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July 2014, Volume 21, Number 3

China: Hukou

There are almost four rural-urban internal migrants around the world for each international migrant. One of the largest such migrations is in China, where some 270 million rural residents live in cities without urban hukous or residence permits, making 20 percent of Chinese citizens somewhat akin to international migrants.

Chinese citizens receive public services such as education and health care in the place where they are registered, so rural-urban migrants and their children have limited access to local public services. China's 1954 constitution guaranteed "freedom of residence and freedom to change their residence," but the hukou system was introduced in 1958 to prevent rural-urban migration that could lead to urban slums.

The hukou system created second-class urban residents. Migrants earned an average $15 a day in 2014, but their insecure status where they live contributes to high savings and continued links to rural areas to which they could return and farm if they lose urban jobs. Some rural-urban migrants do not want urban hukous because obtaining them would require them to give up their farmland. Some migrants hope to save from higher urban earnings and retire to rural areas where the cost of living is lower.

The Chinese government in November 2013 called for reform of the hukou system to make it easier for rural-urban migrants to obtain urban hukous, asserting that 100 million rural-urban migrants should have urban hukous by 2020. Urban leaders generally oppose making it easier for migrants to obtain hukous because of the added cost of providing them with public services. Currently, local officials can require applicants for urban hukous to have a stable job and a legal place of residence, requirements that many migrants cannot satisfy.

The experience of the city of Zhongshan in the southern province of Guangdong suggests that the result may be that fewer rather than more rural-urban migrants obtain urban hukous. Since 2007, rural-urban migrants have been able to apply for an urban hukou by gaining sufficient points that are awarded for educational qualifications, ownership of property, payment of social-security contributions and volunteer activity such as giving blood.

Between 2007 and 2014, some 30,000 of 1.6 million migrants in Zhongshan received urban hukous, less than two percent. Some migrants in Zhongshan used the points they achieved to obtain some of the benefits of an urban hukou, such as a place for their children in local schools, rather than obtaining a full urban hukou.

Over 30,000 workers went on strike in April 2014 at shoe manufacturer Yue Yuen in Guangdong and Jiangxi provinces, the largest strike in recent memory affecting foreign-owned factories, according to China Labor Watch. Yue Yuen makes shoes for Adidas and Nike. According to the China Labor Bulletin, worker unrest was fueled by suspicions that Yue Yuen was not paying all required payroll taxes, so that workers who were laid off could be denied work-related benefits.

Minimum monthly wages in China vary by province, and range from 1,010 yuan ($163) a month in Anhui province to 1,620 yuan ($260) in Shanghai in 2014. Many Chinese shoe manufacturers have closed as shoe production shifts to inland provinces and Vietnam. Many laid-off workers discover that their employers did not make required contributions to pension and other funds.

Most employees in export-oriented Chinese factories are rural-urban migrants who are housed in dorms near the factories. Wages have been rising rapidly, and workers have been more willing to strike as they perceive less of a threat from new rural-urban migrants.

Taiwan. Taiwan is among the world's largest exporters of fish and seafood. Taiwanese trawlers operate in oceans and seas around the world and generate fish and seafood exports of $2 billion a year. Most of the 24,000 workers on the 1,300 deep-sea Taiwanese vessels are migrants from Indonesia, the Philippines and Vietnam. Taiwan does not set a minimum wage or regulate hours on fishing vessels.

Taiwan's Fisheries Agency says that labor laws apply to Taiwanese fishing boats, but notes that some are registered in other countries, staffed by migrants, and never enter Taiwanese ports. NGOs want Taiwanese boats to hire migrant workers directly rather than through recruiters in order to reduce what they consider to be excessive worker-paid fees.