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This article was downloaded by: [Universidad Autonoma de Barcelona] On: 28 October 2014, At: 09:21 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK disP - The Planning Review Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/rdsp20 Small City, Big Solution? Mark Yaolin Wang Published online: 01 Nov 2012. To cite this article: Mark Yaolin Wang (2002) Small City, Big Solution?, disP - The Planning Review, 38:151, 23-29, DOI: 10.1080/02513625.2002.10556820 To link to this article: http://dx.doi.org/10.1080/02513625.2002.10556820 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http:// www.tandfonline.com/page/terms-and-conditions

Small City, Big Solution?

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Page 1: Small City, Big Solution?

This article was downloaded by: [Universidad Autonoma de Barcelona]On: 28 October 2014, At: 09:21Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registered office: MortimerHouse, 37-41 Mortimer Street, London W1T 3JH, UK

disP - The Planning ReviewPublication details, including instructions for authors and subscription information:http://www.tandfonline.com/loi/rdsp20

Small City, Big Solution?Mark Yaolin WangPublished online: 01 Nov 2012.

To cite this article: Mark Yaolin Wang (2002) Small City, Big Solution?, disP - The Planning Review, 38:151, 23-29, DOI:10.1080/02513625.2002.10556820

To link to this article: http://dx.doi.org/10.1080/02513625.2002.10556820

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) containedin the publications on our platform. However, Taylor & Francis, our agents, and our licensors make norepresentations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose ofthe Content. Any opinions and views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be reliedupon and should be independently verified with primary sources of information. Taylor and Francis shallnot be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and otherliabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to orarising out of the use of the Content.

This article may be used for research, teaching, and private study purposes. Any substantial or systematicreproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in anyform to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

Page 2: Small City, Big Solution?

M a r k Ya o l i n Wa n g

Small City, Big Solution?China’s Hukou System Reform and Its Potential Impacts

The most significant move towardsbreaking down the barrier of China’s ex-isting household registration system (orhukou in Chinese) was taken in late2001, when the Chinese government al-lowed its peasants to become legal urbanresidents in all small cities and towns.This is a very important hukou reform,and its impacts will be enormous andmultidimensional. The first impact is onthe existing occupational segregation be-tween migrants and local workers. Thispaper argues that both the phenomenonof occupational segregation and migra-tion settlement related to native place tieswill become less relevant due to thesmall-city-free policy. In addition, it ad-dresses the potential impacts of thissmall-city-free policy on urbanisation andthe urban labour market. Finally, it at-tempts to explain the reasons why theChinese government set up the small-city-free policy and assess the potential im-pacts of the small-city-free policy onChina’s urbanisation pattern/urban sys-tem, and potential competition betweenthose new migrant workers and localworkers in the labour markets. It con-cludes that the small-city-free policy is afirst significant step towards decontrol-ling population mobility. Its impacts needmore research.

1 IntroductionRapid social and economic changessince 1978 have gradually brokendown the barrier of China’s existinghousehold registration system (or hukouin Chinese). The most significant movewas taken in late 2001, when the Chi-nese government allowed its peasants tobecome legal urban residents in allsmall cities and towns as long as theycan prove that they have a legal staticdwelling place and a stable source ofincome (hereafter we call it small-city-free policy). These migrants are entitledto the same housing, medical, educa-

tion and employment benefits as localurban residents. They are also entitledto contracted farmland in their home vil-lages, or they can transfer it to others(http://www.china.org.cn, December24, 2001).

This is a very important hukou reform,and its impacts will be enormous andmultidimensional. Although movementto small cities and towns was never astightly monitored as movement to largecities, a freer population mobility policywill no doubt also attract large numbersof peasants to small cities and towns inthe hope of becoming legal urban resi-dents. This movement will reshapeChina’s urbanisation patterns. It repre-sents not only a simple change fromagricultural hukou status to urban hukoustatus, but has several implicationswhich this paper will discuss.

