China Is on the Move; of All the Threats to Its Economic Boom, Beijing Officially Encourages One, Mass Internal Migration. It's a Very Smart Choice

By Glain, Stephen | Newsweek International, December 12, 2005 | Go to article overview
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China Is on the Move; of All the Threats to Its Economic Boom, Beijing Officially Encourages One, Mass Internal Migration. It's a Very Smart Choice


Glain, Stephen, Newsweek International


Byline: Stephen Glain

The conventional view of China counts three basic threats to its economic boom: corruption and disrespect for the rule of law, environmental degradation and the tide of rural migrants who threaten to overwhelm its cities. It's no accident, however, that while Beijing is officially campaigning to end corruption, impose the rule of law and clean up the environment, it welcomes internal migration. Over the past few years, China has steadily loosened restrictions on the movement of its citizens--accelerating a trend begun in the late 1970s--most recently by extending welfare benefits to peasants looking for work in urban areas. Indeed, central authorities are pushing this plan over the objections of security forces and provincial officials, who fear that huge population shifts will stoke unrest and burden social services.

What this battle shows is that China's senior leaders are on the same side as a growing number of economists who believe that the benefits of a mobile labor force far outweigh the risks. By freeing its proletariat to move about the country, China has created a dynamic labor market that is closer in character to America's flexible work force than to the static societies of Europe or Japan. Increasingly, worker mobility is rated as important a factor in measuring economic health as productivity and money supply. A recent report on global employment by the Organization for Economic Cooperation and Development devotes an entire chapter to worker mobility and its potentially salutary impact on joblessness and income disparity.

In part, that's due to the boost internal migration has given the U.S. economy--led by the shift of the American population toward jobs in the Southwest--which has had its mirror in the shift of China's population to the southeast. Economists say it is no coincidence that the world's most powerful engines of growth, the United States and China, also have the highest rates of worker itinerancy, while Europe and Japan lag behind. ''In the global economy, two of the most important factors are mobility of capital and mobility of labor," says Mohamed El-Erian, the incoming president of Harvard's trust funds and a noted emerging-market bond expert. ''Capital trades internationally, but labor does not, which is why domestic migration is so important."

Beijing clearly understands this. Over the past few years, it has encouraged the efforts of private job-placement agencies and municipal officials to match job hunters with openings nationwide. Government representatives from central Sichuan province, for example, act as full-time brokers for the unemployed, finding jobs in other provinces, arranging transportation and even mediating disputes with employers. In southeastern Guizhou province, one of China's most impoverished areas, municipal officials have set up sister-city programs in which bright young Guizhounese are enrolled in urban training courses. ''If you're a cadre younger than 30 years old, you'll go to the city and come back with either a skill or an investor," says Daniel Wright, a director and China specialist at the National Bureau for Asian Research in Washington, D.C. ''It's a very fluid dynamic."

The flow of Chinese from rural villages to cities has swelled into a mangliu , or peasant flood, and it is perhaps natural that outsiders tend to dwell on the dangers. The estimated average annual movement of 200 million rural Chinese over the past six years is historically unprecedented, dwarfing the annual average of 40 million Americans who moved during the same period, though as a percentage of population the rates are about the same. The big difference is that in the United States, migration swells the number of McMansions in suburban Phoenix. In China it has carved a grimmer landscape, as peasants advertise their availability for work with hand-scrawled placards on Shenyang street corners, and sleep six to a room in Shanghai.

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China Is on the Move; of All the Threats to Its Economic Boom, Beijing Officially Encourages One, Mass Internal Migration. It's a Very Smart Choice
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