News & Analysis
Comment
docdivakar
Junko, what you say is the reality in 99% of the cases, most don't go back. This ...
timemerchant
A US worker at Boeing cannot afford a plane either. There are many similar ...
Yoshida in China: Workers can't afford products they make
Junko Yoshida
8/20/2012 10:34 AM EDT
How China’s massive population of rural migrant workers have helped fuel China’s economy is a well known story. Without their labor, China’s big cities wouldn’t have grown so quickly and Foxconn wouldn’t have been able to manufacture Apple’s iPhones and iPads at low cost.
A report from China's National Population and Family Planning Commission sheds new light on the status of 230 million migrant workers in China and their spending behavior. As wholesale urbanization continues, how these migrant workers will become true middle-class consumers is a key to consumption-driven growth as opposed to China’s traditional investment-driven planned economic growth.
Citing the government study, Reuters reported, “China's domestic migrant labor force could power consumer spending growth in the world's second biggest economy if workers had better access to basic welfare services in the cities where they live and work.”
A complication in this prescription comes from China’s stringent household registration system. Many migrant workers living in big cities lack access to education, healthcare and other services because their entitlement status is tied to their provinces of origin, not to the cities to which they have migrated.
Without access to these social services, migrants have to burn their meager savings, as they pay market rates for otherwise free (or subsidized) public services, according to the report. "Giving the migrant population living in cities permanent status and giving them equal access to fundamental public services would greatly stimulate China's consumption growth," according to the Chinese government’s latest report.
More specifically, the report found that only 23.1 percent of Chinese migrants had pension insurance in the city in which they lived in 2011. Just 13.6 percent were covered by unemployment insurance and 64.3 percent had medical insurance.
How much do they spend a year?Migrant workers, relatively low paid, spent an average of 56 percent of their salary increases in 2011, according to data in the report.Migrant workers living in any given city for one year spent 1,761 yuan ($277) on average, increasing to 2,609 yuan ($410) if they stayed for five years or longer, the report said.
City dwellers covered for basic welfare services typically spend 1.4 times as much as those who are not, the report found.
The report forecasts China will have 250 million migrant workers by 2015, 190 million without access to welfare services.
Toshiba's New Magnet Free Of Chinese Rare Earths
Japan is on a mission to become less dependent on China’s rare earths.
Toshiba Corp. last week announced it has developed a powerful motor magnet that does not contain dysprosium, a rare-earth metal that comes mostly from China.
The magnet instead uses samarium, a rare-earth metal abundant in Australia and the United States, according to the Japanese company. Toshiba aims to begin sales of the magnet for use in electric vehicles and industrial equipment by March, 2013.
Related stories:
-Yoshida in China: Worries about declining U.S. investors
-Rare earth supply chain: Industry’s common cause
|
|
|
|
|
Navigate to related information
jane xu
8/20/2012 11:46 AM EDT
What about housing? Properties are prohibitively expensive in the city for migrant workers to dream of owning. Without it, what can tie them down to the job and the city? Without stable work force, how do employers improve productivity in the long run except for relying on upgrading tools? Where would migrant workers end up after they are done with their services in the booming cities? Is there still a piece of land left back home for them to make a living at the end of the day?
Sign in to Reply
Frank Eory
8/20/2012 5:24 PM EDT
Are there any statistics on how long migrant workers remain in the cities? One might guess that some percentage work for a period of time to save money, then go back home, while others permanently relocate to the city...assuming they are allowed to do so.
Sign in to Reply
junko.yoshida
8/20/2012 10:07 PM EDT
That's a good question, Frank. I will find out.
Sign in to Reply
tthappy
8/21/2012 2:09 AM EDT
Every year, we are going home when spring festival is coming.
May be two or three years to go back to see parents.
Sign in to Reply
junko.yoshida
8/21/2012 5:29 PM EDT
Frank, I actually don't think those migrant workers are going back to their home regions. They have abandoned their home; They send the money they earn in big cities back home; their families left back home depend on their wages.
Sign in to Reply
xingfenzhen
8/21/2012 10:59 PM EDT
Depends on the city, in big cities like Beijing and Shanghai the professional will stay, others simply can't afford to stay and will go to home region or settle in regional or county level cities later on. This at least is the stereotypical experience for 北漂 (People who seek their fortunes in Beijing), 硬盘人(People who seek their fortunes in Shanghai, the strange name is a pun on western digital), 北妹/北仔 that worked in Shenzhen, Guangzhou and Dongguan.
However, for regional cities like Wuhan, Chengdu, Xuzhou etc. People tend to be from the province the city resides in and migrants will stay in the city due to more relaxed and easy Hukou transfer process and similar culture.
Also don't overlook the effect of people returning to the home region and starts business themselves, manufacturing hubs like Yiwu are initially build by this sort of village and township enterprises.
Sign in to Reply
docdivakar
8/30/2012 2:07 PM EDT
Junko, what you say is the reality in 99% of the cases, most don't go back. This applies identically in India as well, where in addition to city jobs, farmers who have lost lands under local government's SEZ policies and have no other option but to move to cities.
