migrating Chinese peasants

GMU economist Tyler Cowen has an interesting column on China in today’s New York Times.

Among other things, he refers to the migration of peasants from the countryside to urban factories:

Several hundred million Chinese peasants have moved from the countryside to the cities over the last 30 years, in one of the largest, most rapid migrations in history.

To help make this work, the Chinese government has subsidized its exporters by pegging the renminbi at an unnaturally low rate to the dollar.

Tyler Cowen, “Economic View: Dangers of an Overheated China”, New York Times, 29 November 2009.

The Chinese government has helped make this work also by keeping labour costs low with a hukou (household registration) system that was promulgated in January 1958 and is still in effect. The system allows the State to treat 150 million internal migrants as ‘guest workers’ in their own country. Immigrants from the countrysides have no right to permanent residence, and no claim on social benefits – not even public schooling for their children! In an unfortunate oversight, Cowen overlooked the hukou system when he drafted today’s column.

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