Chinese Research Perspectives on Population and Labor, Volume 5 : Achieving Prosperity for All Through Shared Development [1 ed.] 9789004407435, 9789004407428

Citation preview

Chinese Research Perspectives on Population and Labor, Volume 5

Chinese Research Perspectives on Population and Labor International Series Advisors Cai Fang (Chinese Academy of Social Sciences) Kam Wing Chan (University of Washington) William Lavely (University of Washington)

VOLUME 5

The titles published in this series are listed at brill.com/crpo

Chinese Research Perspectives on Population and Labor, Volume 5 Achieving Prosperity for All through Shared Development

Edited by

Cai Fang Zhang Juwei

LEIDEN | BOSTON

This book is the result of a co-publication agreement between Social Sciences Academic Press and Koninklijke Brill NV. These articles were selected and translated into English from the original 《中国人口 与劳动问题报告 No. 17》 (Zhongguo renkou yu laodong wenti baogao No. 17) with the financial support from the Innovation Project of the Chinese Academy of Social Sciences. The Library of Congress Cataloging-in-Publication Data is available online at http://catalog.loc.gov LC record available at http://lccn.loc.gov/2014005543

Typeface for the Latin, Greek, and Cyrillic scripts: “Brill”. See and download: brill.com/brill-typeface. ISSN 2212-7518 ISBN 978-90-04-40742-8 (hardback) ISBN 978-90-04-40743-5 (e-book) Copyright 2019 by Koninklijke Brill NV, Leiden, The Netherlands. Koninklijke Brill NV incorporates the imprints Brill, Brill Hes & De Graaf, Brill Nijhoff, Brill Rodopi, Brill Sense, Hotei Publishing, mentis Verlag, Verlag Ferdinand Schöningh and Wilhelm Fink Verlag. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill NV provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, MA 01923, USA. Fees are subject to change. This book is printed on acid-free paper and produced in a sustainable manner.

Contents List of Figures and Tables vii Abbreviations x 1 The Universal Two-child Policy: History and Implementation 1 Zhang Juwei and Yang Ge 2 The Universal Two-child Policy and Support for Families 25 Li Jianmin 3 Quantitative and Structural Changes in China’s Population and the Allocation of Educational Resources 39 Cai Yifei, Wang Zhiyong, and Gao Wenshu 4 The Point-based Household Registration System: Current Condition, Risks, and Policy Improvements 64 Hou Huili 5 Narrowing the Income Gap: Challenges and Strategies 82 Zhang Juwei and Zhao Wen 6 China’s Floating Population and Relative Poverty in Cities: Current Condition, Risks, and Policies 106 Yang Ge 7 Chinese Women in the Workforce: Current Condition and Problems 133 Ma Lifang 8 Building a Universal Social Security System for the Elderly 161 Cheng Jie 9 Dating and Marriage for College-Educated Single Women in the Cities 186 Wu Yaowu Index 205

Figures and Tables Figures 1.1 1.2

TFR Trends in China and other countries 11 Changes in annual GDP growth rate compared with the population aged 65 and older in Japan 15 1.3 Changes in annual GDP growth rates compared with the population aged 65 and older in EU member countries 17 3.1 Projected populations in the main stages of education in the three major regions, 2010–2030 51 3.2 Number of children in kindergarten, 2013 53 3.3 Annual growth rate of the number of children in kindergarten, 2013 53 3.4 Number of elementary school students, 2013 55 3.5 Growth rates of the number of elementary school students, 2013 55 3.6 STRs at elementary schools, 2013 56 3.7 Numbers of admissions to ordinary elementary schools, 2013 56 3.8 Number of elementary school students in the city proper, 2013 57 3.9 STRs at elementary schools within the city proper, 2013 57 3.10 Changes in the number of elementary schools in municipal districts, 2009–2013 59 3.11 Shortages of teachers at elementary schools in municipal districts, 2013 60 5.1 China’s Gini coefficient 83 5.2 The Gini coefficients of select countries, 2012 84 5.3 Gini coefficients in China 90 5.4 Number of Migrant workers and their incomes 92 5.5 Urban-rural income gap 93 5.6 The inter-provincial gap of average resident income: Gini coefficient and Theil index 94 5.7 Share of employee remuneration in GDP and the level of labor wages 97 5.8 Gini coefficients of select countries before and after 2010: Initial distribution vs. redistribution 99 5.9 Proportions of PIT to tax revenue in select countries 100 5.10 Added-value shares of manufacturing in the GDP of select countries 103 6.1 Causes and manifestations of migrants’ relative poverty 111 6.2 Floating population size, 2010–2014 126 8.1 Changes in the coverage of OAIS4RUR vs. OAIS4UE 165 8.2 Changes in insurance coverage of migrant vs. Urban workers 168

viii

Figures and Tables

8.3 Changes in the average pensions of retirees of companies vs. those of government organs/public institutions 172 8.4 Changes in corporate annuity coverage by number and percentage 177 9.1 Changes in the sex-ratio of Chinese with high education levels 188 9.2 Women’s ages at the time of their first marriage by education level 190 9.3 Urban married women aged 20 to 49 in terms of how they nurture children aged three or below 197 9.4 Percentages of women candidates for and holders of master’s and doctoral degrees and their variations 199

Tables  1.1 1.2 2.1 3.1 3.2 3.3 3.4 4.1 4.2 5.1 6.1 6.2 6.3 6.4 6.5 6.6 6.7 7.1 7.2

The impact of the policy adjustment on newborns (in millions) 21 The policy adjustment’s impact on population size and structure (in billions) 22 Latest provincial regulations outlining maternity and paternity leave in order of date of enactment (in days) 35 Changes in population size by educational stage, 2016–2030 (in millions) 42 Changes in urban and rural populations by educational stage, 2016–2030 (in millions) 44 Regression results of logistic model parameters 47 Projected provincial populations by educational stage (in millions) 48 Distribution of the educational levels of talent introduced into Shenzhen, 2013 (in thousands) 72 Age structure of the talent introduced into Shenzhen, 2013 72 GDP structure in China in % 98 The monthly average wage gap between migrant and urban workers 112 Wage gaps between migrant and urban workers in yuan 113 Per capita disposable incomes of migrant vs. urban and rural families in yuan/ year 114 Per capita consumer spending of migrant vs. urban and rural families in yuan/ year 117 Engel’s coefficients for migrant vs. Urban and rural families in % 119 Living expenses of migrant vs. non-migrant families in % 120 Percentages of migrant workers enrolled in five basic insurance programs plus housing fund, by region and industry, 2014, % 127 China’s total and working populations Tolerance of unwritten rules in the workplace in % 135 Male and female worker distributions by industry 136

Figures and Tables 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14 7.15 7.16 7.17 7.18 7.19 7.20 7.21 7.22 8.1 8.2 9.1 9.2 9.3 9.4 9.5 9.6 9.7

ix

Responses to the surveyed statement, “I’ve encountered gender discrimination when seeking a job” in % 137 Responses to the surveyed statement, “I’ve encountered gender discrimination when seeking a job” (women) in % 137 Uneven opportunities for advancement in % 138 Uneven opportunities for advancement 139 Responses to the surveyed statement that “men are more likely to get promoted in the workplace” by Sector (women) in % 140 Responses to the surveyed statement that “hitting the glass ceiling occurs more often to women than men” by Sector (women) in % 141 Views of workplace relationships and interactions in % 142 Views of the relationship between superiors and subordinates in % 144 Tolerance of unwritten rules in the workplace in % 145 Tolerance of unwritten rules in the workplace by age and income in % 146 Tolerance of unwritten rules in the workplace (women) in % 147 Views towards the statement that the company should offer gender-specific benefits for women in % 148 Current setup of gender-specific benefits for female employees in % 148 Women’s perception of the availability of gender-specific benefits for women in different sectors in % 149 Ideal careers for women in % 150 Women’s ideal careers by marital status in % 151 Planned career goals by gender in % 152 Views of female leadership in the workplace in % 153 Significant gender differences in views towards leadership characteristics in % 154 Gender differences in views towards female leaders’ success variables 155 OAIS4RUR vs. OAIS4UE According to 2014 standard-based static estimations in yuan/year 164 Insurance coverage of migrants vs. Locals in urban areas in % 170 Marital status of women aged 25 to 34 in % 189 Marital status of women by hukou type in % 191 Years of education by spouse combination type in years 192 Education level of spouses in % and people 193 Subjective well-being by combination of educational level of spouses (overall score) 195 Percentages of married candidates for and holders of master’s and doctoral degrees by age group in % 198 Education levels of married people aged 25 to 44 in % 200

Abbreviations ACWF AFAF AFS APMP BS

All-China Women’s Federation agriculture, forestry, animal husbandry, and fisheries accommodation and food services automobile, production, manufacturing, and processing business services (including consulting, accounting, legal, advertising, public relations [PR], certification and outsourcing services) CGSS Chinese General Social Survey CON construction CPC Communist Party of China CPDRC China Population and Development Research Center CPEACFA cultural and physical education, arts and crafts, and fine art CMES culture, media, entertainment, and sports CSE culture, sports, and entertainment CV coefficient of variation DESA Department of Economic and Social Affairs EET exempt-exempt-taxed EME energy, mining, and environmental protection EU European Union FIN financial sector FMCG fast-moving consumer goods GN governmental and NPO HSSSW health, social security, and social welfare ICEI IT, communications, electronics, and Internet ICS information transmission, computing services, and software industries ILO International Labor Organization IND industry ISSS Institute of Social Science Survey IT information technology LBS leasing and business services LTG The Limits to Growth MAN manufacturing MOE Ministry of Education MOH Ministry of Health MPK marginal product of capital MSL minimum standard of living NBS National Bureau of Statistics NDRC National Development and Reform Commission

Abbreviations NHFPC NOAIS4RR NPC NPO OAIS4RUR OAIS4UE OAS OECD PASO PIT PPP PR PRB PRC QOL RE ROS RROS ROC SCOPSR SOE SOL SRTSGP STR TEE TFR TLW TWP TWRLFD UN UNDP VAT WEPFM WR YoY

National Health and Family Planning Commission old-age insurance system for rural residents National People’s Congress non-profit organization old-age insurance scheme for rural and urban residents old-age insurance scheme for urban employees old-age security Organization for Economic Cooperation and Development public administration and social organization personal income tax purchasing power parity public relations Population Reference Bureau People’s Republic of China quality of life real estate resident and other services resident, repair, and other services return on capital State Commission Office of Public Sectors Reform state-owned enterprise standards of living scientific research, technical services, and geological prospecting student-teacher ratio taxed-exempt-exempt total fertility rate transportation, logistics, and warehousing transportation, warehousing, and postal services trade, wholesale and retail, leasing, fast-moving consumer goods (FMCG), and durables United Nations United Nations Development Programme value-added tax water conservancy, environmental protection, and public facility management wholesale and retail year-over-year

xi

Chapter 1

The Universal Two-child Policy: History and Implementation Zhang Juwei and Yang Ge1 Since its implementation more than 30 years ago, China’s family-planning policy has proven effective in alleviating both overpopulation and uncontrolled population growth, leading to changes in human reproduction in the country. The confluence of the country’s family-planning policy and more recent socioeconomic development has led to radical changes in China’s demographic situation. Structural problems within China’s population, not the total population size itself, are proving to be obstacles to further harmonious demographic and socioeconomic development; what’s more, the working age population has begun to decrease, the overall population is aging, and the sex ratio at birth remains high. Accordingly, the need to adjust the family-planning policy is becoming increasingly urgent. As such, it was decided at the 18th Communist Party of China (CPC) Central Committee’s Third Plenary Session that either two-child policy for couples who are themselves the only child of their parents, or a selective two-child policy, would soon be implemented. In 2015, it was announced at the Fifth Plenary Session of the 18th CPC Central Committee that a two-child policy for all couples would be implemented. In other words, a two-year buffer period was sufficient for China to complete its adjustment of the one-child policy into a universal two-child policy. Adjusting the birth control policy in this period of time was intended not only to suit changes in the demographic situation but, more importantly, to match corresponding improvements in social institutions and the entry of the Chinese economy into the so-called “new” normal. This adjustment will have far-reaching influences not only on demographic changes in China but also on local family structures. We will begin by presenting the historical background and demographic situation in which the universal two-child policy was introduced, its demographic implications, and our expectations of future policies.

1  Zhang Juwei is the Director of and Researcher at the Institute of Population and Labor Economics, the Chinese Academy of Social Sciences (IPLE-CASS); Yang Ge is Associate Researcher, IPLE-CASS.

© koninklijke brill nv, leiden, 2019 | doi:10.1163/9789004407435_002

2 1

Zhang and Yang

The Birth Control Policy: History and Controversy

1.1 Evolution of the Birth Control Policy China’s family-planning policy has gone through various controversies, negations, stagnations, agreements, decisions, levels of enforcement, and adjustments since the People’s Republic of China (PRC) was founded in 1949. Its evolution can be roughly divided into the following stages in terms of China’s demographic situation, thoughts, and policies: The first stage took place between 1949 and 1969, when the initial concept of birth control and related policies came into being and subsequently matured alongside rapid population growth. China’s economy grew rapidly after the founding of the People’s Republic of China in 1949. Its population skyrocketed to 602 million in 1953 from only 450 million in 1949, with a total fertility rate (TFR) of 6.8 thanks to a rising quality of life, rapid decrease in mortality, a growing birth rate, and a policy encouraging population growth. Nonetheless, this policy was soon replaced by one favoring birth control. In 1955, in a birth control report compiled by the CPC Committee of the former Ministry of Health (MOH), the CPC Central Committee stated that birth control was a significant policy issue, and that, given the situation at that time, the CPC was in favor of appropriate birth control in the interests of the state, individual families, and the new generation. This statement signaled that China’s relevant policies would abruptly shift toward favoring birth control, rather than being against it. From that point on, the gradual implementation of the state’s family-planning policy was clearly enumerated both in certain documents of the CPC Central Committee and in speeches by China’s president. In 1962, the State Council issued the Directive on Promoting Family Planning 《 ( 关于认真提倡计划生育的指示》), which was followed by other directives specifying the means of birth control and necessary supporting measures, indicating the advent of a new birth control policy for China. In October 1963, the CPC Central Committee and the State Council established both central and local family planning authorities in order to effectively enforce the birth control policy. In 1964, the State Council formed the Family Planning Commission, which was soon followed by regional counterparts in provinces, municipalities directly under the Central Government, and autonomous regions (collectively referred to as “provincial-level administrative regions”). Despite these measures, however, China continued to face growing pressure from population growth, as its population already exceeded 700 million, according to the Second National Population Census of the People’s Republic of China in 1964 (the 1964 Census); this number topped 800 million in 1969. During this period of time, the birth control policy was relatively ineffective,

The Universal Two-child Policy

3

with family planning authorities rendered inoperative as a result of political campaigns such as the Anti-Rightist Struggle and the Cultural Revolution. Chinese scholars feared to discuss population after Ma Yinchu was dismissed from public life, following the repudiation of his New Population Theory ( 新人口论》). Nonetheless, the evolution of population-specific thoughts and 《 policies and the establishment of family planning authorities during this stage laid the foundation for the subsequent conception and enforcement of a stringent family-planning policy. Stage two took place in the years between 1970 and 1983, as a consensus on fertility control was reached and the state family-planning policy was implemented and subsequently tightened. In just over 20 years, from 1949 to the 1970s, China’s population doubled. Excessive population growth was of great interest to the CPC and state leaders, as the State Council set up a steering group for family planning at the same time that local governments at all levels either restored or formed family planning committees in order to resume the birth control methods that had previously been interrupted due to the Cultural Revolution. The State Council released the Report on Family Planning Work 《 ( 关于做好计划生育工作的报 告》) in 1971 before subsequently issuing a fertility policy in favor of late marriage, long birth intervals, and no more than two children per family in 1973. In October 1978, the CPC Central Committee approved and released the Report on the First Meeting of the State Council Leading Group on Family Planning ( 关于国务院计划生育领导小组第一次会议的报告》), specifying that late 《 marriage meant men and women should be at least 23 and 25 years old, respectively, to get married, that the number of children per couple was preferably one but must not be more than two, and that birth intervals should last at least three years between children. China’s family-planning policy thus took shape under these parameters in the 1970s, leading to a TFR of 2.23 in 1980 versus 5.81 in 1970. And it was in 1980 that the State Council officially announced the implementation of the family-planning policy; the CPC Central Committee released An Open Letter to All Communist Party Members and Communist Youth League Members on the Control of Population Growth of Our Country 《 ( 中共 中央关于控制我国人口增长致全体共产党员共青团员的公开信》).2 By that time, in the early 1980s, the family-planning policy had shifted toward one 2  “Zhonggongzhongyang guanyu kongzhi woguo renkou zengzhang zhi quanti gongchandangyuan gongqingtuanyuan de gongkaixin 中共中央关于控制我国人口增长致全体 共产党员共青团员的公开信 [An Open Letter to All Communist Party Members and Communist Youth League Members on Control of the Population Growth of Our Country],” http://news_Xinhuanet.com/ziliao/2005-02/04/content_2547034.htm, Feb. 4, 2005.

4

Zhang and Yang

that promoted late marriage, late childbirth, one child per family, and healthy newborns, as opposed to the earlier incarnation that encouraged late marriage, long birth intervals, and no more than two children per family in the 1970s. With this adjustment, it officially became one of China’s basic state policies, leading to the tightest birth control in history—not just in China, but globally. During this period, the family-planning policy remained consistently effective and resulted in a sharp decrease in the birth rate. Later on, the one-child policy faced tremendous resistance in the countryside, where it most severely conflicted with the economic and cultural need to have more than one child. The third stage took place from 1984 to 2000, when the family-planning policy was further adjusted and stabilized, together with changes in the public view of the family’s reproductive function due to this policy’s influence, as well as the continued reduction in birth rate. Given that the family-planning policy faced rural resistance in the early 1980s, China began implementing tighter control with limited exceptions in 1984. With the Report on the Status of Family Planning Work 《 ( 关于计划生育 工作情况的汇报》), the CPC Committee of the Family Planning Commission amended certain particular provisions of the family-planning policy in order to allow the loosening of restrictions on bearing a second child in rural areas and, for ethnic minorities each with a population of under ten million, two or even three children per couple. Following this amendment, a two-child policy for rural families whose only child was a girl came into force in the rural areas of most provinces, municipalities directly under the Central Government, and autonomous regions, which, from the late 1980s to the early 1990s, formulated local family-planning regulations that were then enacted by the corresponding standing committee of the local people’s congress. It was at that point that the family-planning policy became stable, with rapidly-changing public viewpoints regarding the family’s reproductive function coupled with a simultaneous decrease in the overall willingness to bear children and the actual birth rate due to the influence of policies and socioeconomic developments. In 1993, for example, China’s TFR reached the replacement level before dropping into a range between 1.6 and 1.8. A precipitous decline in the birth rate led to rapid changes in China’s demographic structure and growing structural problems. Since 2001, China is considered to be within Stage Four. Rapid changes in its demographic structure have produced glaringly negative effects, causing relevant state organs to rethink the existing family-planning policy. At this stage, authorities have begun loosening the birth control policy due to the fact that China’s birth rate has dropped to an extremely low level. Since 2000, China’s family-planning policy has faced new challenges posed by growing demographic problems in areas such as population quality,

The Universal Two-child Policy

5

structure, and distribution. These challenges have also led to new questions regarding how to best improve extant policy. On the one hand, China has entered a stage characterized by a low fertility rate—one which has been consistently under replacement level for over twenty years. On the other hand, China’s population is aging at an increasingly-rapid rate; its working age population began decreasing in 2011 while the sex ratio at birth remains extremely high. These problems with China’s demographic structure may have negative impacts on the country’s socioeconomic development overall. China is adjusting its population-specific policies and will loosen restrictions on fertility in order to suit the ongoing need for socioeconomic development. On November 15, 2013, The Decision of the Communist Party of China Central Committee on Some Major Issues Concerning Comprehensively Deepening Reforms 《 ( 中共中央关于全面深化改革若干重大问题的决定》), which had been previously passed at the Third Plenary Session of the 18th CPC Central Committee, was released to the public. It stated that China will continue family planning as a basic state policy while simultaneously beginning to implement a policy allowing for two children by couples in which either member is him/herself an only child, namely, the so-called “selective” two-child policy. Nevertheless, the increase in the number of newborns did not meet expectations in the first year after this policy took effect, with fewer than one million policy-covered couples actually applying for a second child. On December 27, 2015, the Population and Family Planning Law of the People’s Republic of China ( 中华人民共和国人口与计划生育法》) was amended at the 18th Session 《 of the Standing Committee of the 12th National People’s Congress (NPC). A new family-planning policy encouraging each couple—regardless of their own status as a single or multiple child—to have two children came into force on January 1, 2016. 1.2 Controversy concerning the National Population Policy Chinese scholars’ thoughts on population routinely evolved throughout the establishment of, adjustment to, and improvements in the state’s familyplanning policy. In the 1970s and 1980s, nearly all scholars agreed that a large population was burdensome—they attributed the undersupply of food and many other resources to overpopulation, which was held to severely impact socioeconomic development and hence must be subject to control. As only children began to become identifiable as a unique demographic group, some scholars began paying attention to growth-specific issues such as education, psychology, and personality development. Well into the 1990s, a small number of Chinese scholars became aware of the potential consequences a tight birth control policy might pose to the nation, as the TFR dropped below replacement

6

Zhang and Yang

level;3 they began doubting the prevalent view that a large population was burdensome.4 Concurrent with the appearance of various demographic problems, controversy among local scholars about population-specific issues and the birth control policy has become unprecedentedly bitter since 2000. This contention is focused on the following topics: First, China’s fertility rate is disproportionately low. Some demographers think that China’s fertility rate has dropped to so low a level that birth restrictions should be loosened as early as possible. Data from the Fifth National Population Census of the People’s Republic of China (the 2000 Census) shows that China’s TFR has fallen to 1.22. Some demographers believe that, given issues of concealment and omission,5 the real TFR should be 1.8 and that, as such, birth restriction should be maintained to stabilize the fertility rate. Yu Xuejun, et al., re-estimated China’s TFR in 2000 according to the 2000 Census data, omissions, etc., concluding that it ranges somewhere between 1.6 and 1.8. The National Bureau of Statistics (NBS) calculated that, on the basis of the numbers of newborns in previous years, China’s TFR dropped to replacement levels in 1991, before further falling to about 1.7 in the late 1990s and to about 1.6 in 2002. In 2007, using methods such as queue analysis, retracing based on mortality table, and regressive fitting on the basis of the numbers of elementary school students across China in previous years, Zhai Zhenwu and Chen Wei reconstructed the age and gender structures of the low-age group in the 2000 Census. According to their estimations, China’s TFR dropped to below the replacement level in 1992, before further dropping to 1.69 in 1999 and to somewhere between 1.59 and 1.66 between 2000 and 2007. It set a record low of 1.18, according to the Sixth National Population Census of the People’s Republic of China (the 2010 Census); several scholars corrected it to about 1.5 using relevant data.6 Most Chinese scholars estimate that China’s TFR has fallen to about 1.5 from 1.8 over time, although there are always concealments and omissions that may affect these numbers. They have reached a consensus that China has 3  Gu Baochang and Mu Guangzong 顾宝昌、穆光宗, “Chongxin renshi zhongguo renkou wenti 重新认识中国人口问题 [New Understanding of Demographic Issues in China],” Population Research 5 (2007). 4  Editorial Department of Population Research, “Renkou duo shi zhongguo xiandaihua de zhuyao zhang’ai ma 《人口多是中国现代化的主要障碍吗》 [Is a Large Population the Main Hurdle to China’s Modernization Process?],” Population Research 1 (1996). 5  Zhang Weimin and Cui Hongyan 张为民、崔红艳, “Dui zhongguo 2000 nian renkou pucha zhunquexing de guji 对中国 2000 年人口普查准确性的估计 [Estimation of the Accuracy of China’s 2000 Census],” Population Research 4 (2003). 6  Cui Hongyan, Xu Lan, and Li Rui 崔红艳、徐岚、李睿, “Dui 2010 nian renkou pucha shuju zhunquexing de guji 对 2010 年人口普查数据准确性的估计 [Estimation of the Accuracy of China’s 2010 Census Statistics],” Population Research 1 (2013).

The Universal Two-child Policy

7

become a country with an extremely low fertility rate, and that, as such, birth restrictions should be loosened. Second, it’s simply not worth continuing the family-planning policy. Birth restrictions have produced an abundance of negative effects, manifesting primarily in the fact that the long-term one-child policy has made families much more vulnerable or even at risk of collapse. On the one hand, the loss of a child in one-child families constitutes the primary reason for a higher risk among such families with inherent structural defects and systemic risks. China Report of the Development on Aging Cause 2013 《 ( 中国老龄事业发展报告 （2013）》) shows that Chinese families which have lost their only child have increased by 76,000 per year on average.7 The 2010 Census data indicates that the average size of Chinese families is 3.10 persons, which is 0.34 fewer than the 3.44 average indicated by the 2000 Census data, suggesting that Chinese families are becoming smaller and more vulnerable. On the other hand, rapid population aging and problems with the one-child policy combine to make family-based old-age care inherently precarious, which in turn makes one-child families even more vulnerable. In 2010, the percentage of the population aged 60 and older was 13.3%, up 2.9 percentage points, or 28.4% (Translator’s note: 2.9 / (13.3 − 2.9) = 27.88%, not 28.4%), from 2000.8 By the end of 2013, there were already 100 million empty nesters in China.9 What’s more, birth restrictions have caused significant damage to the country’s socioeconomic development. Some scholars note that tight control over the number of children remains the primary reason for China’s consistently high sex ratio at birth, which, in turn, results in a large number of single men who, in their overabundance, cause family and societal instability. The labor supply has already begun decreasing, as China’s working-age population (those between 15 and 59) declined for the first time in 2012—or, put another way, China is approaching the Lewis Turning Point.10 The one-child policy has also brought about family and societal risks such as poverty, physical/mental health problems with women 7  “Shoubu laoling shiye fazhan lanpishu fabu laolinghua dailai xin tiaozhan 首部老龄事 业发展蓝皮书发布老龄化带来新挑战 [China’s First Blue Book of Aging Shows New Challenges from Aging],” http://politics.people.com.cn/n/2013/0228/c1001-20623900 .html, Feb. 28, 2013. 8  National Bureau of Statistics, “2010 nian diliuci quanguo renkou pucha zhuyao shuju gongbao (di 1 hao) 2010 年第六次全国人口普查主要数据公报 (第 1 号) [Sixth National Population Census Key Data Bulletin 2010 (No. 1)],” Chinese Journal of Family Planning 8 (2011). 9   “Shoubu laoling shiye fazhan lanpishu,” http://politics.people.com.cn/n/2013/0228/ c1001-20623900.html. 10  “Zhongguo laodongli renkou shouci xiajiang renkou hongli guaidian xianxian 中国劳 动力人口首次下降人口红利拐点显现 [China’s Working Population Declines for

8

Zhang and Yang

and children, decadence, corruption, tensions between CPC/government officials and the public, a decreasing number of the elite in total population at large, and national defense-specific risks.11 Given these risks, some scholars do not consider it to be worth continuing the family-planning policy.12 Third, a large population is a valuable resource. From the Malthusian trap to the 1972 report commissioned by the Club of Rome, The Limits to Growth (LTG), the 20th century has been rife with pessimistic expectations of population growth. The LTG simulated unencumbered and undirected global development in terms of industrialization, population, food, resources, and environmental pollution, among others, before predicting that human civilization will collapse around 2070. Given that China is the world’s most populous country and, throughout the late 20th century, was facing both and undersupply of consumer goods and the corresponding means of production, Chinese scholars were understandably concerned about excessive population growth. This was the core reason for the introduction of China’s family-planning p ­ olicy—China is populous with a limited number of per capita resources; a large population is detrimental to sustainable socioeconomic development because it causes high resource and environmental pressure. As China makes rapid socioeconomic progress, however, a growing consensus has come to realize that a large population is not a burden but, conversely, valuable human resources. Numerous labor resources were an important prerequisite for China’s economic takeoff after it began reforming and opening up. Socioeconomic development depends upon improvements in social institutions and productivity, which are able to offset the insufficiency of per capita resources; environmental problems are largely attributable to production patterns and lifestyles characterized by high levels of consumption and pollution, not population itself.13 Changes in scholars’ understanding of population have gradually influenced China’s policymakers. A fourth point of controversy centers on how, exactly to adjust the ­family-planning policy. Although it is generally believed that the familythe First Time with the Appearance of the Lewis Turning Point],” http://news.xinhuanet .com/fortune/2013-02/24/c_124380454.htm, Feb. 24, 2013. 11  Chen Youhua 陈友华, “Dushengzinü zhengce fengxian yanjiu 独生子女政策风险研究 [On the Risks of the One-Child Policy],” Population and Development 4 (2010). 12  Xu Jun 徐俊, “Woguo jihuashengyu zhengce de fansi yu zhanwang 我国计划生育政策 的反思与展望 [Review of and Outlook for China’s Family-planning Policy],” Population & Economics 6 (2014). 13  Liang Jianzhang, and Li Jianxin, Zhongguo ren taiduo le ma? 中国人太多了吗？ [Too Many People in China?] (Beijing: Social Sciences Academic Press [China], 2012), 177–178. 



