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22/07/2015

India’s Labor Force – WSJ

India’s urban women are four times less likely to be in paid work than their male counterparts with the most educated being the least likely to participate in the workforce, the latest figures from India’s labor ministry show.

Meanwhile in rural India, women are marginally more likely to have a job – the ratio of male to female participation in the workforce is 2.6 to 1.

Here are some more findings from the survey.

39%

The proportion of women who have received vocational training were not part of the workforce in 2013/14.

Although women were not asked to give reasons in the survey, Jayan Jose Thomas, an assistant professor of economics at the Indian Institute of Technology in New Delhi and an expert on India’s labor market and industry, said women often face discrimination at work in rural and urban India, including unequal pay.

In urban India, there were also concerns for women’s safety, traveling to and from work and in the workplace. Pushing the figures higher, women who chose to be homemakers were counted as unemployed.

“When you look at the figures for women, you understand the real employment situation in India. You see a huge mismatch,” said Mr. Thomas.

Indian women’s participation in the workforce falls as their education level rises, according to research by Mr. Thomas.

Labor-force participation by women in 2009-10 showed nearly 55% of women with post-graduate level education had not joined the workforce. Most women who didn’t join the workforce said “they are attending to domestic duties.”

524 rupees

The average daily wage for a man educated beyond high school working in an Indian city. That is the equivalent of $8. For women, average earnings were 391 rupees a day.

12 million

The number of people who enter India’s workforce each year. Some argue India’s rigid labor laws, which make it harder to fire employees, may be the reason employers are reluctant to hire full-time staff but Mr. Thomas says, despite official figures showing otherwise, the growth of India’s workforce has stagnated from lack of investment in infrastructure.

Government investment in basic infrastructure, like setting up power plants, needs to take place before the country can realize Indian Prime Minister Narendra Modi’s “Make In India” drive, which seeks to supercharge the country’s manufacturing growth, according to Mr. Thomas.

“India’s infrastructure shortage is so high that you cannot expect private investment to kick-start industrial growth. You need public sector to do the work first,” Mr. Thomas said. “Major initiative has to come from the government.”

5.5 million

Jobs created in India every year. Even though 12 million people join India’s workforce every year, the number of new jobs is much lower. Mr. Modi’s government has set a target of creating 400 million jobs by 2020 to try and narrow the gap.

6.8 %

The proportion of India’s population signing up for vocational training in the country. Among those who successfully train, a large proportion – 75% – find employment.

via India’s Labor Force – WSJ.

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22/07/2015

Kind of Blue: China’s Air Pollution Not as Terrible as Before – China Real Time Report – WSJ

If you’re living in China and have the vague impression that the skies have been bluer than usual this year, it’s not just wishful thinking.

According to an analysis released Wednesday by Greenpeace East Asia, China’s air is not as awful as it used to be. Among 189 cities examined by the environmental nonprofit, PM2.5 levels in the first half of 2015 were down an average of 16% compared to the same period last year. Only 18 cities saw their levels of PM2.5 increase.

Health experts say that small particles such as PM2.5 are particularly worrisome for human health, given their ability to creep deep into the lungs and aggravate heart or lung disease.

“I think this is the first time I’ve seen a massive reduction on PM2.5 concentrations at a national level,” said Dong Liansai, Greenpeace East Asia energy and climate campaigner. In recent years, the frequent grey pall and onset of periodic “airpocalyses” have helped discourage tourism to Beijing and have spurred expats and locals alike to leave for more oxygen-rich environments.

In the country’s notoriously smoggy capital, residents have seen PM2.5 levels drop by 15.5%, with levels of sulfur dioxide – which can contribute to respiratory problems — experiencing a still more precipitous drop of 42.6%, the group said. The capital has been making a concerted push to clean up its skies, closing or relocating 185 firms in the first half of this year, according to the Beijing government. Since last July, the city has also shuttered three of its four coal-fired power plants.

