Urban stampede

Zhao Reng, 22, left a small village in central Sichuan for Beijing in May 1998. Her first trip outside home, Zhao was dazzled by the bright lights of the city. "I was so frightened of the cars speeding along the road," she recalls. She has since got used to the city's fast pace and is earning a few hundred yuan a month as a hairdresser.

Zhao is one of some three million rural residents who have come to the capital for work. All round China, there are an estimated 120m to 180m peasants working in the city, or up to 20 percent of the rural population.

These migrant workers, usually young and hard working, are the unsung heroes of China's economic miracle of the last few decades. They work in factories at a fraction of what urban workers demand, helping

China to flood the world with cheap exports. They also do unpleasant but much-needed work such as building roads, collecting rubbish, cleaning the streets and other jobs that urban people avoid.

Despite their importance, migrant workers cannot be registered as permanent urban residents. Without this status, they are not entitled to benefits such as social welfare and subsidised education for their children.

Such discrimination against migrant workers is a legacy of the old Stalinist-style control of the mobility of the people. A strict hukou (household registration) system based on one's birthplace has kept peasants out of city headcounts. China's official urbanisation rate therefore has remained low, at 31 percent, compared with a 70 percent-plus norm for developed economies. Officially, there are398m urban residents and 910m farmers.

For years, city governments responded passively to the massive flow of labour from the farms, either beckoning or chasing them out according to the needs of the cities. Changes to this ad-hoc policy however are on the way as central and local governments finally realise that many migrant workers, with or without a permanent status, are going to settle in the cities and there will be more of them in future.

China has finally introduced policies and set targets for the relocation of farmers to the cities, after years of empty rhetoric about boosting urbanisation. In the landmark 10th five-year plan of 2001-05 announced last July, the government listed urbanisation as a top national priority. It predicts that 85m peasants will settle in urban areas in the next five years.

After the announcement, the government has slowly eased the conditions for farmers to settle first in towns and counties, though it still retains tight control in big cities. Farmers now can be permanent residents in these lesser urban areas if they can prove that they have a steady job and a permanent address in their new settled home.

Regional initiatives
Since Beijing's signal to press ahead with urbanisation, provinces and cities have come up with their supporting measures. In eastern China, the coastal province of Zhejiang expects that half of its population will live in urban areas by 2010, up from the current 40 percent. To help farmers to settle, Zhejiang plans to develop industrial zones in small towns to generate new non-farm jobs.

In the south, the already highly industrialised province of Guangdong anticipates that urbanisation will reach 40 percent by 2005. In the province's affluent Pearl River Delta, where former small rural towns such as Dongguan and Zhongshan have already become industrial powerhouses, the urbanisation rate is expected to rise to 60 percent five years from now. Guangzhou and Shenzhen, the province's two most affluent cities, are expected to be the backbone of this urbanisation drive, with new suburban areas likely to flourish around them.

In the north, the port city of Tianjin has started to allow farmers to settle for the first time in the 30 small towns under its jurisdiction. Until recently, cities like Tianjin had not been welcoming to migrant workers, blaming them for rising crime and environmental deterioration. Given this situation, why has there been a sudden change of heart?

The main reason is Beijing's realisation that farmers can no longer survive by merely tilling their land and are seeking to find new ways to support themselves. Growth of rural income has been dropping for four consecutive years, from 9.6 percent in 1997 to 2.1 percent last year. In many places, the already meagre income of farmers has dropped in real terms, despite an average annual growth of eight percent that China has enjoyed in recent years.

Farmers are getting poorer because prices of agricultural products have declined, while those of fertilisers, tractors, seeds and other production inputs have gone up. The government has raised the prices of state procurement of grain twice by a total of 105 percent between 1994 and 1996. However, the increases were of limited help because of the overall low level of agricultural prices and the small quantity of food farmers can pro-duce from their tiny plots of land that average 0.8 hectares per person.

Making matters worse is the decline of rural factories, which created at their peak in 1996 an estimated 135m jobs in the countryside. However, many rural firms have gone bankrupt in recent years, as a result of greater competition from state enterprises and foreign-funded firms. In 1999, the sector employed 127m workers and the number is still going down.

The Ministry of Agriculture has tried to help farmers squeeze more out of their plots by promoting the growth of cash crops and better irrigation. But specialists like Mr. Wen Tienjun, formerly a researcher at the Rural

Economic Research Office under the ministry, feel such tinkering of existing policies cannot raise the living standard of peasants in the long run.

"The fact is that China has too little arable land, with too many people living off it. Old policies no longer work and we need to find new ways to absorb the idle farm labour," Wen says. He points to growing peasant unrest as a sign of the urgency of the problem.

There is now a consensus that cities should open their door wider to rural workers, but no agreement on how this should be done. Some economists suggest that China should develop more towns and townships to absorb surplus rural labour, rather than expanding the already overcrowded big metropolises. In fact, the small-town policy has been in operation for a few years, leading to the emergence of hundreds of small towns.

Towns and counties are ranked in China's administrative structure below cities but considerably higher than the lowest rank, villages. Most towns and counties have populations of under 200,000 and are situated close to big cities. In recent years, many villages have been upgraded to towns and counties and given resources to develop infrastructure befitting their new status.

Mr. Fan Gan, director of the Beijing-based National Economic Research Institute, says that this small-town policy has led to wastage and inefficiency. As these new urban centres are scattered far from each other, more money has to be spent on education and other public services on a per capita basis than in the big cities. Also, he adds, without a sizable concentration of people and markets, new services, industries and commercial activities cannot develop.

The ideal population for a Chinese city is 1m-4m, he says, based on studies made by his think-tank. For a big country like China, he adds, having 50 to 100 new cities each with 2m people or more in the next 15 years is "not too much." He admits there will be problems such as traffic congestion, environmental deterioration and even urban slums commonly found in big cities elsewhere in the world, but this should not stop China from moving faster towards urbanisation.