Financial News

  • 18 March 2014, 8:34

China Growth Plan To Target Internal Migrants

China is to encourage 90 million more rural residents to move to cities before the end of the decade, in an attempt to boost domestic consumption growth.

It said the plan is to boost urbanisation of its 1.4 billion population, from the current 53.7% to 60%, by 2020.

The nearly six-year long migration wave - more than 43,000 a day - is expected to help expand cities, improve public transport and bolster sustainable growth amid a shift from foreign trade and investment.

Rural dwellers moving to higher-paid jobs in cities are seen as a key driver of consumption, as they need to buy goods to furnish new homes.

China has announced the plans to expand its cities and improve public services to support economic growth.

The International Labour Organisation (ILO) said that by the end of 2009 China had a total of 229.8 million rural migrant workers.

Many work away from home for more than six months at a stretch.

Although coastal cities such as Shanghai have expanded rapidly, migrants are hampered by a household registration system that tethers them to home town locations.

Since 1979, China has seen an estimated 340 million citizens reclassified as urban dwellers.

According to University of Washington Professor Kam Wing Chan, if only half of those reclassified are migrants, this "epic scale" migration wave would be the quickest and largest in human history.

The current system, known as hukou, only allows citizens to officially move within their existing rural or urban boundary.

The non-residents are thereby given limited access to schools, health care and pensions - even if they have lived in cities for years.

Prof Chan said: "However, formal or permanent moves - meaning those involving a hukou change - crossing city, town and township boundaries are strictly regulated and require approval by the public security authorities."

The ILO has pushed for improvements to migrants' rights, protection and employability, and legal assistance as part of the system's overhaul.

An estimated 660 million Chinese people now live in urban locations but a study by Beijing's Tsinghua University found only 27.6% with official urban status.

The Cabinet's announcement of the "National New Type Urbanisation Plan" for 2014-2020 did not reveal any financial or other details of how it would be enacted.

But it comes after earlier calls for improved housing for 100 million people living in dilapidated shantytowns.

"Domestic demand is the fundamental impetus for China's development, and the greatest potential for expanding domestic demand lies in urbanisation," the official Xinhua News Agency said of the report.

The migration plan follows a vision to make the economy more productive through entrepreneurial freedom and market-led changes to banking and other sector.

Xinhau said the urbanisation plan will mean building railways to reach cities with more than 200,000 residents by 2020 and high-speed rail to cities above 500,000 people.

It promised to pursue a "human-centred and environmentally friendly path".

"A scientific and reasonable urban development model should be adopted, with green production and consumption becoming the mainstream in urban economic activities," it said.

"China should strive to push for harmonious and pleasant living conditions."

Authorities now expect 300 million rural residents to become city dwellers by 2030 - the equivalent of almost the entire US population moving.