The Universal Two-child Policy

9

planning policy should be adjusted, debate remains over how and when it should be adjusted, with opinions generally falling into three types. According to the first category of opinion, the family-planning policy should be gradually adjusted and birth restrictions gradually loosened to avoid a large number of newborns within a short period of time, among other problems;14 the selective two-child policy should be replaced with the universal one,15 with the pilot program being expanded to the whole country from certain municipalities, and provinces.16 Most experts hold this opinion.17 According to the second category of opinion, China’s current fertility rate has dropped to a dangerously low level, making it necessary to increase it by immediately canceling birth restrictions as part of the family-planning policy.18 According to the third group of opinions, China should maintain the current low ferti­lity rate.19 Scholars holding this opinion think that birth restrictions should be moderately loosened only after Chinese couples’ willingness to bear children further drops to a certain level, as this will avoid a sudden dramatic increase in the number of babies being born.

14  Chen Youhua 陈友华, “Guanyu jinyibu wanshan shengyu zhengce de ruogan renshi wenti 关于进一步完善生育政策的若干认识问题 [On Some Issues regarding How to Further Improve Family-planning Policy],” Market & Demographic Analysis 1 (2007). 15  Zeng Yi 曾毅, “Yi wanyu wei ganggan, pingwen xiang erhai zhengce guodu 以晚育为杠 杆，平稳向二孩政策过渡 [Leverage Late Birth to Achieve Steady Transition to Twochild Policy],” Population & Economics 1 (2005). 16  Ma Li and Gui Jiangfeng 马力、桂江丰, “Zhongguo tese de renkou zhuanbian 中国 特色的人口转变 [Demographic Changes with Chinese Characteristics],” Population Research 2 (2012). 17  Wei Xiuping and Wu Ruijun 位秀平、吴瑞君, “Zhongguo Jihuashengyu zhengce fansi 中国计划生育政策反思 [Review of China’s Family-Planning Policy],” Journal of Harbin Institute of Technology (Social Sciences Edition) 6 (2013). 18  Li Jianxin 李建新, “Fangkai shengyu zhengce, cujin renkou changqi junheng fazhan 放开 生育政策，促进人口长期均衡发展 [Loosen the Family-Planning Policy to Promote Long-Term, Balanced Population Development],” Journal of Nanjing College for Population Programme Management 2 (2013). 19  Yin Wenyao, Li Fen, and Yao Yinmei 尹文耀、李芬、姚引妹, “Zailun zhongguo shengyu zhengce de xitong moni yu bijiao xuanze—jianlun xianxing shengyu zhengce zai wending 15 nian 再论中国生育政策的系统模拟与比较选择—兼论现行生育政策再稳 定 15 年 [New Discussion on the Systemic Simulation of and Comparative Selection for China’s Birth Control Policy and on whether the Current Birth Control Policy Should Be Maintained for another Fifteen Years],” Journal of Zhejiang University (Humanities and Social Sciences Edition) 6 (2006). 

10 2

Zhang and Yang

Preparations for Policy Changes

Negative effects related to the rapid demographic changes of China’s population began appearing thirty years after the family-planning policy officially took effect. The negative effects are visible primarily in the country’s unreasonably low fertility rate, the decrease in the labor supply, the rapidly-aging population, an extreme increase in the sex ratio at birth, and more. In more recent years, the main problems with China’s population have focused more on its structure than on its total size, and will likely have a severely negative impact on the socioeconomic development of the country. As such, it is time to adjust the family-planning policy. 2.1 New Problems in Population Development 2.1.1 Persistence of Low Fertility Rates From the 1980s onwards, the state family-planning policy has made China’s fertility rate fall quickly. This rate had already dropped to below the replacement level by 1995; China’s TFR has fallen to below 1.8 since 2000. Seeing the continuous reduction in the fertility rate, some Chinese scholars anxiously note that China may fall into a low fertility trap. The international community usually categorizes a TFR lower than 1.5 as a very low fertility rate, and a TFR lower than 1.3 as the lowest or an extremely low fertility rate. In the 1990s, an extremely low fertility rate began appearing in Europe before spreading into some East Asian countries and regions. This indicates that it would be very difficult for the fertility rate to rebound once a country enters the stage of extremely low fertility rates, and that its demographic structure will be locked into negative growth. China has entered the stage of having a very low fertility rate, as its TFR has dropped below 1.5 over the past decade, according to the results of NBS censuses and sample surveys on demographic changes. With omissions, however, it is difficult to know the real fertility rate. According to the 2007 World Population Data Sheet published by the Population Reference Bureau (PRB), China’s TFR is 1.6, and it was 1.55 from 2010 to 2015, according to The World Population Prospects: 2015 Revision published by the United Nations (UN). From a fertility rate perspective, therefore, it is urgent for China to adjust its family-planning policy. 2.1.2 Rapid Population Aging Due to the fact that individuals are living longer lives and having fewer children, China’s population is aging quickly. In 1990, people aged 65 and older accounted for only 5.57% of China’s total population; this percentage had already risen to 6.96% by 2000, the year which, according to globally accepted

The Universal Two-child Policy

11

Figure 1.1 TFR trends in China and other countries Source: The World Population Prospects: 2015 Revision compiled by the Population Division of Department of Economic and Social Affairs (DESA) of the United Nations

standards, indicated that China had become an aging society with an elderly population of 88.793 million; the share of the population aged 65 and older reached 8.87% in 2010, making China the world’s only country with an elderly population of more than 100 million. Apart from a large elderly population and rapid population aging, this trend is characterized by uneven regional distribution, making it even more difficult to address. Globally, China will become second only to Japan in terms of the aging rate. It took Japan only 24 years (1970–1994) to see the share of population aged 65 and older rise to 14% from 7%, as opposed to the United Kingdom (45 years), Switzerland (50 years), the United States (65 years), France (115 years), and other aging countries (JARC, 2003). It is forecast that it will take China about 27 years to go through this process, though it is predicted to eventually surpass even Japan in terms of the population aging rate if its fertility rate also continues dropping. Population aging will bring about a series of societal problems related to the ongoing care of and medical services for the elderly. Rapid graying makes it even more urgent for China to build a sound social security system and carry out economic and industrial transformation. 2.1.3 Rapid Shrinking of Labor Supply Recent years have seen a swath of changes to the labor supply in China. Starting in 2012, China’s working-age population—those aged 15 to 59—has

12

Zhang and Yang

decreased in absolute size, dropping to 937.27 million in 2012, down 3.45 million from 2011, before further decreasing by 2.44 million on a year-over-year (YoY) basis in 2013. Accordingly, China’s labor market has evolved into one characterized by labor shortage, rather than unlimited labor supply—that is, it has reached the Lewis Turning Point. The corresponding labor supply curve has started to tilt upward, with a continuous increase in wages. This has caused changes in the size of the labor force as a basic element of China’s economic development, and hence has produced far-reaching consequences for its longterm economic development. This is because, first of all, a reduction in the labor supply plus an increase in labor costs has made China’s labor-intensive industries lose their comparative advantages; China urgently needs to shift its reliance from labor to capital input and technological advances in order to promote economic development. This necessity for a shifting economic basis mirrors the growing need for, and general trend of, improving the nation’s industrial structure. Second, a reduction in the country’s youth population will adversely affect the overall innovativeness across society as a whole and, in doing so, slow down technological advances. Third and last, a reduction in the size of the labor force causes the working-age population to decline, while an increase in the elderly population results in a shrinking group of those individuals contributing to social security through paying into their pensions. This will cause an overall decrease in savings, investment and consumption rates, and, consequently, in China’s potential economic growth rate. 2.1.4 Sex Ratio at Birth A consistently high sex ratio at birth has become a serious demographic problem for China. Theoretically, this ratio should stay somewhere between 103 and 107, enabling a balanced ratio between men and women of marrying and childbearing ages. Unfortunately, however, China has been above this range for more than 30 years, as its sex ratio at birth was already 107.2 in 1982, before rising to and remaining above 115 from 1994 onward, with a peak value of 121.2 in 2004. The year 2009 was viewed as a turning point in China’s sex ratio at birth, which dropped to 117.6 in 2013. That being said, it remains much higher than the normal level. Survey results show that there are two reasons for such a high sex ratio at birth: preference for boys on one hand, and the spread of fetal gender identification and pregnancy termination techniques on the other. With limitations on the total number of children per family, the family-planning policy has contributed to the tendency towards selecting fetal gender. A persistently high sex ratio at birth is bound to cause an unbalanced ratio between men and women of marrying age, which in turn results in intensified competition among men for marriage and a resultant series of associated family

The Universal Two-child Policy

13

phenomena and crises. The occurrence of these phenomena also promises to threaten the country’s healthy, stable socioeconomic development. Negative Impact of Demographic Changes on Socioeconomic Development Demographic changes have both positive and negative effects on socioeconomic development. Individuals are both consumers and producers. As such, demographic transitions interact with the macro economy through both production and consumption. On one hand, demographic dividends during periods of decline in the dependency ratio accompanying a given demographic transition have a positive effect on economic growth, as exemplified by a rising proportion of the working-age population to the total population, an increase in society’s overall productive capacity, and the country’s enhanced capacity for creating and maintaining public wealth. On the other hand, dependency ratios show a U-shaped trend throughout demographic transitions. This ratio rises along alongside a reduction in the labor supply and increased population aging immediately after the period of demographic dividends. This may hinder social and economic development. The impact of a demographic dividend on economic development in East Asia is often regarded by scholars as a typical case of demographic transition in favor of economic development. The East Asian Miracle: Economic Growth and Public Policy report published by the World Bank points out that two thirds of the East Asian miracle is attributed to factors such as increased investment and human capital accumulation, while the remaining one third is best attributable to improved labor productivity. Compared with other developing countries, East Asian economies are better able to allocate material and human resources and use them for high-yield investments and mastering advanced technologies. The economic miracle in East Asia has benefited from the persistence of high investment and savings rates, which is closely linked to a demographic dividend. For their part, Chinese scholars note that economic growth in China also benefits from a demographic dividend,20 as labor input contributes about 20% of the country’s economic growth.21 2.2

20  Cai Fang and Wang Dewen 蔡昉、王德文, “Zhongguo jingji zengzhang kechixuxing yu laodong gongxian 中国经济增长可持续性与劳动贡献 [On the Sustainability of and Labor’s Contribution to Economic Growth in China],” Economic Research Journal 10 (1999). 21  Li Kunwang 李坤望, “Zhongguo jingji zengzhang yinsu de bijiao fenxi 中国经济增长 因素的比较分析 [Comparative Analysis of Factors for Economic Growth in China],” Academic Journal of Zhongzhou 1 (1996).

14

Zhang and Yang

However, demographic dividend from demographic transition is one-shot. Changes within the age structure of the country’s population—such as a declining birth rate leading to an aging population—have profoundly negative impacts on economic growth in multiple ways. First—and most profoundly— an aging population within a given country inevitably leads to an absolute decline in that country’s labor supply and a corresponding sharp drop in the rate of participation in the labor force, resulting in the decline of potential labor productivity. Secondly, the overall consumer market may shrink as the number of consumers declines. Third, in order to pay pensions to its rapidlyexpanding elderly population, the government is forced to increase taxation and social insurance, which, in turn, increases the economic burden borne by the public. Fourth, population aging will lead to a sharp rise in demands for, and costs of, health care, with the result being that families are likely to shoulder the heaviest burdens of medical costs. The negative effects of a demographic transition can be seen in the following experiences already undergone by developed countries. 2.2.1 A Graying Japan and the Lost Decade In line with its demographic transition, Japan’s economic take-off began in the early 1950s, with its dependency ratio showing a trend opposite to that characterizing economic development. Japan enjoyed the world’s fastest economic growth in the 1960s, which was also the stage wherein the proportion of its working-age population to the total population rose dramatically. Japan’s dependency ratio remained at a low level—less than 50%—until the 1990s, and its economy also maintained an average growth rate of about 5%. As its population aged, however, the dependency ratio in Japan has shown an upward trend, and the Japanese economy has subsequently started to falter. Some studies suggest that population aging and its pension system are among the major factors contributing to the long-term economic slowdown of Japan.22 First, population aging causes an inadequate labor supply and contributes to a faltering real economy. In the 1990s, the working-age population in Japan peaked before gradually declining thereafter. According to a forecast made by a certain Japanese population projection organization, Japan’s working-age population will decline from 81.285 million to 6.404 million between 2010 and 2030.23 This labor supply shortage has led to the emergence of what may be 22  P  aul S. Hewitt, “The Gray Roots of Japan’s Crisis,” Asia Program Special Report No. 107 (2003). 23  Tian Xianglan 田香兰, “Riben laodongli buzu wenti ji jiejue duice 日本劳动力不足问 题及解决对策 [The Issue of Inadequate Labor in Japan and its Solution],” Journal of Social Work (Theories Edition), 1 (2009).

The Universal Two-child Policy

15

Figure 1.2 Changes in annual GDP growth rate compared with the population aged 65 and older in Japan Source: World Bank database

termed an industrial “hollowing-out.” Against the background of economic globalization, capital follows the labor force. An inadequate labor supply contributes to the rise of labor costs, causing industrial capital to flow to countries with cheaper labor costs, which, in turn, results in a shortage of industrial capital in the original capital-exporting country. Consequently, deindustrialization will occur in this country, as its manufacturing-centered real economy is greatly weakened. Since labor productivity cannot catch up with labor costs, capital will dissipate and the economy as a whole will suffer sluggish growth. Second of all, aging creates an ongoing and regular increase in the dependency burden across society. Japan’s population is rapidly aging due to increasing life expectancy coupled with a decrease in the fertility rate. According to UN estimates, Japan’s population aging coefficient—that is, the percentage of the population aged 65 or over within the total population—was 5% in 1950 but rose to 27% in 2010, implying more than one senior for every four persons. The increase in the elderly population leads to an ever-increasing dependency burden and a sharp rise of social security spending. As the proportion of the elderly population grows, concurrent expenditures on social security systems such as pensions, medical care, and welfare also will have a negative impact on the country’s social and economic development.24 24  Chen Liang 陈亮, “Riben huli baoxian zhidu de xiuding yu feiyingli zuzhi de yanglao canyu 日本护理保险制度的修订与非营利组织的养老参与 [On the Modification of Japan’s Care Insurance System and Not-for-profit Organizations’ Participation in Old-Age Care],” Population Journal 2 (2009).

16

Zhang and Yang

Third and finally, population aging disrupts the balance between production and consumption. The negative growth of population—or, rather, a decrease in the population—means a decreasing number of consumers, and, as such, the ability to consume on the part of the population as a whole will decline. Enterprises that produce consumer goods and industries—such as entertainment and associated services—in the existing economic structure will have to scale back their operations and may even face a business crisis.25 What’s more, generous welfare policies that rely on high taxes will fail, as huge fiscal deficits will be inevitable when the productive and consumptive natures related to the age structure of the population are out of balance. 2.2.2 The European Debt Crisis and Aging The European Debt Crisis of 2009 has left many of Europe’s established industrial economies in a slump, primarily due to high levels of welfare and aging. At the end of the 20th century, Europe as a whole entered a period of low fertility rates, as the fertility rates of Eastern, Southern and Western Europe were down to 1.29, 1.33, and 1.52, respectively, excepting the Nordic countries, whose TFR remained at a relatively high level of 1.7. Since the mid-1980s, a longer life expectancy, unreasonably low fertility rates, and the senescent baby boom generation have caused a rapid decline in the size of the working age population and a concurrent significant increase in the elderly population across Western and Southern Europe. In 2010, the real dependency ratio between the working-age population and the elderly was, on average, 2.9:1 in the Nordic countries, 2.8:1 in Western European countries, and 2.4:1 in Southern European countries. That can be compared with the ratios of 3.7:1, 3.1:1, and 3.0:1 that were seen 20 years earlier. The social welfare system is essentially a kind of social redistribution mechanism, with pensions functional as a kind of institutional arrangement that achieves balance between income and spending in an individual life-cycle through the inter-generational distribution of income. Sharp increases in the dependency ratio caused by a growing elderly population and a persistently low fertility rate serves to unbalance the inter-generational support structure and creates tension in the current supply and demand relationship. National finances—and even the entire social welfare system as a whole—will be faced with crisis when the population aging and dependency ratios exceed certain levels. In 2009, state expenditures on social protections accounted for 30.41% 25  Hou Jianming and Zhou Yinghua 侯建明、周英华, “Riben renkou laolinghua dui jingji fazhan de yingxiang 日本人口老龄化对经济发展的影响 [On the Impact of Population Aging on Japan’s Economic Development],” Contemporary Economy of Japan 4 (2010).

The Universal Two-child Policy

17

Figure 1.3 Changes in annual GDP growth rates compared with the population aged 65 and older in EU member countries Source: World Bank database

of the GDP in the 17 Eurozone countries and 29.61% across 27 European Union (EU) member states; pension expenditures took up more than 13% of the GDP in both cases, while the expenditures of Italy, France, Spain, and Greece exceeded this average. With a rising dependency ratio, therefore, the highwelfare system has lost its suitable demographic conditions. Moreover, high welfare coupled with persistently low fertility rates have led to higher labor costs in Europe and accelerated the shift of domestic industries to emerging developing countries. Since labor productivity cannot catch up with labor costs, capital will dissipate and the economy as a whole will suffer sluggish growth. In 2011, the economic growth rates of Eurozone and EU member countries were only 1.2% and 1.5%, respectively. Unemployment was exacerbated by the global economic downturn. In July 2012, unemployment rates in Eurozone and EU member countries were 11.3% and 10.4%, respectively; youth unemployment rates in the Eurozone and EU were 22.5% and 22.6%, respectively, and even reached 53.8% and 52.9%, respectively, in Greece and Spain in May 2012. This indicates that, without being able to restore the previous vitality of their demographic structures, it is exceedingly difficult for countries involved in the European Debt Crisis to overcome the so-called high welfare trap. 2.3 Deliberating Policy Changes Faced with the country’s demographic situation, China has no choice but to make changes to the current birth control policy. The first move will be to replace the one-child policy with a two-child policy for couples who are both

18

Zhang and Yang

the only child of their respective parents. As early as in the late twentieth century, this policy had already been implemented in 27 provinces, municipalities directly under the Central Government, and autonomous regions. The provinces of Hubei, Gansu, and Inner Mongolia followed suit in 2002. By 2011, the revision of the Henan Provincial Regulations on Population and Family Planning ( 河南省人口与计划生育条例》) marked the implementation of this policy 《 across China. Nonetheless, this policy had few effects on the overall fertility rate given that it targeted a relatively small group of people. On December 28, 2013, the Resolution on Adjusting and Improving the Birth Control Policy 《 ( 关于调整完善生育政策的决议》) was passed at the Sixth Session of the Twelfth NPC Standing Committee, legally implementing the selective two-child policy—a broadly-welcomed move. According to expert calculations, this policy will increase the annual number of newborns in China by one to two million. Data released by the National Health and Family Planning Commission (NHFPC) showed that as of December 2014, nearly one million couples across China applied to have a second child, with 920,000 receiving approval. According to statistics released by the NBS, the total number of newborns in 2014 was 16.87 million, or an increase of only 470,000 over 2013, and the number of newborns in 2015 was 16.55 million, down, not up, by 320,000 from the previous year. Both the number of applicants for additional births and the actual number of newborns were significantly lower than expected. According to statistics from the Shanghai Municipal Commission of Health and Family Planning, 90% of all women of marrying and childbearing ages registered within the local hukou (household registration) system were covered by either of the two aforementioned two-child policies, but the actual percentage of applicants for a second child was less than 5%, indicating low willingness within this group to bear additional children. As one of the regions with the earliest decline in birth rate and the lowest fertility rates in China, Shanghai—with its family-planning policy and fertility reality—will embody, to a certain extent, the basic fertility situation in Eastern coastal developed areas of the country. The decline in the number of newborns in 2015 was mainly affected by the following factors: First, the number of women in the peak period of fertility was declining steadily during this time, decreasing after reaching a peak in 2011. In 2015, the number of women of childbearing age from 15 to 49 decreased by about five million from the previous year, of which about 1.5 million were aged somewhere between 20 and 29, or at the peak period of fertility. Second, the willingness of newly-fertile women to bear children was declining. Of all the 15 to 20 million couples covered by the new birth control policy, only 50–60% were willing to give birth to a second child, according to a previous

The Universal Two-child Policy

19

survey on willingness to bear children conducted by the NHFPC. This number was lower in some areas—for example, fewer than 50% of respondents in Beijing, Shanghai, and Jiangsu Province indicated a desire for a second child (Ma Xiaohong, 2007; Ma Xiaohong, and Zhang Xinfeng, 2008; Zheng Zhenzhen, 2011). Third, the desired, preferred, or ideal number of children was generally greater than the planned number of children, which in turn was usually larger than the actual number of children. A large number of empirical studies in Europe and the United States show that the birth level remaining below the replacement level is not due to an unreasonably low level of willingness to bear children—on the contrary, although the birthrate of most developed countries at the turn of the century was far below the replacement level, willingness to bear children was still far above the replacement level (Yang Juhua, 2008). Fourth, a considerable proportion of the target population affected by the birth control policy had already passed their prime childbearing years, and, as a result, their fertility had declined. Medical data shows that the best ages for pregnancy are between 23 to 30 years old, as the fertility of women over 35 will decline rapidly, which may force couples born in the 1960s and 1970s to give up their dream of a second childbirth despite their willingness to bear additional children. Neither the expected birth peak nor a sudden increase in the number of newborns has appeared, leading to numerous concerns about the lack of a significant fertility rebound. These concerns have spurred the Chinese government to further adjust its birth control policy. Only two years later, therefore, the 18th Session of the 12th NPC Standing Committee voted on December 27, 2015 to pass the Amendment to the Population and Family Planning Law (the Draft) 《 ( 人口与计划生育法修正案（草案）》). The universal two-child policy proposed at the Fifth Plenary Session of the 18th CPC Central Committee was formally implemented on January 1, 2016. 3

Forecast of Effects of Universal Two-Child Policy on Population Size

The universal two-child policy can effectively reduce the administrative costs of family planning and ensure equal access to the right to bear children. The simultaneous implementation of supporting policies also promises to enhance the effect of adjustments to the birth control policy. Most importantly, such adjustments can slow the process of population aging and provide a rare buffer period for any corresponding adjustments to social institutions and the economic structure, despite being fundamentally unable to reverse the basic

20

Zhang and Yang

trend of demographic changes. Given these effects, what changes will the universal two-child policy have on population development when compared with its selective counterpart? 3.1 Birth Peak in the Short Run, Tapering Off in the Long Run The number of additional newborns was not as sizeable as earlier expectations—based on the effect of the selective two-child policy in the 2014–2015 period—had predicted. This is largely due to the current decrease in the overall willingness to bear children. Following the country’s ongoing industrialization, urbanization, and modernization, social transformation has brought about great changes in people’s living environment and lifestyles and, accordingly, in the public’s view of the family’s reproductive function. At the same time, living, employment, educational, and medical costs have risen significantly, resulting in a great reduction in the public’s willingness to have children. Given this two-pronged situation, a universal two-child policy will not bring about a soaring birth rate, nor a sharp increase in the population. According to experts’ calculations, the target population of the universal two-child policy makes up fewer than 90 million after deduction of the numbers of women of childbearing age in one-child couples in which both/either/ neither are/is the only child of their respective parents, and of women of childbearing age in rural areas affected by the two-child policy belonging to families whose only child is a girl. Of this target population, over 40% are 40 years old and above. Regarding the universal two-child policy, it is highly unlikely that the resulting annual number of additional newborns will reach or exceed eight million. Instead, it will probably be closer to 4.3 million. This policy is unlikely to increase the annual proportion of childbearing-age women 40 years old and over who bear a second child by more than 1%.26 According to Liang Jianzhang’s estimation, among all the women of childbearing age from 20 to 40 in China, there may be 50 to 60 million covered by the universal two-child policy, and the annual average number of newborns is expected to be around 2.5 million in the future. Huang Wenzheng, a demographer with a Ph.D. degree in Biostatistics from Johns Hopkins University, said in an interview with the media that the universal two-child policy would result in an additional population of three to eight million per year, with an estimated median value of five 26  Guang Zhou 王广州, “Quanmian lianghai zhengce mubiao renqun ji chusheng renkou biandong cesuan fenxi yanjiu baogao—jiyu hongguan haici dijin ji weiguan fangzhen moxing de cesuan 全面两孩政策目标人群及出生人口变动测算分析研究报告— 基于宏观孩次递进及微观仿真模型的测算 [Analytic Research Report on the Target Population of the Universal Two-Child Policy and Measurement of Changes in Newborn Populations Based on Macro-Level Parity Progress Ratios and Micro-Level Simulation Models],” a project report compiled by IPLE-CASS, unpublished, 2015.

21

The Universal Two-child Policy

million coupled with a birth peak in 2017. Lu Jiehua, Professor of Sociology at Peking University, believes that people born in the 1980s and 1990s constitute the majority of the population being targeted by the universal two-child policy, although they evince major changes in their view of the family’s reproductive function. Chen Youhua, Professor of Sociology at Nanjing University, believes that the added population brought about by the implementation of this policy will not exceed six million annually, while the total annual number of newborns in China will not exceed 24 million (see Table 1.1).27 Table 1.1

The impact of the policy adjustment on newborns (in millions)

Year

Universal

Selective

Difference

2016 2017 2018 2019 2020

18.070 19.291 20.348 18.295 17.265

17.007 17.727 16.278 15.823 15.347

1.063 1.564 4.070 2.472 1.918

The population was estimated under the assumption that China will maintain either the universal or selective two-child policy from 2016 to 2050. The universal two-child policy promises to result in a short-term fertility peak in China. The peak will probably appear in or around 2018 with more than 20 million newborns, or over four million more than the current figure. Due to a concomitant decrease in the number of women of childbearing age, however, the annual number of newborns will soon drop again to about 17 million by 2020. Compared with its selective counterpart, the universal two-child policy will be able to increase the number of newborns by over four million in the peak period and one to two million in the stable period. Insignificant Role of Policy Changes in Improving Demographic Structure Adjustments to the birth control policy are unable to reverse changing trends that are ongoing within the demographic structure, but are able to mitigate its worsening, increase the total working age population, decrease the process of population aging, and extend the period of demographic dividends. Regarding 3.2

27  Li Dandan, Wang Shu, Xin Na, and Deng Qi 李丹丹、王姝、信娜、邓琦, “Zhongguo quanmian fangkai erhai 中国全面放开二孩 [China Issues Universal Two-Child Policy],” The Beijing News, October 30, 2015.