The first impact is on the existing oc-cupational segregation between mi-grants and local workers. Before thesmall-city-free policy was introduced, ru-ral migrants in urban areas (called˝floating population˝) were not grantedlegal urban residency status, eventhough they had worked and resided inurban areas for many years. They hadto take 3-D jobs (dirty, demeaning anddangerous), which were considered tobe inferior by urban residents (Roberts2000; Wu and Li 1997; Meng 1996).They did not pose any serious competi-tion to local workers for urban non-3-Djobs, which were protected by the mu-nicipal government for locals. Meng’s(2000) survey samples show that ruralmigrants in Chinese cities appear tohave little impact on open urban unem-ployment because less than 12 percentof migrants are employed in the statesector and these migrants account for3.5 percent of the total state sector em-ployment. There was a clear occupa-tional segregation. This paper arguesthat this occupational segregation willdisappear when migrants become per-manent/legal urban residents.

Secondly, the degree of dependenceon home town ties for job access and se-lection of places to reside will becomeless important when migrants becomelegal urban residents. Without legal ur-ban resident status, the floating popula-

tion in Chinese cities gained access tourban jobs mainly through “specialchannels” (Zhao 2000). My field inter-views in the last few years show thatmost of the floating population had joboffers before they moved to urban ar-eas, and many of these jobs were intro-duced by migrants’ friends from the re-spective home town – or native-placeties (Zhao 2001). Massey et al.’s obser-vation that “migrant networks are sets ofinterpersonal ties that connect migrants,former migrants, and nonmigrants in ori-gin and destination areas through ties ofkinship, friendship, and shared commu-nity origin” holds true for China’s float-ing population (Massey et al. 1993:448). Floating population workers notonly accessed jobs via such social net-works, but also migrant accommodationor migrant settlements such as the areasof Zhejiang Village, Xinjiang Village,and Henan Village, as well as Anhui Vil-lage in Beijing (Davin 1999; Ma and Xiang 1998).

Therefore, one of the arguments of thispaper is that both the phenomenon ofoccupational segregation and migrationsettlement related to native place tieswill become less relevant due to thesmall-city-free policy. In addition, the potential impacts of this small-city-freepolicy on urbanisation and the urbanlabour market will be addressed. Thefirst section outlines the changing hukousystem and urbanisation processes overthe years, as well as the impacts of therigid hukou system. Then, an explana-tion as to why the Chinese governmentset up the small-city-free policy is given,followed by a discussion of the potentialimpacts of the small-city-free policy onChina’s urbanisation pattern/urban sys-tem, and potential competition betweenthose new migrant labourers and localworkers. It concludes that the small-city-free policy is a first significant step to-wards liberalising population mobility.Its impacts, however, need more re-search.

2 Strict Hukou System and theEmergence of Floating PopulationThe hukou system was introduced in1958 and became the Chinese govern-

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ment’s tool to control rural-urban migra-tion. According to the hukou system, allfamilies were tied to a particular placeand divided into non-agricultural (ur-ban) or agricultural (rural) categories,and each person was assigned eitherrural or urban status with little hope ofchanging this registration (Wan 1995).Basic necessities such as grain and clothwere available only in strictly rationedamounts through the work units (danweiin Chinese) or collectives to which indi-viduals were officially assigned. Popula-tion mobility was strictly controlled:peasants were unable to move to urbancentres and urban workers were tied totheir particular jobs and accommoda-tion through their work unit. Therefore,the hukou system made China one of themost static societies in terms of popula-tion mobility in the world.