Mr. Dong said the bump in clean air doesn’t appear to be just a blip. He credited more aggressive government standards on emissions and efforts to shutter its dirtiest factories. He also cited the government’s 2013 air pollution control plan, which mandates that by 2017, certain regions must reduce their PM2.5 levels by as much as 25% compared to 2012 levels.

Compared with the rest of the world, the Middle Kingdom’s air still ranks as wretched: the average PM2.5 level in the 385 cities ranked by the group was 53.8 µg/m3, more than five times the World Health Organization’s recommended annual mean.

To keep skies blue-hued for events such as last November’s APEC summit, the city periodically shuts down nearby factories and orders cars off the streets. Such a strategy has in the past paid health dividends for residents. A recent study found that women pregnant during the 2008 Beijing Olympics—when the Chinese government worked aggressively to keep air pollution down for a seven-week period—gave birth to heavier, and presumably healthier, babies.

via Kind of Blue: China’s Air Pollution Not as Terrible as Before – China Real Time Report – WSJ.

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21/07/2015

Indian Companies Invest Billions, Create Thousands of Jobs in the U.S. – The Numbers – WSJ

As India attempts to thaw its business environment and attract the interest of foreign companies, a hundred Indian firms have together made investments worth more than $15 billion in America, according to the findings of a new survey by the Confederation of Indian Industries and audit firm Grant Thornton International Ltd.

The findings, which were released in a report titled “Indian Roots, American Soil” on Tuesday, suggest that Indian companies in the U.S., most operating in the information-technology sector, have created thousands of jobs there and show a growing interest in hiring more American workers in the next few years.

Indian outsourcing companies in the U.S. have in recent months been criticized for depending too much on foreign staff — H1-B visa holders – instead of hiring locals.

The 100 Indian companies surveyed are spread across all 50 U.S. states, the report said. Here are the main numbers from the report.

91,000

The survey says Indian firms have created more than 91,000 jobs in the U.S., most of them concentrated in New Jersey, where they have hired over 9,000 people. In California, more than 8,000 people work for Indian companies.

$15.3 billion

The total value of tangible investments – for example in real estate or equipment — made in the U.S. by the surveyed companies. Texas has received the largest amount — almost $3.85 billion from 17 Indian companies, most in the information-technology and telecom sectors. The report didn’t give a timeframe for these investments.

40%

The percentage of surveyed companies that do information-technology business is 40%. The report also highlights the emergence of Indian companies in the pharmaceutical and manufacturing sectors, which each accounted for 14% of the firms surveyed.

84%

That’s the proportion of companies in the survey that plan to make more investments in the U.S. in the next five years. California, New Jersey, New York and Texas are the “most promising states for expected future investment,” the report said.

90%

The forecast for hiring local U.S. employees is also encouraging, the survey reveals. Almost 90% of the companies responded positively when asked if they foresaw hiring locally in the coming five years.

via Indian Companies Invest Billions, Create Thousands of Jobs in the U.S. – The Numbers – WSJ.

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21/07/2015

Traveling on India’s Roads Is Getting More Dangerous – The Numbers – WSJ

Traveling on India’s roads is getting more dangerous. In 2014 there were 141,526 deaths due to road accidents in the country, up from 137,423 a year earlier.

Prime Minister Narendra Modi’s government is set to introduce the Road Transport and Safety Bill in the upcoming 18-day session of Parliament, which starts Tuesday.

It would be India’s first separate legislation to govern road safety. Counter-intuitively, the legislation would reduce penalties for offenses such as drunken driving or speeding, but road-safety campaigners say that would make the law more likely to be enforced.

Until then, some numbers from the National Crime Records Bureau that show how safe it is (or isn’t) to travel on India’s roads.

39.2%

The percentage of India’s accidental deaths in 2014 that were the result of traffic accidents.

May

The month in 2014 in which the most traffic accidents were reported in India. Accidents that month accounted for 9.2%, or 44,106 out of 481,805 of the total traffic accidents that year.

3 p.m. – 9 p.m.

