Agriculture Reference
In-Depth Information
Urban-rural inequality in China
Income nequalty n Chna exsts between urban and rural resdents as
well as within urban and rural areas. It also has a strong regional pattern,
partcularly between nland and coastal provnces. Of overall ncome
inequality, Lozada (2002) estimates that 75-80 per cent is due to the
urban-rural divide. Official estimates of the trends of rural and urban
household incomes are displayed in Figure 10.1. These indicate a general
upward trend n ncome n both areas whle urban ncome experenced
comparatvely sharp ncreases n the 1990s. The correspondng proportonal
difference between urban and rural household incomes is plotted in Figure
10.2. The comparatively rapid growth of rural incomes in the early 1980s,
and the associated decline in urban-rural inequality, coincided with the
major reforms of that period that first impacted on the rural sector. Since
then, however, urban incomes have growth more rapidly, most prominently
in the early to mid 1990s leading up to the Asian crisis in 1997-98, and in
the post crss perod.
Internal migration,
If there were no costs or barriers to internal migration, workers would
be expected to respond to the wdenng ncome gap between rural and
urban areas by migrating until wages were equalised. Indeed, rural labour
markets that facltate ths relocaton of workers have been essental to
economic growth in the more advanced countries (Burgess and Mawson
2003). Although the estimated number of Chinese internal migrants has
grown (100 million since the 1980s) these relocations have been insufficient
to stem the growing inequality (Dolven 2003). Some of this apparent growth
n nequalty s due to a rse n sklled employment n urban areas. A more
controversal porton s due to reduced urban labour demand assocated
with real wage growth and to official migration barriers. Together, they
appear to have left an expandng labour supply 'bottled up' n the rural
sector. The key official barrier has been the HRS.
Introduced in major cities in 1951 and extended to rural areas in 1955,
the HRS was intended to deal with the escalating urban influxes of rural
migrants at the time of the Great Famine of 1959-61 (Chan and Zhang 1999).