As table 1 shows, from the late 1950sup to the late 1970s, China’s hukou re-lated policies became more and morerestrictive. In 1975, the Chinese peo-ple’s freedom of mobility was removedfrom China’s Constitution. The impact ofthe strict hukou system during the periodfrom 1958 to 1978 on the society wasenormous. First, China had experiencedcounter-urbanisation in the 1960s andearly 1970s. Its urbanisation leveldropped from 19.7 percent in 1960 to17.9 percent in 1978 (see fig. 1). Thisdrop was mainly due to restricted rural-to-urban migration as well as the “send-ing-down programme” – urban youthwere sent to rural areas for re-education (Bernstein 1977). Chan(1994) called the hukou system duringthis period the city’s “invisible wall”.Rural-urban linkage was artificially cutoff (Knight and Song 1999; Wang1997a; 1997b).

Deng Xiaoping’s open door and re-form programmmes, introduced since1978, have called for more cheaplabour in urban areas, especially alongthe coastal regions. Peasants have grad-ually been allowed to work and residein urban areas and have been referredto as the floating population. Theirmovements are mainly rural-urban butalso rural-rural, urban-rural and urban-urban, and cross local, county andprovincial borders. Some moves were

DISP 151 24 2002

Year Policies or Regulations Implication for population mobility

1958 Hukou Registration Regulations of PRC

For the fi rst time, a concept of approval system for rural-to-urban migration was introduced in China.

1963 Agricultural hukou and non-agri-cultural hukou were introduced

Emergence of dual society: highly subsidised non-agricultural (urban) population with entitlement for food rations versus agricultural (rural) population.

1975 Amendment of Constitution – abo-lished the items related to freedom of population mobility

Legalisation of the strict control of population mobility.

1977 Regulations for Hukou Change Detailed tough regulations towards migration from rural to urban and from small cities to large cities. If a rural hukou holder married an urban one, the rural one must work in the rural area and child/children were also rural hukou.1

1980 Offi cial urban development stra-tegy was introduced – “Strictly control the growth of large cities, rationally develop medium-sized cities and encourage development of small cities/towns”

Population mobility control was linked with na-tional urban development strategy.

1984 New regulations which allowed peasants to work and reside in small towns, but they should fi nd jobs and provide food for themselves

The first step toward relaxation of the hukou system: peasants were allowed to work/reside in small towns.

1992 State Council established Docu-ment Drafting Group for Hukou System Reform

Formal organisation in central government was established to deal with hukou reform and to relax population mobility control.

1993 Proposed Hukou Reform in Small Towns

Feasibility study stage for small town hukou reform.

1997 The Ministry of Public Security started pilot work in reforming the existing hukou system in 552 small towns and small cities2

Experiment Stage of Hukou Reform: Peasants were allowed to become legal city/town residents in these towns and small cities.

1998 Ideas for fi xing a few big problems in current hukou management

The policy allows urban returnees‘3 spouses and children to move to the city; aged rural-hukou parents to move to city where their children live; rural hukou holders to move to urban if he/she marries an urban hukou holder; peasants to be-come legal urban residents if they invest in the city or purchase housing property in the city.

2001 Small-city-free policy Peasants are allowed to move to towns and small cities.

1 People’s Daily, 29 August, 2001.2 State Family Planning Commission of PRC, materials are available at www .sfpc.gov.cn/EN/news20011028-1.htm.3 Urban returnees refer to those urban youth who were sent down to the countryside and married peasants during the cultural revolution. After 1978 they were allowed to return to their home cities but their rural spouses and children were left behind. The new regulation allowed these rural spouses and children to move to the city legally.Source: www.macrochina.com.cn/zhzt/000093/003/20010823017257.shtml

Table 1: China’s hukou related policy changesand the implications from 1958 to 2001.

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temporary and seasonal, while othersare semi-permanent or permanent, butin either case the movers come underthe classification of floating population,because they are not recognised as le-gal urban residents by the governments(Cai 1998).

Without legal urban residency permis-sion, the floating population can survivein cities mainly due to the developmentof the urban free market (Chan 1995).Rapid development of the urban privateeconomy also enables the floating pop-ulation to access goods and servicesoutside official channels. A peasantworking in the urban area no longerneeds to bring along a supply of grainand she/he can always buy it on theopen markets (Chan 1996).

