Wednesday, November 02, 2005

Treating the symptoms

or, "Follow the Brazillian model" they've got things right.

For decades now, China has had a system in place to regulate where people were allowed to live. It was somewhat more free than South Africa's pass laws, but not exactly the type of freedom of movement people in the U.S. have become accustomed to over the past 500 years. The way it works is that each household recieves a document called the hukou (Hoo-koh) which grants them rights to live and work in a certain area. Within that area, you have access to certain things: housing, work, health care, education for your children. (Much of this system has eroded or been legislated away already, but education remains a key component.)

The BBC reports that the People's Daily is reporting 11 Chinese provinces are considering doing away with the household registration system (hukou). In a country where an estimated 100 million agricultural workers are actually resident in cities as day-laborers and migrants, this is a significant step. It means that poor migrant workers will be able to take their families with them when the leave rural China for urban China and jobs that pay money.

Good for China, embracing democracy, yadda yadda.

The government is missing the point. Hukou reform will make life better for millions of individual families, but I expect it will do nothing to help improve China's economy, or more fundamentally, the social concerns that having as much as 10% of its population in migrant status are causing in China.

China has a rural population (usually called "countryside," "agricultural," or "peasant" in Chinese media) of between 800 and 900 million people. From informal straw polls taken amongst taxi drivers, business owners, college students, hair dressers, and video store clerks, I'm guessing about 90% of rural dwellers in China are itching to get to a city. Any city. Just get them out of the countryside.

This might sound strange in a country where even people who work in downtown settings are trying to live as far out into the country as possible, but put it in a Chinese context. Living in the countryside means you farm. Period. Farms aren't John Deere operations. They are hip-waiter and back-power operations. Who wants to do that kind of work? No one. So, they want to move to cities. And the younger they are, the more likely they are to not only want to move, but actually move.

I'm nervous that over the next 10 or 15 years, China will start to reap the long-term harvest of its development plan, and it will be the absolut worst consequences a Chinese could think of: Turmoil.

Why will turmoil result from economic growth, expanded educational opportunities, and China entering the world market?

Because there are virtually no opportunities in rural China. The infrastructure isn't there; the rule of law is less robust there than in cities; there is little government focus on the needs of rural China; like in the U.S. rural schools recieve less funding, and have a harder time attracting teachers than those in or near major urban centers.

So what are rural Chinese doing? Moving to cities.

What is the consequence? Cities are becoming over-crowded, schools can't expand fast enough to take in the surplus. We talk about overcrowding in U.S. schools. In China, classrooms that are designed for 50 children (not a typo) are holding 70 and 80 children (also not a typo). Rising urban crime rates are being blamed on migrants from rural China who are easily identifiable because of what would, in the U.S., constitute semi-homeless appearance.

Cutting to the chase

If China really wants to control the way in which it's population moves, and how fast its cities expand, it has to change to equation. For a country where economists have had such success in planning growth, they seem to have missed a couple entry-level grad school courses.

To keep people in rural China, there has to be economic incentive for them. Here are some ideas: start expanding elementary and secondary education funding for rural areas. Expand the reach of quality roads and frequent train-service. Encourage foreign investment in places besides Shanghai's Pudong, and Guangdong province. Create circumstances that will allow companies to put facilities in Jiaohe, Yanji, or Taishan.

Making a comparison with the U.S.; even if most people in the world only know New York, LA, and Harvard, it doesn't mean there aren't great companies and schools in almost every state in the country. If China truly wants to develop, it's going to have to figure that out, or it will start to look like Brazil.

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