The time the largest number of traffic accidents were reported in 2014, making up a total of 34.2% of traffic accidents that year.

2.9%

Amount fatalities from road accidents increased by in 2014, from a year earlier. Road accidents overall increased by 1.8% in 2014.

31.39%

Percentage of road accidents in India in 2014 where at least one person died.

Two wheelers

Type of vehicle most often involved in fatal road accidents. More than one in four (26.4%) of accidental deaths on roads involved motorbikes, scooters and other two wheelers, followed by trucks and lorries at 20.1%, cars at 12.1% and buses at 8.8%. The statistics do not say if this included bicycles.

National highways

Roads which saw the highest number of accidents, contributing to 27.5% of total road accidents. These roads makes up just 1.58% of India’s total road network. State highways had a share of 25.2% of total accidents. The national highways also saw the most fatal accidents – accounting for more than 32.5% of the total deaths on India’s roads in 2014.

Uttar Pradesh

The state with the most road traffic accident deaths in India in 2014 –16,284. Perhaps not surprising, since it is India’s most-populous region. The state was closely followed by Tamil Nadu at 15,190 deaths and Maharashtra at 13,529 deaths.

Speeding

The cause of most road accidents in India in 2014–accounting for 36.8% of total accidents, causing 48,654 deaths and injuring 181,582 people. Dangerous, careless driving or overtaking caused 137,808 road accidents, the data showed, resulting in 42,127 deaths and injuring 138,533 people. Poor weather caused 3.2% of road accidents, while driving under the influence of drugs or alcohol contributed to 1.6% of total road accidents

via Traveling on India’s Roads Is Getting More Dangerous – The Numbers – WSJ.

Posted in Economics, India alert, Transport | 1 Comment »

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19/07/2015

Farmer suicides in Karnataka – The Hindu

Is it falling prices? Is it a glut in production? Or are farmers just falling into debt because of aspirational spending? Whatever the reason, Karnataka is again facing the spectre of rising suicides

“Crop loans are difficult to get, but large personal or consumption loans are easily available. This is the surest way to push farmers into deep debt, from which they are unable to recover because their earnings cannot keep pace with agricultural costs.” Photo: K.Bhagya Prakash

Krishna, 32, a farmer in Singamaranahalli, about 30 km from Hunsur in Mysuru district, consumed pesticide and died in the first week of June. The sesame farmer with three acres of land could not survive the debt trap he was in. He had defaulted on repayment to a local cooperative bank, fallen into the clutches of moneylenders, the water table had dropped, and his borewells had run dry. Having lost all hope of repaying the loans, he decided to end it all.

In the last fortnight alone, 50 farmers have committed suicide in Karnataka. The State Agriculture Minister Krishna Byre Gowda admits “it is alarming”. What is puzzling is that cases of farmer suicides had actually dropped over the last two years and have now suddenly begun to increase from mid-June onwards.

The suicides point to two things: first, a serious agrarian crisis shaped by an increase in cultivation costs and a decline in agricultural income, which is pushing farmers into a debt trap; and second, the sociological pressures that farmers face because of the disparity between their income and those in urban areas.

Vivek Cariappa is an organic farmer from Mysuru. He talks of the insecurity among farmers because neither the State nor institutional mechanisms have been able to address the crisis.

It is difficult to get crop loans, he says, but loans for consumption goods like cars, or personal loans for weddings and festivals are easily available. It is the surest way to push farmers into debt.

In Panakanahalli in Mandya district, Mahesh took a loan for his sister’s marriage. In Kestur village of Chamarajanagar district, Nanjundaiah borrowed Rs. 30,000 from a bank and Rs. 4 lakh from moneylenders to get his daughters married. Both farmers were unable to repay the loans and committed suicide.

The problem is also sociological: Farmers who aspire to the lifestyle of salaried persons end up taking loans, sometimes at 60-80 per cent interest rates, and become prey to loan sharks.

