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New Policies to Facilitate Transfer of Rural Labor to Cities
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"China could issue a series of policies in the next five years giving nearly 200 million migrant workers more rights (to live and work) in cities," Chen Huai, director of the Policy Research Center under the Ministry of Construction, said at a China-EU regional economy development seminar on May 16.

Chen added that the general plan is to "synthetically improve" the bearing capacity of cities to accommodate this floating population, in accordance with the central government's 11th Five-Year Plan (2006-2010), its social and economic development blueprint.

Fan Gang, director of the Research Center for National Economy under the China Reform Foundation, and Wang Yiming, vice director of the Macro-economics Research Center under the National Development and Reform Commission, expressed their support for these proposed policies.

Wang pointed out that the current system of household registration and social insurance policies in cities hinder the movement of this workforce.

Perhaps signaling a move in the right direction, Wang Guangtao, minister of construction, announced on May 10 that certain discriminatory rules governing the employment of migrant workers in cities, and unreasonable restraints on their movement and urban resident status would be canceled.

According to Fan, transferring surplus labor from rural areas to cities can help to narrow regional economic disparities. This is because much of the income earned by migrant workers is remitted to their families in the countryside.

In 2004, migrant workers sent home almost 300 billion yuan (US$37.50). In 2005, they remitted as much as 330 billion yuan (US$41.25).

"The transfer of labor is the most practical solution because it is unrealistic to build development zones everywhere in our country. It is impossible to develop the inland cities using the coastal city model," Fan said.

"The situation in China now is that cities are expanding faster than the workforce can be localized," Wang Guangtao said.

Currently, migrant workers and other people who are deemed to be part of the floating population account for only 20 to 30 percent of registered urban householders. This is despite the fact that they might outnumber locals by as much as 4:1 in some relatively developed cities. Moreover, there are between 150 and 200 million people who are ready and willing to be transferred to the cities to work.

"These floating populations have not been able to take root in the cities because of current policies," Wang said. "They are a critical part of a city's development, but they are not given their fair share of the benefits of that development. For instance, they are not covered by the same social insurance system that applies to locals."

Further, a stronger yuan might slow down export trade in the Pearl River Delta, a region that employs hundreds of thousands of migrant workers from Sichuan Province. If exports slow, many of these workers could find themselves unemployed and forced to return to the countryside, putting even more pressure on local administrations.

Wang stressed that it is therefore crucial that policies relating to the employment and treatment of migrant workers in cities be revised as soon as possible. 

"The cities are growing stronger and stronger economically. A system of equal employment opportunities in urban and rural areas should be implemented to protect the legitimate rights and interests of migrant workers in the cities," he said.

Some of the measures he has suggested include:

  • Modifying the rules relating to employment and  application for residence status in cities;
  • Allowing migrant workers to choose where to work and live;
  • Developing training programs for migrant workers;
  • Giving children of migrant workers equal access to education;
  • Helping them solve housing problems, providing assistance if they wish to buy or rent property;
  • Improving the management system of the floating population;
  • Offering resident status to migrant workers if they have stable incomes and fixed accommodations.

( by Li Xiaohua, May 22, 2006)

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