22

Zhang and Yang

the absolute population size, the policy adjustment is expected to enable the peak population of 1.421 billion in 2026 to increase to 1.443 billion in 2027, and the working-age population in 2050 to jump from 799 million to 833 million. From the perspective of the country’s population burden, the ongoing adjustment to the birth control policy defers the closing point of the demographic window of opportunity—the period of time during which the dependency ratio is less than or equal to 50%—from 2031 to 2035. In terms of the aging process, the adjustment to the birth control policy will make the coefficient of the elderly population in 2040 and 2050 decrease from 23.66% and 25.62% to 22.94% and 24.33%, respectively (Table 1.2). We can still clearly see that the current adjustment to the birth control policy has had a negligible impact on the demographic structure, however, and that greater adjustments will be required in the future. That being said, the significance of the current adjustment to the birth control policy is also meaningful in the following six aspects: the universal two-child policy has eliminated what were previously unfair differences in birth restrictions between urban and rural residents; it better meets the wishes of the vast majority of couples in terms of child bearing, as it returns to families the rights to select and make their own reproductive decisions; an increase in the number of two-child families can reduce the risk of one-child families losing their only child and, additionally, strengthen the family function of care for the elderly; the adjustment to, and improvement of, the birth control Table 1.2

The policy adjustment’s impact on population size and structure (in billions)

Year

2016 2017 2018 2019 2020 2030 2040 2050

Universal Population aged 15–64

Total population

Total dependency ratio (%)

% of population aged 65 or above

1.006 1.003 1.000 0.996 0.994 0.966 0.895 0.833

1.384 1.394 1.404 1.412 1.418 1.443 1.423 1.373

37.63 38.95 40.43 41.67 42.72 49.47 58.95 64.81

10.01 10.52 11.05 11.57 12.04 16.69 22.94 24.33

23

The Universal Two-child Policy

policy can reduce, to a certain extent, interference in reproductive behaviors stemming from gender preference, and, in turn, promote an equitable gender structure; adjustments to the birth control policy can also effectively alleviate existing difficulties in the approval and regulation of grass-roots authorities and reduce conflicts between public willingness and state policy. 4

Policy Outlook

In response to demographic problems across different periods, China has regularly adjusted and improved its family-planning policy. It is noteworthy that demographic development and changes cannot be completely controlled by policies, despite the accumulated experience the state has amassed in dealing with them previously. Although the official birth control policy holds the promise of creating better conditions for long-term, balanced population development, it is also likely to be burdened by undesirable side effects. Both an imminent shortage of labor resources and the problem of population aging are inevitable in China, as a result of which the country must make early strategic choices when approaching the overall socioeconomic system in order to adapt to trends in demographic development. To begin with, the need to continuously monitor national fertility and adjust the birth control policy as necessary remains pressing. The universal two-child

Selective Population aged 15–64

Total population

Total dependency ratio (%)

% of population aged 65 or above

1.006 1.003 1.000 0.996 0.994 0.966 0.875 0.799

1.383 1.391 1.397 1.403 1.407 1.416 1.379 1.304

37.53 38.69 39.76 40.76 41.62 46.67 57.51 63.26

10.01 10.54 11.10 11.64 12.14 17.01 23.66 25.62

24

Zhang and Yang

policy is not the end of adjustments to the birth control policy. Timely decisions on changing or maintaining this policy should be made according to ongoing trends of fertility indicators so as to adjust the people’s reproductive behaviors to the needs of social, economic, environmental, and resource sustainability. From the examples set by other countries, we can see that with changes in lifestyles and increasingly late marriage and childbirth, people’s willingness to bear children will likely continue to decrease. To avoid falling into the low fertility trap, China may need to further relax or even completely cancel birth restrictions in the future. Second, it is necessary to improve fertility-supporting measures in order to jointly create and maintain a good environment for human reproduction—a critical component of national power. China must therefore act from a strategic perspective to protect families’ reproductive rights and create legal, cultural, and social environments that are amenable to reproduction. It should start from women-specific public policies regarding education, employment, maternity leave, and medical treatment, so as to encourage women of childbearing age covered by these policies to bear children in a relaxing environment, thereby achieving a constantly stable and appropriate fertility rate. Third and last, China should adapt its social and economic systems to the shrinking labor force and aging population. Adjustments to the birth control policy are incapable of reversing the current decline in the working-age population, nor can they reverse the trend of population aging. No longer having a global advantage in terms of labor resources is an inevitable issue to the new normal of the Chinese economy. In addition to adjusting the birth control policy to decelerate the deterioration of its demographic structure, China must speed up its efforts to increase labor productivity, promote the upgrading of its industrial structure and the transformation of its economic growth pattern, and make the economy less dependent on labor resources. It should deepen the hukou system reform in order to promote the inclusion and integration of migrant workers into cities as well as healthy urbanization, and, in doing so, realize the optimal allocation of labor resources. Additionally, state social security, elderly care service, and medical service systems should be improved as soon as possible in order to eliminate public concern over post-retirement life.

Chapter 2

The Universal Two-child Policy and Support for Families Li Jianmin1 In 2015, the decision was made at the Fifth Plenary Session of the 18th CPC Central Committee to implement the universal two-child policy. This constitutes the most significant improvement to the country’s birth control policy since it was decided at the Third Plenary Session of the 18th CPC Central Committee that the selective two-child policy would take effect. This marked the end of the one-child policy that had previously been in effect for 35 long years; in a shift of priorities, promoting long-term, balanced demographic development has been central to the latest population policy. The universal two-child policy has caused a sensation across Chinese society and where the decision to have a second child or not has become a hot topic for countless families. That being said, great uncertainties remain in regards to whether the new birth control policy will definitely lead to a fertility rate rebound and, additionally, whether or not the future fertility rate will stay at a relatively high level, given that the current average level of the population’s willingness to bear children is below the replacement level in China,2 and even lower than the willingness to bear children seen in countries with extremely low fertility rates, such as European countries and Japan.3 This is because under the current socioeconomic conditions in China, the primary determiner of a given couples’ willingness to bear children and their associated fertility behavior is no longer the birth control policy, but, rather, the costs of raising children and the availability of a supportive environment for child growth. 1  Li Jianmin, Professor of the School of Economics, Nankai University. 2  Wang Jun and Wang Guangzhou 王军、王广州, “Zhongguo yuling renqun de shengyu yiyuan jiqi yingxiang guji 中国育龄人群的生育意愿及其影响估计 [Estimation on the Willingness of Chinese People of Childbearing Age to Bear Children and Its Impact],” Chinese Journal of Population Science 4 (2013). 3  Wu Fan 吴帆, “Cong jiating zhengce beijing xia de ouzhou shengyulü bianhua kan zhongguo di shengyulü xianjing de fengxian 从家庭政策背景下的欧洲生育率变化看中国低生育 率陷阱的风险 [On the Risk of the Low Fertility Rate Trap in China from the Perspective of Changes in the Fertility Rate in Europe within the Context of the Family Policy],” Sociological Studies 1 (2016).

© koninklijke brill nv, leiden, 2019 | doi:10.1163/9789004407435_003

26 1

Li

The Unexpected Inefficacy of the Selective Two-child Policy

In November 2013, the Central Government implemented the selective twochild policy across all Chinese provinces, municipalities directly under the control of the Central Government, and autonomous regions, rolling the policy out over the first half of 2014. Despite this wide-scale action, the national fertility level did not show an immediate rebound as result of policy implementation. Although this policy involved as many as ten million couples, data released by the NHFPC indicated that by the end of May 2015, only 1.45 million couples across the country applied for a second child. In 2015, this policy led to only about 800,000 newborns nationwide.4 According to NBS statistics, the number of newborns across China was 16.87 million in 2014—only 470,000 more than in 2013. That compares with 16.55 million in 2015, which was 320,000 fewer than in the previous year.5 Some demographers believe that two factors are primarily responsible for the decrease in the number of newborns in 2015—namely, the age-structure effect, which indicates a decrease in the number of women of childbearing age within the population as a whole; and the “year of the sheep” effect unique to China, wherein some couples avoid bearing children in the year of sheep. Utilizing only these two reasons, however, it is impossible to explain why fewer than 15% of all couples covered by China’s selective two-child policy applied, one year after this policy took effect, for a second child. On the other hand, the majority of people believe that two children within a family is ideal, according to the results of several recent large-scale (i.e. the number of samples is over 10,000) surveys on willingness to bear children made. In 2013, for example, the ideal number of children for married respondents between 20 and 44 years old was 1.93, as those who wanted to have two children made up over 80% of respondents; families that wanted to have a second child made up over 60% of all families that already had one child with either parent being the only child of his/her own parents, according to a survey by the China Population and Development Research Center (CPDRC) on

4  Zhai Zhenwu 翟振武, “Chusheng renkou shuliang bodong fanying renkou jiegou xin bianhua 出生人口数量波动反映人口结构新变化 [New Changes in the Demographic Structure Reflected by Changes in the Number of Newborns],” http://www.nhfpc.gov.cn/jczds/s3578/2 01601/313a47980a3f4cd59436c3a2577f80d9.shtml, Jan. 21, 2016. 5  N BS, “Zhonghua renmin gongheguo 2015 nian guomin jingji he shehui fazhan tongji gongbao 中华人民共和国 2015 年国民经济和社会发展统计公报 [Statistical Communiqué of the People’s Republic of China on 2015 National Economic and Social Development],” http:// www.stats.gov.cn/tjsj/zxfb/201602/t20160229_1323991.html, Feb. 29, 2016.

The Universal Two-child Policy and Support for Families

27

the willingness to bear children.6 In May 2015, the Health and Family Planning Commission of Shandong Province conducted a sample survey on the willingness of couples of childbearing age to bear children and its determinants, with the result showing that, of all couples covered by the local household registration system who were between 20 and 49 years old, 85%/78.7% of those with either/neither of them being the only child of his/her parents wanted to have two children.7 Substantially fewer couples actually plan to have two children, however, compared with those who think that having two children is the ideal or who wish to have two children. A survey was conducted in Hubei Province on the childbearing-specific willingness of those families covered by the selective two-child policy and within which the women were between the childbearing age of 19 to forty-five. The results indicated that fewer than one-quarter of these families explicitly replied that they wanted to have a second child.8 In February 2015, another survey—conducted via certain social networking platforms by the CPDRC—evaluated the willingness among a specific group of people (3,043 valid samples) to bear children. The results indicated that although 35.4% of the 478 respondents with one child wanted to have a second child, fewer than 10% received the birth permit.9 Why is there such a sizeable gap between the ideal or desired number of children and actual fertility behavior? According to related survey results, the decisive factor currently restricting couples’ fertility behavior is pressure associated with the costs of bearing and raising children. The primary reason for not planning to have a second child is financial stress. Having no time to take care of children and their effect on the parents’ own development also are important reasons. According to the 6  Zhuang Ya’er, Jiang Yu, Wang Zhili, Li Chengfu, Qi Jianan, Wang Hui, Liu Hongyan, Li Bohua, and Qin Min 庄亚儿、姜玉、王志理、李成福、齐嘉楠、王晖、刘鸿雁、李伯华、    覃民， “Dangqian woguo chengxiang jumin de shengyu yiyuan—ji yu 2013 nian quanguo shengyu yiyuan diaocha 当前我国城乡居民的生育意愿—基于 2013 年全国生育意愿 调查 [Current Willingness to Bear Children among Urban and Rural Residents in China, according to Nationwide Surveys on Such Willingness in 2013],” Population Research 3 (2014). 7  Zhang Xiaoqing, Huang Caihong, Zhang Qiang, Chen Shuangshuang, and Fan Qipeng 张晓 青、黄彩虹、张强、陈双双、范其鹏, “Dandu erhai yu quanmian erhai zhengce jiating shengyu yiyuan bijiao ji qishi ‘单独二孩’ 与 ‘全面二孩’ 政策家庭生育意愿比较及 启示 [Comparison and Conclusions on Willingness to Bear Children of Families Covered by Selective and Universal Two-Child Policies],” Population Research 1 (2016). 8  Shi Zhilei and Yang Yunyan 智雷、杨云彦, “Fuhe dandu erhai zhengce jiating de shengyu yiyuan yu shengyu xingwei 符合 ‘单独二孩’ 政策家庭的生育意愿与生育行为 [On Willingness to Bear Children and Fertility Behavior of Families Covered by the Selective TwoChild Policy],” Population Research 5 (2014). 9  Zhao Yimeng 赵一盟, “Woguo shengyu yiyuan wangluo diaocha jieguo fenxi 我国生育意 愿网络调查结果分析 [Analysis of the Results of Online Surveys on Willingness to Bear Children in China],” Population and Family Planning 12 (2015).

28

Li

aforementioned survey in Hubei Province, financial stress and time-related pressure were cited by more than 50% and nearly 20%, respectively, of local families covered by the selective two-child policy but with no intent to have a second child.10 The same results were obtained by the Health and Family Planning Commission of Shandong Province and CPDRC surveys.11 2

Policies Needed to Support Parents Financially

Unlike the dominant mechanism—which primarily operates through involving a decline in children’s utility and leads to a decline in the dropping birth rate during a demographic transition—the post-transition dominant mechanism primarily affecting childbearing and fertility decisions is the increase in children-specific costs, which includes both direct and incidental costs. As a result, it is common in low-fertility countries for the actual number of children born to be significantly smaller than the ideal or desired number of children, as in China. The primary reason why a large number of policycovered families choose not to have a second child lies in the pressure incurred by children-­specific costs, childcare, and women’s career development, according to research into and an analysis of the selective two-child policy.12 Such pressure is mainly caused by: 2.1 High Costs of Living and Raising Children While incomes have greatly increased across the board for more than ten years, the cost of living also has been on the rise in China. Soaring home prices and educational/medical costs, in particular, have been a source of great pressure. For young couples, home buying, child care and education, etc., are all needs that must be satisfied. The skyrocketing prices of products and services specific to these needs have made the situation of young couples even more financially precarious, and many have had to give up on their plan to have a second child. Take the burden imposed by education, for example. As China becomes an increasingly highly competitive society, parents attach great importance to their children’s education. The resultant spending is an important—­ sometimes even the primary—family expense. From September 2010 to June 10  Shi and Yang, “Fuhe dandu erhai zhengce jiating,” 5 (2014). 11  Zhang, Huang, Zhang, Chen, and Fan, “Dandu erhai yu quanmian erhai zhengce jiating,” 1 (2016). 12  Peng Xizhe 彭希哲, “Shixian quanmian erhai zhengce mubiao xuyao zhengtixing de peitao 实现全面二孩政策目标需要整体性的配套 [Comprehensive Support is Required to Implement the Universal Two-Child Policy],” Probe 1 (2016).

The Universal Two-child Policy and Support for Families

29

2011, a survey of 7,718 families with children aged three to six was conducted across ten representative cities in East, Central, and Western China, with the results indicating that the total cost of pre-school education accounted for 81% of the family’s per capita disposable income.13 In 2013, the total educational expense of Chinese families was 895.9 billion yuan, accounting for 29.5% of the country’s total educational spending. For urban households, the average annual expenditure on children’s education accounted both for 76.1% of the total child-related expenses and 30.1% of total household income.14 International comparisons show that the educational expenses of households accounted for less than 1.0% of consumer spending in the Czech Republic, France, Germany, Italy, the Netherlands, and other countries, 1.0–1.9% in Turkey, the United Kingdom, Spain, Canada and Poland, 2.0–4.0% in Australia, Japan, Mexico, and the United States, and 5.9–7.5% in South Korea.15 Other international comparative research shows that the level of private educational expense in China is the highest globally.16 We may therefore say that China has among the highest levels of educational expense per family in the world. From another angle, empirical findings also reflect the impact of the cost of bearing and raising children on the willingness to bear children in the first place, as well as several related fertility decisions. For example, both the educational background and income of respondents are highly and positively correlated with respondents’ willingness to have a second child, according to a survey conducted by Shanghai Municipal Commission of Health and Family Planning.17 Another study also reached the conclusion that income has a significant effect on young people’s willingness to bear children—the higher the 13  Liu Yan and Song Yanping 刘焱、宋妍萍, “Woguo chengshi 3–6 sui ertong jiating xueqian jiaoyu zhichu shuiping diaocha 我国城市 3~6 岁儿童家庭学前教育支出水平调 查 [Survey on the Level of Pre-school Educational Expenses of Chinese Urban Families with Children Aged Three to Six],” Journal of Huazhong Normal University (Humanities and Social Sciences) 1 (2013). 14  Zhou Xuehan, and Zhang Yu 周雪涵、张羽, “Gaozhong jiaoyu jieduan jiating jiaoyu chengben jiqi yingxiang yinsu fenxi 高中教育阶段家庭教育成本及其影响因素分 析 [Analysis of Educational Costs of Families with Children at High School and Their Determinants],” Tsinghua Journal of Education 5 (2015). 15  Shen Baifu and Yan Jianchao 沈百福、颜建超, “Woguo chengzhen jumin jiaoyu zhichu de diqu chayi jiqi bianhua 我国城镇居民教育支出的地区差异及其变化 [On Regional Differences of and Changes in Educational Expense of Chinese Urban Residents],” Fudan Education Forum 6 (2012). 16  Wang Yuanwei 王远伟, “Geren jiating jiaoyu touru jiqi shehui yingxiang de guoji bijiao yanjiu 个人家庭教育投入及其社会影响的国际比较研究 [International Comparative Research on the Educational Spending of Individuals and Families and Its Social Impact],” Comparative Education Review 6 (2012). 17  Peng, “Shixian quanmian erhai zhengce mubiao,” 1 (2016).

30

Li

income, the stronger the desire to have children, while lower-income groups face heavier financial stress and are more likely to forego bearing a second child (Zheng Zhenzhen, et al., 2009).18 Despite lower absolute costs, rural residents face even higher costs related to bearing and raising children relative to income than their urban counterparts.19 The actual and desired birth rates of rural floating population decrease with any increase in the level of income or of localized consumer spending, according to a study based on rural micro-level data from the 2010 Chinese General Social Survey (CGSS).20 The aforementioned studies and evidence indicate that under socioeconomic conditions with low fertility rates, the relationship between income level/­educational background and childbearing-specific willingness has been marked by a very different set of factors than what may be seen in the period of ­fertility-rate transition. Potential parents make more rational childbearing-related decisions under the dual pressures of the costs of living and of child bearing/­raising. In other words, planned and responsible childbirth has become something that is done under individual’s own initiative. 2.2 Difficulties in Balancing Childcare and Work Raising children is a time-intensive activity, leading to severe time conflicts between childcare and work, especially when both husbands and wives have jobs. Care services for infants under three years old are largely unavailable in China, despite the fact that the admission rate of children aged three or above to public educational institutions has greatly increased in more recent years. Before attending kindergarten, the only option for childcare is generally parental or grandparental care. For a significant period of time, wages, income distribution, and other associated systems in China have all been predicated upon both the husband and wife having jobs to support a family of three. For 18  Z  heng Zhenzhen, Li Yuzhu, and Liao Shaohong 郑真真、李玉柱、廖少宏, “Di shengyu shuiping xia de shengyu chengben shouyi yanjiu—laizi jiangsusheng de diaocha 低生 育水平下的生育成本收益研究—来自江苏省的调查 [On Returns on the Costs of Child Bearing and Raising at Low Fertility Rates—from a Survey in Jiangsu Province],” Chinese Journal of Population Science 2 (2009). 19  Chen Youhua 陈友华, “Nongmin shengyu chengben fenxi: chengxiang bijiao de shijiao 农民生育成本分析: 城乡比较的视角 [Analysis of Rural Residents’ Costs of Child Bearing and Raising from the Perspective of an Urban/Rural Comparison],” Journal of Nanjing College for Population Programme Management 2 (2011). 20  Mo Weiqiao, Zhang Weiming, and Zhu Zhongshi 莫玮俏、张伟明、朱中仕, “Renkou liudong de jingji xiaoying dui shengyulü de yingxiang—jiyu CGSS nongcun weiguan shuju de yanjiu 人口流动的经济效应对生育率的影响—基于 CGSS 农村微观数据 的研究 [On the Impact of Population Flow’s Economic Effect on Fertility Rate—Based on CGSS Rural Micro-Level Data Study],” Zhejiang Social Sciences 1 (2016). 



The Universal Two-child Policy and Support for Families

31

low- and middle-income families, the husband or, more often, the wife leaving his/her income-earning position to take care of children at home can put more strain on family life as a result of the subsequent reduced family income. Consequently, many couples give up the idea of bearing a second child, as it is not financially feasible. The fertility status of married women has a notably negative impact on their employment as a whole, as shown by an analysis based upon data from the third survey on the social status of Chinese women. For one thing, bearing a second child would significantly reduce the employment potential of urban women. What’s more, either having an infant at home or the experience of employment being interrupted due to maternity leave would also significantly reduce the employment possibilities of women in both urban and rural areas.21 2.3 Inadequate Policy Support for Families Since 2010, policy support for families has been considered at the national level. The 12th Five-year Plan included measures to this effect, such as policies aimed at enhancing families’ developmental capacity, increasing support for families in need, addressing the admission rate of young children, the supply of affordable housing, and the supply of public services in communities, and aggressively eliminating institutional barriers affecting family reunions within China’s floating population. Given the country’s long-held policy of strictly controlling births, however, China lacks the necessary and due policy support, as well as related public services, for families raising children. For example, care services for infants under the age of three are practically unavailable; personal income tax calculations do not factor in the financial burdens of raising a family; the proportion of government money within total educational spending is a pittance; and pediatric resources are undersupplied. The existing policy framework and public service system are entirely insufficient to meet the various public needs brought on by the universal two-child policy. In fact, the selective two-child policy itself is directly related to the lack of statelevel policy support for families. This is because there were two mistakes in the implementation of this policy: first, relevant government departments focused on alleviating what they expected to be a sudden, rapid increase in the number of newborns and preventing/controlling excessive newborns. Second, they did

21  Song Jian 宋健, “Pubian erhai shengyu dui funü jiuye de yingxiang ji zhengce jianyi 普遍 二孩生育对妇女就业的影响及政策建议 [On the Impact of Having Two Children on Female Employment and Policy Recommendations],” Population and Family Planning 1 (2016).

32

Li

not formulate family support policies that were compatible with this new birth control policy. The aforementioned situation reflects the strong public need for family policy support. In order to encourage more couples to have two children while simultaneously recognizing that they are under significant pressure from the cost of living and child bearing/raising, a more direct and effective policy measure than simply increasing their income level would be to increase policy support for families. The experience of several other countries has shown that comprehensive family policies not only effectively relieve parenting pressures and facilitate an appropriate work-family balance, but also promote child development, gender equality, and women’s employment, and aid countries in avoiding the low fertility rate trap.22 3

Improving Policies to Support Parents with Two Children

The universal two-child policy differs greatly from its selective counterpart in that relevant supporting policies have been considered in both policy formulation and implementation. In his government work report delivered at the Fourth Session of the 12th National People’s Congress, Chinese Premier Li Keqiang specifically proposed improving those policies that supported the possibility of two children per couple. The Decision of the CPC Central Committee and the State Council on the Full Implementation of the Two-Child Policy and the Reform and Improvement of Family Planning Service Management 《 ( 中共中央 国务院关于全面实施两孩政策，改革完善计划生育服务管理的决定》) states that resources such as maternal and child health care, childcare, pre-school/ elementary/secondary education, and social security should be rationally allocated according to existing demand for reproductive services and concurrent demographic changes, thereby meeting any emerging needs for public services; it is therefore necessary to guide and encourage social forces to open non-profit women and children’s hospitals, as well as create inclusive childcare centers/kindergartens and other service organizations. Improving policies that support parents with or planning to have two children means offering active policy support for each couple to actually be able to bear and raise two children. This is the Chinese government’s positive response to public needs under the new birth control policy, as well as an important opportunity for rolling out family policy reform. Policy support for families should become a basic aspect of future institutional arrangements 22  Wu, “Cong jiating zhengce beijing xia de ouzhou shengyulü,” 1 (2016).

The Universal Two-child Policy and Support for Families

33

aimed at improving the people’s livelihood, as well as an important part of public services. In this sense, the family policy reform led by the improvement of the birth control policy will open up an important channel for the public dissemination of socioeconomic development. Policies supporting the universal two-child policy should cover six aspects, including: providing maternity and reproductive health services, protecting women’s and children’s health, promoting child development, reducing the financial burden on families, facilitating work-family balance, and promoting gender equality. Currently, there is a need to formulate family support policies in the following particular areas. 3.1 Maternity and Reproductive Health Services The most pressing public needs arising from the implementation of the universal two-child policy are those related to maternity and reproductive medical and healthcare services, particularly ensuring healthy pregnancies, childbirth, and newborns. Therefore, the government and society at large are tasked with providing both information and medical and healthcare services covering the entire reproductive cycle from beginning to end in order to ensure the health of mothers and children alike. In 2014, the prenatal examination and in-hospital delivery rates nationwide reached 95.6% and 99.5%, respectively, indicating that the supply of and demand for obstetric resources in China were more or less equally balanced before the universal two-child policy was implemented. Under the implementation of this policy, however, such a balance would be broken. It is estimated that there are nearly 90 million women of childbearing age in this country who fall under the umbrella of the two-child policy. Even if only 20% of them have two children, another 18 million women needing obstetric services will flood the country’s hospitals. It is estimated that the demand for obstetric resources will increase from 2016 onward, and that the 2017–2019 period will see the peak of such demand. For example, the demand for beds in the obstetrics department in 2017 may increase by more than 25% when compared with 2014. Therefore, it is necessary to increase the total number of obstetric resources, including medical institutions, doctors, midwives, nurses, beds, equipment, and related technical personnel, and, furthermore, to balance the distribution of such resources. 3.2 Pediatric Care Services At present, the relationship between the supply of and demand for pediatric services in China is tense, mainly manifesting in an inadequate supply of medical and healthcare resources for children, unbalanced development, a high workload for medical and healthcare workers, and difficulties in children’s access to medical services. It will be very difficult to cope with any additional

34

Li

growth in the demand for pediatric services resulting from the universal twochild policy if the existing supply of pediatric services and resources is not improved. In 2013, for example, the number of pediatric beds was 414,200, with a bed density of 1.85 beds/1,000 children aged zero to fourteen. The demand for beds is predicted to increase by 20% within the next 10 years, even maintaining the same bed density. This demand will increase by 30% if bed density increases by 10%. In terms of the demand structure, the demand for medical services for infants under three years old is much higher than that of other children. Therefore, the growth in demand for pediatric services from 2016 to 2020 will mainly be due to the increase in the number of infants under three years old. By 2020, infants are likely to account for more than 80% of the total demand for pediatric services. The Chinese government has already committed to addressing deficiencies in the pediatric service system at the national, provincial, municipal, and county levels, and to strengthen its support for children’s and general hospitals during the 13th Five-year Plan. 3.3 Maternity and Paternity Leave Maternity and paternity leave constitutes an important facet of the available fertility benefits in China. The introduction of an extended period of maternity leave represents the most immediate adjustment to relevant welfare policies after the universal two-child policy took effect. The Amendment to the Population and Family Planning Law 《 ( 人口与计划生育法》（修正 案）) passed by the NPC in 2016 stipulates a 98-day maternity leave. As of the end of March 2016, 19 provinces, municipalities directly under the Central Government, and autonomous regions had extended maternity leave to varying degrees on the basis of national regulations, and, additionally, had made new provisions for paternity leave, which is now 15 days in most provinces. It can be seen from Table 2.1 that the first provinces to amend the relevant regulations offer a 128-day maternity leave, versus 158 days in nearly all the provinces that followed suit afterwards. The stipulations regarding maternity leave in Beijing offer the greatest flexibility, but even the most miserly allotment, the 128-day maternity leave, is longer than the International Labor Organization (ILO)-recommended maternity leave (12 weeks) and the Organization for Economic Cooperation and Development (OECD) countries’ average level (18.1 weeks).23 Given the corporate burden and the effect of such a period of absence on female employment, maternity leave should not be extended too much. Nevertheless, additional less-paid or unpaid parental leave may be offered if it is acceptable to employers or commensurate with the 23   O ECD Family Database, http://www.oecd.org/social/database.htm.

