People going for a walk in the clear sunshine along Beijing's main Changan Avenue quickly find they have unwelcome companions - children dressed in rags clinging to their legs and begging for money. The next suppliant, shaking a metal cup, is a blind man in his 60s guided by a female companion. Foreigners are the preferred target - most Chinese walk swiftly past, averting their eyes. The ugly face of rural poverty mars China's new urban affluence. The battle between the two will become sharper this year. A national meeting in Beijing last week, chaired by Minister of Public Security Tao Siju, on how to control the flood of rural people into the cities, revealed that in the first nine months of last year, police in 15 key cities detained and sent home 190,000 migrants and beggars and picked up 100,000 waifs found wandering the streets. In 1998, these migrants will be increasingly unwelcome in cities where a rising number of unemployed fight for a limited number of jobs. The statistics make uncomfortable reading for mainland leaders. Of the rural labour force of 450 million, 130 million are unemployed and 70 million have left their villages to work, of whom 25 million have jobs in towns and cities outside their home provinces. In each of the next three years, 6.7 more million peasants will enter the workforce. Meanwhile, in the cities, the number of unemployed is growing, as state firms try to meet a government target of transforming into modern enterprises by 2000 and have the green light to lay off unnecessary workers. Last year, 12 million urban workers were laid off, of whom about half found new jobs. The pace of layoffs will quicken this year because the economy will grow no faster than the 8.8 per cent of last year, according to official forecasts. Many economists expect growth to slow, with a drop in exports and foreign investment and no new engines of expansion on the horizon. Also, with the abolition of credit quotas as from January 1, banks can no longer make stability loans to insolvent companies to keep them afloat or pay their wage bills. Workers laid off are fighting to keep their privileges in the job market in the face of competition from their rural cousins and have forced municipal governments to limit their opportunities. For example, the Shanghai government bans migrant labourers from 23 job sectors and Beijing more than 20, although many employers ignore the regulations because they can pay the migrants less and find them harder working and more willing to work overtime. The restrictions are tightest in the service sector, which the government wants to absorb up to 80 per cent of the laid-off workers, leaving migrants to work on building sites and in other low-paid jobs. At the policy level, the debate within the government is no longer whether to control the migrants, but how. Forcing the migrants to return home and giving their jobs to the millions of laid-off workers would, in theory, solve the problem of urban unemployment but such an option, possible in the Maoist era of strict controls on movement, is no longer feasible. First, the government does not have the means to force millions of people to give up their jobs and homes to return to poverty and an uncertain future in the countryside. Second, the migrants have become part of the urban economy, contributing their skills, services and capital which have played a vital role in creating the wealth of the eastern cities, from the bricklayer on the building site to the stallholder selling leather coats and the property investor with his mobile phone, Lexus and overdressed mistress. This endless supply of cheap labour will be China's strongest competitiveness card well into the next century, said Cai Fang, deputy director of the Population Research Centre at the Chinese Academy of Social Sciences. He argues that, if they were given better legal protection and less interference by officials, thousands of individuals would channel billions of yuan sleeping in individual bank accounts into setting up family and private businesses. Mr Cai also proposes that migrants should be treated as more complete citizens of the cities in which they live and be properly covered by the welfare system. Mr Tao has a different view of the migrants who are blamed for a high proportion of crime in the cities. For example, as one newspaper reported last week, migrants accounted for 98.2 per cent of criminals arrested in Shenzhen in 1996, up from 76.3 per cent in 1992. At the meeting in Beijing, Mr Tao called for stricter enforcement of rules that migrants obtain temporary registration permits, for more stringent checks on landlords who give them apartments and for those who give them jobs to ensure they work only in approved occupations. He also urged that better legal education be made available, assurances that their children would attend school, and stricter compliance with family planning laws. He said that those migrants with the three nos - no job, no resident permit and no identity card - should be detained and sent home.