“ There is a serious agrarian crisis with an increase in agricultural costs and a decline in earnings. There is also sociological pressure ”

For most farmers across the State, what were once considered luxury items such as cars have now become aspirational necessities. Kurubur Shanthakumar, President of the State Sugarcane Growers’ Association, talks of how he followed his father’s footsteps and became a farmer, but his son wanted to study in Mysuru. This ended up costing Shanthakumar a sizeable sum of money. The pressure is most severe in areas close to the big urban centres of Mysuru and Bengaluru, but is true in general all over, points out G.K. Veeresh, former chairman of the State government’s committee that studied farmer suicides in 2002.

Then, mono-cropping had been seen as a major cause for suicides. Mr. Veeresh talks about how farmers had a tendency to focus on a single crop if it had seen commercial success. The problem was, when it failed, they faced total collapse. More than land holding, says Mr. Veeresh, crop planning is the bigger issue. Farmers must be educated to see the long-term benefits of “multi crop-multi income” farming.

But this time around, the farmers who committed suicide don’t appear to have stayed with one crop. Yes, some sugarcane farmers have faced a major crisis after sugar factories, mostly owned by powerful politicians, defaulted on payments, but they have not accounted for the majority of suicides.

T.N. Prakash, Chairman, Karnataka Agriculture Price Commission, speaks of the urgent need to address the issue of rising input costs when incomes stay stagnant. One suggestion Mr. Prakash makes is interesting. He says that the Agriculture Price Commission could instead become a commission for agricultural cost, prices and farmer’s incomes, which would give it more authority to implement suitable measures.

Another reason could be a glut in production. Mr. Cariappa and Mr. Shanthakumar point out that the State, despite having records of the area under sugarcane cultivation and the crushing capacities of sugar mills, has turned a blind eye to excessive cultivation. This has kept prices low enough to benefit the sugar mills owned by politicians.

This glut is true for cotton, tobacco and other crops as well. Excess production helps processing industries, as it ensures that the prices of raw materials stay low and they profit from it. There is also “mass hysteria” when a farmer commits suicide, and it may result in others taking the same step. Politics over farmer suicides and the wide publicity they get tend, in a way, to “glorify” suicides and worsen the situation, says Mr. Veeresh.

via Farmer suicides in Karnataka – The Hindu.

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13/07/2015

China says 75 percent of cities failed to meet air standards in June | Reuters

Nearly 75 percent of China’s big cities failed to meet air quality standards in June, the environment ministry said on Monday, an improvement over the same month last year, as the country continues to wage “war on pollution.”

General view of downtown Shanghai on a hazy night January 25, 2015. REUTERS/Aly Song

Nineteen cities met air quality standards every day, the Ministry of Environmental Protection said in a statement on its website (www.mep.gov.cn), compared to five at the same time last year.

Air quality in the capital Beijing was subpar on almost 60 percent of the days in June and saw levels of PM2.5 – particulate matter with a diameter of 2.5 micrometers that can penetrate deep into the lungs – rise 11 percent compared to the same period last year.

Amid growing public disquiet about smog and other environmental risks, China said last year it would “declare war on pollution” and it has started to eliminate substandard industrial capacity and reduce coal consumption.

Last year, nearly 90 percent of China’s 74 big cities failed to meet air quality standards.

The state standard is 35 micrograms of PM2.5 per cubic meter, but the government does not expect to bring the national average down to that level before 2030.

In April, the vice minister for environmental protection announced a two-year inspection campaign to root out fake air quality data and accused some local governments of manipulating the data to meet national standards.

via China says 75 percent of cities failed to meet air standards in June | Reuters.

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13/07/2015

The Seven Signs of India’s Outsourcing Apocalypse – The Numbers – WSJ

After years of success, the outsourcing industry is under stress as the market shrinks and spending falls. Indian companies say their business models, built on cheap labor, are under threat from a shift to cloud computing, where clients ditch server rooms and bespoke software. Here’s how the outsourcing industry has shrunk in the past several years.

$120.4 billion

The value of outsourcing deals worldwide in 2014, down from $206.8 billion in 2010.