35

The Universal Two-child Policy and Support for Families Table 2.1

Latest provincial regulations outlining maternity and paternity leave in order of date of enactment (in days)

Province

Maternity

Paternity

Province

Maternity

Paternity

Guangdong Hubei Zhejiang Tianjin Guangxi

128–158a 128 128 128 148

15 15 15 7 25

Sichuan Fujian Jiangxi Shanghai Beijing

20 15 15 10 15

Anhui Liaoning Shanxi Ningxia Shandong

158 158 158 158 158

10–20b 15 15 25 7

Qinghai Jilin Jiangsu Hebei

158 158–180 158 128 128 + 1 to 3 monthsc 158 158 128 158

15 15 15 15

a 158 days in the case of cesarean section; b 20 days for husband and wife living in different places; c One to three months may be added with consent of the employer.

nature of their particular work. This will avoid increasing the corporate burden while at the same time reducing family pressures caused by parenting, while also lessening the impact of childbearing on female employment. 3.4 Professional Infant Care Services and Preschool Education The term “professional infant care services” refers to infant care and those early education services provided by specialized organizations such as nurseries and kindergartens. Infant care requires the largest amount of time and energy in relation to childcare services overall, and is also an important catalyst for the social conflicts related to one woman filling the dual roles of professional and mother. As a result, professional infant care services are increasingly valued by governments and by society at large in many countries. Professional infant care services not only promote the healthy growth of children, but also help their parents to balance the work-family dynamic, thus alleviating the impact of motherhood on a woman’s employment prospects and increasing the overall productivity of society. In China, one of the major difficulties facing couples with two children is the care of their children, which is also an important constraint on couples’ willingness to bear children in the first place. What’s more, it is currently quite difficult for children in many Chinese provinces and cities

36

Li

to be admitted to kindergarten at all. According to NBS statistics, there were 198,600 kindergartens with 38.947 million children across the country in 2013, suggesting a mere 67% admission rate among pre-school children aged three to six. A more pressing public need lies in the need for the professional care of infants under three years of age, but this service is practically unavailable in China, where only a very small number of care service providers accept such infants. In some cities, there are kindergartens that have set up infant care classes for children aged two to three. Unfortunately, however, almost all these classes have been canceled due to the more pressing need to ensure the admission rate of children over three years of age. At present, the professional care of infants under the age of three in China faces the predicament of the “three Nos”—that is, there is no industry access standard, no service norm, and no competent authority. This is situation is disproportionate to the huge demand for such services. International experience shows that the level of development of infant care services directly affects female labor force participation and fertility rates. On average, 33% of children under three years of age in OECD countries received professional care in 2010;24 this percentage exceeds 54% in all Nordic countries, as exemplified by the 66% of pre-three-year-olds receiving care in Denmark.25 What’s more, the female labor force participation rate in these countries is positively correlated with the fertility rate.26 The Chinese government should therefore attach great importance to the issue of professional infant care services and actively promote the development of these services as an important part of its ongoing supportive policies. The government must step up its support for professional infant care services and devise methods for encouraging the opening of more nurseries and kindergartens. In addition, enterprises should be urged to shoulder their social responsibilities by providing childcare support and flexible jobs for women employees in the period of lactation or whose children are infants.27 Kindergartens in China also undertake the task of pre-school education— that is, education offered before formal schooling begins. The period before the age of six is critical for child development, and pre-school education is an important method by which to develop children’s intelligence. The Chinese government values pre-school education and defines it as the beginning 24  Ibid. 25  Eurostat, Family Indicators, http://appsso.eurostat.ec.europa.eu/nui/submitViewTable. Action.do, 2015. 26  Wu, “Cong jiating zhengce beijing xia de ouzhou shengyulü,” 1 (2016). 27  In 2005, among all enterprises employing ten or more employees in 21 EU member states, an average of 8% provide childcare and other related services, with this percentage in the Netherlands and the United Kingdom being 41% and 17%, respectively.

The Universal Two-child Policy and Support for Families

37

of lifelong learning, an important part of the national education system, and a significant undertaking for the common good. The National Outline for Medium and Long-Term Education Reform and Development (2010–2020) ( 国家中长期教育改革和发展规划纲要（2010~2020）》) formulates a plan 《 for the reformation and development of pre-school education and puts forward the goal: by 2020, offering universal access to a year of “before school” education, near-universal access to two years of “before school” education, and—in regions with the necessary resources—universal access to three years of “before school” education. The Opinions of the State Council on the Current Development of Pre-School Education 《 ( 国务院关于当前发展学前教育的若 干意见》) makes it clear that government-led participation, whether public or private, is required to ensure access by children of a certain age to basic, high-quality pre-school education. The Twelfth Five-Year Plan for the National System of Basic Public Services of the People’s Republic of China 《 ( 国家基本公共 服务体系 “十二五” 规划》) proposes an inclusive pre-school education public service system covering both urban and rural areas with reasonable distribution. In 2014, the Ministry of Education (MOE), the National Development and Reform Commission (NDRC), and the Ministry of Finance (MOF) co-issued the Opinions on Implementing the Phase II Three-Year Action Plan for Pre-School Education 《 ( 关于实施第二期学前教育三年行动计划的意见》), with the intention to implement this action plan from 2014 to 2016. Its main aims were to attain a 75% gross admission rate of pre-school children aged three to six by 2016. With the implementation of the universal two-child policy, the number of children who should receive pre-school education will increase significantly in the years between 2020 to 2023. In order to achieve the aforementioned goal, therefore, both the government and society as a whole still need to contribute more resources and make greater efforts towards ensuring access to education. 3.5 Making Education More Affordable Children’s education is a need that must be satisfied. As mentioned above, the educational expenses of Chinese households make up a disproportionately large share of both household income and of total educational spending in China overall. The cost of education for Chinese families remains high, though the situation has improved somewhat since the new compulsory education law came into force in 2008. There are many reasons for this situation, with one of the important being the shortage in and uneven distribution of quality education resources. Many parents have to spend large sums of money on housing in excellent school districts and various extra-curricular educational services in order to get their children into good kindergartens, elementary schools, or secondary schools. Family expenses on education for students in private and excellent public schools are 3.0 and 2.5 times those of students in ordinary

38

Li

schools, according to a 2011 survey distributed by Peking University’s Institute of Social Science Survey (ISSS).28 If this situation cannot be improved, the increase in the number of newborns caused by the universal two-child policy will further exacerbate the problem. The pressure caused by competing for access to quality educational resources has left many couples hesitant about whether or not to have a second child at all. To change this situation, the Chinese government must develop better and fairer education by taking four distinct measures: increasing state financial contributions to compulsory education, ensuring the fair distribution of educational resources, increasing the supply of educational resources, and rationally distributing those same highquality educational resources. 3.6 Fiscal Support While raising children is the responsibility of parents and families, ensuring their healthy growth is also the responsibility of the government and of society at large. Chinese Premier Li Keqiang noted in the Report on the Work of the Government (2016) that all involved entities—families, schools, government, and society—must take responsibility for children’s safety, health, and growth, as they are the hope for the future. Given that families generally face heavy financial pressure to raise two children, any further reformation of China’s income distribution system should fully take into consideration offering financial support for families raising underage children. Under the universal two-child policy, the standard family model in China is no longer a family of three consisting of one couple and one child, but, rather, a family of four, consisting of one couple and two children, which necessarily entails higher reproductive costs. It is therefore necessary to increase the financial support for families raising underage children. It is recommended that the following measures be taken: Increase the share of personal income in the initial income distribution, so that all workers have a fairer share of the fruits of economic development; set up special policies in the personal income tax system that offer tax relief to parents raising underage children; offer childcare subsidies for families raising underage children under special circumstance, such as the needy, low-income, and/or single-parent families and those with unemployed parents; and, finally, provide them with financial assistance for infant care and preschool/compulsory education through government procurements, educational vouchers, and other means.

28   I SSS, Zhongguo minsheng fazhan baogao 2012 中国民生发展报告 2012 China Family Panel Studies 2012 (Beijing: Peking University Press, 2012).

Chapter 3

Quantitative and Structural Changes in China’s Population and the Allocation of Educational Resources Cai Yifei, Wang Zhiyong, and Gao Wenshu1 Population is the most basic variable affecting a country’s social and economic development. In recent years, China’s demographic situation has undergone significant change, with the total population slowly increasing, the number of the working-age population declining, and the proportion of the elderly population rapidly rising, all coupled with the prominent trend towards late birth and few children per family. In response to these pressures, in late 2013, China relaxed the one-child policy by implementing a selective two-child policy, while in 2016, the universal two-child policy took effect. Changes in the national population policy have added impetus to the ongoing demographic changes. Reformation of the country’s birth policy and changes in its demographic situation will undoubtedly have a significant impact on the development of education in China. Public education mainly centers on the target age-appropriate population, the size of which largely decides the scale and extent of what education can be supplied. Given that the population continues to change rapidly in terms of both its size and structure while changes to the educational system are only capable of being gradually implemented, the government must be visionary in implementing a plan for the country’s future supply of educational resources. As a result, a scientifically-sound prediction of the size and structure of the future school-age population will lay the groundwork for formulating national educational policy and allocating educational resources. Following the full implementation of both the selective and the universal two-child policy, the numbers of newborns in Chinese cities will increase— to varying extents—within a short period of time. Since the new population will add to the already-great needs for the distribution of basic educational resources, it is obviously an important task for both the government and the education sector to fully meet these new needs. In order to meet the 1  Cai Yifei is Associate Researcher at IPLE-CASS; Wang Zhiyong is Researcher at IPLE-CASS; Gao Wenshu is Researcher at IPLE-CASS.

© koninklijke brill nv, leiden, 2019 | doi:10.1163/9789004407435_004

40

Cai, Wang, and Gao

educational needs of the growing population and realize equal access to public education services, it is necessary not only to adjust the existing basic educational resources, but to know which geographic areas have new populations and/or need adjustment, as well as how any adjustment should be made. Therefore, a careful analysis of demographic changes, especially changes in the newborn population after the implementation of the universal two-child policy, offers an important reference value for the rational allocation of educational resources. This study presents forecasts on the size, structure, and urban/rural and regional distributions across China’s population from 2016 to 2030, as well as provides an analysis of the current state of the supply of available educational resources, including the basic conditions of the supply of educational materials and services at the national, urban/rural, and regional levels. It also offers estimates of the predicted shortages and excesses of educational resources according to the extant demographic situation. On this basis, it puts forward policy suggestions regarding how to best adapt the country’s educational system to its ongoing demographic development, changes in the regional population patterns, and the country’s ongoing urbanization in order to guarantee and promote fairness in education. 1

Population Size and Distribution Forecasts

There are many methods for population forecasting, including time-series extrapolation, econometric model fitting, and the cohort component method, of which the last is most popular. We used the cohort component method to predict the Chinese population from 2016 to 2030 by age group and in three dimensions, including total size, urban/rural areas, and regions. The software PADIS-INT developed by the NHFPC Center for Population Development was used for projection. 1.1 School-age Population Size and Age Structure First, we predicted China’s total population from 2016 to 2030. The first forecast parameter was the average life expectancy of the population. In 2010, the average life expectancy of China’s population was 74.83 years—72.38 for men and 77.37 for women. Life expectancy relates closely to medical conditions and living standards. With the country’s ongoing economic and social development, Chinese citizens’ life expectancy will likely increase. The average life expectancy of men and women will continue to grow between 2010 and 2030, but at an increasingly slow rate. It was assumed that, by 2030, the average life expectancy of men and women will be 78 and 82 years, respectively.

Quantitative and Structural Changes in China ’ s Population

41

Parameter two was fertility level. Most recent years have shown signs of relaxation in China’s family planning policy, as the selective and universal twochild policies were implemented in 2014 and 2016, respectively. The fertility level is therefore expected to rise. The TFR from 2010 to 2015 was 1.5, and it was assumed that this rate will increase to 1.6 in the 2016–2020 period and to 1.7 in the 2020–2030 period. Parameter three was the sex ratio at birth, for which we used the male/ female ratio of under-one infants. This ratio was 118:100 in 2010 and will decline with the implementation of the universal two-child policy. It is expected to drop to 110:100 in 2020 and to the normal 105:100 in 2030. Parameter four looked at international migration, which, in China, is subject to more stringent control than is typically seen elsewhere. Since the net number of international migration relative to total population is almost negligible, it was assumed—for the purposes of our study—that the net amount of international migration is zero. The forecast results show (see Table 3.1) that China’s total population will evince a slow growth trend between 2016 and 2030, as it will reach 1.40, 14.2 and, at peak value, 1.43 billion by 2020, 2025, and 2030, respectively. However, the pre-school-age population will keep declining from 63.78 million in 2016 to 62.26 million in 2020 and further to 55.65 million in 2030. The elementary school-age population will generally be in a relatively stable state, with a slight increase from 94.27 million in 2017 to 95.88 million in 2021. It will gradually decline from 2022 onward to 88.90 million in 2030. The middle school-age population will increase and then decrease, as it will reach 44 million in 2016, before reaching a peak value of 49.13 million in 2023, and then gradually drop to 46.51 million in 2030. The high school-age population will increase from 43.29 million in 2016 to 48.65 million in 2027, and then begin to decline slightly to 47.13 million in 2030. The university-age population will decrease from 62.81 million in 2016 to 57.93 million as the lowest level in 2020, and then gradually increase to 64.78 million in 2030. As we can see from the table, the proportion of pre- and elementary school populations to the total population across all educational stages will decrease from 20.3% and 30.1% in 2016 to 18.4% and 29.3%, respectively, in 2030. This directly relates to China’s becoming a society with an ultra-low fertility rate. At present, the TFR in China is about 1.5, which is globally considered an ultralow level. Even given the implementation of the universal two-child policy, the fertility rate will not rise significantly, due to factors such as a low willingness to bear children coupled with the high costs of child bearing and raising. As a result, the proportion of the youngest among the population in need of education will gradually decrease; the proportions of middle and high school students will increase slightly—to 15.4% and 15.5%, respectively—in 2030;

42 Table 3.1

Cai, Wang, and Gao Changes in population size by educational stage, 2016–2030 (in millions)

Year

2016

2017

2018

2019

2020

2021

2022 2023

Pre-school (3–6) Elementary (7–12) Middle (13–15) High (16–18) University (19–22)

63.78 94.27 44.00 43.29 68.21

62.96 95.87 44.20 43.52 63.78

62.84 96.43 44.70 43.75 60.38

62.60 96.55 45.68 43.98 58.55

62.26 96.38 46.69 44.18 57.93

61.83 95.88 47.70 44.67 58.12

61.31 95.04 48.53 45.66 58.32

60.70 94.04 49.13 46.66 58.81

Year 2024 2025 2026 2027 2028 2029 2030 Pre-school (3–6) 60.04 59.32 58.58 57.84 57.09 56.36 55.65 Elementary (7–12) 93.71 93.21 92.57 91.80 90.91 89.94 88.90 Middle (13–15) 48.67 47.97 47.19 47.15 47.02 46.80 46.51 High (16–18) 47.68 48.51 49.11 48.65 47.95 47.18 47.13 University (19–22) 59.28 60.24 61.50 62.79 64.07 64.95 64.78 Total Population 1,417.34 1,420.14 1,422.58 1,424.63 1,426.33 1,427.67 1,428.67

meanwhile, the proportion of the university-age population will drop from 21.8% in 2016 to 18.4% in 2020, after which it will then gradually rise to 21.4% in 2030. 1.2 School-age Population in Urban and Rural Areas Regarding the urban-rural distribution of the school-age population, it is first necessary to separately predict urban and rural population sizes by age group. Unlike the aforementioned projection of the national population’s age structure, however, both urban and rural areas are open, with no direct restriction on human migration between regions. Since it began reform and opening up, China has been making continuous progress in urbanization thanks to the fact that hundreds of millions of rural citizens have been entering towns and cities. Human migration between urban and rural areas affects not only the size of urban population, but also its structure. Nonetheless, rural migrants into urban areas are a constantly evolving group, as there are always people entering cities or returning to their hometowns, as well as rural migrants who register as urban residents, leading to changes in the total number of such migrants. It is precisely because of the uncertainties of these migration patterns that it is difficult to project urban and rural populations. For the purposes of this study, we have tried to use the method of repeated forecasting to calculate the urban-rural population structure.

Quantitative and Structural Changes in China ’ s Population

43

First, we used the urban/rural 2000 Census data to predict changes in urban and rural populations from 2010 to 2015 with no urban-rural migration. The forecast parameters included the urban TFR of 1.6, the rural TFR of 1.8, the urban sex ratio at birth of 110:100, the rural sex ratio at birth of 120:100, and male/female life expectancy rising from 74/77 in 2000 to 77/80 in 2015 in urban areas and from 72/75 to 74/78 in rural areas. Second, we compared the projected urban and rural populations with those released annually by the NBS to obtain theoretical changes in the net inflow of the population. Estimated on the basis of this indicator, the net increase in the number of migrants was used for trend extrapolation (the method of least squares was used for estimation) to obtain the net migration growth in urban and rural areas from 2010 to 2030. Using such methods of projection, the newlyincreased urban population will be 15 to 20 million, averaging 16.5 million per annum. In addition, if a prediction is to be made with the cohort component method, it is necessary to differentiate the genders of migrants. For differentiation, we used the 2010 Census-obtained male/female ratio of local permanent residents whose hukou was registered in non-local rural sub-districts. Third, we predicted the future sizes and structures of urban and rural populations for a second time on the basis of the 2010 Census data, with the projected urban and rural migrant populations used as the forecast parameters, including the urban TFR (which will rise from 1.5 in 2010 to 1.8 in 2030), the rural TFR (which will rise from 1.8 in 2010 to 2.0 in 2030), sex ratios at birth in urban and rural areas (which will both drop from 110:100 and 118:100 to 105:100), and male/female life expectancy (which will increase from 76/78 to 80/82 in urban areas and from 74/77 to 77/80 in rural areas from 2010 to 2030). Table 3.2 shows the populations of urban and rural areas that were calculated across all educational stages. Regarding the stage of pre-school education, the pre-school population in urban areas will be slightly smaller than that in rural areas in 2016. With the country’s ongoing urbanization, however, the preschool population in urban areas is predicted to expand rapidly. Throughout the duration of the 13th Five-year Plan, it is expected to increase from 31.77 million in 2016 to 41.12 million in 2020 and reach a peak value of 42.34 million in 2025, before gradually dropping to 41.12 million in 2030 due to a low birth rate. The pre-school population in rural areas will show a continuous downward trend, dropping from 32.01 million in 2016 to 14.54 million in 2030, or a decrease of more than half. The urban elementary school-age population will gradually expand from 41.14 million in 2016 to 64.36 million in 2030, while its rural counterpart will rapidly contract from 53.13 million in 2016 to 24.54 million in 2030. Changes in the distribution of urban and rural middle and high schoolage populations will be similar to those seen at the pre- and elementary school

44

Cai, Wang, and Gao

levels—these populations in urban/rural areas will increase/decrease from 21.21/22.79 and 23.01/20.29 million in 2016 to 33.30/13.21 and 32.32/14.81 million in 2030, respectively, with lower growth and decline rates than those in the stages of pre- and elementary schools. University-age populations will change in the opposite manner, perhaps because migration from rural to urban areas is the main contributor to urban youth population growth. But with a growing level of urbanization and the slowing of migration from rural to urban areas, the natural growth of the urban university-age population will be unable to offset overall population decline due to shrinking migration. In summary, then, populations of the lower age groups will increase/decrease in urban/rural areas at faster rates than what will be seen at the university level. In the future, urban areas will have greater demand for more educational resources in the stages of pre- and elementary school education, and, accordingly, the task of increasing the education supply will focus on towns and cities, as opposed to the countryside. Table 3.2 Changes in urban and rural populations by educational stage, 2016–2030 (in millions)

Year

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Pre-School

Elementary

Middle

High

College

Urban Rural

Urban Rural

Urban Rural

Urban Rural

Urban Rural

31.77 35.25 38.71 39.97 41.12 41.47 41.70 41.81 41.79 42.34 42.15 41.86 41.49 41.02 41.12

41.14 41.20 41.98 44.63 47.68 50.81 54.23 58.21 62.07 63.00 63.76 64.34 64.73 64.95 64.36

21.21 21.74 21.82 21.81 21.75 22.44 22.48 22.40 22.38 24.82 27.86 30.90 31.77 32.58 33.30

23.01 22.93 23.30 23.68 24.12 24.08 23.95 23.75 24.38 24.31 24.13 24.02 26.39 29.36 32.32

44.74 41.96 38.64 37.38 36.43 35.88 36.90 36.96 36.38 36.87 36.27 36.00 36.40 35.82 37.70

32.01 27.71 24.13 22.64 21.15 20.36 19.60 18.89 18.25 16.98 16.43 15.97 15.61 15.34 14.54

53.13 54.67 54.45 51.92 48.70 45.07 40.80 35.84 31.64 30.21 28.81 27.46 26.19 24.99 24.54

22.79 22.46 22.88 23.88 24.94 25.27 26.05 26.73 26.30 23.14 19.34 16.26 15.25 14.22 13.21

20.29 20.59 20.45 20.30 20.05 20.59 21.71 22.91 23.30 24.20 24.98 24.63 21.56 17.81 14.81

23.48 21.82 21.74 21.17 21.49 22.24 21.42 21.85 22.90 23.37 25.23 26.79 27.67 29.14 29.07

Quantitative and Structural Changes in China ’ s Population

45

1.3 Regional Distribution of the School-age Population As a large country with extremely uneven economic and social development among its regions, China experiences great disparity among the regional distribution of its school-age population. The Eastern provinces can be considered to have entered the late stage of industrialization, with some provinces even having attained the post-industrial stage. In contrast, a large number of people in many parts of the Western regions have yet to even gain stable access to adequate food and clothing. Due to the country’s uneven levels of socioeconomic development, a huge inter-regional gap in the education supply has arisen. Therefore, forecasting the educational needs of different regions—that is, the distribution of the school-age population—is very necessary for formulating policies in favor of equal access to public education services. To this end, we will first present the projected provincial population sizes and structures before summarizing the data about provincial-level administrative regions in order to understand the situations across three major regions: i.e., the Eastern, Central, and Western regions. In order to make such analyses, it was necessary to predict population sizes and structures at the provincial level. We continued to use the cohort component method as the basic method of prediction. The basic forecast parameters were the same as the national ones except for populations in the initial year, for which 2010 Census data regarding all provincial-level administrative regions was used. As with urban-rural population projections, provincial-level population projections needed to take into account the effects of human migration, i.e., the effects of net population inflows. Since we were concerned about the resident population, which already contained net population inflows, what we needed to measure was any kind of increase in such inflows. Net population inflow (a positive/negative value means net inflow/outflow) is equal to the size of the resident population in each province minus that of the population holding a local hukou; the population size in a given year minus that of the previous year yields the increase in the net population inflow or outflow. We obtained the net population inflow in each province from 2000 to 2014 by using existing statistics. The calculation results showed that the increase in the net population inflow in each provincial-level area has first accelerated only to then decline, but has been in a stable state throughout most recent years. Given that the period of most accelerated population growth in China has passed and that the migrant population at the provincial level will likely remain stable for the near future, we used the increase in the net population inflow from 2010 to 2014 as the initial values. Assuming zero increase in the net population inflow in 2030, we did linear interpolation for the intermediate year to get the value in each year. The proportion of men and women in the net population inflow

46

Cai, Wang, and Gao

was set according to the 2010 Census-recorded proportion of male and female inhabitants with hukou in provinces other than where they lived. It should be noted that of the 31 provincial-level administrative regions, the three municipalities directly under the Central Government—namely, Beijing, Shanghai, and Tianjin—are relatively small in terms of area but have relatively high population inflows, making them unsuitable for the aforementioned forecast method. For these three cities, the growth curve method was used to predict the increase in the net population inflow. Then, the annual population size was cumulatively obtained, using 2014 as the base period. The basic model of the growth curve method is shown in Equation 1. This model is appropriate for predicting population growth, life expectancy, etc. In this equation, b0, b1, b2 and b3 are estimated parameters, and Nt denotes population size in Period t. Using the historical data of these three cities, least squares estimation was used to obtain the estimated parameter values, and then Period t was extended backward and substituted into Equation 1 to get the population size in Period t. The parameter estimation results for these three cities are shown in Table 3.3.

N t b0 

b1

1  e  b 2*(t  b 3)

(1 )

In addition, the logistic model can only offer the population sizes of these three cities, but their age distributions need to be based upon the predicted age structure of the provincial population. The populations by age group can be obtained by dividing the projected age structure at the provincial level with the growth curve method (see Table 3.4). Pre-, elementary, and middle school-age populations in these three regions will generally undergo a process characterized by an initial increase in the population followed soon after by decline. Specifically, provincial peaks will appear around 2020, while the ones in Beijing, Shanghai, and Tianjin will appear around 2025, due to the later arrival of their population inflow peaks. These projected provincial-level age group populations can be aggregated according to China’s national strategy to yield the population sizes and structures of the three major regions (see Figure 3.1). As we can see from the changes in the pre-school age population, there are significant differences among these geographic regions. Pre-school age populations in the Central and Western provinces are evidently more stable than those in the Eastern provinces, as they will remain around 20 and 16 million, respectively. By comparison, the pre-school age population in the Eastern regions will grow to a peak value of 27.82 million in 2017, before descending gradually to 20.81 million in 2030.

Quantitative and Structural Changes in China ’ s Population

47

Table 3.3 Regression results of logistic model parameters

Parameter

Beijing

Tianjin

Shanghai

b0 b1 b2 b3



15.05 1,302.48 *** 0.17 *** 33.30 ***

61.91 ***



491.28 ***

0.46 *** 32.97 ***

−0.32 1,213.41 *** 0.20 *** 28.78 ***

Note: * means that the parameter estimation results are significant at the level of 10%; ** means they are significant at the level of 5%; *** means they are significant at the level of 1%.

The projected elementary school-age population shows a similar process of changes to that of its pre-school counterpart. The elementary school-age populations in the Central and Western regions will be relatively constant, as they will stabilize around 30 and 25 million, respectively. By comparison, the elementary school-age population in the Eastern regions will rise to a peak value of 40.89 million in 2023, later than the peak value of the pre-school age population in this same geographic region. This peak population year will arrive later than the peak year for the pre-school stage. Similarly, the middle school-age population in the Central region will remain around 15 million, while that of the same population in the Western region will show a gradual trend downwards, from 14.20 million in 2016 to 11.92 million in 2030. The middle school-age population in the Eastern region will slightly decline, then gradually increase and then slightly decline again; this population’s peak value of 20.98 million will appear in 2026, later than that of the elementary school-age population in this region. The projected high school population differs from those in the previous stages in terms of anticipated demographic change. In the Central provinces, this population will decrease and then stabilize while simultaneously continuing to decline in the Western regions; it will show a U-shaped trend in the Eastern provinces, as it will reach a trough value of only 19.41 million in 2016 and then gradually rise to 21.03 million by 2029. Regarding the Eastern region, it is noteworthy that there seems to be another downtrend from 2030 onward—given that the predicted peak values of populations in the previous stages will appear increasingly late, the population of high schoolers will continue to decline from 2030 on. Finally, from the perspective of the population at the stage of attaining their university education, all three regions will show an overall downtrend, but the difference here is that this population will become almost stable in the Eastern and Central regions after 2020 while continuing to steadily decline in the Western provinces.

