Immigration News: April, 2005 - Volume 12

China: Migrants, Farms

In 2005, the Chinese Lunar New Year or Spring Festival fell on February 9,there were some two billion trips by car, bus, train, boat or airplane, many involving the 120 million migrants returning from coastal cities to their villages in rural inland areas. In some cases, migrants are not paid regularly by their employers, and Spring Festival is the time when back wages are to be paid so that migrants can take gifts and money back to relatives and friends. In some areas, construction bonds equivalent to two percent of each firm's contracts are being established so that migrants who are not paid can collect at least some of their back wages.

The central government ordered employers to pay back wages for fear that there may be more situations such as that in the Pearl River Delta, where the failure to pay migrants has reportedly led to labor shortages. Surveys of employers in Guangdong and Fujian who report vacant jobs find that most are not planning to raise wages to attract workers, but employers in the Yangtze River Delta region near Shanghai already offer higher wages, as much as $150 a month at the Zhongce Rubber tire plant.

The city of Dongguan announced that the minimum wage there would rise from Rmb450 ($55) to Rmb574 a month in March 2005, and urged employers, for instance, not to fine workers who make mistakes or take bathroom breaks, lowering their take-home pay. Some employers have loosened hiring rules- previously, workers had to be 18 to 25 and high school graduates, and some bankers speculate that rising wages may divert some of the investment now pouring into China to lower-wage countries such as Vietnam.

The annual report on the 14-million resident city of Beijing estimated there were four million migrants without permanent resident permits in the city. They earned an average 800 yuan or $100 a month, about 40 percent as much as registered Beijing residents.

China's one-child policy was launched in 1980, and one unanticipated side effect is the growing gap between the number of boys and girls: 130 boys for every 100 girls born in some places. Ultrasound tests to determine gender are prohibited, but there are widespread reports of women seeking to determine the sex of their fetuses and aborting girls.

Agriculture. China in February 2005 announced reduced taxes and increased subsidies for farmers aimed at improving the incomes of the 800 million Chinese in rural areas. Rapid economic growth has lifted average per capita incomes to more than $1,000 a year within a generation, but the benefits have been concentrated in urban areas. Urban incomes averaged more than 3.2 times rural incomes in 2004, and the gap was widened by benefits, since urban employees often receive housing and other benefits not available to rural residents.

Rural-urban inequality has risen in part because the government invested billions in coastal areas and encouraged private enterprise but maintained tight control over the rural economy. For example, farmers get their land on 30-year contracts that can be altered by local governments, and, since collective farms were dismantled in favor of private farms in the early 1980s, have had to pay an annual tax.

As part of the reforms, the government announced that 24 of China's 31 provinces and metropolitan regions would eliminate the basic agricultural tax by the end of 2005, and other provinces soon afterward. Farmers, who earn an average of $350 a year, must pay the $5 a year farm tax plus local supplements, while urban residents do not pay taxes unless they earn more than $1,200 a year.

Outlook. There are predictions that the world is entering "The Chinese Century," with China on track to have the largest GDP measured by purchasing power. Like Japan, which rose to second place in world GDP rankings in 30 years after WWII, China has a highly educated population, an undervalued currency and access to capital and technology.

China was the world's largest economy for much of the 700 years starting around 1000, as the introduction of early-ripening rice and later of New World crops like maize and sweet potatoes created food surpluses, allowing the buildup of porcelain and silk industries that dominated global trade in these goods. In 1730, China may have produced a third of world manufactured goods, compared to an eighth today.

Hong Kong. Migration from mainland China to Hong Kong fell sharply in 2004, to 38,100 from 53,507 in 2003.

Joseph Kahn, "China to Cut Taxes on Farmers and Raise Their Subsidies," New York Times, February 3, 2005. Kathleen E. McLaughlin, "It's Chinese New Year. Will workers get paid?" Christian Science Monitor, February 1, 2005.