1,144

The number of outsourcing deals signed globally in 2014. The deals are down 61% from 1,805 deals in 2010, KPMG data shows.

$552 million

The average value of the world’s 100 largest outsourcing deals in 2012. Since then, the average size has fallen and was at $452 million in 2014, according to International Data Corp.

9

The number of outsourcing deals made in 2014 worth $1 billion or more, the lowest in more than a decade. Big outsourcing deals are rarer, and are being won by fewer companies – five of those deals were made by International Business Machines Corp., according to International Data Corp.

20%-30%

The amount Indian outsourcing contract values fall when they are renewed, according to Emkay Research. As the work gets scarcer, clients bargain harder on prices.

$21,307

The average annual salary of a software developer in India, according to job search website Naukrihub.com. That’s in contrast to the $93,350 average annual salary of a developer in the U.S., according to the Bureau of Labor Statistics. Outsourcing companies say that clients are demanding quicker results and fewer, more experienced staff, forcing Indian outsourcers to hire more in the U.S. and Europe. As a result, Nasscom estimates that only 200,000-220,000 outsourcing jobs will be added in India in 2015 compared with 273,000 new jobs in 2011.

More than 50%

Amount revenue growth at India’s outsourcing giants has fallen since 2008. Tata Consultancy Services said sales grew 15% for the financial year that ended in March, compared with the financial year ending March 2008 when sales grew 37%. Infosys said revenue rose 6% last financial year, down from 19% growth in 2008.

via The Seven Signs of India’s Outsourcing Apocalypse – The Numbers – WSJ.

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13/07/2015

Under a Cloud: Outlook for India’s Outsourcers Looks Gloomy – India Real Time – WSJ

Investor fears that growth in India’s outsourcing industry is slowing down appear all but confirmed.

Tata Consultancy Services Ltd., India’s biggest outsourcer by revenue, reported its first results for the fiscal year of 2016 late last week.

The Mumbai-based company met analyst expectations, with a 12.9% rise in its first-quarter net profit. A bigger concern is slowing sales growth, a sign that the company is finding it harder to grow its business. Tata’s revenue grew by 3.5% in the three-months through June, down from 5.5% growth over the same period the previous year.

The slowdown spooked investors: TCS is an industry bellwether.

After the results, Tata’s shares closed down 2% on Friday, below the benchmark S&P BSE Sensex that closed up 0.3%. Competitors Infosys Ltd. and Wipro Ltd. are set to report results next week.

Analysis by The Wall Street Journal of revenue and profit data from India’s top-three outsourcing firms since March 2014 shows that TCS is not alone.

Other Indian firms are also not just struggling to return to the lightning growth they experienced in the ‘90s, they are moving further away from it.

With the exception of the three-month period ending September 2014, when the weakening rupee helped boost their bottom lines, revenue and net income at TCS, Wipro and Infosys has been slowing, data showed.

All three have seen their revenue growth since March 2014 turn south.

So what’s behind the deceleration?

One reason: a change in the way multinationals spend on technology.

In the past two years, many firms have resumed spending on technology after cutting back in the wake of the 2008 financial crisis, say Indian outsourcers.

Clients increasingly want solutions that use new technologies like data analytics software that help them analyze customer data or save on costs associated with procurement and logistics, and Indian outsourcers are not as good at this compared to their global competitors, say technology purchasing managers.

And, instead of employing large technology firms to run their back-end systems, the firms have increasingly signed up for pay-as-you-go services on the cloud—where servers and software are accessed via the Internet rather than on local networks or personal computers.

In the fight to regain ground, TCS is boosting its spending on digital technology, like big data, mobile app development and cloud computing.

On Thursday, for the first time, the company disclosed how much.  TCS said that it earned about $2 billion in revenue from digital technologies in the three months through June. That figure indicated that the Indian company was earning a small but significant part of its revenue from new technologies, including software that helps firms analyze social media or spending patterns for retailers.

