Urbanization and Migration in
China: Situations and Implications
Du Yang
Chinese Academy of Social Sciences
Main Contents
• The situations of urbanization in China
• New trend of rural to urban migration and
the implications
• Impacts of migration on aging society and
social protection system
Definitions of Urbanization in China
• There is no consistent definitions of
urbanization in China, which brought about
difficulties on urbanization studies in China
• The confusions come from which areas
should be defined as urban areas and who
should be defined as urban people
Urban areas
• In general, urban
areas in China
refer to city and
City
town
(chengshi)
• Huge variation of
size among towns
• The system of
Urban
counties under
Areas
city is also a
(chengzhen)
source of
confusion
Narrow
Sense
Broad Sense
Only cities
included
Cities and
built-up
towns
Cities and
built-up
towns
Cities, builtup towns,
and
administrati
ve towns
Urban definition in 1990s
Urban definition since 2000
• The urban population in China consists of the
city population and the town population
• Residential population that is used for defining
urban population is composed of people with
local hukou and migrants who stay in the locality
more than 6 months
• Districts with an average population density of at
least 1,500 persons per sq. km are automatically
counted as urban. All the people in such a
district are counted as city population
• A contiguous build-up areas criterion is also
used to define localities other than the above as
urban.
Who is defined as urban people
• Defining urban people according to hukou
localities has been used for a long time
• Now the definition is based on residence
• Migrants who live in cities more than 6
months are statistically counted as urban
people, but the welfare system is still
based on hukou locality
Speed of urbanization
• According to NBS, the percentage of
urban population in 1978 was 17.9% and
increased to 44.9% in 2007, which means
a compound annual growth rate of 3.2
percent
• Compared to other economies, this is a
fascinating speed of urbanization
City growth
700
600
prefecture
county
total
500
Number of Cities
• from 1949 to 1978,
the total number of
cities had been
strictly controlled
fewer than two
hundred
• New county-level
cities are main
source of city
number growth
400
300
200
100
0
1949
1954
1959
1964
1969
1974
1979
Year
1984
1989
1994
1999
2004
City size distribution in China
Impetus of China’s urbanization
• Two forces driving the urban growth in
China lead to a high speed of urbanization
• One of them is the fast economic growth
and sector shift
• The other is correction of distortion of dual
society formed in the era of planning
economy
• According to Chan (2003), rural to urban
migration accounted for 60 percent of
urbanization
The Largest Internal Migration in History
• Compared to other economies, China has a
huge size of migration
• Two forces drive the rural to urban migration
flow and make it unique: transitional effects and
development effects
• The former refers to the correction of distortional
economic system that formed in planning
economy, and the other is fast economic growth
and economic sector shift
Migrant Workers and Urban
Employment
Year
Migrant Workers
(thousand)
Urban Employment
(thousand)
Proportion of
Migrants(%)
2000
78490
212740
36.9
2001
83990
239400
35.1
2002
104700
247800
42.3
2003
113900
256390
44.4
2004
118230
264760
44.7
2005
125780
273310
46
2006
132120
283100
46.7
2007
136390
292060
46.8
New Situations of Migration
• Demand side: fast economic growth creates
job opportunities
• Supply side: Demographic transition driven
by both population policy and economic
development start affecting labor market
• The changes in supply side also indicate a
trend in long run because of the difficulties
to change fertility rate
Population pyramids in various census year
Distribution of Rural Labor Forces
64.17, 14%
10.59 , 2%
54.24, 12%
less than 6 months migration
323.69, 72%
local farm work
local off-farm work
unemployment and out of labor market
Predicted Probabilities by Age with
Different Level of Human Capital
Rural Labor Forces and Migration Probability
Age and Education Group
Number of
labor
(million)
Predicted
Probability
Predicted
Migrants
(million)
17.16
-
4.97
Primary School or below
4.44
0.189
0.84
Jr. High School
12.03
0.315
3.78
Sr. High School or above
0.69
0.505
0.35
50.08
-
11.18
Primary School or below
15.39
0.142
2.18
Jr. High School
32.24
0.248
7.99
Sr. High School or above
2.46
0.410
1.01
88.96
-
13.44
Primary School or below
39.45
0.109
4.31
Jr. High School
46.69
0.178
8.29
Sr. High School or above
2.82
0.298
0.84
16-20
21-30
31-40
Rural Labor Forces and Migration Probability
(cont.)
Age and Education Group
Number of
labor
(million)
Predicted
Probability
Predicted
Migrants
(million)
76.48
-
8.29
Primary School or below
39.86
0.078
3.10
Jr. High School
30.52
0.123
3.76
Sr. High School or above
6.10
0.235
1.43
93.7
-
5.69
Primary School or below
76.3
0.053
4.04
Jr. High School
15.51
0.084
1.30
Sr. High School or above
1.88
0.182
0.34
326.39
-
43.57
41-50
50 and above
All
Weighted Wages on Urban Labor Market
Real Wage Growth Rates by Group
Vulnerability of Migrants
• Most of migrants work informally in urban
areas
• They are less protected by current social
protection system
• Less likely access to public service in
urban areas
• With urbanization, migrants might bring
poverty into cities
Size and Components of Informal Employment
Local Residents
Migrants
18.5
72.5
% of self-employment
65
73
% of unregistered work
35
27
32.6
84.3
% of self-employment
37
69
% of unregistered work
63
31
CULS2001
Size of informal
employment
CULS2005
Size of informal
employment
Hourly Earnings: Migrants vs. Local Residents
Facing the new Situations of
Migration: Impacts
• End of unlimited labor supply
• Rising labor costs as we have already
seen
• Increasing demand for labor protection
• For labor market regulation, more efforts
to seeking the balance between flexibility
and security---flexicurity
Implications of Migration and
Urbanization to Aging
• Despite of some pilots on pension system for
migrants, the vulnerability of migrants in terms of
social protection is still significant
• Since more and more young people move out of
rural areas, the ageing issues in rural areas is
being more serious with urbanization and
migration
• Inclusion of migrants into urban pension system
might be a good choice to sustain current PAYG
pension system, but the reform is facing with
many challenges