China: On the Horizon
In China’s push to reach the utmost dreams of its people, the hour glass still needs to be tipped in many parts of the country. Below are a just few of the major challenges that lie in store for 21st Century China.
11th January 2008 | Stephen McCutcheon
Over the next 50 years, an estimated 650 million people will migrate from rural to urban areas in China, marking the greatest mass migration of people the world has ever seen. If there were 560 million urban residents in 2005, there will be 1.2 billion by the year 2060 or approximately 80 percent of a predicted 1.4 billion people (second only to India).1 As literally millions of new residents fill China’s towns and cities, gargantuan investment will be needed in infrastructure, education, health, and sanitation to stave off catastrophe.2
Today, urban poor may already number around 70 million and the numbers are growing.3 Every year 13 million migrants flood China’s cities looking for new jobs and new lives, but the jobs rarely exist and life can either be for rags or riches.4 Looking ahead, Beijing is spending 77 percent of its education budget on city education, but will it be enough?5 Over 15 percent of all incoming migrants live beneath the poverty line in urban areas. In a recent survey in the city of Xiamen, 50 percent of households were out of work due a debilitating disease alone.6
At the heart of migrant troubles in China lies its outdated Hukou system, a form of household registration set up in 1958 as a social control mechanism to prevent migration between the village and city. The result is a two tier Chinese society where the urban privileged have access to free education, healthcare, employment assistance and social insurance and rural farmers are guaranteed a small plot of land and subjected to high fees, low wages and a set of contractual life obligations they have no control over.
By 2005, hukou restrictions had somewhat lifted, but people are still defined by it and calls for its demise grow louder by the day. China now has a ‘floating’ population of 160 million with no fixed residence, no chance to settle down and no opportunity to begin a new life in a new place. Whilst it has prevented the social upheaval that rapid urbanisation can bring, a rural hukou reduces migrants to nothing more than second-class citizens and massively hampers China’s progress.7
13 million people are migrating to Chinese cities every year
DFID - China Urban Poverty Study
China’s population is becoming old and there may not be enough workers to support them. By 2025, the Middle Kingdom will have a population of 1.4 billion people and an average age of 40 years, similar to the UK today. By 2040, the population will reach 1.6 billion people,8 of whom 397 million, or 28 percent, will be over 60 years old as fertility rates plummet and the population fails to replace itself.9
Following the effects of China’s renown One-Child policy, the country’s fertility rate is currently at 1.7 children per woman10 and as low as 0.96 in Shanghai.8 Predictions show that post 2020, China’s working population will begin to decline from a peak of 930 million, meaning a critical loss of tax revenue at a time of rising pensions, high medical costs and a shrinking domestic market.8
In the old days it used to the mean that land was the privilege of the farmer but that no longer seems to be the case. In 2006, authorities estimate that out of 17,900 "massive rural incidents" across China, 80 percent were linked to inappropriate loss of land near urban centres.11 Corrupt party officials have been making huge profits by buying farmers land at cheap cost and selling it on to [possibly unsuspecting] developers , yet the country is losing farmland at a phenomenal rate, and the race is now on to save what’s left.12
Since 1978, between 40-50 million farmers have been expropriated from their lands and numbers are rising at a rate of 3 million a year. Most were compensated a bare pittance of what their land was worth and over 46 percent of all farmers have stated a loss of income since.13
On Oct 01, China’s new Property Law gave all Chinese residents an equal right to land-use, as well as the right to challenge any improper action against that privilege. Farmers now have more protection, and perhaps incentive, to confidently invest in their holdings and generate an estimated US$500 billion in land wealth. In countries like China, land is usually the main source of income for poor people. By giving people the ability to enforce their legal rights, the potential is there to close the urban-rural income gap and finally develop a solid domestic economy.11
Land expropriation has led to the decline of farmers’ living standards as farmers have lost all or part of their farmland.
However, it took an unprecedented 5 years to pass the bill through parliament and the bill is intentionally vague in places as a result.14 The Communist Party still technically own all land in China and though compensation must be paid to people on appropriation by the state, there is no clear amount as to how much - land must also be registered with local authorities for the law to count. By the end of 2007, the Government aims to distribute information on the new law to 90 percent of households nationwide, but doubts remain on its implementation.11
The new Property Law is only months old and it may take years to bring the country’s judiciary, party officials and law enforcement agencies up to speed, not to mention 1.3 billion people. For the country’s 700 million farmers, a good proportion are illiterate, legal aid is a myth and the nation’s courts are hardly known for equitable verdicts on the side of the common man. Frankly, whilst urban dwellers may learn quickly about their new rights, millions of farmers may never know and land expropriation is unlikely to stop, or even slow down, overnight.11
The new bill has yet to be battle tested and is riddled with potential loop holes for the unscrupulous to take advantage of. While the potential is there to launch a second wealth generation spree, people’s rights in China are unlikely to take such an upsurge so quickly, making the new law more of a beginning than a national revolution.
- In 2005, there were approximately 550-600 million rural residents in China (see yearbook). In 2060, an estimated 1.2 billion people will live in China’s urban areas marking an increase of 650 million people over the next 50 years.
- The UN already estimates that 400 out of 600 cities in China are water short with 10 percent severely so.
- The official figure for urban poor in China is 14.7 million. However, a report commissioned by the UK’s DFID, places urban poverty in China at around 10 percent. Given the figures above that would make say 55 million. The China National Human Development Report 2005 states that based on an estimate of 150 million migrants, 15 percent or approximately 20 million live below the urban poverty line. Thus we have around 75 million.
- Source: Study of Urban Poverty in China - DFID (2007)
- Source: Education Void expands Wealth gap - China Daily (March 2005)
- In a survey conducted in the Siming district of Xiamen city, 44 percent of the poor had a disability or chronic disease, 23% were unemployed and 7% were divorced.
Source: China National Human Development Report 2005, p81
- Extra info on Hukou can be found at:
- Source: China, a demographic time bomb - OCED Observer (Sept 1999)
- Source: Changing Demographic Trends of China - Institute of Strategic Studies, Islamabad
- Source: UNICEF Info by Country - China (2005)
- Source: Poverty or Prosperity for China’s Farmers - Cato Institute (Nov 2007)
- Source: Illegal land use poses major threat - China Daily (Sept 2007)
- Source: China National Human Development Report 2005, p84 (p123)
- Source: China’s landmark Property Law takes effect - China Daily (Oct 2007)
- New Property Law Updates
- China Digital Times remains one of the best sources of information for keeping up-to-date with news in China. See related articles on this page for the latest.