China's Urbanization Drive Will Leave 200 Million Chinese Without Benefits

The "people-centered" plan has some serious flaws.

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Reuters

On March 16, China's government published a long-awaited urbanization plan for bringing some 85 million rural Chinese into cities between now and 2020. It stressed, as it has before, that the process should be "human-centered," saying it would expand health insurance, pensions, and other public welfare services. Other impressive pledges include promises to spend over $163 billion redeveloping slums that often house migrant workers and build railways in every city with over 200,000 people.

But one data point undercuts the government's promise to put people first. While the goal is for 60 percent (up from 53.7 percent today) of the Chinese population to be living in cities by 2020—in line with other countries with similar income levels—many of them will still be there as somewhat second-tier citizens. According to the government, by 2020 only 45 percent of the total Chinese population (up from 35.7 percent currently) will have an urban hukou, the residence permit that provides access to the full range of a city’s public benefits, like health care and school. That will mean 15 percent of the population—over 200 million people at today’s levels—will be city-dwellers without a hukou.
 

Hukou reform is considered the biggest obstacle to urbanization. China has loosened the requirements for gaining permanent residence in small cities in hopes of attracting rural labor, but workers and urbanization researchers say the measure hasn't been that useful. Most migrant workers still opt for larger cities where salaries are higher and job options are more.

And even though premier Li Keqiang has promised to give over 100 million people urban hukou status by 2020, the government's overarching goal is still to prevent workers from rural China from flooding into the wealthiest cities. In the plan, officials said they would strictly manage the population of cities with over 5 million people.

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About the Author

  • Lily Kuo is a reporter at Quartz covering emerging markets.