Beijing Tianjin Hebei Shanxi Inner Mongolia Liaoning Jilin Heilongjiang Shanghai Jiangsu Zhejiang Anhui Fujian Jiangxi Shandong Henan

Region

Year

0.90 0.60 3.89 1.56 1.03

1.56 1.07 1.42 1.06 3.43 2.28 2.83 1.84 2.44 4.46 5.06

22.16 15.47 74.24 36.78 25.26

44.34 28.11 39.23 24.56 80.11 55.67 60.67 38.12 45.85 97.79 96.48

1.90 1.30 1.72 0.88 4.15 2.88 4.16 2.38 4.01 6.16 8.12

0.78 0.59 5.28 2.18 1.34

1.01 0.65 0.93 0.36 1.85 1.40 2.0 1.05 1.88 2.90 3.76

0.33 0.27 2.18 1.21 0.69

Total PreElem­ Middle school entary

2015

44.45 28.54 39.87 25.53 81.03 56.63 61.64 39.16 47.05 98.69 98.77

24.08 16.25 75.77 37.78 25.64 1.75 1.21 1.71 1.17 3.54 2.55 2.72 1.85 2.09 4.17 4.37

1.21 0.81 3.62 1.71 1.09 2.33 1.60 2.13 1.61 5.10 3.41 4.24 2.73 3.64 6.65 7.56

1.44 0.93 5.79 2.34 1.53 0.94 0.65 0.85 0.46 2.11 1.44 2.11 1.20 2.02 3.10 4.10

0.44 0.31 2.68 1.09 0.67

Total PreElem­ Middle school entary

2020

Table 3.4 Projected provincial populations by educational stage (in millions)

44.0 28.70 40.06 25.93 81.39 57.04 62.07 39.91 48.06 98.63 100.81

25.21 16.68 76.24 38.61 25.79

Total

1.46 1.12 1.58 0.77 3.34 2.36 2.53 1.75 2.11 3.52 4.47

1.09 0.73 2.93 1.75 1.03 2.63 1.82 2.56 1.81 5.33 3.84 4.07 2.78 3.14 6.26 6.58

1.88 1.24 5.40 2.58 1.64 1.25 0.85 1.15 0.94 2.65 1.79 2.08 1.40 1.73 3.38 3.61

0.80 0.52 2.90 1.20 0.79

PreElem­ Middle school entary

2025

43.08 28.53 39.67 26.07 81.01 56.74 62.02 40.30 48.74 97.97 102.26

25.78 17.08 76.24 39.12 25.62

Total

1.20 1.0 1.32 0.54 3.0 1.97 2.24 1.58 2.02 3.19 4.43

0.89 0.54 2.56 1.68 0.90

2.20 1.68 2.37 1.21 5.02 3.55 3.81 2.63 3.18 5.33 6.73

1.69 1.14 4.45 2.63 1.55

1.29 0.90 1.27 0.90 2.65 1.91 2.04 1.38 1.57 3.07 3.28

0.96 0.64 2.68 1.29 0.81

PreElem­ Middle school entary

2030*

48 Cai, Wang, and Gao

58.58 66.99 108.66 46.66 8.95 29.09 80.86 35.28 47.37 3.05 38.46 26.38 5.73 6.51 22.77

2.55 3.18 5.14 2.43 0.47 1.22 3.27 1.58 2.22 0.18 1.69 1.16 0.28 0.32 1.23

3.21 4.88 6.33 4.28 0.68 1.92 5.23 3.13 3.74 0.29 2.11 1.74 0.46 0.52 1.84

1.43 2.22 3.35 2.06 0.32 1.01 2.81 1.90 2.03 0.14 1.07 0.96 0.24 0.28 0.89

Total PreElem­ Middle school entary

2015

59.84 67.98 112.85 47.26 9.19 29.26 81.33 36.09 48.71 3.08 39.31 27.13 5.81 6.70 23.68

2.73 2.88 5.76 1.91 0.44 1.12 3.13 1.43 2.13 0.16 1.89 1.20 0.26 0.31 1.11

3.80 4.75 7.69 3.63 0.70 1.83 4.90 2.40 3.35 0.27 2.54 1.74 0.41 0.48 1.83

1.64 2.45 3.21 2.15 0.34 0.97 2.62 1.55 1.86 0.14 1.07 0.87 0.23 0.26 0.93

Total PreElem­ Middle school entary

2020

Note: * means that the parameter estimation results are significant at the level of 10%

Hubei Hunan Guangdong Guangxi Hainan Chongqing Sichuan Guizhou Yunnan Tibet Shaanxi Gansu Qinghai Ningxia Xinjiang

Region

Year Total

60.54 68.66 116.38 47.83 9.36 29.38 81.73 37.14 49.98 3.08 39.57 27.81 5.88 6.87 24.52

Table 3.4 Projected provincial populations by educational stage (in millions) (cont.)

2.70 2.82 5.65 1.98 0.40 1.17 3.41 1.83 2.21 0.15 1.63 1.25 0.26 0.31 1.13

4.09 4.34 8.65 2.87 0.66 1.69 4.72 2.17 3.21 0.23 2.82 1.81 0.38 0.46 1.67

1.93 2.33 3.99 1.68 0.34 0.89 2.38 1.10 1.64 0.13 1.31 0.87 0.20 0.23 0.89

PreElem­ Middle school entary

2025

60.30 68.90 118.71 48.30 9.45 29.38 81.56 37.91 50.99 3.06 39.34 28.29 5.90 6.99 25.22

Total

2.23 2.71 5.13 2.03 0.35 1.18 3.38 1.91 2.23 0.13 1.30 1.24 0.26 0.30 1.13

4.04 4.25 8.49 2.97 0.60 1.76 5.12 2.73 3.33 0.22 2.45 1.89 0.39 0.47 1.71

2.06 2.15 4.32 1.43 0.33 0.85 2.36 1.09 1.60 0.11 1.41 0.91 0.19 0.23 0.84

PreElem­ Middle school entary

2030*

Quantitative and Structural Changes in China ’ s Population

49

50

Cai, Wang, and Gao

Quantitative and Structural Changes in China ’ s Population

51

Figure 3.1 Projected populations in the main stages of education in the three major regions, 2010–2030 Source: Estimations by the authors

In summary, then, the school-age populations in the Central and Western regions will show a stable or slightly downward trend overall. Accordingly, the demand for educational resources will not change significantly, and only improvements in the quality of resources—not their quantity—should be emphasized. By comparison, populations among the lower age groups in the Eastern region will increase in the short term as a result of constant migration from the Central and Western regions. Given such circumstances, the Eastern provinces need to make reasonable adjustments to the supply of basic educational resources, especially resources for pre- and elementary school education, in order to meet the needs of the growing population.

52 2

Cai, Wang, and Gao

China’s Educational Resources: an Overview

Since education is intended to serve the public, the spatial distribution of the population is always an important consideration for the supply of educational resources. The size of the school-age population directly affects the levels of students’ average indicators, and hence is an important basis for the allocation of educational resources. Therefore, mastering trends within this population size lays the appropriate foundations for reasonably planning future school development standards and those objectives specific to compulsory education. Populations affected by the implementation of the selective and universal two-child policies reside largely in Chinese cities. We therefore focused this paper on the allocation of educational resources in municipal districts. Prefectural cities can be taken as a statistical unit for analysis. We then used statistics about prefectural cities provided by the China Statistical Yearbook for the Regional Economy 《 ( 中国区域经济统计年鉴》) and aggregated them into provincial data in order to analyze the differences and trends in the supply of educational resources among all regions. 2.1 Kindergartens The number of kindergartens in China has been growing rapidly for several years, with the population of children enrolled in such institutions continuing to rise. Since 2007, a steady increase in the number of newborn babies has resulted in the growing demand for admission to kindergarten and, accordingly, an increase in the number of kindergartens being established in order to fulfill that need. Another major reason is that kindergarten education is beginning to receive increased attention in both urban and rural areas across China. Relevant data shows that the aforementioned constant growth in the number of children at kindergarten coincides with a steady increase in the number of kindergartens themselves. The increase in the number of kindergartens is significant in the vast majority of Chinese provinces, which obviously corresponds to the growing number of newborns (see Figures 3.2 and 3.3). It can be seen that the number of children enrolled in kindergarten closely relates to the population base of each province. In several major populous provinces, the number of children attending kindergarten is also correspondingly large, although the situation varies from province to province from the perspective of the annual growth rate. The number of children in kindergarten in the coastal municipalities and provinces is growing at a slower rate than that of the kindergarten population in the Central and Western regions, mainly depending upon the population base in each region.

Quantitative and Structural Changes in China ’ s Population

Figure 3.2 Number of children in kindergarten, 2013

Figure 3.3 Annual growth rate of the number of children in kindergarten, 2013

53

54

Cai, Wang, and Gao

2.2 Elementary Schools The number of elementary schools shows a downtrend; the numbers of students and the student-teacher ratios (STRs) at elementary schools shows significant inter-provincial differences with respect to overall trends. The declining number of elementary schools is due in large part to the merger of schools in some cities, and to the shutdown and consolidation of some schools in rural areas for a number of villages (see Figures 3.4 and 3.5). The number of elementary school students is very similar in terms of trends to the number of children enrolled in kindergarten. From the perspective of the annual growth rate, however, the number of such students in most provincial-level administrative regions in 2013 decreased significantly from the previous year. Such a distinct trend from that seen in of the number of children in kindergarten reflects the turning point of the newborn population that appeared several years ago—that is, a change from what could be classified as a continuous decrease to one more consistent with a gradual increase (see Figures 3.6 and 3.7). From the STR perspective, it is clear that this ratio is higher in Southern China than in the Northern, Northeastern, or Northwestern regions of China. The number of student admissions per annum are much higher in Guangdong, Henan, Sichuan, Shandong, and Hebei than in Qinghai, Tibet, or Ningxia, with their significantly smaller population sizes. “Province,” of course, is a very large geographical unit that retains outstanding internal differences. That being said, inter-regional differences are more obvious at the level of prefectural city (see Figures 3.8 and 3.9). Figure 3.8 shows the spatial distribution of the number of elementary school students in municipal districts, with prefectural city being used as the statistical unit. It can be seen that there are generally more elementary school students in coastal areas than inland. There are significantly more elementary school students in the cities of Shanghai, Beijing, Tianjin, and Chongqing, as well as cities along the Pearl River Delta region, than in other regions. The distribution of the number of elementary school students in municipal districts closely relates to the spatial distribution of the population as a whole, but is not completely consistent. As mentioned above, factors such as the level of economic development and willingness to bear children also are important. The relatively large numbers of elementary schools in Shanghai, Beijing, Tianjin, and the Pearl River Delta region relate to the higher levels of economic development there. Most importantly, local budgets in these areas are greater than elsewhere and thus educational funding can be better assured. Moreover, people in these areas are generally better educated than their more provincial counterparts, with corresponding greater emphasis on children’s education.

Quantitative and Structural Changes in China ’ s Population

Figure 3.4 Number of elementary school students, 2013

Figure 3.5 Growth rates of the number of elementary school students, 2013

55

56

Cai, Wang, and Gao

Figure 3.6 STRs at elementary schools, 2013

Figure 3.7 Numbers of admissions to ordinary elementary schools, 2013

Quantitative and Structural Changes in China ’ s Population

Figure 3.8 Number of elementary school students in the city proper, 2013

Figure 3.9 STRs at elementary schools within the city proper, 2013

57

58

Cai, Wang, and Gao

Regarding STRs at elementary schools in municipal districts (Figure 3.9), the ratios in Northeastern China, Northern China, and some coastal areas are generally lower than many corresponding areas in the South-central, Southwestern, and Southern areas of China. This suggests that inter-regional differences in the allocation of basic educational resources may largely relate to the level of economic development. Economically developed regions, such as Beijing, Tianjin, and Shanghai, can attract enough teachers thanks to adequate financial support for the education sector and their geographical locations, enabling them to maintain comparatively low STRs. From another perspective, lower STRs also mean greater room for more students. Places with higher STRs are mainly located in Central, Southwestern, and Southern China, which are densely populated and thus need more basic educational resources. Failure to properly allocate basic educational resources tends to manifest in higher STRs. It is noteworthy that there are also higher STRs in the Pearl River Delta region, which may relate to the fact that there is a larger floating population in this region, with many migrant children accordingly studying at elementary schools in local municipal districts. As a result, local teacher resources are obviously inadequate. Furthermore, the relatively high STRs in Southern China may relate to the fact that a large number of elementary school teachers have resigned and sought out employment further south during the economic development of the Pearl River Delta region. Relevant data also shows that from 2009 to 2013, there were significant inter-regional differences in the trend of the numbers of elementary schools in municipal districts of prefectural cities. These numbers decreased in most places, yet increased in some others (see Figure 3.10). This situation would obviously affect changes to the relationship between supply of and demand for admissions to elementary schools. The current teacher staffing standards for elementary and secondary schools are fundamentally based upon STRs; ideally, they are set at 18:1 at rural middle schools, 16:1 at middle school in county towns, 13.5:1 at urban middle schools, 23:1 at rural elementary schools, 21:1 at elementary schools in county towns, and 19:1 at urban elementary schools, according to the Opinions on Developing Elementary and Secondary School Staffing Standards co-issued by the State Commission Office of Public Sectors Reform (SCOPSR), Ministry of Education (MOE), and the Ministry of Finance (MOF) in 2001. In contrast, STRs at many urban elementary schools in Central and Southern China exceed the national standards, implying a lack of teacher resources in these areas. This issue needs to be addressed through the rational allocation of basic educational resources. If elementary school teacher resources are allocated on a 19:1 basis, such schools would be obviously understaffed in Central, Southwestern,

Quantitative and Structural Changes in China ’ s Population

Figure 3.10

59

Changes in the number of elementary schools in municipal districts, 2009–2013

and Southern China, yet overstaffed in Northeastern/Northern China and in some coastal areas (see Figure 3.11). Moreover, the number of teachers is only one aspect of what constitutes quality educational resources, while competence is another important aspect. This is because the building of teacher teams is much more difficult than that of simply building a campus’ infrastructure. The primary difficulty in achieving the balanced development of compulsory education lies in teacher teaming, especially the allocation of teacher resources. It is widely known that the competence of teachers determines the quality of teaching. The unbalanced allocation of school education resources centered on the competence of teachers largely constitutes the differences in the quality of education between urban and rural areas and in between individual schools. Unequal access to educational resources will inevitably bring about corresponding gaps in human capital. Some studies show that the allocation of teacher resources comes with the Matthew Effect—namely, that there are better teacher resources in developed regions than in underdeveloped ones, and that, furthermore, this gap compounds over time. There tend to be a disparity even in the same city when it comes to the quality of basic educational resources between different areas—high-quality resources are typically concentrated in the city center,

60

Figure 3.11

Cai, Wang, and Gao

Shortages of teachers at elementary schools in municipal districts, 2013

despite the population density growing more rapidly in the surrounding areas. To rationally allocate educational resources, therefore, it is necessary to fully consider the competence of teachers so that students in different areas share a fair learning environment. China’s current urbanization process takes the promotion of urban-rural integration as its primary goal. This process will inevitably lead an everincreasing number of rural citizens to cities. With the gradual removal of educational barriers for the children of rural-urban migrants, the urban education sector, especially in such mega-cities as Beijing, Shanghai, Guangzhou, and Shenzhen, is under increasing pressure to meet the educational needs of school-age children. With the selective and universal two-child policies taking effect across China, the number of newborn babies will—at least in the short term—increase. Since some policy-covered women of childbearing age are already considered to be within or near the age range cutoff for high-risk childbirth, they are more willing to have a second child, which may cause, to a certain degree, a sudden, rapid increase in the number of newborns, especially in urban areas with both higher proportions of people that are the only child of their parents (and thus legally able to have a second child) and higher population density overall. From the above analysis, it is not difficult to see that for Central, Southwestern,

Quantitative and Structural Changes in China ’ s Population

61

and Southern China, there is a pressing need for the more rational allocation of basic educational resources for compulsory education. The government and educational authorities should take positive measures to increase the supply of basic education resources, especially the procurement of excellent teachers. This is intended to decrease STRs in those regions so as to promote educational fairness, on the one hand, and to meet the schooling needs over the next few years of the newly-born population, on the other. In larger cities with higher STRs than the national standards, the numbers of schools and teachers in the stage of compulsory education should be appropriately increased to meet the growing educational demand from an increasing number of school-age children that have developed as a result of the country’s adjustments to the birth control policy and the new trends in urbanization. 3

Conclusions and Suggestions

The size and structure of China’s population from 2016 to 2030 being forecast in this paper shows that, in terms of age groups, the population of elementary schoolers will continue increasing during the 13th Five-year Plan; the population of high schoolers (including secondary vocational school) will grow rapidly during the 14th Five-year Plan; and the population of college age students will rise rapidly during the 15th Five-year Plan. In terms of urban and rural areas, the rural school-age population will continue declining rapidly, while its urban counterpart will grow rapidly following the 13th Five-year Plan. From a regional perspective, the school-age populations in the Central and Western regions will remain stable or decrease slightly, while those in the Eastern region will, on the whole, continue to increase. Accordingly, the supply of elementary education resources in China will be under greater pressure during the 13th Five-year Plan; the pressure on the supply of middle school education resources will continue to increase; and the pressure on the supply of university education resources will rapidly increase during the 15th Fiveyear Plan. With the country’s ongoing urbanization and with the gradual implementation of the hukou reform policy, more and more rural citizens will become urban residents, with a corresponding growth in the number of school-age children. As a result, urban educational institutions are—and will continue to be—under ever-increasing pressure, as shown by progressively tight supply of basic educational resources. In the meantime, adjustments to the birth control policy will also bring about an increase in the newborn population, resulting in a growing need for admissions to kindergartens and schools in

62

Cai, Wang, and Gao

subsequent years. Therefore, governments at all levels should give due attention to the issue of the demand of the newborn population for schooling due to the universal two-child policy, and subsequently allocate basic educational resources as early as possible in a bid to address potential problems caused by the upcoming sudden rise in the demand for basic education. With regards to the existing educational and financial systems, county and district governments are responsible for most of the spending on basic education, which is an important factor leading to the inter-regional imbalance of basic educational resources. Therefore, in order to promote the balanced development of basic educational resources and, in particular, to adapt such resources to the short-term increase in the newborn population, it is necessary for the central and provincial governments to increase macro-level control efforts so that their shares of funding for compulsory education approach or even exceed those of the lower-level governments. It is worth noting that the effect of the universal two-child policy may mostly occur within the next three to six years, so any increase in the newborn population will not remain in effect for a long period of time. Affected by the age structure of population, the number of newborns resulting from adjustments to the birth control policy will eventually stabilize subsequent to the steady implementation of this policy. After reaching a certain peak, the newly-born resident population will still tend to decline. Accordingly, educational authorities should take full account of such short- and long-term effects when allocating basic educational resources—they should not only address the strong short-term demand for admissions, but also consider the possibility that the country’s long-term demand may be subject to a stable or even decreasing trend. References Chen Feng 陈峰. “Junheng fazhan quxiang xia de yiwu jiaoyu jiaoshi ziyuan peizhi yanjiu 均衡发展取向下的义务教育教师资源配置研究 [On the Balanced DevelopmentOriented Allocation of Teacher Resources for Compulsory Education],” Journal of Educational Development 2 (2007). Guan Songlin 关松林. “Quyu nei yiwu jiaoyu shizi junheng peizhi: wenti yu pojie 区域内义务教育师资均衡配置: 问题与破解 [The Balanced Allocation of IntraRegional Teacher Resources for Compulsory Education: Problems and Solutions],” Educational Research 12 (2013). Meng Zhaomin 孟兆敏 and Wu Ruijun 吴瑞君. “Xueling renkou biandong yu jichu jiaoyu ziyuan peizhi de xietiaoxing ji yuanyin tanxi—yi shanghai weili 学龄人口变

Quantitative and Structural Changes in China ’ s Population

63

动与基础教育资源配置的协调性及原因探析—以上海为例 [Analysis of Changes in the School-Age Population, Coordination of the Allocation of Basic Educational Resources and Reasons in the Case of Shanghai],” South China Population 1 (2013). Qiao Xiaochun 乔晓春. “Dandu erhai zhengce de shishi hui dailai shenme—2013 nian shengyu yiyuan diaocha shuju zhong de yixie faxian ‘单独二孩’ 生育政策的 实施[x4f1a]带来什么—2013 年生育意愿调查数据中的一些发现 [What Will the Implementation of the Selective Two-Child Policy Bring—Findings from 2013 Childbearing-Specific Willingness Survey Data],” Population and Family Planning 3 (2014). Qiao Xiaochun 乔晓春. “Dandu erhai zhengce de li yu bi ‘单独二孩’ 政策的利与弊 [On the Pros and Cons of the Selective Two-Child Policy],” Population and Society 1 (2014). Wang Guangzhou, Hu Yaoling, and Zhang Liping. Zhongguo shengyu zhengce tiaozheng 中国生育政策调整 Adjustment of Family Planning in China (Beijing: Social Sciences Academic Press [China], 2013). Wang Zhiyong 王智勇. “Chengzhang huanjing yu renli ziben xingcheng—jiyu shanghai, zhejiang he fujian de jiating diaocha yanjiu 成长环境与人力资本形成—基于 上海、浙江和福建的家庭调查研究 [Growth Environment and Human Capital Formation—Research Based on Household Surveys in Shanghai, Zhejiang, and Fujian],” Economic Research Journal 1 (2013). Wei Xie 韦谢 and Yang Zhi 杨治. “Zhongguo jumin jiaoyu ziyuan de fenpei yu gongji— cong hongguan dao weiguan de bupingdeng 中国居民教育资源的分配与供给— 从宏观到微观的不平等 [Distribution and Supply of Educational Resources for Chinese Residents—Inequality from Macro to Micro Levels],” Education Research Monthly 1 (2015). Xue Haiping 薛海平 and Wang Rong 王蓉. “Woguo yiwu jiaoyu gongping yanjiu 我国义 务教育公平研究 [On the Fairness of Compulsory Education in China],” Education & Economy 3 (2009). Yu Changjun 岳昌君. “Jingji fazhan shuiping de diqu chayi dui jiaoyu ziyuan peizhi de yingxiang 经济发展水平的地区差异对教育资源配置的影响 [Impact of Regional Differences in Economic Development on the Allocation of Educational Resources],” Education & Economy 1 (2003). Zhang Liping 张丽萍 and Wang Guangzhou 王广州. “Fen quyu dandu erhai zhengce mubiao renqun ji xiangguan wenti fenxi 分区域 ‘单独二孩’ 政策目标人群及相关问 题分析 [Analysis of the Selective Two-Child Policy’s Target Population and Relevant Issues by Region],” Sociological Studies 1 (2014).

Chapter 4

The Point-based Household Registration System: Current Condition, Risks, and Policy Improvements Hou Huili1 Released by the State Council in March 2014, the National New-Type Urbanization Plan (2014–2020) 《 ( 国家新型城镇化规划（2014~2020 年）》) was the first urbanization plan released and implemented by the Central Government. From the outset, at the macro level it constituted a strategic and fundamental plan for the short-term, healthy development of urbanization across China, with a heavy emphasis on promoting the migration of China’s qualified rural population into towns and cities. Due to the unbalanced development of cities, however, it also necessarily proposes that cities of different sizes should implement differential hukou policies, and that ultra-large cities may establish multi-level approaches—such as the points system—in order to adjust the influx and pace of migrant inflow. In order to most strongly support the smooth implementation of this plan for urbanization, the State Council released the full text of the Opinions of the State Council on Further Promoting the Reform of the Household Registration System 《 ( 国务院关于进一步推进户 籍制度改革的意见》) (the Opinions) on July 30, 2014. The Opinions promoted household registration reform, as it not only eliminated differences between rural and non-rural hukous in order to unify the various types of household registrations, but also made clear the policy of canceling the existing limitations on household registration in small and medium-sized cities while simultaneously more tightly controlling population sizes in large and mega cities. In particular, it proposed improvements to the current household registration policy in cities with populations of more than five million in municipal districts, as well as the establishment and/or implementation of a points system for the household registration of China’s floating population. Before the Opinions was released, the point-based household registration system had been piloted in select cities such as Zhongshan, Shenzhen, and Wenzhou. Although this pilot program was effective on certain fronts, it remained incomplete. Since then, the point-based household registration system has been rolled out in other large cities across China, all of which have introduced relevant points policies 1  Hou Huili holds the title of Associate Researcher with IPLE-CASS. 

© koninklijke brill nv, leiden, 2019 | doi:10.1163/9789004407435_005

The Point-based Household Registration System

65

according to their own extant conditions. In December 2015, for example, Beijing released a series of drafted regulations for managing the point-based household registration system and residential permits, with the intention of receiving outside revision. This document has since attracted significant attention. Beijing’s system is widely considered, however, to have established an exceptionally high threshold, making it very difficult to comply with its correspondingly harsh terms and conditions.2 Is the point-based household registration system an appropriate strategy for the process of China’s new-type urbanization, especially considering its relative newness? What benefits and risks will it bring to people’s lives and social development at both the local and national levels? This paper aims to first explain the formation and development of this system before presenting a more engaged analysis from the perspective of theories of societal risk. 1

History and Key Requirements

China’s household registration system is symbiotic with economic and social structures characterized by urban-rural dualism. Different types of hukous represent inequalities in dimensions such as status, welfare, rights and others. The maintenance of such inequalities under the national redistribution system is achieved through the household registration system. Household registration has become a tool not only for managing people, but even for limiting the free flow of people. With the transition toward the market economic system, however, the Chinese market has had a strong demand for labor mobility, leading to an increasingly frequent flow of labor force. The household registration system has gradually shown drawbacks that hinder socioeconomic development, and it has become an obstacle to population mobility. Migrant workers cannot access various benefits in the places where they work and live because of restrictions on household registration, which exacerbate social inequality. Under the impact of marketization, the Chinese government started a pilot, smallscale household registration system reform with local characteristics in small towns. In 1997, it began testing household registration of rural citizens in small towns. In 2001, the State Council approved the Opinions on Promoting the Reform of Household Registration Management System in Small Towns 2  “81.6% beijing shoufangzhe renwei beijing jifen luohu menkan gao 81.6% 北京受访者认 为北京积分落户门槛高 [81.6% of Respondents in Beijing Think the Local Household Registration Threshold Is High],” http://news.sohu.com/20160307/n439635330.shtml, Mar. 7, 2016.

66

Hou

《 ( 关于推进小城镇户籍管理制度改革的意见》), conducting the reform of the

hukou management system in small towns in an all-around way. In 2004, the Central Government also announced that it would promote the reform of the household registration system in medium-sized and large cities by relaxing conditions for the employment and settlement of rural citizens in urban areas. This was the first time that the household registration reform in medium-sized and large cities was put forward. Subsequently, some local governments began trying to reform the household registration system. In 2004, Nanjing uniform rural and non-rural hukous into resident hukou throughout the city; Zhengzhou relaxed conditions for household registration in order to lower the threshold for entering cities; Shijiazhuang canceled hukou quota management, hukou classification, etc. The general trend of reforming the household registration system already became irresistible, though the household registration reform in some areas did not completely achieve the goal at that time. All the local governments were looking for ways of adapting the household registration system to local socioeconomic development. In 2009, Zhongshan City, Guangdong Province first explored the point-based household registration system, which started to be rolled out across Guangdong Province after a year of trial; both Shenzhen and Guangzhou set about implementing this system. In 2014, the State Council officially stated in the Opinions that the point-based household registration system would be implemented in large and ultra-large cities. From this point of time onward, the points system has been in full swing nationwide. Given that conditions vary—often wildly—from place to place, there are slight differences in the contents of the metrics utilized for the points system. That being said, systems for assigning points at the local level are almost all the same, if we accept the data being produced by cities that have already implemented such a system. Take Shenzhen, for example, which has already implemented a relatively mature points system. Further specific details can be found in the Interim Measures for Household Registration of Migrant Workers in Shenzhen City (SFHB [2012] No. 40) (深府办函 〔2012〕 40 号《深圳市外来务工人员入户暂行办法》).3 The points system mainly comprises basic conditions and household registration metrics; indicator scores are summed up given the prerequisite that basic conditions are satisfied. The basic conditions for consideration include that the age range falls between 18 and 48; that the individual is in good health; that they have completed high school (including technical secondary school) or above; that they are the holder of Shenzhen residential permit and pay into social security; 3  For the full text, please visit http://www.szhrss.gov.cn/tzgg, Oct. 26, 2012.

The Point-based Household Registration System

67

have no record of violating the national population and family planning law, regulations, or policies; have no record of participating in government-banned organizations or activities; and hold no criminal records. Indicators above and beyond these basic metrics include such categories as personal qualities (education level and inventions), taxpaying status, insurance, living conditions, age, and bonus and penalty points. In terms of indicator scores, education level and taxpaying status net the highest scores, but only either of them can be chosen for points calculation; the other indicators have decreasing scores. In brief, the higher the education level or the amount of taxes paid, the higher the points; those with social insurance, housing, or multiple years of local residence, and younger people receive higher points. In other words, the college-educated, the young, and the rich are more likely to receive high points towards a local hukou. 2

A New Reform Approach

While already implemented in cities such as Guangzhou and Shenzhen, the point-based household registration system as a measure of reforming the household registration system and managing the population at large has been affirmed by Chinese scholars across the board, who believe that this system is an inclusive institutional choice capable of factoring in the numerous objectives of hukou system reform.4 2.1 Relaxed Hukou Policy Before it began the process of reform and opening up, China’s household registration system specifically restricted the free flow and migration of its internal population. Because pre-reform hukous represented differences in status and associated benefits, loosening the existing limitations on household registration found little traction, and was especially difficult for migration between urban and rural areas. After China’s transition into a market economy, pilot household registration reform projects were carried out in several places, as the need for improving the hukou system became increasingly obvious. Nonetheless, substantial change remained nonexistent because these projects were still based upon the administrative policy of inflow control via hukou 4  Peng Xizhe, Wan Qian, and Huang Suping 彭希哲、万芊、黄苏萍, “Jifen quanyi zhi: jiangu huji gaige duochong mubiao de puhuixing zhidu xuanze 积分权益制：兼顾户籍改 革多重目标的普惠型制度选择 [Points System: Inclusive Institutional Choice Factoring in Multiple Objectives of Hukou System Reform],” Population & Economics 1 (2014).