In a further shift toward digitizing its business offering,  TCS will also train 100,000 people in digital technologies in the fiscal year 2016.

TCS Chief Executive N. Chandrasekaran said the Indian outsourcing giant would reach its target of earning more than $5 billion from digital technologies in the next four years. Revenue from this segment is growing at double-digits on a quarter-to-quarter basis, he said.

With its $4.08 billion in cash, left after paying huge dividends and industry-beating wage hikes, TCS could reach that target sooner than expected if it buys firms specializing in digital services, analysts say.

via Under a Cloud: Outlook for India’s Outsourcers Looks Gloomy – India Real Time – WSJ.

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13/07/2015

Tales of the unexpected | The Economist

WEIJIA is a typical Chinese seven-year-old. He loves riding his bike and anything to do with cars; he is a badminton fanatic and has lessons twice a week. In a few months’ time, however, he will become rather less typical. He will have a brother or sister—something most urban Chinese children lack.

His parents are taking advantage of a relaxation in November 2013 of the country’s strict family-planning rules. Couples are now allowed to have a second baby if one parent is an only child. After more than 35 years of often brutal enforcement of the one-child-per-couple policy, some had expected a mini baby-boom to follow. The National Health and Family Planning Commission estimated that the new rules would allow 11m more couples to have a second child (there were already exemptions for some). It thought that 2m of them would try in the first year. But by the end of 2014 fewer than 1.1m people had applied for the necessary permit.

 

That worries the government, which has tweaked the rules not out of sympathy for lonely only children or for parents who want a spare heir, but because of a population crunch. The country is ageing rapidly. In 2012 its labour pool shrank for the first time in 50 years. In the largest cities the fertility rate—meaning the number of children an average woman is likely to have during her lifetime—is among the lowest in the world, at around one. For the country as a whole it is less than 1.6—far below the level of 2.1 needed to keep the population steady (see chart).

The one-child policy did not curb Chinese fertility as much as its boosters imagine. By the time it was introduced in 1979, the fertility rate had already fallen to 2.8 from 5.8 in under a decade, thanks to usually less coercive efforts to encourage fewer births. Ruthless enforcement of the new policy resulted in widespread forced abortions and infanticide. It inflicted misery on parents who wanted larger families. But its overall impact on births was limited. In most countries, rising affluence has led to fewer babies. India’s fertility rate fell steadily over the same period without such formal policies, even though its economy did not grow nearly as fast as China’s. In wealthy South Korea the birth rate has fallen to 1.3 children per woman, down from six in 1960.

China’s authorities have now changed tack, from relentlessly proclaiming the virtues of having only one child to encouraging eligible couples to “procreate legally”. But they should not be surprised that this is failing to achieve the desired effect.

Since the 1980s rural families whose first child was a girl have been allowed to try for another. More recently, couples who are both single children have been allowed to have a second. Yet the uptake has been low. Academics, including Cai Yong of the University of North Carolina, Chapel Hill, conducted a study in 2007-10 in the coastal province of Jiangsu. They found that among 2,500 urban and rural women they surveyed who were entitled to have a second child, only 6.5% did so. Ethnic minorities (nearly a tenth of the population), have long been allowed to have two or more. But on average each ethnic-minority woman bears only about 1.5 children, according to a census in 2010.

Mr Cai believes that rising incomes have been a big cause of shrinking family size. “Development is the best contraceptive,” he says. Births would have plummeted even without the one-child policy, he reckons, though not as fast or as low. Families worry about the expense of having babies: good education and health care are increasingly pricey. A study by Credit Suisse in 2013 found that couples typically spend over 22,500 yuan ($3,600) a year to raise a child to the age of 18. That is more than three-quarters of the average annual disposable income per person of urban households. A government report in 2015 said that in the first five years of a child’s life, city parents spend twice as much as rural ones, even before the high cost of urban housing is included—particularly near the best schools (see article).

