Anyone lucky enough to have a Shanghainese hukou, or registration, gets decent healthcare and a good pension. Schools are better and cheaper than in other big cities, and although plenty of neighborhoods have been razed to the ground as the city modernizes, by and large property owners are equitably resettled.
Yasheng Huang, the economist and author of Capitalism with Chinese Characteristics, has argued that Shanghai has substituted private enterprise for a combination of state investment and foreign direct investment. He is quite right: the Shanghainese have been happy to accept higher average wages working for big multinationals in lieu of access to investment so they can start their own companies.
In the long term, Prof Huang feels this will rebound on the city. However, as long as Shanghai remains a destination for migrants, sucking up talent and money from its surrounding provinces, it should continue to prosper. The Shanghainese may feel marginalised, but a lot of the city’s success seems to stem from the arrival of both wealthy entrepreneurs and of migrant workers from Zhejiang, Jiangsu and Anhui.
To keep one step ahead, Shanghai has been broadening who can have access to its social security system. Now, the city has decided that all the children of migrant workers can have free education in the city. At a time when it is proving difficult for some provinces to attract low-skilled workers back from their families in China’s interior, this seems like a stroke of genius.
Migrant families can settle in Shanghai, in the knowledge that their children will not be discriminated against because of their lack of a local hukou. Shanghai says it already spent 3.69 billion yuan ($543 million) in 2009 to help schools enroll more migrants. The investment is worth it as an easy way to keep the city ahead.