China’s Urbanization and the World Economy
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China’s Urbanization and the World Economy

Fan Zhang

This innovative book places China’s urbanization within a broader global context, including a detailed estimate of China’s total domestic market and its impact on the world economy.
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Chapter 4: Labor migration

Fan Zhang


Labor migration in China in the late twentieth century and early twenty-first century has been unprecedented in the entire course of human history. Rural-urban migration has been the main source of urban population growth and the main factor input of industrialization. The total number of migrant workers in the urban areas is estimated to be about 250 million, of which 150 million are permanently living in urban areas (National Bureau of Statistics 2011c). The rural-urban income gap has been the driving force of the dramatic migration. The income of rural households was much lower than that of the urban residents during the planned period from the early 1950s to the late 1970s, mainly due to government policy. To promote the development of industries, the government manipulated the price system, with a very low price for agricultural products. It was a policy designed to lower the cost of industrial inputs. Because the prices were set by the government and the government monopolized the purchases of major agricultural products, the income of rural residents was extremely low. Moreover, rural households were not covered by the social security system and the public goods provided in urban areas. The major force that kept peasants in the poor rural areas was the Hukou system.

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