Academic journal article China: An International Journal

Chinese Minority Income Disparity in Urumqi: An Analysis of Han-Ugyhur Labour Market Outcomes in the Formal and Informal Economies

Academic journal article China: An International Journal

Chinese Minority Income Disparity in Urumqi: An Analysis of Han-Ugyhur Labour Market Outcomes in the Formal and Informal Economies

Article excerpt

INTRODUCTION

Ethnic tensions between Uyghur and Han Chinese culminated in 2009 with the Urumqi riots, one of the bloodiest conflicts in Xinjiang's modern history, which left more than 200 people dead and another 1,700 injured. Following the 2009 Urumqi riots, Chinese policy towards Xinjiang underwent a major shift, breaking away from its previous "gradualist" approach to one of economic development. In its place, China implemented policies meant to spur "leapfrog development" in Xinjiang. These new economic policies are likely to bring about rapid growth to the region; however, the question remains whether this growth will be equitably transferred amongst all ethnic groups and regions within Xinjiang.

To this end, the Chinese literature on Han minority studies is understudied in terms of income inequality, poverty and labour market outcomes. (1) The lack of Han-minority studies is largely because individual "income" is generally not reported by ethnicity in official Chinese statistical sources, and due to political sensitivities, researchers are generally uninterested or unable to carry out fieldwork in minority areas, predominately located in western China.

The small body of research that does exist on income inequality among ethnic groups has produced mixed evidence in terms of Han-minority disparities. On the one hand, Hannum and Xie (2003) contend that both income and occupational attainment gaps between Chinese minorities and Han have widened (2), while Gustafsson and Shi (2003) argue that Hui minorities are not at an economic disadvantage relative to the Han in urban Ningxia. (3)

The purpose of this paper is to contribute to the growing body of Han-minority studies on China. The two main questions addressed in this paper are: 1) How do the roles of ethnicity, gender and migrant status impact wage outcomes and are the respective impacts independent of human capital; and 2) Does the rate of return on key demographic variables (e.g. human capital, ethnicity, gender and migrant status) vary depending on whether a respondent is employed in the formal or informal sectors. Both research questions are timely and relevant in the wake of the 2009 Urumqi riots, especially since economic inequality is considered a major driver of the uprising and Uyghur discontent. Moreover, very little is known about China's informal economy, in part, because the state statistical apparatus largely neglects the informal sector. (4) It is suspected, however, that Uyghur participation in the formal sector is lower compared to Han, coinciding with a rise of Uyghurs engaging in informal sector employment. (5)

The analytical framework adopted in this study was informed by a rich source of empirical survey data, which was collected in 2008 in Urumqi by the author, in collaboration with Chinese affiliates. To the author's knowledge, Zang's study (2011) is the only other quantitative work that uses survey data to examine income disparity between Uyghur and Han. (6) Although many of the general results found in the present paper confirm Zang's findings (i.e., a large Han/Uyghur and male/female inequality gap) there are several important areas of divergence.

First, the current paper offers the first attempt to statistically analyse Hanminority income disparity in both the formal and informal Chinese economy, whereas Zang only examines the formal economy. Second, the current paper extends the analysis by adding a third ethnic group, the Hui. The Hui are included in the analysis as a type of control group, in order to determine whether income disparity exists along minority-majority lines or specifically, only Uyghur-Han. Third, the present research is informed by more recent data collected in 2008, while Zhang's data was collected in 2005.

The outline of this article is as follows. The next section briefly draws on arguments made by human capital theory and labour market segmentation theory, and summarises the recent work carried out on Chinese ethnic-based labour market outcomes and disparities. …

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