Friday, June 21, 2013

The Dark Underbelly of China's Urbanization

A recent New York Times article on China's urbanization plans has been making the rounds---no fewer than six friends and colleagues have sent it to me. In a sentence: China is forcibly urbanizing its land and people through displacement and forced migration, and by construction on and development of rural areas. I've written on the mechanics of some of this in earlier posts. But this time I'll focus more on the human dimension.

Since the 1980s, when government reforms started emphasizing urban development, rural areas have been in a bind: unable to produce enough agricultural produce to feed the local areas, or to generate large enough profits to earn a living income. (More on this in a later post on food policy).

To look for work and a livelihood, many workers have migrated to cities to work in factories (light industry like textiles and electronics as well as heavy industry like steel mills). Because of the Hukou system, in which people are legally allowed to remain only where they have official residence, many (illegal) migrants live on the fringes of urban society, in a legal and logistical limbo. They are disallowed from receiving public services in cities, but they are also severed from the care of their families in the village. The migrant can be any member of the family---mother, father, child---while small children are often left in the care of the grandparents in the village, while mothers and fathers go to the city to look for work. Families often remain separated, and segregated, for years at a time.

In order to actually build these cities (apartment buildings, roads, malls, subways, etc), land is often confiscated from rural inhabitants. This usually starts with a local (rural) official's desire to build some big show project in order to demonstrate his (it's usually a male) management capabilities in order to secure promotions in the party. (Much of the development in China is driven by this desire, according to many people I've interviewed). These officials will offer to pay local families below-market prices for their land and tell them where to relocate to. If they do not accept the terms, they are often intimidated and violently coerced into moving. Sometimes the family will be forcibly detains while their household belongings are moved, their homes are destroed, and new construction begins---and only then will the family be released. With a new development under construction where their house used to be, the family has little choice but to relocate to a city or another area where they have little to no prospects.

Lastly, in the city itself, many (even college graduates) struggle to find work. Though this forced urbanization has been part of Beijing's plan to boost GDP through domestic consumption, economic growth may not be keeping pace---meaning that white collar, and even factory jobs are insufficient in number to employ China's growing urban population. Many younger urban Chinese are forced to borrow money from their parents (who have been saving for years) and even to take out bank loans to try and improve their prospects. This adds not only to the burdens on individuals and families, but also to the burgeoning Chinese financial system that is basing itself on an increasingly shaky mountain of municipal and consumer debt. This debt is only being offset by growing national GDP, mostly its (declining) exports that are in turn being maintained by cooked books and an artificially devalued currency.

These are some of the dark underbellies of the shining towers, malls, and subways that are dotting---and increasingly covering---China's landscape.

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