affairs, told a forum in late January. “This is a big problem that we need to deal with in the future urbanization process,” he said, while estimating that China’s true urbanization rate is about 35 percent, rather than the official figure of 53 percent.
Wu Deming, 43, is one of the temporary urban residents who remain stubbornly rural.
Sitting in waiting room No. 4 in the enormous Beijing train station, surrounded by thousands of others just like him, he says he has no desire to live for the rest of his life in the Chinese capital. As soon as he has saved enough to build himself a modest house in his village in Manchuria, he will return to be with the rest of his family.
Of his rural neighbors on the outskirts of Sanyuan township, he estimates that 40 to 50 percent of them have moved temporarily to big cities to find work, but that “basically all of them plan to come back and live in their home eventually.”
“Life in the city is not for us — we can’t get an urban household registration, we can’t earn much money, we can never afford to buy an apartment in the city, and if we get sick we have to pay a lot,” Wu said. “Back in the village, our family has a plot of land that my elder brother cultivates while I’m gone, and when I get old, I can just grow enough food for us to eat.”
Reform of the household registration, or “hukou,” system is one of the first tasks that the new administration is expected to tackle.
China’s outdated and discriminatory hukou system classifies citizens as either rural or urban and ties all of their social benefits, including health care, education, pensions and even employment, to their place of birth.
This means that most migrants to the cities find it difficult to access even basic services in their new places of residence, so they often leave their families behind and live the most temporary lives in dormitories and makeshift dwellings.
Of the 160 million or so people classified as migrant workers living away from their home provinces, only about 33 million have moved to the city with their entire family, according to government figures. Reform of hukou is seen as essential for addressing this problem and encouraging more people to move permanently into the cities, so they can become the consumers of the future and contribute more to economic growth.
But on its own, the overhaul of this system will not be enough. “Hukou reform is actually related to many other very difficult reforms, including expansion of the social welfare system and, most importantly, land reform,” said Mary Gallagher, director of the Center for Chinese Studies at the University of Michigan. “Rural citizens in China have started to realize the real value of land and so are increasingly unwilling to give up their land rights in exchange for permanent residence in the cities.”
In China, all land technically belongs to the state, and in the countryside, arable land is divided up into tiny family plots and leased to households, usually for 30 years at a time.
Land cannot be freely sold or mortgaged, so migrant workers usually make sure that relatives remain in the village to till the land and maintain the family’s usage rights. When migrant workers lose their jobs or tire of city life, they move back to the village, where at least they can grow enough food to survive.
Defenders of the status quo say this system is the main reason Chinese cities do not have the kind of large permanent slums that have emerged in other overpopulated developing countries, such as India, Indonesia and Brazil.
But to make urbanization a more permanent phenomenon — and create a huge new consumer class — in China, these ties to the land will have to be broken, analysts say. The challenge will be to ensure that those who do decide to give up their rural land rights are able to obtain the products and services they expect when they move to China’s ever-expanding cities.
“If China gets urbanization right, it will surpass the United States and cement its position as the world’s largest economy,” said Tom Miller, author of “China’s Urban Billion.” “But if it turns sour, the world’s most populous country could easily become home to the world’s largest urban underclass, and that would be a disaster.”
— Financial Times
Gu Yu contributed to this report.