Volume 44, Number 172,
January-March 2013
Migration and Exclusion in China:
the Hukou System
Gabriela Correa and René Núñez
THE MARKET, MIGRATION AND WELFARE ( ...continuation )

The third item of relevance when analyzing social welfare in China is the urbanization process, which has two main sources: rural-urban migration and the creation of new cities. In other words, besides the fact that cities have grown due to demographic population increases, urbanization also adds to the population moving from rural to urban zones and encourages the growth of small or medium-sized locales. As such, many of those who had a rural hukou changed their status to urban, which excludes them from possible future compensation for changing the use of their land or income for operations from local collective property companies.3

In Beijing and Shanghai, some of the data regarding changes in hukou registrations is linked to a temporary regulation that granted a change to those who purchased apartments in the city. In Shanghai, it was reported that 3,000 persons met the condition of seven years of residency in 2007, which, as mentioned above, is one of the established requirements (Cheng Xiaobei, 2009: 1).

It is also important to emphasize that the increase in the number of large cities and the attractions of market consumption have also driven rural-urban migration in the Chinese urbanization process, and together with regional differences, has reinforced the expansion and dynamism of the East coast of the country.

A study from Shuming Bao et al. (2010: 23) is relevant to this discussion, because it shows that hukou has a notable influence on migration, because due to the greater flexibility in migration regulations, there are greater migratory flows. The population quickly responds to government regulations and in this way the migratory structure evolves rapidly. In other words, the hukou system directly, or indirectly, determines the direction and density of migration.

The problems derived from migration have become a source of protests, both in destination cities and in rural locales. In the cities, there have been many cases of workers being fired without back pay for overdue salaries, especially during the 2009 crisis. In rural zones, local authorities have improperly appropriated land for urban expansion or for productive installations, which has led to protests and confrontations with the authorities.

THE CHINESE DILEMMA: WELFARE OR LOW LABOR COSTS

A variety of research has confirmed that the Chinese government, through the hukou system, has maintained a segmented labor market by controlling population movement, which only allows for the flows necessary to cover the labor demand in large cities. These barriers to migration lead to a disadvantaged population, which further segments the labor market into very different groups with low mobility between levels (Huafeng Zhang, 2010: 57; Whalley and Shunming Zhang, 2007: 400; Xiaomin Li et al., 2006: 6).

Consequently, the quality of life of millions of people has been affected; they have little or no chance of moving up the social ladder due to the persistence of an exclusive system. An entire portion of the population that has migrated in search of employment opportunities and a better standard of living has been excluded from access to public social welfare services provided by the local government to residents in the territories where they live.

Given this panorama, the Chinese local and central governments are facing the dilemma of having to set the speed at which to modify the hukou system; if they decide to eliminate it abruptly, it is expected that the inequality gap generated by the system would close, despite the fiscal or administrative load that would fall on local business and governments; if they modify it gradually, they would manage to contain the increase in labor costs that has been registered in recent years.

3 It should be pointed out that in large cities, such as Guangdong, Chongqing and Shanghai, there are also illegal foreign immigrants, mainly from some regions in Africa and the Middle East. There is no official data regarding these groups but there is growing evidence that their numbers are increasing, as well as their difficulties to access social services.

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 194 July-September 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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