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June 1994, Volume 1, Number 5

China Loosens Internal Migration Controls

China is planning to change its decades-old rules that restrict internal migration. The government will, as soon as June 1, 1994, relax rules which currently prevent farmers from settling in cites. No rural-urban influx is expected: at most, it is predicted, several million peasants will apply for permanent residence in the cities. The reform of the registration system (registration in an area is necessary to obtain housing and coupons for rationed goods) will also regularize the status of the 20 to 30 million peasants "illegally" living in cities.

There are an estimated 100 million internal migrants in China, a number equivalent to the worldwide population of persons living outside their countries of citizenship. The Chinese registration system was coming under strain because of the uneven economic boom in the country--the economy has been grew in real terms by six percent annually between 1985 and 1992, but much of the job growth was in the urban areas of southeastern China.

Internal Chinese migrants send remittances to their villages of origin: 50 billion yuan, or US$5.7 billion, by one estimate.

Under the revised registration system, internal migrant workers must carry their ID card, work permit and single status or family planning certificate. Many Chinese states have formal procedures through which migrant workers must find jobs, including signing up with the local labor service office. Through this mechanism, Beijing feels it has effectively managed migration throughout the country.

In October 1993, the Chinese Ministry of Labor published an urban and rural employment coordination plan which called for organizing the rural labor exodus through legitimate channels, for regional governments to formulate necessary labor market rules and management systems to handle migrant workers, and to improve services to migrant workers during their trans-regional travel. The Ministry hopes that the implementation of these measures will ensure an orderly flow of labor throughout the country by 1996.

Internal Chinese migrants may look to emigrate. Russia, Hong Kong, Taiwan, Spain, Japan, Indonesia, among others, have expressed concern that deteriorating conditions and internal migration within China could lead to a mass exodus.

China's Labor Ministry reported that it found jobs for only 1.2 million o f the 5.4 million urban workers who were laid off in 1993. There are reportedly 100 million underemployed Chinese peasants.

The 47,000 foreign-funded firms operating in China are to have unions to cover their six million Chinese workers within two years. There have been disputes over foreign "exploitation" of Chinese workers.

"Labor Disputes in China Grow", The Wall Street Journal, April 27, 1994, p. A9. Kathy Chen, "China to Ease Policy Favoring City Over Farm, " The Wall Street Journal, April 26, 1994. BBC Summary of World Broadcasts, April 25, 1994. "China to Unionize Foreign Firms," The Wall Street Journal, May 11, 1994.