Chinese families want their offspring not only to get a good education, but also to gain an edge in the global jobs market. Hence Weijia’s parents spend nearly 15% of their annual income just on classes for him, including weekly English lessons. Over half of children under six take extra classes in addition to those at kindergarten, according to IResearch, a Chinese market-research company.

Grandparents help to reduce the cost of child care (they often live with their grown-up children). But since people marry and have children later than they used to, the age of live-in grandparents is rising too; fewer are sprightly enough to deal with two children. It has become so common in China to have only one child that society is no longer geared to handle multiple offspring: hotel rooms for two children cannot be booked online (parents must call); play vehicles in parks seat two adults and one youngster; toothbrush-holders in family bathrooms often have space for just three brushes.

Decades of propaganda about the benefits of single children have changed the way parents think, says Wang Feng of the University of California, Irvine. A belief that China has too many people is widely shared, as is a conviction that the country would have been far worse off without the one-child policy. Many Chinese are surprisingly willing to blame the country’s terrible traffic and its air and water pollution on overpopulation, rather than bad planning. Having just one child still has the whiff of the patriotic about it.

The government’s next step may be to allow all couples to have two children. There is much speculation that the country’s parliament will approve this next year. Family-planning bureaucrats still fret about what might happen if restrictions were to be lifted. But the same factors of cost and hassle will continue to suppress the birth rate, regardless of how fast the policy is adjusted. Growing numbers of young Chinese people now prefer not to marry or have children at all.

via Tales of the unexpected | The Economist.

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12/07/2015

13 Million Guangdong Migrants Could Gain Permanent Residence By 2020 – China Real Time Report – WSJ

Faced with a persistent influx of rural workers, China’s most populous province plans to allow more migrant residents to settle permanently in its cities, in its latest effort to ease decades-old curbs on rural-urban migration.

Under new guidelines published this week, Guangdong authorities aim to grant local household registration to roughly 13 million migrant workers by 2020, allowing them to access public services—spanning housing, health-care, social security and education—that are typically reserved for urban residents.

Guangdong has often taken the lead in efforts to liberalize the hukou system, a national household-registration regime that curbs rural-urban migration by tying benefits like health care and pensions to a person’s place of birth. Experts say the system forces many rural migrants to live as second-class citizens in urban areas, aggravating social inequality while fueling tensions between locals and outsiders.

Hukou reforms are a pressing matter for Guangdong, a southern Chinese manufacturing hub that hosts the country’s largest transient population. Among its roughly 110 million residents, more than 24 million are migrants from other regions, while another 10.6 million have relocated within the province.

“Reforming the household-registration system will speed up our province’s urbanization process, and facilitate the coordinated development of the Pearl River Delta region,” Peng Hui, deputy director-general of Guangdong’s public security department, told a news briefing this week.

As part of the reforms, provincial officials will aim to “equalize” the provision of public services and ensure “balanced” economic development between rural and urban areas, according to the new guidelines.

China has used the hukou system since the 1950s to keep people from moving to the cities and forming the sort of slums that plague other developing nations. In recent decades, however, rural migrants have increasingly bucked the system to seek better opportunities in urban areas, without approval to live there.

Beijing, for its part, has since changed tack and pushed to urbanize its population of nearly 1.4 billion people, of which about 45% still in live in rural areas. But experts say the government must speed up its dismantling of the hukou system, warning that social tensions could fester and even boil over in the coming decade as China’s “floating population” of more than 250 million continues to expand.

Last year, Beijing pledged some changes to the hukou system, with restrictions to be lifted first in small towns. More stringent requirements will remain on those who want to live in larger cities, which are generally more attractive to migrants.

 

Guangdong’s plan follows a similar approach. Provincial officials say they plan to “fully liberalize” settlement rules in small, county-level cities and so-called “administratively designated towns,” where migrants with legal and stable places of residence will be allowed to apply for permanent residency.

via 13 Million Guangdong Migrants Could Gain Permanent Residence By 2020 – China Real Time Report – WSJ.

Posted in China alert, Economics, migrant worker, temporary workers | Leave a Comment »

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