He said that even if their incomes do not increase, the purchasing power of migrant workers will increase by 30% due to improved social safety nets.
“China accounts for 17.8 percent of the world’s population, but contributes only 12.8 percent to global consumption,” Tsai said in a statement posted on the website of the Beijing-based think tank Chinese Economist 50 Forum. I mentioned this in a December article.
“If we can turn immigrant workers into city residents, that will help close that gap.”
Currently, access to government services is restricted outside of the place of registration, which is generally determined by the legal residence of the parents at the time of birth.
Rural hukou holders, who have fewer benefits than their urban brethren, have switched residences in the past by getting a university education, getting married, or buying a home in an urban area.
Former finance minister Lou Jiwei also encouraged changes to the system, theorizing that if rural residents were given access to government services in urban areas, they could safely buy homes in urban areas. This could stimulate consumer demand by almost 30 percent, he suggested.
03:51
Fewer jobs and lower wages: China’s migrant workers continue to face insecurity even after economic reopening
Fewer jobs and lower wages: China’s migrant workers continue to face insecurity even after economic reopening
“Farmers can also freely transfer their land and houses in the countryside, which can provide initial assets to buy real estate in urban areas,” Lu said at a conference in Beijing late last month.
“The government should consider taking the first steps to reform counties around large cities, which would lead to fewer social conflicts and greater impact.”
China’s growth after joining the World Trade Organization in 2001 is partly due to mass migration of farmers to coastal cities, which is thought to have facilitated a rapid rise in labor productivity. Masu. In the 2010s, further urbanization was accompanied by a frenzy of real estate purchases, which itself became a prerequisite for hukou relocation in many Chinese cities.
As the population declines, will urbanization become China’s new economic engine?
As the population declines, will urbanization become China’s new economic engine?
Urbanization was listed as one of the economic priorities for 2024 at last month’s Central Economic Work Conference, but Beijing’s decision-makers have shifted their focus to equal public services and the development of small cities.
During a recent visit to Sichuan province and Chongqing, which account for about one-tenth of the Chinese population, Premier Li Qiang reiterated his emphasis on “people-centered” urbanization, or the quality of life of residents over quantitative performance indicators. did. population.
“We should prioritize converting the agricultural population into an agricultural population. [urban] Gain citizenship and use counties as important actors to accelerate urbanization, build and improve the coordinated development of large, medium and small cities. [their] economic and demographic carrying capacity,” he said at a meeting with local leaders.
03:38
China plans to build 1,000 large parks over five years to green up concrete jungle
China plans to build 1,000 large parks over five years to green up concrete jungle
China’s “first-line” cities maintain strict standards for new residents, typically only accepting those with high levels of skills, world-class education, or significant investment. As a result, their populations are either fairly stable or in decline. For example, in Beijing, the resident population decreased to 21.8 million in 2022, the sixth consecutive year of decline.
In 2022, the National Bureau of Statistics (NBS) reported that 65.22 percent of China’s population lived in cities. However, based only on place of residence, the proportion drops to 47.7%. This number has room for improvement in terms of growth potential.
The pace of urbanization has also slowed. According to NBS data, China’s urban population reached 920 million last year, an increase of only 6.46 million from 2021, the smallest such increase in 42 years. By the end of last year, the number of migrant workers living in cities had fallen by more than 530,000.
Urbanization is not just about attracting the agricultural population to cities, but ensuring that they are treated equally.
The top economic planner of the National Development and Reform Commission said in the mid-term evaluation of the country’s development plan for 2021-2025 that the urbanization rate has already reached the five-year target of 65%. .
With this goal achieved, the challenge now is to support the integration of the rural population living in cities, currently estimated at 250 million. In theory, this group can easily loosen their purse strings because they can receive public services of the same quality as those in urban areas.
As the real estate market continues to slump, Beijing has promoted three major projects: affordable housing, emergency public facilities, and urban villages as the basis of a new real estate development model. But questions remain as to whether such large investments can be sustained as local debt mounts, and even if they are, whether they will be enough to fill the gap left by private sector inactivity.
“Urbanization is not just about attracting the agricultural population to cities, but also equal treatment of the agricultural population and urban residents, including equal access to insurance, pensions, employment, health care, and educational resources for future generations. The goal is to ensure that the Professor of Finance at Renmin University of Beijing.
Local governments’ finances are tight, and given their high debt and already significant levels of spending, the chances that China will provide equal social services to migrant workers unconditionally are diminishing.
“China cannot completely abolish the hukou system by 2050, because it would require large amounts of money that even the central government cannot afford,” he said.