The government’s liberalisation ofpopulation movement has been carriedout gradually. Since the early 1980s,the Chinese government has graduallyallowed its citizens much freer mobility,but such relaxation has been incremen-tal, even though it is argued that theemergence of the floating population inurban China is associated with a grad-ual loosening of state control over popu-lation mobility (Fitzpatrick 1999). How-ever, it is further suggested that theemergence of the floating population isnot the explicit aim of government poli-cies but a by-product of the economic re-form and open door policy (Chan1995).

The pace of relaxation of the hukousystem, as indicated in table 1, hasbeen very slow, and lifting the restrictionon peasants’ mobility has never beenthe Chinese government’s top agenda. Itcan be argued that peasants in Chinesesociety have been the soft potato. Theyhave been viewed as being less vocal

and their interests and political viewshave often been ignored. Discriminationagainst the floating population has beenwidely reported. The most noticeableproblem is migrants’ lack of politicalrights and long-term position in the localcommunity. Moreover, migrants foundthemselves subject to local restrictions.They were forced to pay a series of fees (Yang 2001). Migrant children inChina’s big cities have struggled to findplaces in school. For many, the unli-censed route is at best, the only option.These children have a sense of inferior-ity wrought by their second-class status(http://www.unesco.org/courier).

3 Why Small-City-Open-DoorOnly?There is no research as to why Chinaadopted the small-city-free policy andwhat its impacts will be. Based on avail-able information from various sources ofChinese media and government reports,this paper argues that at least the fol-lowing are the key reasons:• It has been gradually realised thatfreer labour mobility has become a po-sitive factor in China’s overall economicdevelopment and that the floating popu-lation have significantly contributed toChina’s urban development. China’sstepped-up industrial production, an ex-panding number of non-state enter-prises, and modernisation of urban in-frastructure all require a huge number ofcheap labourers (Logan 2002; Chan1995).

Rural migrants have transformed thecities of China. Everyone who visits Chi-nese cities observes rural migrants’ con-tributions to the development of Chinesecities. Not only have they built skyscrap-ers, worked in assembly lines (either for-

eign-owned or joint venture firms), keep“Made in China” products cheap, butthey have also provided a variety of ur-ban services and greatly eased the livesof official urban residents. They prepareand serve food sold in sidewalk standsand fine restaurants, decorate houses,fix bicycles and plumbing, sell vegeta-bles, clothes and a variety of other com-modities in markets that previously didnot exist, and do the hard and dirtywork in factories, transport and sanita-tion (3-D jobs) (Qian 1996). For exam-ple, in the mid-1990s, construction inBeijing, one of the city’s most vibrant in-dustries, was dominated by more than800,000 migrant labourers and about80 percent of Beijing’s housekeepers,restaurant staff and vegetable marketsellers were floating population (Chan1995). • Speeding up urbanisation is conside-red to be one of the important drivingforces for sustaining economic growth inChina. After two decades of rapid eco-nomic growth, one of the challengesChina is facing is how to maintain thisgrowth and fix the problem of sluggishdomestic demand (Webber, Wang andZhu 2002). Urbanisation is thought tobe an ingredient of further development.This idea was clearly stated in China’s10th Five-Year Plan for Economic andSocial Progress (2001–2005). The go-vernment’s small-city-free migration po-licy is to expand small cities and townsand make steady progress in urbanisa-tion in order to increase job opportuni-ties and sources of income for farmers.The small-city-free policy is intended topromote the transfer of redundant rurallabour, as well as stimulate infrastruc-ture construction and the developmentof the real estate industry in small citiesand towns (Peoples’ Daily, September24, 2001).