68

Hou

quotas. Reformation by means of the points system bypasses this idea and replaces it with a conditional access system so that rural migrants are increasingly likely to receive hukous in the city. This indicates a major ideological shift in the government’s approach to household registration reform, and brings with it a brand new, pragmatic path for adjustment and implementation.5 2.2 Contributor to Urbanization Since hukous are linked with various benefits and local financial interests, floating populations have no access to basic public services in their places of residence. Migrant workers in cities are only semi-citizens, and the value of the points system lies in removing limitations imposed by the structure of urbanrural dualism, making it conducive to realizing equal access to urban public services, turning the floating population into urban residents, attracting talent to the city, and urbanization. The points system can also do the following: affect the behavior of the floating population; help the government strengthen urban management; contribute to the reasonable and orderly flow of migrants; gradually optimize the demographic structure; improve the age structure within floating populations; and gradually optimize the urban demographic structure by attracting well educated, highly skilled people into developed areas.6 Given the current shortage of basic public goods, the country’s incremental reform of the household registration system coupled with the points calculation standards corresponding to local socioeconomic development have balanced the interests of various stakeholders and, together, constitute a new path to urbanization. On the Fairness of Household Registration and the Principle of Interdependent Rights and Obligations The points system establishes a new set of quantitative criteria as the basis for the floating population to receive basic urban public services and local 2.3

5  Zheng Zizhen and Song Jian 郑梓桢、宋健, “Huji gaige xinzheng yu wushi de chengshihua xinlu—yi zhongshanshi liudong renkou jifenzhi guanli weili 户籍改革新政与务实的城市 化新路—以中山市流动人口积分制管理为例 [New House Registration Reform Policy and the Pragmatic New Path to Urbanization—the Case of Floating Population Management Based on the Points System in Zhongshan City],” Population Research 1 (2012). 6  Chen Jingyun and Liu Zhiguang 陈景云、刘志光, “Liudong renkou jifenzhi guanli de xiaoguo fenxi—yi shenzhenshi weili 流动人口积分制管理的效果分析—以深圳市为 例 [Effect Analysis of Floating Population Management Based on the Points System—the Case of Shenzhen City],” Chinese Journal of Population Science 6 (2013); Chen Jingyun 陈景 云, “Liudong renkou jifenzhi guanli de jiazhi, xiandu yu zhanwang—yi shenzhenshi weili 流 动人口积分制管理的价值、限度与展望—以深圳市为例 [On the Value, Limitations, and Prospects of Floating Population Management Based on the Points System—Case of Shenzhen City],” Lingnan Journal 1 (2014).

The Point-based Household Registration System

69

hukous. Every migrant who wants to receive a local hukou can calculate his/ her own points through the scoring of specific indicators. These uniform and objective criteria are completely fair and unbiased, predicated upon the assumption that the individual receiving the rights and benefits of citizenship can correspondingly contribute to the city from which he or she expects to receive said benefits.7 Research on the points system shows that it appears efficient at promoting urbanization and allocating the limited resources in cities. After all, it offers somewhat looser conditions governing household registration than the original household registration system with its tight restrictions. According to the aforementioned analysis, those arguments for promoting the points system are largely defined by several key characteristics. For one thing, they are centered on local governments’ interests, as shown by the metrics of the points system, which was designed so that people who are well educated and/or pay high taxes receive higher points than those who do not. Such a design is favorable to local development, yet lacks adequate consideration about such a system’s effects on the long-term development of the entire country. For another, the points system still follows the old rule of social welfare being dependent upon hukou status. The basis of the points system itself remains the possession of a local hukou, through which one can then receive associated benefits. As a result, the basic fact of benefits being reliant on hukous remains unchanged. These two characteristics also show that the points system possesses certain inherent limitations. We must therefore assess its potential risks while also recognizing the benefits it brings. Based on societal risk theories, this paper will present, at the national level, an analysis of the points system as a phase-specific product of the household registration system reform. 3

Societal Risks and Risk Burden Sharing

German sociologist Ulrich Beck was the first to develop a theory of the “risk society.” Later on, British sociologist Anthony Giddens expanded its content and further emphasized the link between a risk society and policy making. Specifically, with the increase in human activities and the continuous advancement of science and technology, the influence of human decision-­making and actions on nature and human society has greatly increased. The main risks facing humanity have also gradually evolved from natural risks toward societal ones and are primarily due to the uncertainties of human behavior. Risk society in the modern sense appears when human beings become the main 7  Peng, Wan, and Huang, “Jifen quanyi zhi,” 1 (2014).

70

Hou

producers of risks. Modern countries have established various systems for combating, avoiding, and mitigating such human-centric risk factors. Over a period of more than 200 years of industrialization, the history of institutional changes—as well as the evolution of various policies, laws, regulations, and rule systems—are all processes of predicting and warning against those risks and disasters caused by industrialization, and is characterized by the ever-­increasing accuracy of its estimations and warnings.8 Although systems established by modern countries provide protection for human safety and security, the systems themselves bring about another risk, namely, the risk of systemic malfunction, so that the institutionalization of risk itself translates into institutionalized risk.9 Another question then arises—who will be held responsible once these risks endanger human beings themselves? Without the capacity for either full prevention or of knowing who should be held responsible, all members of society, including the victims of its failures, tend to share the costs of these risks. Since the poor shoulder relatively more burden of risk, the sharing of societal risks worsens social inequality.10 Given that risks are inevitable in a risk society, it is important to identify those who are to share the risks. The greatest risk results from having disadvantaged groups share risks for which it is impossible to identify the responsibility bearers. The process of market-oriented reforms and systemic transition in China is actually a process of reconstructing the country’s risk governance and its mechanisms for sharing risk. Under the original planned economic system, all central and local government departments solved the issues of risk responsibility through coordination and the centralized use of resources, which, at that time, were insufficient. Later, internal social disparities were exacerbated amidst the transition toward a market economy. The state-centered risk-­sharing mechanism utilized under the original planning system has experienced major setbacks as a result. Privileged groups in society have completely shirked their responsibility to disadvantaged groups to resolve social risks.11 This inevitably aggravates social conflict, as society as a whole is flooded with risks. 8  Ulrich Beck. “From Industrial Society to the Risk Society: Questions of Survival, Social Structure and Ecological Enlightenment,” ed. Wang Wulong, Marxism & Reality 3 (2003). 9  Anthony Giddens. Modernity and Self-Identity, trans. Zhao Xudong, et al. (Beijing: SDX joint Publishing Company, 1998). 10  Richard Titmuss. Ditemasi shehui zhengce shijiang 蒂特马斯社会政策十讲 [Social Policy: An Introduction], trans. Jiang Shaokang (Changchun: Jilin Publishing Group Co., Ltd., 2011). 11  Yang Xuedong 杨雪冬, “Fengxian shehui lilun 风险社会理论 [Theory of Risk Society],” in Xifang shehui fuli lilun qian yan 西方社会福利理论前沿 [Western Frontier Theories of Social Welfare: On State, Society, Institutions, and Policies] (Beijing: China Social Publishing House, 2009), 280–295.

The Point-based Household Registration System

71

Urbanization in China, for example, is a process of societal risk concentration. Following the experience of other countries, the process of urbanization is bound to risk unemployment, poverty, a widening income gap, and prominent social conflicts. These risks have become even greater in China due to a much faster pace of urbanization than in other countries. Specifically, the process of urbanization in China involves risks such as insufficient impetus for marketization, a widening gap between urban and rural development, a slow process of urbanization (i.e., government-registered permanent residence in the city) of rural citizens, the unbalanced development of urban structures, and the intensification of social conflicts.12 Current and ongoing problems in these veins include the influx of rural population into large cities, faster urbanization in small and medium-sized cities than the corresponding urbanization of rural citizens in those areas, and rural migrants’ lack of equal access to resident rights in the city. None of these constitutes urbanization in the full sense. It is in this risk environment that the points system came into being, yet this system itself also involves some societal risks. 3.1 Widening Inter-regional Gap in Human Capital The level of economic development in a region closely relates to the overall educational level of the local population. That is to say, a college-educated population is conducive to regional economic development. Therefore, the gap in human capital is an important factor leading to the overall inter-regional gap. The points system aims to attract highly-educated people into developed cities by offering local hukous. High levels of education and young ages are given high scores, as shown by the indicator designs for the points system. According to the result of household registration via the points system in Shenzhen City in 2013, there were 124,725 people—or 82.66% of those who received local hukous in that year—with an education level of three-year post-secondary school or above; there were 11,547 people—or 7.66%—with a master’s or doctoral degree; there were 65,912 people—or 43.68%—with bachelor’s degrees; and there were 47,266 people—or 31.33%—with an education level of three-years of post-secondary school (see Table 4.1).

12  Liu Jianping and Yang Lei 刘建平、杨磊, “Zhongguo kuaisu chengzhenhua de fengxian yu chengshi zhili zhuanxing 中国快速城镇化的风险与城市治理转型 [On the Risks of Rapid Urbanization in China and the Transformation of Urban Governance],” Chinese Public Administration 4 (2014).

72

Hou

Table 4.1 Distribution of the educational levels of talent introduced into Shenzhen, 2013 (in thousands)

Number %

Ph.D.

Master

Bachelor

Three-year

Two-year

High School or Below

311 0.21

11,236 7.45

65,912 43.68

47,266 31.33

3,016 2.00

23,148 15.34

A large number of highly-educated people being attracted into a city, of course, is conducive to the improvement of local human capital. On the other hand, however, less-developed areas will see a decrease in the overall quality of human capital, as local people with high levels of education move to developed areas through the auspices of the new household registration system. This is detrimental to the socioeconomic development of underdeveloped regions. As a result, the gap in human capital between the developed and underdeveloped regions will widen. More importantly, the resulting risk of a widening interregional gap is one posed to already underdeveloped regions. In addition to the migration of highly educated people into those developed cities that have adopted the points system, such cities are also equally attractive to young people under forty. Table 4.2 shows the age structure of talent introduced into Shenzhen in 2013, for example. Table 4.2 Age structure of the talent introduced into Shenzhen, 2013 Age

Indicator

18–30 30–35 35–40 40–48 > 48 Total Average age

Graduates

% of graduates

Talent in service

% of talent in service

Subtotal

% of talent

56,331 341 80 21 1 56,774 22.9

99.22 0.60 0.14 0.04 – –

44,604 27,377 13,455 8,577 102 94,115 31

47.39 29.09 14.30 9.11 0.11 –

100,935 27,718 13,535 8,598 103 150,889 28

66.9 18.37 8.97 5.70 0.07 –

Note: The upper age limit is excluded, as opposed to the lower limit (e.g., the age group of 18–30 means ages of at least 18 years but below 30).

The Point-based Household Registration System

73

The fact that almost all new talent has been comprised of individuals under the age of 40 has been exceedingly helpful in optimizing the age-related demographic structure of the receiving city. As a country with a rapidly aging population, China has seen a particular rise in the number of young people moving from rural areas to cities, exacerbating the aging of those rural areas they have left behind. Policies based on the points system and designed to attract young people undoubtedly play a role in lowering the average age of the population in the receiving regions, optimizing their age structure, and increasing their demographic dividends. At the same time, however, such policies also result in the opposite effects on the regions from which those young migrants originate, further widening the existing inter-regional gaps. This runs counter to the goal of China’s approach to urbanization. The points system merely transforms the urban-rural gap amid urbanization into the inter-regional gap, to which it adds a legalized and institutionalized disguise. The ultimate result is that less-developed regions are left further behind. The risks arising from the points system-based mechanism of identifying highly-educated and highlypaid young people are eventually passed on to underdeveloped areas at the cost of overall national development. The fact that developed regions where human resources are already concentrated do not share these risks will also undoubtedly result in widening inequality. Worsening Disparities in Public Services between Urban and Rural Areas The points system is considered to have broken the existing structure of China’s urban-rural dualism by providing a method by which migrant workers may move into cities. Following its implementation in Shenzhen City, however, we can see that, despite changes to urban demographics due to the points system, urban residents still account for 81.31% of all recipients of local hukous, as opposed to the 18.69% bestowed upon rural applicants, regardless of skill level. Since the points system has ultimately and overwhelmingly benefited people with urban hukous, how is it possible to fully eradicate urban-rural dualism? The points system enables people with urban hukous to gain faster access to more welfare resources and allows them to take precedence over those with rural hukous in terms of household registration in the receiving city. This has actually aggravated the existing inequality between urban and rural residents and, therefore, is not conducive to urbanization. It is also difficult for the points system to ensure equal access to public services. At the same time, however, urban hukous are becoming less appealing to those holding rural ones. Surveys have shown that rural citizens are increasingly unwilling to receive urban hukous—more than half of the rural respondents 3.2

74

Hou

polled have said that they are reluctant to become urban inhabitants, and 30% are decisively set against it. The older the respondents, the more willing they were to give up their land. Of respondents aged 60 or over, 57.4% are willing to receive urban hukous, while 70.6% of those in 20–29 age group are reluctant to give up their rural hukous. This is diametrically opposed to what is required by the points system.13 Given that young people with rural hukous are largely unwilling to receive urban ones, it is no more than wishful thinking on the part of cities that the urban-rural gap will be narrowed through the points system. The key to urbanization therefore lies in not offering rural citizens urban hukous, but in assuring their rights to land and ensuring their equal access to public services. The Chinese government has become aware of this issue, and in response, the State Council has stated several modes of action in the Opinions. These actions include the initiative for China to unify the urban and rural household registration systems in order to eradicate extant differences between rural and urban hukous, that it will improve the rural property system, and that—in the current stage—it is not allowed to accept any renouncement of existing rights to land contracting and management, to homesteading, and/or to sharing collective benefits as the preconditions for rural residents to receive urban hukous. This has relieved rural citizens of worries about the possible consequences of receiving an urban hukou and hence is favorable to further urbanization. With that said, if the points system places too much weight on education and income levels, rural citizens may not be able to receive an urban hukou even if they are willing to receive it in the first place. In this sense, the points system happens to have hindered the reception of urban hukous by rural-urban migrants. 3.3 Personal Risks Arising from Industrial Upgrading Chinese cities that have adopted the points system are feature high levels of economic development and were the first cities to achieve industrial upgrades and restructuring. As such, they tend to frequently adjust relevant scores to better identify the labor force most needed for further industrial restructuring. As an example of actively introducing individuals meeting the needs of industrial development through the points system, Shenzhen raised the minimum 13  Li Qiang 李强, “Lun nongmin he nongmingong de zhudong chengshihua he beidong chengshihua 论农民和农民工的主动城市化和被动城市化 [On the Active and Passive Citizenization of Rural citizens and Migrant Workers],” Hebei Academic Journal 4 (2013).

The Point-based Household Registration System

75

score specific to technician qualifications from 80 to 90 points in 2013, with the aim of transforming the city’s economic development pattern as well as furthering its industrial upgrades and restructuring and to introduce even more technical and skilled talent. Talent introduced into Shenzhen mostly specializes in electronics and information technology (IT), finance, accounting, and related fields, with the most popular specialties including computing, communications engineering, electronics/information engineering and automation, accounting and accounting computerization, English and business English, business administration, administration, finance and financial management, international economics and trade, logistics management and e-commerce, art design, and civil engineering, suggesting that Shenzhen’s demand for talent in these fields remains strong. Furthermore, the talent being introduced is concentrated in local foundational industries. The locally-leading industries ranked by the number of employees as introduced talent (excluding those introduced through agencies) are: manufacturing, information transmission, computing services and software, wholesale and retail, transportation, warehousing and postal services, finance, construction, public administration and societal organization, real estate, scientific research, technical services and geological prospecting, leasing, and business services. In brief, local industries that serve as pillars for the community still have a strong demand for new talent. Annual adjustments to scores utilizing the points system enables talent identification in line with the transformation of the economic development pattern, as well as any necessary industrial upgrading and restructuring. As the scored weights of the points system keep changing, however, who is to undertake societal risks, such as the transformation of the workforce and unemployment of workers caused by industrial upgrading and restructuring? It is claimed that the point-based household registration system is capable of balancing interests within the current context of national resource inadequacy, and is further championed as part of an incremental reformation echoing local socioeconomic development. In fact, however, it imposes very specific risks to industrial upgrading upon those of China’s floating population without local hukous. These are migrants who return to their places of origin or move to areas where they are needed only after they become jobless due to industrial upgrading and economic restructuring. These places or areas must then provide them with public services and social security, a risk that economically underdeveloped areas assume in the process of economic development. This is also one of the reasons for the widening inequality seen in the country as it urbanizes.

76 4

Hou

Risk Burden Sharing and Policy Improvements for the Points System

The points system is a product of household registration reformation carried out on the precondition that the population of large cities is controllable. Any household registration reform that does not remove benefits linked to hukous, however, is still incomplete. In essence, the points system still relies on household registration to limit the use of local resources by non-local people. The fact that people rely on the household registration system to receive welfare remains unchanged, and the role of this system as a barrier to full social benefits has actually been shored up and strengthened. The process by which developed regions define their points requirements in order to prioritize the granting of local hukous to college-educated and highincome young people while simultaneously offering them more benefits is also a process by which national human resources are used to optimize the local population’s human capital and age structure. This will widen the gap between developed regions (with net population inflow) and underdeveloped ones (with net population outflow), with the exacerbated risk of inter-regional disparities to poor regions or even, potentially, country-wide. At the same time, the points system can always select talent most suitable for local industries by adjusting its indicator scores. Consequently, the risk of unemployment for workers and the necessity of training for new jobs, as well as the risk to pensions due to industrial upgrading and economic restructuring, can only be assumed by places where these workers are originally from. When rural citizens are no longer willing to receive urban hukous, speeding up urbanization through changes in the household registration is only a superficial fix. The claim that the points system is a new path to urbanization is clearly ignorant of statistical reality. By using points to establish a new set of quantitative criteria as the basis for the floating population to receive basic urban public services and local hukous, local governments are actually utilizing the points system to allow the upper classes receive more local public services while denying those same services to lower classes not in possession of an urban hukou. In other words, access to public services is not equalized, but, rather, further stratified. The resulting risks to urbanization are then shared by underdeveloped regions. In terms of creating and sharing the burden of social risks, the pointbased household registration system runs the risk of exacerbated disparities in various aspects across China, though it also facilitates the optimization of local talent and economy. In order to improve the points system going

The Point-based Household Registration System

77

forward, therefore, it is necessary to control for potential risks in the following areas. First of all, points-based household registration in large cities should give full consideration to the role of the labor market while also controlling for size. The labor market itself operates under reasonable selection mechanisms, of which, employment stability is the primary manifestation of such labor market selection. Stable employment leads to stable opportunities for residency. Accordingly, the points system should give the highest weight to indicators of employment and residential stability. These two measures illustrate the degree to which the floating population is integrated with the city. By contrast, taking educational level, the total amount of taxes paid, and age as the most highlyweighted indicators reveals the inclination of local governments to profit from the points system, which then is naturally conducive to attracting talent while simultaneously widening the inter-regional gap. Given that the influx of ­college-educated and rich young people is not the result of selection by the labor market itself, it is fair and just to let labor market mechanisms decide who should receive local hukous. Secondly, the points system should embody the principle of fairness and justice. The Opinions state that the points system should operate under the principles of total population size control, openness/transparency, operation according to rules, fairness, and justice. The last points are meant specifically to ensure proper treatment of members of the floating population. The current points system shows an obvious preference for groups from the upper classes, which is one of the root predictors for future risks. Of course, large cities need both talent for high-end industries and an adequate labor force for low-end services. Rejecting those individuals suitable only for low-end services damages the economies of scale generated by urbanization, and establishes barriers to groups of people who would otherwise benefit greatly from urbanization.14 The Central Government should work to prevent and control risks and to avoid shifting all future risks to the underdeveloped regions primarily responsible for sending their migrants. The Central Government should share the resultant risks when necessary.

14  Lu Ming 陆铭, “Chengshi kuozhang ciji jiuye yu shouru 城市扩张刺激就业与收入 [On How City Expansion Stimulates Employment and Income],” in Zhenshi de zhongguo— zhongguo moshi yu chengshihua biange de fansi 真实的中国—中国模式与城市化变 革的反思 The Real China—China Model and Urbanization, ed. Huang Yasheng and Li Huafang, (Beijing: CITIC Press Group, 2013), 110–111.

78

Hou

Assigning more weight to employment stability in the points system can prevent local governments interference and limit the growth of inter-regional disparities. Rural citizens rank lower than urban ones in terms of education and income levels, and most of them work in low-end industries. If the points system places too much weight on education and income levels, rural migrants are less likely to receive a local hukou than urban ones, even if the former are more receptive to it. If employment stability is taken as a high-score measure, rural citizens employed in low-end occupations can find greater acceptance in cities because of the huge demand for them, which may serve to narrow any gap in the likelihood of household registration between urban and rural citizens and, further, to reduce the risk of exacerbated urban-rural inequities regarding access to public services. Third, cities with the points system in place can frequently adjust their indicator scores to ensure industrial upgrading and restructuring. Then, in order to prevent personal risks caused by the labor force being left unprotected prior to industrial restructuring, it becomes necessary to stress the importance of participating in social insurance programs. Accordingly, participation in social insurance programs and years of such participation prior to urban hukou application should be taken as high-score indicators in order to enhance personal ability to resist risks. Fourth and last, the points system is a phase-specific product of China’s household registration reform, and, accordingly, will be phased out with further social development. With the Opinions, the State Council has uniformed the urban and rural household registration systems. Ongoing household registration reform aims to realize urban-rural integration so that urban and rural residents are equal in terms of rights. The hukou, as a system, will eventually resume its original role, namely, residence registration, and will ultimately be disconnected from certain benefits. The points system built upon hukou-linked benefits is also bound to eventually disappear. In the current period, however, when the hukou is still required to function as a guarantor of geographicallybounded citizenship, the points system is intended to prepare for the separation of hukous from social benefits. Additionally, the points system is intended to gradually weaken the role of social stratification by giving urban and rural residents equal access to local hukous; otherwise, its utilization will widen the gap between these two groups of residents. While implementing the points system, relevant government departments should make the greatest possible effort to offer urban and rural residents equal access to public services. Equality in hukous will then not be far away. It is necessary to fully recognize the risks that the points system brings, evade risks that may arise in the future,

The Point-based Household Registration System

79

and prevent existing risks from becoming institutionalized. The government must fully take all these into account when formulating policies. 5

The Points System and Residential Permit Management

In addition to the point-based household registration system, the Chinese government has implemented another floating population management and service system, namely, the residential permit management system. These two systems—the points system and the residential permit management system— represent two different paths to urbanization and towards realizing the equalization of social security and public services for urban and rural residents.15 The first path is still based on hukous. Changing rural hukous into urban ones allows rural denizens access to the same social security and public services as those available to urban residents, thus raising the level of urbanization. This policy is the one most espoused in mainstream China, with the points system being representative of such a view. The second path is that of facilitating urbanization by means of permanent residence; that is, the availability of public services and social security is decided not by the hukou, but by one’s place of permanent residence. In fact, both paths to urbanization co-exist in China. The point-based household registration system is a method of bestowing citizenship for rural individuals based on their hukou, while the residential permit management system is a system of citizenship predicated upon the place of permanent residence. Residential permits appeared as a method for managing the floating population after rural migrants began flooding Chinese cities. Unlike the points system in terms of either short-term purpose or function, residential permits have two functions: population registration and management, and the allocation of welfare resources. As a result, only a low threshold of residential permits can register as many migrants as possible. By comparison, the points system is mainly intended to address resources allocation and the change of one’s hukou.16 15  Zhang Yi 张翼, “Nongmingong jincheng luohu yiyuan yu zhongguo jinqi chengzhenhua daolu de xuanze 农民工 ‘进城落户’ 意愿与中国近期城镇化道路的选择 [Willingness of Migrant Workers to Receive Urban Hukous and China’s Recent Choice of Paths to Urbanization],” Chinese Journal of Population Science 2 (2011). 16  Wang Yang 王阳, “Juzhuzheng zhidu difang shishi xianzhuang yanjiu 居住证制度地 方实施现状研究 [Research on the Local Implementation of the Residential permit System],” Population Research 5 (2014); Zhao Deyu and Peng Xizhe 赵德余、彭希哲,

80

Hou

China restricted the free movement of its internal population prior to the country’s period of reform and opening up. The subsequent large-scale population mobility resulted in many new problems for those cities receiving a significant influx of new migrants. As a result, strategies for the management of China’s floating population became a new priority. In 1985, the Provisional Regulations of the Ministry of Public Security on the Management of Temporary Residents in Urban Areas 《 ( 公安部关于城镇暂住人口管理的暂 行规定》) was released, with a focus on temporary residential permits targeting floating populations. The temporary residential permit system focused on managing the floating population, while ignoring any assurances about their due rights and benefits. Consequently, many of its drawbacks were exposed during its implementation. Following further population mobilization during the 1990s, several cities began to explore the residential permit system, initially aiming to introduce high-level talent by offering certain local public services and social security to migrants with a residential permit. In March 2014, the CPC Central Committee and the State Council co-issued the National New-Type Urbanization Plan (2014–2020) 《 ( 国家新型城镇化规划（2014~2020 年）》), stating that the residential permit system for the floating population would be rolled out across China (not just in select cities or provinces), and that a residential permit-based basic public service delivery mechanism linked with key conditions—such as number of years of residence—would be established and, gradually, improved. In July 2014, the Opinions was released, with the goal of fully implementing another new residential permit system. On December 12, 2015, the Interim Regulations on Residential permits 《 ( 居住 证暂行条例》) was released, which then took effect on January 1, 2016. Permitbased residence management will mean radical changes to the management of floating populations as well as what services are made available, and represents the beginning of initiatives to provide migrants with the same public services and social security benefits as those available to urban residents with local hukous. Released by the State Council, these interim regulations stipulate that the floating population can access six types of basic public services and seven types of conveniences in the cities where they live. These basic public services include compulsory education, basic public employment services, basic public health and family planning services, public cultural and sports “Juzhuzheng zhidu dui wailai liudong renkou de zhidu houguo ji jili xiaoying—zhidu daoru yu jiceng nei de zai fenhua 居住证制度对外来流动人口的制度后果及激励效 应—制度导入与阶层内的再分化 [On Institutional Consequences and the Stimulus Effect of the Residential permit System—Institutional Introduction and Intra-class Re-division],” Population Research 6 (2010).

The Point-based Household Registration System

81

services, legal aid and other legal services, and assorted other public services prescribed by the state. The seven types of conveniences involve the reception of exit and entry documents, renewal and reception of identity cards, motor vehicle registration, applications for a driver’s license, registration for vocational qualification-­specific examinations, applications for vocational qualifications, maternity service registration and the reception of family planning certification materials, and other conveniences prescribed by the state. Furthermore, migrants can receive local hukous as long as they meet certain conditions specified by the government of the city to which they are migrating. Compared with the points system, the residential permit system establishes a relatively low threshold, as migrants can apply for a residential permit as required if they have lived in the receiving city for more than six months and satisfy any of the following conditions: having a lawful and stable job, having a legal and stable dwelling, and continuously receiving local education. This move towards inclusion covers migrants in a relatively stable state within the group of qualified local residency applicants. The residential permit system has opened the door to sufficient public services for migrant applicants, and, furthermore, has greatly reduced their reliance on hukous thanks to their ability to receive public services in the place of residence with no need for a local hukou. It is in this way that hukous have been disconnected from resident benefits. With no restrictions on education level, age, or profession, the residential permit system covers most migrants and thus reduces the potential risks posed by the points system to household registration. It is plausible that as they undergo further improvement, both the residential permit and points systems will eventually work towards the same objectives—that is, completely realizing the endowment of citizenship upon rural-urban migrants, promoting the ongoing process of urbanization, and increasing the level of national urbanization overall.

