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January 2013, Volume 20, Number 1

China: Migrants, Taiwan

China's 2010 census enumerated 1.3 billion people, including 940 million between the ages of 15 and 59. There were 253 million rural-urban migrants in 2012, and these internal migrants were a third of the urban labor force. Over 100 million workers living on farms have nonfarm jobs, suggesting that China is nearing the end of its rural labor surplus and explaining why the wages of migrants in urban areas have been rising sharply.

Median household income in China in 2012 was 17,510 yuan ($2,800). However, the median income in urban households was 28,000 yuan ($4,480), almost three times more than the median 10,580 yuan ($1,700) of rural households. Surveys suggest that the wages of rural-urban migrants, which rose more than 20 percent between 2010 and 2011 in response to rising minimum wages in many of the cities attracting migrants, barely increased between 2011 and 2012.

Some local governments increased the minimum wage to squeeze out low-wage industries and encourage employers to move up the value chain. They want local industries to pay higher wages to workers with higher productivity.

The hukou or household registration system provides benefits such as education, health care and subsidized housing only in the place where people are registered to live. This means that most of the 250 million rural-urban migrants cannot receive social services in the cities where they live and work. Many leave their children in rural areas, where they are looked after by grandparents with the support of remittances from parents in cities. Migrants must also save in case they lose their jobs, which holds down consumption.

The average monthly wage of internal rural-urban migrants rose to 2,200 yuan a month at the end of 2012, up from 1,500 yuan in 2010. By 2012, the average rural-urban migrant had been in cities nine years, up from eight years in 2011, suggesting that few migrants are returning to their rural areas of origin with their savings. Many economists urge the government to modify the hukou system so that rural-urban migrants can receive benefits and settle in cities.

Several reports in Fall 2012 urged changes to China's one-child policy and the hukou household registration system. The one-child policy introduced in 1980 has produced a generation smaller than the parental generation that these youth are expected to support. Reformers urge that the one-child policy be phased out, perhaps by permitting couples to have two children after 2015 and abolishing rules on births by 2020.

The current fertility rate in China is 1.7, meaning that the average woman has 1.7 children in her lifetime. Some government experts say the ideal fertility rate would be 1.8, which is still lower than the replacement rate of 2.1.

China's Ministry of Human Resources and Social Security publishes a quarterly report on job opportunities and job seekers at local employment bureaus in 100 cities. During the third quarter of 2012, the ratio of vacant jobs to job seekers was 1.05, suggesting a tight labor market in which urban employers scramble to find workers.

Many young professionals continue to leave China; 508,000 left for the 34 OECD countries in 2010. Some cite a development-at-all-costs strategy that has ruined the environment, while others point to uncertainties arising from a political system that could turn unstable. Many see a foreign passport as insurance.

The Chinese Ministry of Commerce reported that 800,000 Chinese were working abroad at the 2011, up from 60,000 in 1990.

China operates one of the world's largest systems of forced labor known as laojiao, with up to 100,000 inmates at any one time serving up to four years in 350 factory and farming camps after arrests by local police for "subversion." Reformers say that the ability of local police to send suspects to labor camps without trial should be banned because often arbitrary arrests can fuel local corruption; the police earn money from the products made in the camps.

Taiwan. There were 450,000 foreign workers in Taiwan in Fall 2012, when the government raised the maximum share of migrants in workplaces from 35 to 40 percent, which could result in 80,000 more migrants being admitted. Employers have to pay migrants the same minimum wage as local workers, NT$ 18,780 ($650) a month, but the government is considering a plan that would allow employers to pay migrants less.

Taiwan became the 38th country in the US visa waiver program on October 1, 2012. The US visa waiver program allows nationals of participating countries to enter the US for up to 90 days without visas.