It should be pointed out that the Chi-nese government expects different sizecities to perform different tasks. For ex-ample, small cities and towns are ex-pected to: (i) provide various types ofservices for agriculture and farmers, (ii)develop advantageous labour-intensiveindustries, and (iii) support industrial de-velopment in central cities. The suburbsof central cities (central cities are those

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0.0

10.0

20.0

30.0

40.0

50.0

60.0

1949

1953

1957

1961

1965

1969

1973

1977

1981

1985

1989

1993

1997

2001

2005

2009

2013

2017

2021

2025

(%)

NoHukouPeriod

Strict Hukou Period

Period of Hukou Relaxation

Town-and- Small-City-Free

Fig. 1: China’s urbanisation level during diffe-rent hukou periods, 1949 to 2001.Sources: Urbanisation data from China Statis-tical Yearbooks (various years); data in 2001from People’s Daily, June 7, 2001; post-2001data are from http://www.unhabitat.org.

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large cities with urban populations overtwo million) are expected to develop ex-port-oriented, ecologically sustainableagriculture. And the central cities them-selves are to develop high-tech indus-tries and manufacturing, and other in-dustries with high added-value andgreat employment capacity (http://www.china.org.cn). However, rural mi-grants in medium and large cities arestill not allowed to become legal urbanresidents. • Why not big cities? The hukou reformhas not been carried out with undue haste in large cities and only some citieshave given urban hukou to those pea-sants who have invested or purchasedhousing in the city. This policy was called “Business Investment for UrbanHukou and Purchasing CommercialHousing for Urban Hukou,” which wasissued in 1998 by the Ministry of PublicSecurity of PRC (http://www.china.org.cn December 24, 2001).

The reasons for not allowing all ruralmigrants to become legal urban resi-dents in large cities are both politicaland economical. On the one hand, thebig concern is the existing urban sub-sidy and benefits. Without urban hukou,rural migrants are denied the benefits(housing, medical, education and em-ployment) available to urban hukouholders, even if they live and work incities. It is also true that per capita pub-lic welfare levels in large cities are muchhigher than in small cities. Therefore, aslong as the urban subsidy exists, it istemporarily unsuitable and politicallysensitive to pursuing the policy of de-controlling the hukou system in largecities. The financial implication is thateach additional urban hukou holder in alarge city means one more financial bur-den for municipal government.

On the other hand, urban residents’complaints are the important politicalreason. Despite the contributions of ru-ral migrants to urban development be-ing recognised by the government in therecent years, urban residents in largecities blame the floaters for crowdingthe railway stations and buses and con-gregating in groups while waiting forwork in street-side labour markets(Solinger 1999; Wu and Li 1997). De-

spite some sympathetic notes, the toneof coverage of migrants in the Chinesepress was predominately negative untilthe small-city-free policy was imple-mented in 2001. In addition, most ur-banites associate rural migrants withchaos, crime, violence, high fertility andillicit sex, and they are presented asthreatening to social stability and lawand order in various ways (Davin1999). To many urban residents theyappear as foreigners in their midst(Roberts 2000). More recently, they areblamed for taking jobs that could other-wise be filled by those laid-off from fail-ing state industries. Links are oftenmade between migration and urban un-employment. Urban residents believethat the low wages and profits that mi-grants are willing to accept are seen byurban workers as unfair and invidiouscompetition. For example, a survey inthe mid-1990s found that 74 percent ofShanghai residents held migrants re-sponsible for at least three of the follow-ing four problems: crime, transport, em-ployment and environmental degrada-tion (Solinger 1999).

The floating population are alsoblamed for placing great strains on theexisting urban infrastructure and serv-ices, such as water supply and housing.Large cities, such as Beijing, Shang-hai and Guangzhou, are simply ill-equipped to cope with the needs of themillions of people from the floating pop-ulation. In Beijing, the floating popula-tion accounts for about a quarter of itstotal population, in Shanghai about onethird (Webber, Wang and Zhu 2002). Itis believed that the grade of infrastruc-ture construction is much higher in largecities, and the amount of governmentpublic expenditure needed for an in-crease of every urbanite is large. It is fi-nancially impossible for the municipalgovernment to support the large numberof newly-added legal urban residents(People’s Daily, September 24, 2001).Therefore, the Chinese government ismaking an effort to channel rural mi-grants into small cities and towns. It isexpected that this will not only help cutunemployment in villages, but also ac-celerate the urbanisation process. This isnot to say that small cities and towns

have better labour absorbing capacity.In fact, many Chinese scholars believethat medium and large cities are morecapable of absorbing labour due totheir better-developed tertiary sector,but the government as well as some Chi-nese scholars worry about migrants’pressure on large cities and the inherentsocial and political risks.