Chapter 5

Narrowing the Income Gap: Challenges and Strategies Zhang Juwei and Zhao Wen1 China’s Gini coefficient has been declining throughout recent years. Does this mean that significant inequality in income has begun to ease? In order to answer this question, we must first understand the nature and characteristics of various determinants of China’s income gap. These determinants are always complicated and include, at the very least, factors specific to socioeconomic development, the market, and various institutions. Regarding income distribution, some positive changes in overall socioeconomic development are already apparent, such as the narrowing of existing urban-rural and inter-regional income gaps. Therefore, a decreasing Gini coefficient is, here, a positive indicator of progress. We must also recognize, however, that not all of the factors leading to an income gap in China are undergoing positive change. Owing to imperfections in the market itself and unpredictable patterns of economic development, a host of challenges remain to any further narrowing of the income gap. For example, the income gaps between urban and rural areas remain significant, income distribution-specific priorities are non-compliant, the problem of hidden and illegal incomes is widespread, there are always people in trouble, and the overall pattern of income distribution needs to be improved. On the one hand, these problems are closely related to China’s basic national conditions and developmental stage, with a certain degree of inevitability and phase-specific characteristics. On the other, they are also directly related to the country’s lack of institutional reform in income distribution and other related fields, as well as a lack of effective policy implementation. The key to solving these problems lies in rapidly implementing income distribution reform. In this paper, we will explain the changes to the Gini coefficient in conjunction with a discussion of the so-called Kuznets curve. We will also analyze the reasons underlying these changes and offer recommendations for the further promotion of income distribution reform.

1  Zhang Juwei is Head and Researcher of IPLE-CASS; Zhao Wen is Associate Researcher of IPLE-CASS. 

© koninklijke brill nv, leiden, 2019 | doi:10.1163/9789004407435_006

Narrowing the Income Gap: Challenges and Strategies

1

83

Latest Trends in China’s Gini Coefficient and Associated Explanations

China’s Gini coefficient has dropped for the last few consecutive years, leading some people to argue that the income gap has been approaching an overall turning point.2 An important argument for this is the arrival of the turning point within the Kuznets curve. What, then, is the Kuznets curve? How does it relate to the latest changes in China’s Gini coefficient? Will the narrowing trend continue as a matter of course beyond this point? 1.1 Locating China on the Kuznets Curve 1.1.1 Latest Changes in the Gini Coefficient Since reform and opening up began in China, the country’s Gini coefficient has seen a sharp rise followed by a slight dip. Its Gini coefficient was 0.31 in 1978 and reached a peak of 0.491 in 2008. The Gini coefficient is a measure of the income gap, with higher values denoting wider income gap. A value of 0.4 is globally recognized as a significant threshold in terms of income gap. In response to this problem, the State Council issued the Opinions on Deepening the Income Distribution System Reform 《 ( 关于深化收入分配制度改革的若干 意见》) in 2013, in which the full agenda for income distribution reform was outlined. With joint efforts by all stakeholders, China’s Gini coefficient has declined slightly since 2009. The Gini coefficient of national income dropped for seven consecutive years starting with 2008 and reached 0.462 in 2015, the lowest it had been since 2003 (see Figure 5.1).

Figure 5.1 China’s Gini coefficient Source: NBS’s official website 2  “Woguo shouru chaju zheng yinglai suoxiao de guaidian 我国收入差距正迎来缩小的 拐点 [China Is Approaching a Turning Point Leading to Narrower Income Gap],” the People’s Daily, http://news.xinhuanet.com/society/2012-04/10/c_111756205.htm, Apr. 10, 2012.

84

Zhang and Zhao

Figure 5.2 The Gini coefficients of select countries, 2012 Source: NBS and OECD websites

Although it has declined somewhat, the Gini coefficient in China remains higher than in other countries. In 2012, the Gini coefficients of most OECD countries were around 0.3 (see Figure 5.2)—0.33 in Australia and Italy, 0.31 in France and South Korea, 0.29 in Germany, 0.35 in the United Kingdom, and 0.39 in the United States, according to data published on the OECD website. These countries all have lower Gini coefficients than China. 1.1.2 What the Kuznets Curve Means Amongst theories of income distribution, the Kuznets curve stands out as an important hypothesis. It holds that as the economy grows, the income gap will show an inverted U-shaped trend, i.e., it will rise first before falling. The specific point at which the income gap begins to fall is known as the Kuznets turning point. This hypothesis is drawn from an article titled “Economic Growth and Income Inequality” written by Simon Kuznets, which is focused on explaining trends in income inequality within a given economy during the period of industrialization.3 After studying scattered data about countries in the early stages of development, Kuznets discovered a decline in income inequality in the middle and late stages of industrialization. In order to explore what he saw as the trend of income inequality, Kuznets adopted a simple simulation analysis system. He assumed that any given country going through 3  Simon Kuznets, “Economic Growth and Income Inequality,” American Economic Review 45 (1955): 1–28. 

Narrowing the Income Gap: Challenges and Strategies

85

industrialization would possess a low-income agricultural sector and a highincome non-­agricultural sector, each with a constant internal income gap, and that as urbanization and industrialization advanced, the agricultural sector would demonstrate a narrowing income gap, while the non-agricultural sector would evince a widening one. The results indicated that there was a point in the trends of the income gap that could be considered the “turning point,” as overall income inequality showed an inverted U-shaped curve. As such, the Kuznets curve comes to several primary conclusions. First, it implies that developmental factors have an impact on the income gap between different groups. “Developmental factors” as a term refers to factors brought about by economic development that are capable of narrowing the inter-­sectoral and inter-group income gaps. The most common developmental factors are urbanization—which may eliminate the urban-rural income gap— and industrialization—which may reduce or even remove the income gap between the agricultural and non-agricultural sectors. When both economic and social development enter a certain stage and new economic sectors emerge, economic growth accelerates, and as a result the originally significant income gap between certain sectors gradually shrinks, contributing to a declining overall income gap. Second, the Kuznets curve is unable to narrow intra-sectoral income gaps. Any existing intra-sectoral income gap is generated and decided by market factors and has nothing to do with the developmental factors discussed by Kuznets. The internal income gap will not automatically disappear even if the Kuznets curve manifests. If the intra-sectoral income gap widens quickly, the overall income gap may continue to widen even if the inter-sectoral gap narrows, and the Kuznets curve may not appear. Third, the Kuznets curve does not involve redistribution. Any income-­ adjusting policy may either hinder or promote the appearance of the Kuznets curve, which, therefore, cannot be considered the final outcome of the income gap across society, but only the result of initial distribution. The academic debate over the Kuznets curve has much to do with different understandings of its implications, with many influential studies drawing different conclusions. Gary Fields, for example, raised doubts about the Kuznets curve hypothesis in his study on newly-industrialized Asian countries and regions. He found that income distribution in the Four Asian Tigers (Hong Kong, Singapore, Taiwan, and South Korea) did not deteriorate but, rather, improved during their periods of rapid economic growth.4 Dr. John C.H. Fei, et al., discovered that while Taiwan achieved rapid economic growth from the 4  Gary Fields, “Employment, Income Distribution and Economic Growth in Seven Small Open Economies,” Economic Journal 94 (1984): 74–83. 

86

Zhang and Zhao

1950s to 1970s, with its per capita GNP rising from 500 USD in 1964 to over 1,000 USD in 1974, local income inequality kept decreasing, as its Gini coefficient dropped to 0.29 in 1972 from 0.57 in 1953.5 The United Nations Development Programme (UNDP) argued in the Human Development Report 1996 that the traditional view that early economic growth was deterministically bound to the deterioration of income distribution had been discredited.6 These studies are common in that they take the trend of a post-redistribution income gap as evidence for the non-appearance of the Kuznets turning point. This clearly runs counter to the original intention of Kuznets’s focus on developmental factors specific to initial distribution. 1.1.3 What is China in Relation to the Turning Point? So, again, has China passed the turning point of its own Kuznets curve? Scholars have yet to agree on this question. Some argue that with the country’s shrinking urban-rural income gap, this turning point either already has or is about to come.7 There are several justifications for this view. First, the urban-rural income gap is narrowing. Rapid urbanization promotes rural labor mobility, and wages have become the largest contributor to the growth of rural citizens’ income while leading to a narrowing urban-rural income gap—the income ratio between urban and rural residents dropped from a peak value of 3.3:1 in 2009 to 2.9:1 in 2015. The narrowing of the urban-rural income gap plays

5  John C.H. Fei, Gustav Ranis, and Shirley W.Y. Kuo. Growth with Equity: The Taiwan Case, (Oxford: Oxford University Press, 1979). 6  U NDP, Human Development Report 1996, 6. 7  Zhang Shiwei, Lü Shibin, and Zhao Liang 张世伟、吕世斌、赵亮, “Kuzinieci dao U xing jiashuo: jiyu jini xishu de fenxi tujing 库兹涅茨倒 U 形假说：基于基尼系数的分析途径 [Kuznets’s Hypothesis of an Inverted U-Shaped Trend: an Analytical Approach Based on the Gini Coefficient],” Economic Review 4 (2007); Xu Bing and Zhang Shangfeng 许冰、章上峰, “Jingji zengzhang yu shouru fenpei bu pingdeng de dao U xing duo guaidian cedu yanjiu 经济 增长与收入分配不平等的倒 U 形多拐点测度研究 [Research on Economic Growth and Measurement of Multiple Turning Points on the Inverted U-Shaped Curve of Unfair Income Distribution],” The Journal of Quantitative & Technical Economics 2 (2010); Zhou Yunbo 周云 波, “Chengshihua, chengxiang chaju yiji quanguo jumin zongti shouru chaju de biandong: shouru chaju dao U xing jiashuo de shizheng jianyan 城市化、城乡差距以及全国居民 总体收入差距的变动：收入差距倒 U 形假说的实证检验 [Urbanization, Urban-Rural Disparity, and Changes in the Overall Income Gap among Chinese Residents: Empirical Test of the Hypothesis of an Inverted U-Shaped Income Gap Trend],” China Economic Quarterly 4 (2009); Gao Fan 高帆, “Woguo jumin shouru chaju biandong de yinsu fenjie: qushi ji jieshi 我国居民收入差距变动的因素分解：趋势及解释 [Factor Decomposition of Changes in Income Gap among Chinese Residents: Trends and Explanations],” Economic Science 3 (2012).

Narrowing the Income Gap: Challenges and Strategies

87

a decisive role in changes to the overall income gap.8 Second, the inter-regional income gap is narrowing thanks to faster economic growth in the Central and Western regions of the country.9 Third and last, the income gaps within urban and rural areas are trending towards stability. Driven by the country’s tax reforms and agricultural subsidy policies, the Gini coefficient in rural areas has gradually declined from 0.44 in 2001 to 0.39 in 2010, narrowing steadily after 2003, in particular. The income gap within urban areas is also almost stable, as the Gini coefficient increased from 0.342 in 2002 to 0.361 in 2004, before dropping to 0.349 in 2007.10 Nevertheless, other scholars argue that even as the income gap in China continues to expand, the turning point has not yet come. For the Kuznets turning point to appear, one of the prerequisites is that the income gap between urban and rural areas does not rise significantly. What, then, are the changes taking place in these income gaps? The Gini coefficient released by the NBS is calculated on the basis of household survey data, and is likely to appear smaller than reality actually suggests is the case, since high-income groups often do not take such surveys. If income inequality within urban or rural areas continues to 8  Cai Fang and Wang Meiyan 蔡昉、王美艳, “Weishenme laodongli liudong meiyou suoxiao chengxiang shouru chaju 为什么劳动力流动没有缩小城乡收入差距 [Why Has Labor Mobility Failed to Narrow the Urban-Rural Income Gap?],” Economic Perspectives 8 (2009); Gao Wenshu, Zhao Wen, and Cheng Jie 高文书、赵文、程杰, “Nongcun laodongli liudong dui chengxiang jumin shouru chaju tongji de yingxiang 农村劳动力 流动对城乡居民收入差距统计的影响 [Impact of Rural Labor Mobility on Statistics of the Income Gap between Urban and Rural Residents],” in Reports on China’s Population and Labor (No. 12)—Challenges during the 12th Five-Year Plan Period: Population, Employment, and Income Distribution, ed. Cai Fang (Beijing: Social Sciences Academic Press [China], 2012); Lai Desheng and Chen Jianwei 赖德胜、陈建伟, “Woguo shouru chaju suoxiao de guaidian huoyi lailin 我国收入差距缩小的拐点或已来临 [Turning Point at which the Income Gap in China Begins to Narrow May Have Arrived],” Policy Research & Exploration 5 (2012); Zhao Wen and Zhang Zhanxin 赵文，张展新, “Tongji fangfa dui guji chengxian shouru chaju de yingxiang ji chongxin cesuan 统计方法对估 计城乡收入差距的影响及重新测算 [Impact of Statistical Methods on Estimation of the Urban-Rural Income Gap and its Re-estimation],” Studies in Labor Economics 1 (2013). 9  Jia Wei 贾伟, “Nongcun laodongli zhuanyi dui jingji zengzhang yu diqu chaju de yingxiang fenxi 农村劳动力转移对经济增长与地区差距的影响分析 [Analysis of the Impact of Rural Labor Mobility on Economic Growth and the Inter-regional Gap],” Chinese Journal of Population Science 3 (2012); Qu Yue, Cai Fang, and Zhang Xiaobo 曲玥、蔡昉、张晓波, “Feiyan moshi fasheng le ma?—dui 1998–2008 woguo zhizaoye de fenxi ‘飞雁模式’ 发生了吗？—对 1998~2008 我国制造业的分析 [Has the Flying Geese Paradigm Occurred?—Analysis of China’s Manufacturing, 1998–2008],” China Economic Quarterly 3 (2013). 10  Richard Herd, “China’s Emergence as a Market Economy: Achievements and Challenges,” OECD Economics Department, Working paper (2011).

88

Zhang and Zhao

grow, the Kuznets turning point will appear later than expected or may not occur at all. Li Shi and Luo Chuliang used CHIP data to supplement data about high-income groups and found out that the Gini coefficient had increased significantly.11 The income gap continues to widen within urban areas, especially between sectors and occupations, with huge amounts of hidden income floating throughout the economy.12 What’s more, the actual urban-rural gap remains significant, especially given “hidden welfare” such as public services, social security, and housing.13 An analysis of studies comparing the aforementioned opposing views reveals that those studies concluding that the turning point has not yet come used data and papers published earlier than those studies concluding it had arrived, with no similar studies carried out in the past few years; the ones concluding that the turning point has or is about to arrive involved papers published more recently. Given the latest evidence, we think that China may in fact be passing through the Kuznets turning point, on the grounds that the narrowing urban-rural and inter-regional income gaps are the main reason for the ongoing decline of the Gini coefficient. The narrowing of these income gaps is a developmental factor as described by Kuznets. In the following sections, we will focus on explaining how such a narrowing relates to the decline of the Gini coefficient. 1.2 Understanding Recent Drops in China’s Gini Coefficient 1.2.1 Determinants of the Income Gap Similar families can be grouped together by employment status. China generally considers urban residents as one single group and rural ones as a separate group. There are two determinants to changes in the income gap according to this classification. One is the inter-group income gap, which is mainly 11  Li Shi and Luo Chuliang 李实、罗楚亮, “Zhongguo shouru chaju jiujing you duoda: dui xiuzheng yangben jiegou piancha de changshi 中国收入差距究竟有多大：对修正样 本结构偏差的尝试 [How Big is China’s Income Gap?: an Attempt to Correct Sample Structure Deviation],” Economic Research Journal 4 (2011). 12  Xing Chunbing and Li Shi 邢春冰、李实, “Zhongguo chengzhen diqu de zunei gongzi chaju: 1995–2007 中国城镇地区的组内工资差距： 1995~2007 [Overview of the IntraGroup Wage Gap in China’s Urban Areas, 1995–2007],” China Economic Quarterly 1 (2010); Wang Xiaolu 王小鲁, “Huise shouru yu guomin shouru fenpei 灰色收入与国民收入分 配 [On Gray Income and National Income Distribution],” Comparative Studies 48, ed. Wu Jinglian (Beijing: CITIC Press Group, 2010). 13  Xing Chunbing 邢春冰, “Qianyi, zixuanze yu shouru fenpei: laizi zhongguo chengxiang de zhengju 迁移、自选择与收入分配：来自中国城乡的证据 [Migration, SelfSelection and Income Distribution: Evidence from Urban and Rural Areas in China],” China Economic Quarterly 2 (2010).

Narrowing the Income Gap: Challenges and Strategies

89

affected by developmental factors. Any narrowing of the urban-rural income gap brought about by urbanization and that of the inter-regional income gap by late-mover advantages are typical examples of developmental factors. The other is the intra-group income gap, which is mainly affected by the market. Such factors as individual ability, education level, and opportunity for development often exhibit the Matthew Effect and will not narrow the income gap due to a growing level of development. Therefore, the intra-group gap usually consistently grows. In addition to developmental and market factors, institutional factors are important in considering how they affect the income gap. The Kuznets turning point mainly refers to changes in the income gap brought about by developmental factors. The inter-group gap will gradually disappear with further economic development, while the intra-group gap will continue to grow. As a result, the latter and its causes receive more attention from economists. The phenomenon of the market mechanism widening the intra-group gap has been proven by many studies. Zhang Juwei has discovered that the return on education in China shows an upward trend as income increases, as the highest 95% of all income earners are more than twice as numerous as the lowest 5%, showing an obvious Matthew Effect.14 Yang Jun and others have also found that the income gap leads to inequality in education, yet any decrease in educational inequality fails to narrow the income gap.15 Yao Xianguo and Zhang Haifeng have discovered that differences in the education level of the labor force constitute the major reason for inter-regional income gaps.16 In fact, according to some studies, opportunities for residents to earn an income are unfairly ­declining— the income of the lowest-earning group is stabilizing at the same time that the probability of members of the middle-income group entering the lowincome group is greater than that of them entering the high-income bracket.17 14  Zhang Juwei 张车伟, “Renli ziben huibaolü yu shouru chaju: matai xiaoying jiqi zhengce hanyi 人力资本回报率变化与收入差距： ‘马太效应’ 及其政策含义 [Relationship between Changes in Return on Human Capital and the Income Gap: the Matthew Effect and Its Policy Implications],” Economic Research Journal 12 (2006). 15  Yang Jun, Huang Xiao, and Li Xiaoyu 杨俊、黄潇、李晓羽, “Jiaoyu bupingdeng yu shouru fenpei chaju: zhongguo de shizheng fenxi 教育不平等与收入分配差距: 中国的实 证分析 [Relationship between Educational Inequality and the Income Gap: Empirical Analysis of China],” Management World 1 (2008). 16  Yao Xianguo and Zhang Haifeng 姚先国、张海峰, “Jiaoyu, renli ziben yu diqu jingji chayi 教育、人力资本与地区经济差异 [Relationship between Education/Human Capital and Inter-Regional Economic Gaps],” Economic Research Journal 5 (2008). 17  Wang Hongliang, Liu Zhibiao, Sun Wenhua, and Hu Qizhi 王洪亮、刘志彪、孙文华、    胡棋智, “Zhongguo jumin huoqu shouru de jihui shifou gongping: jiyu shouru liudongxing de weiguan jiliang 中国居民获取收入的机会是否公平：基于收入流动性的微 

90

Zhang and Zhao

Figure 5.3 Gini coefficients in China Source: Estimates based on data from China Statistical Yearbook published in previous years

At present, the income gap caused by market factors in China does not show any obvious signs of shrinking. As shown in Figure 5.3, both urban and rural Gini coefficients remain somewhere between 0.31 and 0.35. It should be noted that the Gini coefficients here were calculated using statistics provided by the China Statistical Yearbook surveying urban and rural residents across income quintiles. As mentioned earlier, samples of the high-income group tend to skew the statistical Gini coefficient lower than the actual number. Therefore, the Gini coefficients shown in this figure may be considered conservative estimates. The fact that the Gini coefficients within urban and rural areas show no sign of narrowing even under such conservative estimation indicates that the income gap caused by Chinese market factors will not change upon the arrival of the turning point of the Kuznets curve. Thus, the inter- and intra-group gaps are totally different from each other in terms both of how they appear and how they can be expected to act. There should be policy measures specific to factors pertaining to these two types. The inter-group gap can be narrowed by removing barriers to the mobility of production factors between urban and rural areas and promoting balanced development between them. The Matthew Effect of the market itself is a 观计量 [On whether Chinese Residents Have Fair Opportunities for Earning Income: Micro-Level Measurement Based on Income Mobility],” The Journal of World Economy 1 (2012); Yan Binjian, Zhou Yingheng, and Yu Xiaohua 严斌剑、周应恒、于晓华, “Zhongguo nongcun renjun jiating shouru liudongxing yanjiu: 1986–2010 nian 中国农村 人均家庭收入流动性研究： 1986～2010 年 [Research on the Mobility of Household Income per Capita in China’s Rural Areas: 1986–2010],” China Economic Quarterly 3 (2014).

Narrowing the Income Gap: Challenges and Strategies

91

product of market failure in the sense of income distribution. The most fundamental method of overcoming this market failure lies in the government further favoring the poor and the disadvantaged, thus reducing the driving force behind a widening income gap through redistribution. 1.2.2 Causal Analysis of Gini Coefficient Drops in China The recent decline of China’s Gini coefficient is primarily due to developmental factors, or, put another way, the narrowing of the inter-group gap, which is mainly reflected in the narrowing of the urban-rural and inter-regional income gaps. By comparison, the impact of market factors continues to widen the existing income gap, as shown by the fact that the income gap within urban areas remains large, with no sign of any decline. There are still tough challenges ahead in terms of narrowing the income gap in China. First and foremost among these challenges, the urban-rural income gap is decreasing. This gap plays an important role in China’s overall income gap, of which it used to make up between 40–60%. Although the income gaps within urban and rural areas themselves continue to grow, the urban-rural gap remains greater than both, making up the greater part of the overall income gap.18 In the meantime, the urban-rural income gap constitutes 70% of the overall interregional income gap.19 Therefore, narrowing the urban-rural income gap is an important method of reducing the overall income gap. This urban-rural dualism is a significant cause of the urban-rural income gap, as it has resulted in the sluggish growth of rural resident income. The Central Government has taken various measures to increase rural residents’ income since China began its policy of reform and opening up. One of these measures is to encourage the rural labor force to work in cities. Following 2000, the number of non-local migrant workers has increased by an average of 3.2% annually. In 2015, for example, a total of 270 million rural laborers, including nearly 177 million non-local migrant workers, were employed in the non-agricultural sector (see Figure 5.4). What’s more, the monthly income level of non-local migrant workers increased 18  Terry Sicular, Yue Ximing, Björn Gustafsson, and Li Shi 史泰丽、岳希明、别雍·古斯 塔夫森、李实, “Woguo chengxiang zhijian shouru chaju fenxi 我国城乡之间收入 差距分析 [Analysis of Urban-rural Income Gap in China],” in Woguo jumin shouru fenpei yanjiu 我国居民收入分配研究 [Research on Income Distribution in China], ed. Li Shi, Terry Sicular, and Björn Gustafsson (Beijing: Beijing Normal University Publishing Group, 2008); Ravi Kanbur and Zhang Xiaobo, “Fifty Years of Regional Inequality in China: A Journey through Central Planning, Reform and Openness,” in Working Paper 50/2004, Helsinki: United Nations University World Institute for Development Economics Research, 2004. 19  Wan Guanghua, Inequality and Growth in Modern China, Oxford: Oxford University Press, 2008.

92

Zhang and Zhao

Figure 5.4 Number of migrant workers and their incomes Source: Data from NBS’s official website

from 644 yuan in 2001 to 3,072 yuan in 2015. Although slower than GDP growth within the same period, it was the fastest-growing income among all categories of income earned by rural residents, narrowing the urban-rural income gap. As we can see, the urban-rural income gap in China has actually been overestimated, due the difficulty of including migrant workers’ income into the statistical system. This gap may have gradually declined after 2003.20 In 2009, the urban-rural income gap had already begun to show signs of narrowing, even without factoring in the aforementioned statistical bias. The income ratio between urban and rural residents dropped from a peak value of 3.33:1 in 2009 to 2.9:1 in 2015, as shown in Figure 5.5. The narrowing of the urban-rural income gap plays a decisive role in changes to the overall income gap. Migrant workers in cities are the primary force behind the narrowing of the urban-rural income gap. Second, the inter-regional income gap is narrowing overall, yet an existing imbalance in regional development constitutes another important determinant of the income gap among residents. Throughout most recent years, certain provinces in the Central and Western regions have witnessed accelerated development with higher economic growth rates. Compared with them, the Eastern region was more affected by the 2008 financial crisis. If we compare the coastal Eastern region with the Central and Western regions, it is 20  Ying Ruiyao and Ma Shaoye 应瑞瑶、马少晔 “Chengxiang shouru chaju de zai jianyan 城乡收入差距的再检验 [Re-examination of Urban-rural Income Gap],” Jiangsu Social Sciences 5 (2010).

Narrowing the Income Gap: Challenges and Strategies

93

Figure 5.5 Urban-rural income gap Source: Calculations based on China Statistical Yearbook 2015

apparent that the inter-regional income gap exhibits an apparent downtrend. If measured by per capita GDP, the highest figure in 2008 was in Shanghai and the lowest in Guizhou, with a ratio of 7:1; the highest in 2014 was in Tianjin and the lowest in Gansu, with a ratio of 4:1. The per capita income of residents in different regions can be obtained if the per capita disposable income of urban residents and the per capita net income of rural residents are weighted against population. It is then possible to calculate the Gini coefficient, coefficient of variation (CV), and Theil index of resident income in each region. The trends across these measures are routinely consistent with one another, as shown in Figure 5.6. Trends indicate that the inter-regional income gap grew rapidly from the early 1990s to 2006, before passing the turning point shortly after 2007 and entering its downward phase. Regarding the post-2006 narrowing of the income gap between the Eastern region and other regions in China, Qu Yue, et al., described it according to the “flying geese paradigm,” a term referring to changes in regional economic growth caused by the shift of primary industries from the Eastern region to other regions.21 Initially, coastal areas served as the hubs of Chinese manufacturing thanks to advantages in fields such as transportation, foreign investment, and policy support, as well as a continuous supply of adequate and cheap laborers. Later, in order to develop its high-end industries, the Eastern region shifted some primary industries into the Central and Western regions. At the macroeconomic level, the international economic downturn since 2008 has most heavily hit the Eastern region, which is another cause for 21  Qu, Cai, and Zhang, “Feiyan moshi fasheng le ma?,” 3 (2013).

94

Zhang and Zhao

Figure 5.6 The inter-provincial gap of average resident income: Gini coefficient and Theil index Source: Zhang Juwei and Cai Yifei 张车伟、蔡翼飞, “Renkou yu jingji fenbu pipei shijiao xia de zhongguo quyu junheng fazhan 人口 与经济分布匹配视角下的中国区域均衡发展 [On Balanced Regional Development in China from Perspective of Population and Economic Distribution Matching],” China Industrial Economics 11 (2013), along with the latest data

the narrowing economic gap between regions. Whatever the reason, it is an indisputable fact that the economic growth rates in the Central and Western regions are higher than they were previously. In fact, their shares of national GDP rose from 19% and 17% in 2004 to 20% in 2014.

