Lunacy of Lunar New Year travel must spur hukou reform

Hu Shuli says the distortions of a two-track household registration system cannot be corrected with an unco-ordinated, piecemeal approach

PUBLISHED : Thursday, 21 February, 2013, 12:00am
UPDATED : Thursday, 21 February, 2013, 5:46am

The Lunar New Year travel crunch this year was worse than ever, according to initial estimates that said some 3.4 billion passenger trips were made during this time, an increase of 8.6 per cent from last year.

This is no figure to be proud of. In fact, it's deeply worrying because it underlines the distortions in China's urbanisation.

Millions of migrant workers go home for the new year holiday. The wave starts from the Beijing-Tianjin area, the Yangtze River Delta and the Pearl River Delta, spreading northeast, northwest and southwest to the rest of the country, with the returning wave going in the opposite direction when the holiday has ended.

As the rapid growth in the number of people on the move shows, Chinese urbanisation is increasingly lopsided and may be reaching a breaking point.

Urbanisation is the natural consequence of economic development, as people move off the land and into the city for work. On paper, more than 51 per cent of Chinese live in cities. In reality, of course, for many of them, their home is in a village; the city is a place they live in, but it isn't home. This is half-baked urbanisation. Furthermore, the heavy concentration of industries in the coastal regions fails to deliver the goal of balanced development.

These conditions have created an army of migrant labourers on the mainland, their sheer numbers unmatched anywhere else.

This is a systemic problem, the result of China's city-or-country land management system as well as its household registration system. About 35 per cent of Chinese people have an urban hukou. This means some 220 million city residents hold a rural account and may not enjoy the rights and public services accorded their neighbours in the city. Without these basic guarantees, rural hukou holders can't settle down in the city. Thus, the numbers living in cities grow, but the quality of life doesn't improve.

The latest round of hukou reform that started in 2009 advocates a gradual approach, and leaves city governments to decide for themselves the criteria and pace of granting migrants an urban hukou, in step with each city's development and capacity. Three years on, progress remains slow because of a lack of co-ordination.

Worries about slums and environmental problems are holding back city governments. Lately, some officials have even started driving away the so-called "ant" and "rat" tribes. This tells us that the method of "crossing the river by feeling the stones" is no longer useful. Critics point out that the current approach to reform raises the labour costs for consumer services without improving the quality of life or furthering the development of high-end services.

Urbanisation is a driver of economic growth. Thus, it is important to get it right. People flocking to the city for work is the nature of urbanisation, so keeping a strict household registration system not only hinders development but will also create social conflict.

Both the central and local governments must do more.

Local governments should promote "people-centred" rather than "land-centred" urbanisation. They should map out long-term plans that give migrants a sense of belonging in the city. This means recognising them both as job holders and members of a community who live, work and socialise as one, sharing common values. Change will take time, but the direction of that change must be clear.

The central government, too, must not just pay lip service to people-centred urbanisation, but offer legal and financial support to help villagers become true urbanites. It is Beijing's duty to lead nationwide reform such as changes to the hukou system and land reform.

Some scholars suggest setting up a central agency to grant urban hukou to migrants in batches. The first to be allowed on the urban register could be skilled workers with stable jobs. Then the scheme could be gradually rolled out to other groups of migrants. Funds for the programme could come out of central government coffers. If we set a target of processing, say, 15 million migrants a year, this means an estimated annual outlay of 45 billion yuan (HK$55.5 billion) - well within the central government's means. At this pace, it would take 10 or 15 years to tackle the problem. This step-by-step approach is worth considering.

Besides hukou and land reform, the government must also make changes to the relevant fiscal regulations and social security programmes. These will involve clarifying the line of command between the central and local governments. The government needs a master plan that co-ordinates a number of reforms that will drive improvement.

The costs of reform are high, but the costs of not acting will be even higher. Policymakers must find the courage to act.

To see off this "Age of Migrant Workers", China must seek to raise the quality of its urbanisation. This in turn will aid the much-needed transformation of the country's economic model. Any change will be gradual; no one should have fantasies of Utopia. But gradual must not mean slow.

The heartbreakingly difficult journey of millions of migrants every year is a reminder of the urgency for change. People-centred urbanisation is change we can see and feel. Next year, or in five or 10 years, the number of Lunar New Year travellers will tell us how successful we've been.

This article is provided by Caixin Media, and the Chinese version of it was first published in Century Weekly magazine.