4 Potential ImpactsThe small-city-free policy will reshapeChina’s rural-urban migration patternand have a range of impacts, althoughit is too early to confidently predict theseimpacts. This paper addresses two im-portant questions: (i) whether new mi-grants will compete with locals in urbanlabour markets, and (ii) how the migra-tion pattern will be changed. It is ar-gued that new migrants will better com-pete with locals in urban labour marketsbased on equity, qualification and skill,and the existing occupational segrega-tion will disappear.

Before the small-city-free policy wasimplemented in late 2001, there was adebate as to whether the floating popu-lation competed with local workers in ur-ban labour markets. This was a verysensitive issue (Yang 2001; Dutton1998). As mentioned above, many lo-cals, including the media, believed mi-grants did compete with locals. It wasbelieved that urban labourers were in adisadvantaged position and that low-skill urban jobs seldom met minimumstandards because the floating popula-tion had drastically altered the urbanlabour market and was willing to do al-most anything. Therefore, the market forunskilled jobs has become a contest tosee who can endure the most, with thefloating population usually “winning”.Being from a farming background, themigrants did not know much aboutlabour contracts, and they were usuallynot concerned about benefits such ashealth insurance and pensions (Iredale2000). As such, rural migrants’ “advan-tages” over urban labour, including ur-ban laid-off workers, were mainly dueto the fact they accepted low wage jobs(floating populations’ monthly wage

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was about 56 to 64 percent of those ofurban residents) and “they can bearhardship and are easily manageable”(Knight, Song and Jia 1999: 91). Chan(1995) concludes that the migrant work-ers are happy to work for low wages,because wages low by urban standardsare very high by rural standards (Hare1999).

Most researchers and observers, how-ever, do not believe there is serious com-petition in urban labour markets be-tween migrants and locals. Knight andSong (1999), analysing a survey ofworkers in urban enterprises, foundsharp segmentation between urban resi-dents and rural migrants due to theunique political and institutional ar-rangements in China which gave urbanresidents privileged access to secureemployment at above market-clearingwages and which controlled the flow ofpeasants to the cities, allowing rural mi-grants to fill only the jobs that urbandwellers did not want (Appleton,Knight, Song and Xia 2001). Obvi-ously, there is a clear occupational seg-regation. For the floating population,employment options were limited andthe majority of migrant workers took upthe 3-Ds jobs.

However, it can be argued that whenrural migrants become legal urban resi-dents in small cities and towns, the his-torically segmented nature of urban em-ployment in China will break down andthe jobs of the migrants and the urbanresidents will become more interchange-able. As mentioned above, occupa-tional segregation by residency was aphenomenon when rural migrants’ resi-dency rights were denied and they weretreated as second-class citizens. Nowthey may not accept underpaid jobs,nor are they likely to be willing to “win”at a wage disadvantage by comparisonwith established urban residents. Thepermanency of migrants’ residence sta-tus will offer them more access in jobhunting and grant more confidence inwage bargaining than when they were“floating” or temporary illegal urbanresidents in the period preceding thesmall-city-free policy.