I am tempted to quote one of my favorite authors here, Oliver Wendell Holmes... "A mind that is stretched to a new idea never returns to its original dimensions!"
MP Divakar
Sign in to Reply
pixies
8/21/2012 9:23 PM EDT
Well, without "Hu Kou", they are not allowed to live in the city. So they are bound to go home sooner or later. They lucky ones can marry to a city dweller, or go to college. There is no other way to permanently stay in a city.
Sign in to Reply
junko.yoshida
8/22/2012 7:53 AM EDT
Thanks, pixies. So, then what's the maximum length ( how many years) migrant workers are allowed to stay in cities without hu kou?
Sign in to Reply
tthappy
8/21/2012 1:59 AM EDT
House pricing is very high in cities like shenzhen and guangzhou.
I can't afford it by myself with my limited salary.
Some relationships with girls are broken.
Dam price of house is going up everyday in every city in china.
Sign in to Reply
junko.yoshida
8/21/2012 7:07 AM EDT
Do you eventually plan to go back yo the region you originally come from? Or do you plan to stay in the city for a long time?
Sign in to Reply
tthappy
8/22/2012 10:41 PM EDT
When the spring festival is coming every year, I will go back to my hometown to visti my parents who I haven't seen for about one year.
My plan is save enough money to buy a house in the capital of Jiangxi province.
Many my workmates also plan to buy a house in their hometown capital or have bought a house there.
The price of shenzhen or guangzhou is so high taht I can't afford it with my incoming.
Sign in to Reply
dylan.mcgrath
8/20/2012 12:01 PM EDT
China is obviously in favor of migrant workers going to a new city to work for companies like Foxconn. But what is the rationale for these restrictions? China seems to make it deliberately more difficult to move to the city for work. Why?
Sign in to Reply
junko.yoshida
8/20/2012 3:24 PM EDT
This is a classic case of how China today is caught between fanatical economic drive and Socialist regime which does not wish to see a social uprising by allowing their own people to move too freely within their own country. I see this government's report a huge progress as they seem to be finally acknowledging the status of migrnant workweeks who have been traditionally treated as the second class citizens.
Sign in to Reply
microe
8/20/2012 5:38 PM EDT
This is a big issue to talk about.
If there are not enough resources, even removing all the restrictions will not help migrant workers much. Look at the movie Slumdog Millionaire. Indians can move freely throughout the country, but it does not mean a better life for people living at the bottom.
The key is actually how many resources China has to provide to all the citizens and how to be fair.
Apparently, China cannot afford to provide to all the citizens the living standard that Beijing/Shanghai local residents are having right now. The solution is to first have more resources and second distribute them fairly among all citizens, including migrant works. It seems China is on this path, (for example the rising labor cost) although not fast as many of us expect. But any change is hard in a country big as China.
Sign in to Reply
Brian Fuller2
8/20/2012 2:32 PM EDT
This is a bit of a different challenge than when Henry Ford made cars that his workers could buy, and I'm not sure why. America then and China now were/are booming economies, creating wealth in one form or another.
A Ford Model T in 1909 cost (in today's dollars) $21,000. Financing made it affordable. If iPads were available in 1909, they'd cost around $16 (compared to the $850 Model T). So, while I'm no economist, something's changed in 100 years that's for darn sure.
Sign in to Reply
Bert22306
8/20/2012 3:51 PM EDT
Brian, I think you're comparing apples and oranges. Even when the Model T was being built, the US economy was not centrally planned, and people could move freely between cities and states, setting up residency wherever they needed to.
In this case, as Junko pointed out, the Chinese government is involved in these relocation decisions, and it has to play catch-up.
Sign in to Reply
microe
8/20/2012 5:45 PM EDT
If the workers were so happy with their life, Communism would not have been so popular in the early 20th century.
Sign in to Reply
xingfenzhen
8/21/2012 1:48 PM EDT
Some reference at Marco-Economic Level:
http://www.worldbank.org/content/dam/Worldbank/document/SR4--293-390.pdf
Some reference at At personal level:
http://www.penguin.com.au/products/9781742535104/northern-girls-life-goes
Sign in to Reply
xingfenzhen
8/21/2012 3:01 PM EDT
Here is an interview with author of the novel
http://www.danwei.com/northern-girls-interview-with-author-sheng-keyi/
Sign in to Reply
xingfenzhen
8/21/2012 3:05 PM EDT
And a novel from the male worker perspective, though no translation yet.
http://translate.googleusercontent.com/translate_c?depth=1&hl=en&ie=UTF8&prev=_t&rurl=translate.google.com&sl=zh-CN&tl=en&u=http://book.douban.com/subject/4727681/&usg=ALkJrhi-UooB-6pqUjapuLAHhPKIC6fsCg
Sign in to Reply
timemerchant
8/23/2012 10:43 PM EDT
A US worker at Boeing cannot afford a plane either. There are many similar examples. If the Chinese products were expensive, would people buy them? The most important issue is to provide employment, as the rising unemployment in US, Europe and elsewhere is going to cause social upheaval. Welfare is self-destruct as able-bodied folk scramble for the remote in front of big LCD TVs provided by state largesse. There are generations on welfare with no intention of working all over the first-world.
Sign in to Reply