This is different from the evidence fromsuch places as Australia about the ef-

fects of migration on the labour market.To many immigrants in Australia, the le-gality is not the central issue – the cen-tral issues are about difference, and es-pecially about English language ability(Cobb-Clark and Connolly 2001). How-ever, the hukou changes do strengthenthe hand of Chinese rural migrants in ur-ban areas and the language barrier isnot a problem (even many rural migrantsprefer to speak local dialect but they canall speak Mandarin). The legality willerode the dividing line between urbannative born and migrants, even thoughnot all migrants change their jobs imme-diately after becoming urban residentsbecause they still need jobs and they areused to different kinds of work.

The second set of impacts is related torural-urban migration patterns. It is notdifficult to make a prediction that the mi-gration pattern may be changed due tothe introduction of the small-city-free pol-icy. As fig. 2 shows, compared with theperiod 1978 to 2001, the post-2001period will witness these four mainstreams of population mobility: Group Awill form the largest group among all ru-ral-urban migrants. It includes those ru-ral migrants who directly migrate tosmall cities and towns and become ur-ban hukou holders. They will changeChina’s migration direction. The migra-tion pattern during the period of 1978to 2001 was dominated by floaters.Both large and small cities were floodedby the floating population. Only a smallproportion of rural migrants became ur-ban hukou holders. However, the small-

city-free policy will attract more andmore rural migrants. So far, the re-sponse to the policy has been very ac-tive. For example, during the trial pe-riod for the small-city-free policy (1996to 2000), Zhejiang Province’s 105towns and small cities were selected aspilot towns and small cities to practicethe small-city-free policy. During that pe-riod they had absorbed over 400,000rural residents, with the population of80 percent of the chosen small citiesand towns being doubled (http://www.china.org.cn. December 24, 2001).

Therefore, the on-going hukou reformwill lead to a new wave of migration inChina, particularly considering the fol-lowing developments: (i) economic ben-efits: rural out-migrants sent home 30percent of their income which equals 80percent of rural expenditure on fixed as-sets, and 3.7 times the state expenditureon agricultural production and adminis-tration (Cai 1998); (ii) large number ofrural surplus labourers: out of the totalnumber of 490 million rural labourers,150 million are engaged in farming (butnot all full time), 135 million are em-ployed by township and village enter-prises (some in small cities and towns),about 50 million are working in cities,and there is a surplus of 150 to 200 mil-lion in rural areas (Zhang 1998; Wuand Li 1996); (iii) more surplus labour isinevitable: China’s accession to WTO in2001 will release more rural labourfrom agricultural activities, according tothe predictions by both the Chinese gov-ernment and scholars (Liu 2001).

DISP 151 27 2002

New Legal Urban Hukou

Holders

1978–2000

New Legal Urban Hukou

Holders

Post-2000

Floater Floater

D C

A B

small city

large city

small city

large city

Fig. 2: Changing migration patterns in China:1978 to 2000 and post-2000 periods.

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The immediate impact is that China’surban system will be reshaped largelydue to a dramatic increase in the officialurban population in small cities. Thisphenomenon can be called small-city-targeted urbanisation. This urbanisationpattern will further flatten China’s urbansystem (table 2). As stated in table 1,China’s official urbanisation strategysince 1980 has been characterised bylimiting the growth of large cities andencouraging the development of smallcities. The urban system has been in-creasingly dominated by small citiesand towns. For example, the number ofsmall cities accounted for 48.4 percentof total cities in 1980 but for 54.9 per-cent in 1999. The number of designatedtowns increased from 2,874 in 1980 to20,312 in 1999. The implementation ofthe small-city-free policy will eventuallylead to further expansion of small citiesand towns in terms of both the numberof cities and the urban population.

Group B includes those rural peoplewho will be granted urban hukou inChina’s large cities. However, they arewealthy or highly skilled labour. Theyhave to buy commercial property or op-erate a business in large cities. Cur-rently many large Chinese cities likeShanghai, Shenzhen and Zhuhai haveregulations according to which any-body who has bought local commercialproperty can apply for status as a per-manent resident; Beijing allows free in-flow of technical workers with seniorprofessional titles (People’s Daily, Au-gust 28, 2001). But they accounted fora small proportion of rural out-migrantsuntil the restriction to migrate to largecities was removed.

Groups C and D represent those mem-bers of the floating population in largeand small cities respectively. It is difficultto predict how many rural migrants willfloat to large cites even when legally mi-grating to small cities and towns is anoption for them. But it is certain that asmaller proportion of rural migrants willbecome floaters in small cities andtowns than that in the period from 1978to 2001. Those who still prefer to befloaters to small cities and town arefarmers who are able to commute tonearby small cities or towns daily by bi-cycle, motorbike or tractor to work orsell agricultural products or may work insmall cities or towns during non-peak-farming seasons (but they spend most oftheir time in their villages).

5 DiscussionChina’s small-city-free policy offers ruralmigrants an option to become legal ur-ban residents. This is a significant re-form related to rural-urban migration.The Chinese government has realisedthe importance of urbanisation in itseconomic and social development.China’s last two decades of reformdemonstrate that while economic free-dom has increased individual mobility,mobility has also facilitated economicprogress. But the Chinese government istaking a very cautious step towards free-dom of mobility.

This partial decontrolling of popula-tion mobility raises several further re-search questions. The first set of ques-tions is related to the geographical pat-tern of rural-urban migration. If rural mi-grants are moving to small cities and

towns, are they moving to nearby citiesand towns or to those in economicallyprosperous regions such as the deltas ofLower Yangtze and Pearl River or urbancorridors of Beijing-Tianjin and Shen-yang-Dalian, as these have traditionallybeen the centres of economic growth(Wang 1998; Lin 1997)? What are theimplications for China’s spatial patternof urban growth and urban system? Isthis what the government wants?

The second set of questions relates tothe nature of migration to small citiesand towns. Is there a brain drain fromrural to urban areas? Will these wealth-ier and skilled rural labourers move tosmall cities and towns permanently?What are the implications for rural de-velopment? All these need more re-search attention.

In the future, China needs to take fur-ther steps towards fair and equal rightsfor its rural population. The small-city-free policy is not ideal. It is not a long-term solution but a first step to addressthe crux of the migration problem: howto create employment opportunities inan economy in transition to a more mar-ket-oriented system. It is understandablethat the government must address theseproblems without causing large socialand political dislocations. The questionis when the large cities will open theirdoors to peasants. This has been a po-litically sensitive issue. Over the last twodecades, the Chinese government hasreformed its hukou system gradually.One of the key obstacles for free popu-lation mobility is dematerialisation ofthe hukou system. The small-city-free pol-icy was possibly due to several reformsrelated to dematerialisation of the hukousystem – hukou has gradually been sep-arated from material subsidy and privi-lege with regard to job access, school-ing, and social welfare. When the Chi-nese hukou has nothing to do with em-ployment, schooling, welfare, but onlypersonal identification, then the largecities will accept rural migrants as legalurban residents.

Note

I would like to thank Dr. Michael Webber,Jon Barnett and Dr. Martina Koll-Schretzen-

DISP 151 28 2002

1999 1980

Super large cities (>2 million) 13 1.9% 7 3.1%

Large cities (0.5–2 million) 73 10.9% 38 17.1%1–2 million 24 3.6% 8 3.6%0.5–1 million 49 7.3% 30 13.5%

Medium-sized cities (0.2–0.5 million) 216 32.2% 70 31.5%

Small cities (<0.2 million) 368 54.9% 108 48.4%0.1–0.2 248 37.0% 62 27.8%<0.1 120 17.9% 46 20.6%

Total 670 100.0% 223 100.0%

Designated towns 20,312 – 2,874 –

Sources: Urban Statistical Yearbook 2000; data from 1980 from China’s National Condi-tion Analysis and Research Group, Chinese Academy of Sciences 1996

Table 2: Number of cities and designated towns in China, 1989 and 1999.

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mayr and the anonymous reviewers for theirconstructive suggestions and comments.

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