Narrowing the Income Gap: Challenges and Strategies

95

2 Challenges Depending on who you ask, China is currently in either the middle or late stages of industrialization—that is, it is in the process of transitioning from a dual economy into what might be recognized as a neoclassical economy. The country’s investment-driven growth pattern determines to what extent capital is important, the dominance of which has long held sway over economic growth; inevitably, then, a lower share of labor wages and growing income inequalities will come to pass as the country’s economy develops along this path. In the context of globalization, it took China just a few decades to complete the process of industrialization, as opposed to more than a century, a time frame seen in what have historically been capitalist countries. Although the basic framework of the market economic system has been established in China, relevant institutions have yet to become mature, and some legacy institutional barriers have become intertwined with the market economic system, resulting in numerous income distribution-specific problems. While at similar stages of development to contemporary China, developed countries also experienced similar income distribution-relevant problems. In the early stages of industrialization, abundant or even surplus labor resources were available while capital was very scarce—an imbalance that inevitably led to low wage rates and high returns on capital (ROC). This relationship between production factors ensured a pattern of national income distribution dominated by capital. The result of such a pattern was a low share of labor wages and a high share of capital gains. Once functional distribution became unbalanced, distribution based on magnitude alone unavoidably deteriorated. In the middle and late stages of industrialization, the labor force was no longer abundant at the same time that the marginal product of capital (MPK) was diminishing; the relationship between labor and capital changed significantly, as the status of labor with respect to capital was rising along with increasing wages. Labor wages—affected by income equalization—gradually increased in proportion to total national income, while that of capital gains under the influence of income consolidation dropped, leading to a decline in the overall income gap. Since the 1970s, developed countries have completed the process of industrialization, and, subsequently, new technologies have become the key motivating force behind economic growth. Industrial and production service industries have been redeployed globally, and important changes to the economic and production-factor structures of many countries have taken place. Perhaps most importantly, the working class has become polarized, as a large number of workers with high human capital have witnessed a rapid increase in

96

Zhang and Zhao

remuneration, which, in turn, has resulted in a growing gap between them and low-skilled workers. As a result, existing income gaps in developed countries have once again grown, despite the fact that the overall share of labor wages has not declined and income redistribution continues to be ongoing. A shrinking income gap in China is mainly attributable to the decline of those urban-rural and inter-regional gaps arising from economic development, yet the income gap within urban areas has not declined. This means that any negotiation of the income gap still faces serious challenges. Of all the current determinants of the income gap in China, such factors as the continuous decline of the urban-rural income gap are most conducive to narrowing the income gap overall, while others—such as the market mechanism itself— are conversely widening this gap. Taken together, the final result of these two determinants may make it difficult for China’s income gap to decline any further after it has been reduced to a certain point. Any further decline in the income gap requires continuous improvements on the part of developed countries in terms of their means of income redistribution. Notably, any further improvement on this front faces three specific challenges, and, barring effectively addressing such issues, is unlikely to be achieved. 2.1 Workers Still at a Disadvantage in Initial Income Distribution Labor wages in China have already long made up a small share of the country’s GDP, and their actual level has dropped in recent years. A greater share of GDP denotes a higher proportion of employee remuneration in initial income distribution. Dividing the total employee remuneration by the total number of employees gives the average wage per employee, of which the ratio to per capita GDP is an important measure for assessing the level of employee remuneration overall. The level of employee remuneration in China has declined steadily since 2003, as shown in Figure 5.7. A more-than-adequate labor supply is the primary reason for the decline in individual employee remuneration. Additionally, any increase in labor productivity (i.e., per capita GDP) is only a manifestation of productive capacity created by investment. As a result, the vast majority of earnings resulting from higher labor productivity has become capital gains. This is the reason why it is difficult to increase the overall share of employee remuneration in China. The proportion of employee remuneration to China’s GDP fluctuates between 30% and 34% over a long period of time, as shown in Figure 5.7. International experience shows that an increase in labor wages is conducive to the narrowing of the income gap, while that of capital gains produces the opposite effect. The low share of labor wages in China is an important factor leading to a widening income gap.

Narrowing the Income Gap: Challenges and Strategies

97

Figure 5.7 Share of employee remuneration in GDP and the level of labor wages Source: Calculations based on data from China Statistical Yearbook published in previous years

Any overall or general trends in the share of employee remunerations is unclear, though it has been increasing yearly since 2012. Due to slow wage adjustments, the share of labor wages may rise during an economic downturn, but such an increase does not general last very long. For its part, rapid growth within the service sector has fueled economic growth in more recent years, although it remains unclear whether or not this will bring about a corresponding increase in the share of labor wages. Since the financial crisis in 2008, the proportion of the service sector’s added value to China’s GDP has risen rapidly, which is mainly driven by wholesale and retail, financial, and real estate industries. The added value of these three industries accounted for 8.3%, 5.8%, and 4.7%, respectively, of China’s GDP in 2008, and 9.8%, 7.3%, and 6.0% in 2014 (see Table 5.1). The shares of labor wages in these industries are all around 30%, which is far below the average level of 40% in industry, not to mention the average level of 65% in other service industries. Following such a growth pattern, it is unrealistic to expect the share of labor wages to rise rapidly. 2.2 Income Redistribution The persistence of large income gaps after initial distribution in developed countries does not necessarily result in significant and inalterable national income gaps, primarily because redistribution effectively adjusts these gaps. Adjustment by redistribution generally ensures that the Gini coefficients of developed countries drop by more than ten percentage points, which is why it is generally believed that income gaps in these countries are small. Both before

98 Table 5.1

Zhang and Zhao GDP structure in China in %

Item AFAF Year

IND

CON

WR

TWP

AFS

FIN

RE

Other Total

2008 2009 2010 2011 2012 2013 2014

41.0 39.3 39.7 39.6 39.3 36.9 35.9

5.9 6.5 6.6 6.8 6.9 6.9 7.0

8.3 8.4 8.8 9.0 9.3 9.6 9.8

5.2 4.8 4.6 4.5 4.4 4.4 4.5

2.1 2.0 1.9 1.8 1.8 1.7 1.8

5.8 6.3 6.3 6.3 6.6 7.0 7.3

4.7 5.5 5.8 5.8 5.9 6.1 6.0

16.5 17.0 16.4 16.4 17.0 17.6 18.3

10.6 10.2 9.9 9.8 9.8 9.7 9.5

100 100 100 100 100 100 100

Note: AFAF = agriculture, forestry, animal husbandry, and fishery; IND = industry; CON = construction; WR = wholesale and retail; TWP = transportation, warehousing, and postal services; AFS = accommodation and food services; FIN = financial sector; RE = real estate Source: China Statistical Yearbook 2015

and after 2010, for example, the Gini coefficient of the United States dropped from 0.5 to 0.38; Germany, from 0.49 to 0.29; France, from 0.51 to 0.3; and the United Kingdom, from 0.52 to 0.34 (see Figure 5.8). Over the past two decades, the governments of developed countries have been increasing their tax revenues and fiscal expenditures to offset the growth of the gap between the rich and poor. Their social policy spending has now reached unprecedented levels. In developed countries, the taxation system is largely based on direct taxes put in place with the express purpose of adjusting the income gap; fiscal expenditures are largely used for the people’s livelihood. Of the total fiscal revenue of the federal, state, and local governments in the United States, for example, direct and indirect taxes have accounted for 44% and 25%, respectively, of taxes since the 1980s, while spending on human resources has accounted for about 60% of total fiscal expenditures, indicating a yearly growth pattern. Attaching equal importance to the peak-clipping effect of tax revenues and the valley-filling effect of fiscal expenditures has played an ideal role in the country’s narrowing of the income gap. Given a lack of effective means to effect redistribution, in developing countries, there is no obvious difference between the income gap after initial distribution and the one after redistribution. If we compare developing countries with developed ones in terms of the income gap after initial distribution, we see no significant difference. Some developed countries also have relatively large income gaps after initial distribution. The Gini coefficients of developing

Narrowing the Income Gap: Challenges and Strategies

99

Figure 5.8 Gini coefficients of select countries before and after 2010: initial distribution vs. redistribution Source: OECD website

countries remain very large, however, even after income redistribution. We may conclude that the ability to adjust its income disparity to a reasonable level through redistribution is an important indicator of the ability of a country to being considered developed. Taking into account all means of redistribution in available in developed countries, the most important is the personal income tax (PIT) system. Under this system, high-income groups are not only subject to higher tax rates, but because of cumulative tax rates and a more integrated tax system, also find it more difficult to avoid taxes in the first place. A higher proportion of PIT to overall tax revenue suggests greater efforts on the part of the country in addressing redistribution. Between 1965 to 2013 the average PIT in OECD countries accounted for about 25% of tax revenue, as shown in Figure 5.9. This proportion often exceeds a third of all taxes collected in Australia, Denmark, Canada, New Zealand, the United Kingdom, and the United States. High PIT ensures that the government effectively controls the income gap. Much like other developing countries, China’s Gini coefficient primarily reflects the income gap after initial distribution, because its redistribution system lacks not only the ability to adjust income distribution, but even has the effect of increasing existing disparities. PIT, in particular, lacks the ability to affect the income gap in China. At present, PIT accounts for a mere 6–7% of China’s tax revenue. Although cumulative tax rates have been implemented in

100

Zhang and Zhao

Figure 5.9 Proportions of PIT to tax revenue in select countries Source: OECD website

addition to this system, because of taxation based on classification brackets, it remains relatively simple for high-income earners to shift their incomes from taxable categories to other categories for the purpose of tax evasion. Moreover, they can do this at very low legal costs, as regulation is difficult. This creates a so-called “hidden income” that exists beyond the reach of the country’s taxation system, resulting in the loss of PIT’s ability to adjust the income gap. In addition to PIT, the social security system is an important means by which developed countries adjust their income disparities. Nevertheless, this means is insufficient for adjusting the income gap in China. He Lixin states that social security programs clearly aid many groups to realize the reverse transfer of revenue.22 For their part, He Lixin and Hiroshi Sato consider the incomes of high-income groups transferred out through the social security system to be practically negligible, such is the progressivity of China’s social security ­burden.23 Hou Huili has found that designs for differentiated, group-specific 22  He Lixin 何立新, “Zhongguo chengzhen yanglaobaoxian zhidu gaige de shouru fenpei xiaoying 中国城镇养老保险制度改革的收入分配效应 [On the Income-Distribution Effect of China’s Urban Pension Insurance System Reform],” Economic Research Journal 3 (2007). 23  He Lixin and Hiroshi Sato 何立新、佐藤宏, “Butong shijiao xia de zhongguo chengzhen shehui baozhang zhidu yu shouru zai fenpei—jiyu niandu shouru he zhongsheng shouru de jingyan fenxi 不同视角下的中国城镇社会保障制度与收入再分配—基于年 度收入和终生收入的经验分析 [China’s Urban Social Security System and Income 



Narrowing the Income Gap: Challenges and Strategies

101

pension insurance systems have actually solidified income inequality, rather than playing any kind of role in income adjustment.24 A survey by Wang Yanzhong et al. shows that, overall, the social security system does narrow the income gap, some institutional arrangements do actually expand it, weakening its role in redistribution.25 Yang Cuiying and Feng Guanggang have discovered that the urban minimum allowance system has not only failed to reduce urban inequality, but, instead, increased the Gini coefficient.26 Overall, China’s public spending on healthcare, education, housing, and other social expenditures is relatively low; what’s more, its social security ­system—especially insofar as related to income distribution—remains flawed, reducing its ability to effectively address the income gap. By comparison, over half of developed countries’ fiscal expenditures are devoted to the people’s livelihood, a considerable proportion of which is directly set aside for those citizens with the lowest income. The proportion of the U.S. fiscal expenditure in terms of GDP is 32%, of which, the portion used to narrow the income gap accounts for 8%; that same portion in developed countries, however, is generally above 10%, as exemplified by 12% in Japan. In contrast, the proportion of public livelihood spending directly used for low- and middle-income groups in China accounts for less than 1% of GDP, suggesting that the peak-clipping and valley-filling effects of public spending on the adjustment of income distribution are not significant. 2.3 Supply-side Structural Reform Short-term supply-side reform will reduce the share of labor wages. Statistics indicate that the current round of cutting excessive industrial capacity will directly affect the employment of about 1.8 million people. The laying-off that started in 1998 directly affected the employment of some 30 million people. Redistribution from Different Perspectives: An Empirical Analysis Based on Annual and Lifelong Incomes],” World Economic Papers 5 (2008). 24  Hou Huili 侯慧丽, “Yanglao baoxian zhidu zai fenpei xiaoying de jieoguxing toushi 养老保险制度再分配效应的结构性透视 [Structural Perspective of the Redistributive Effect of the Pension Insurance System],” Journal of Graduate School of Chinese Academy of Social Sciences 5 (2014). 25  Wang Yanzhong, Long Yuqi, Jiang Cuiping, and Xu Qiang 王延中、龙玉其、江翠萍、    徐强, “Zhongguo shehui baozhang zai fenpei xiaoying yanjiu 中国社会保障收入再分 配效应研究—以社会保险为例 [Study on the Income-Redistribution Effect of Social Security in China—Case Study of Social Insurance],” Economic Research Journal 2 (2016). 26  Yang Cuiying and Feng Guanggang 杨翠迎、冯广刚, “Zuidi shenghuo baozhang zhichu dui suoxiao jumin shouru chaju xiaoguo de shizheng yanjiu 最低生活保障支出对缩小 居民收入差距效果的实证研究 [Empirical Study of the Minimum Living Allowance’s Effect on Narrowing Resident Income Gap],” Population Journal 3 (2014). 





102

Zhang and Zhao

Consequently, the share of employee remuneration dropped from 43% in 1999 to 38% in 2001. As such, the current round of cutting excess industrial capacity may result in a short-term decline in the share of labor wages and a widening income gap. It actually epitomizes the declining status of industry. The proportion of China’s secondary sector in the national economy has continued to drop from 46.7% in 2007 to 40.5% in 2015, while that of the tertiary sector has risen from 42.9% to 50.5% in the same time period. De-industrialization has been an economic phenomenon in developed countries for the past 30 years—the share of manufacturing in major developed countries is declining, as shown in Figure 5.10. Whether it is the result of spontaneous market action or government regulation, de-industrialization in the short term will adversely affect the possibility for an increase in the share of labor wages. In the case of China, it remains difficult to rapidly and generally improve what may be considered an unreasonable economic development pattern and economic structure. This renders the economic basis for solving income distribution problems more dubious. Economic downturns hinder any increase in the wages of labor; conversely, economic growth depends on investment, whether or not production factors are utilized efficiently. Past experience indicates that any increase in investment will reduce the share of labor wages. Therefore, the greater the downward pressure on the economy, the more likely it will hinder an increase in the share of labor wages. The share of employee remuneration remains inversely correlated with the economic growth rate, regardless of whether it occurs in the early or current phase of reforms in China. Under the auspices of promoting an economically and socially prosperous society by 2020, China has set its target economic growth rate between 6.5% and 7% for the next five years. It must be said that the pressure to maintain this level of growth is significant. In order to achieve such a goal, the Chinese government must boost its traditional industries and ensure that they will not significantly decline, in addition to promoting the growth of emerging industries. It is once again necessary to rely on investment in order to replace old, obsolete, and inefficient production technologies and facilities with new, advanced, and efficient ones. Likewise, it is necessary to increase investment levels in order to expand fiscal deficits and increase the construction of infrastructure during an economic downturn. All these factors will have a negative impact on the possibility of higher shares of labor wages. Since it began the process of reform and opening up, China has largely relied on investment and external demand to drive its economic growth, leading to unbalanced initial distributions, a low share of labor wages, and the unfair distribution of production factors. Low wages have always been an

Narrowing the Income Gap: Challenges and Strategies

Figure 5.10

103

Added-value shares of manufacturing in the GDP of select countries Source: World Bank, World Development Indicators, 2015

important advantage in the promotion of economic growth. However, the negative effects of low wages have become increasingly prominent over time, as shown by growing income disparities, insufficient consumption, overcapacity, and an increasing dependence on external demand. As a result, the necessity of raising labor wages is becoming increasingly pressing. Within the context of the Chinese economy’s “new normal,” it is worth considering to what extent labor wages should be raised, and, following that consideration, only making or changing relevant policies with great care. This is because, to some extent, the macroeconomy faces a dilemma. On one hand, in order to avoid both falling into the middle-income trap and to reduce social conflicts, the distribution of national income needs to be equalized and labor wages need to be raised. On the other hand, any sudden increase of labor wages in the current stage would increase the labor cost of those traditional industries with comparative advantages and, further, reduce corporate profitability and competitiveness in labor-intensive industries, so that Chinese enterprises would have to participate not only in low-cost competition in low-end markets, but also in technological innovation-driven competition in high-end ones. In brief, supply-side reform poses new challenges for the narrowing of the income gap. 3

Policy Suggestions

Given the situation of China’s income gap during its 13th Five-year Plan, reductions in the income gap brought about by economic development are visible in the decline of the urban-rural income gap, while the income gap caused by

104

Zhang and Zhao

an imperfect market itself and an improper economic development pattern has yet to shrink. The task of closing this income gap remains arduous, as there are still many challenges to be addressed. Yet, action may be undertaken in the following aspects: First, eliminate distributive inequity through reforms. To this end, the Chinese government should improve the production-factor market; accelerate the reformation of the capital market and of marketizing interest rates; rid the capital market of monopolies and administrative interference; eliminate discrimination against and barriers to private capital; build a uniform, open, and competitive financial system; establish a fair competition-oriented market environment; allow the market to play a decisive role in resource allocation; and eradicate non-market mechanisms’ impact on income distribution. It should also improve the urban and rural land markets; streamline the transaction and income distribution mechanisms of the market in terms of state-owned land; promote the verification of rural land rights; accelerate the establishment of a well-regulated market for rural land ownership transactions; and establish a fair and reasonable rural land-derived income distribution mechanism. It is necessary to prevent the possession and use of public resources at unreasonably low or even no cost through improper means, to establish or improve a public resource transfer revenue sharing mechanism for all citizens, and to prioritize the spending of such revenue on public services. Second, improve the mechanism regulating the reasonable growth of labor wages and raise their share in GDP overall. The government should offer protections and encouragement for a reasonable wage increase. To this end, it should regulate the interest relationship between monopolistic and competitive industries by reducing profits of the former so that the latter—especially employment-intensive industries—can achieve reasonable profit margins; it should accelerate the replacement of business tax with value-added tax (VAT) to rid enterprises of unreasonable tax burdens, creating external conditions for a reasonable wage increase. It is also necessary to strictly implement the existing labor contract law, further improve the labor contract and protection systems, strengthen labor supervision, and perfect the tripartite coordination mechanism necessary for wage growth. Hourly wages—instead of monthly ones—should be used to set the minimum wage in order to protect workers’ rights and interests. Third, narrow the income gap through redistribution. The government should reform the PIT system to reduce the burden on ordinary workers. Currently, the issue of payroll tax is prominent intertwined with PIT. Certain taxes have not been reasonably shared across different income groups, but,

Narrowing the Income Gap: Challenges and Strategies

105

rather, have been borne by ordinary workers. It is necessary to improve high-income earner-specific measures of collecting and managing PIT and corresponding punitive measures, as all their incomes should be legally taxed. The Chinese government should accelerate the establishment of an integrated and classified PIT system, raise the tax threshold, and comprehensively consider factors related to family burdens so that workers at different income levels reasonably share the country’s tax burden. It should make concerted and directed efforts to promote the building of the country’s basic public service system and continue improving the existing social insurance system. At the same time, it should also adapt social security standards to the current level of national economic development and implement social security programs that focus on guaranteeing the people’s basic livelihood. Fourth and finally, continue increasing investment in human capital in order to enhance workers’ skills. The Chinese government should consider expanding compulsory education to the stage of high school. When investing in people, the government must increase funding for poor areas and low-income groups so as to ensure that children in these areas and socioeconomic groups have the means by which to complete compulsory education. The government should encourage private and foreign investors to invest in education, and offer them incentives regarding land, taxes, and other inducements, thereby increasing the education supply and competition in the education market. The government should also establish a technical skills training system targeting all urban and rural workers, and, moreover, provide them with the subsidies for such training, so that they can receive subsidies for vocational training and for vocational skill appraisal as required. In order to meet workers’ needs for career development, the government should encourage them to participate in vocational skills training according to their respective levels of education and skills, as well as offer guidance in this area.

Chapter 6

China’s Floating Population and Relative Poverty in Cities: Current Condition, Risks, and Policies Yang Ge1 Since it began the process of reform and opening up, China has made great strides in alleviating poverty, with the number of rural poor people decreasing by 700 million between 1978 and 2004, an average of 19.45 million per annum. During this same period, incidences of poverty dropped by 90.3 percentage points, with the number of poor people decreasing by 6.4% per annum on average. The CPC Central Committee’s Proposal on Formulating the 13th FiveYear Plan (2016–2020) on National Economic and Social Development 《 ( 中共 中央关于制定国民经济和社会发展第十三个五年规划的建议》) was passed at the Fifth Plenary Session of the 18th CPC Central Committee. This proposal puts forth new requirements in the pursuit of a moderately prosperous society across all aspects, including the general improvement of the people’s standards of living (SOL) and quality of life (QOL), lifting all rural poor people (and thus all poverty-stricken counties) out of the current national standards for poverty, and solving the issue of overall regional impoverishment. Poverty alleviation will become one of the most important tasks to be undertaken by the 13th Five-Year Plan. 1

Defining Poverty

1.1 Social Meaning of Poverty Any attempt at poverty alleviation must first address the question of what constitutes poverty in the first place. The standard for absolute poverty varies from country to country. China’s current standard for poverty in rural areas is an annual per capita net income of 2,300 yuan (at a constant price in 2010) and is dynamically adjusted to the pricing and living indexes every year. In 2014, the standard for poverty rose to 2,800 yuan, which was about 2.2 US dollars per day at purchasing power parity (PPP), slightly higher than the World Bank’s poverty standard of 1.9 US dollars per day. Nonetheless, poverty is divided into 1  Yang Ge is Associate Researcher at IPLE-CASS.

© koninklijke brill nv, leiden, 2019 | doi:10.1163/9789004407435_007

China ’ s Floating Population and Relative Poverty in Cities

107

“absolute poverty” and “relative poverty,” of which the former can be eradicated while the latter cannot. China aims to lift about 70 million absolutely poor people out of poverty before 2020. The British sociological researcher Seebohm Rowntree believed that poverty was defined as the state of total income being insufficient to secure the basic necessities for the normal functioning of the human body, including food, rent, and other associated items.2 The poverty line here is roughly the amount of money needed to satisfy the lowest level of physical needs. Below this line, it is impossible for people to physically maintain normal growth and life, a state which is considered absolute poverty. But there are many problems associated with such a measurement of the poverty threshold in a biological sense—for example, human beings’ minimum physiological needs vary with age, region, gender, physical and climatic conditions, and habits. Some people need more clothes while others need clean water, leading to differences in the calculated minimum level of expenditure. In order to calculate even the minimum requirements for food alone, the minimum food standard required to calculate a basic level of nutrition is dependent upon the combination of available types of food (such as whether wheat or rice is a staple crop), and this, in turn, is predicated on the possibility of differences in availability and cost. It is even more difficult to calculate the minimum need for non-food items.3 As social animals, however, humans not only have physiological needs, but also social requirements. British sociologist Peter Townsend developed the theory of relative poverty and added social explanations to poverty. He believed that: Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the type of diet, participate in the activities and have the living conditions and the amenities which are customary, or at least widely encouraged or approved in the societies to which they belong. Their resources are so seriously below those commanded by the average family that they are in effect excluded from the ordinary living patterns, customs, and activities.4 2  Amartya Sen, Pinkun yu jihuang 贫困与饥荒 [Poverty and Famines], trans. Wang Yu, and Wang Guangyi (Beijing: The Commercial Press, 2001), 20–21. 3  Amartya Sen, Yi ziyou kandai fazhan 以自由看待发展 [Development as Freedom], trans. Ren Chenze, and Yu Zhen (Beijing: China Renmin University Press, 2002), 85. 4  Yang Lixiong and Xie Dandan 杨立雄、谢丹丹, “Juedui de xiangdui, yihuo xiangdui de juedui—tang he sen de pinkun lilun bijiao ‘绝对的相对’，抑或 ‘相对的绝对’—汤森 和森的贫困理论比较 [Absolute Relativity or Relative Absoluteness—Comparison of Townsend’s and Sen’s Theories],” Finance & Economics 1 (2007): 59–66.

108

Yang

The threshold of relative poverty is therefore higher than that of absolute poverty, not only in terms of the minimum standard of living (MSL), but also insofar as the social exclusion caused by an inability to reach the average SOL of the surrounding communities. It is a social state of mind involving a feeling of relative deprivation, based upon other people or social groups as references. The social needs of the poor have therefore been the subject of scholarly attention. Robert Chambers conducted groundbreaking research on the helplessness and isolation of the poor, arguing that poverty is not only a matter of low incomes and expenditures, but also of vulnerability and lack of voice in society.5 Deepa Narayan and others have also defined poverty from the poor’s point of view, arguing that poverty is not merely lack of materials, but more essentially a lack of power and voice.6 Incorporating these concepts, the World Bank defines poverty as: Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life.7 Yet a definite objective criterion for relative poverty exists; it does not change with nor is it based upon individuals’ subjective feelings. This criterion is precisely the aforementioned lower level relative to the average level of income (or consumption) in society. When determining the poverty line, for example, some countries typically take less than 30% or even 20% of the average income as the standard. Nonetheless, current research on urban poverty in China usually starts from the level of macropolicy8 and follows the concept of absolute poverty, with a focus on defining the poverty line and the effects of the minimum living

5  Robert Chambers. “Poverty and Livelihoods: Whose Reality Counts,” Economic Review 2 (1995). 6  Deepa Narayan, et al., Shui qingting women de shengyin 谁倾听我们的声音 [Can Anyone Hear Us?], trans. Fu Yanmei, et al., (Beijing: China Renmin University Press, 2001). 7  World Bank, 2000/2001 nian shijie fazhan baogao 2000/2001 年世界发展报告 [World Development Report 2000/2001: Attacking Poverty] (Beijing: Chinese Financial & Economic Publishing House, 2001). 8  Wu Fulong 吴缚龙, “Zhongguo chengshi de xin pinkun 中国城市的新贫困 [Newly poor in Chinese Cities],” Twenty-First Century bimonthly (Hong Kong) 113 (2009): 86–95.

China ’ s Floating Population and Relative Poverty in Cities

109

allowance line.9 The target of poverty eradication in the 13th Five-year Plan remains based upon the absolute poverty line. In industrialized countries— such as those in Europe and the Americas—current studies on poverty are almost always conducted from a relative point of view and serve as the basis for formulating relevant social policies. At the same time, absolute poverty often occurs in remote rural areas. Conversely, in China, rural poverty alleviation has been the primary focus of attention, while the issue of urban relative poverty is often neglected. Relative poverty exists in all countries and regions, and while it can be alleviated, it is difficult to eradicate completely. Exploring this issue is primarily intended to determine how to control relative poverty so that it remains at a societal level that can be considered secure.10 It is only when public access to sufficient food and clothing is fundamentally assured that the issue of relative poverty will become the primary cause of social conflicts in a society. 1.2 The Floating Population and Urban Poverty Alongside the country’s ongoing urbanization, traditional Chinese society— as predicated upon an urban-rural dualism—is changing. China’s floating population has reached 270 million, most of whom are rural-urban migrants, according to NBS data. The structure of the country’s urban-rural dualism has evolved into a city-based dualistic structure due to the new influx of rural citizens. At the same time, the floating population within those same cities has also begun to show evidence of a new dualism. In the 1990s, some sociologists developed a segmented assimilation theory based on the classic assimilation theory prevalent in the United States.11 According to segmented assimilation theory, the host society offers opportunities that differ from immigrant to immigrant. Some immigrants will be able to integrate into the society economically and socially, while others will enter the bottom of society and integrate into the urban poor.

9  Li Shi and Yang Sui 李实、杨穗, “Zhongguo chengshi dibao zhengce dui shouru fenpei he pinkun de yingxiang yanjiu 中国城市低保政策对收入分配和贫困的影响研 究 [Study on Impact of Minimum Living Allowance Policy of Chinese Cities on Income Distribution and Poverty],” Chinese Journal of Population Science 5 (2009): 19–27. 10  Li Peilin 李培林, Zhongguo xinshiqi jieji jiceng baogao 中国新时期阶级阶层报告 [Social Stratification in the Market Transition in China] (Shenyang: Liaoning People’s Publishing House, 1995). 11  Portes, Alejandro and Min Zhou, “The New Second Generation: Segmented Assimilation and Its Variants,” Annals of the American Academy of Political and Social Sciences 530 (1993): 74–96.

110

Yang

Some studies show that migrants continue to become stratified after they move into cities, and that some will gradually become an important component of the urban poor. If measured using the minimum living allowance line, incidences of poverty are about 8.3% among migrants and 7% among natives. If measured by the expenditure cap, poverty incidences are about 10.3% among migrants and 8.7% among natives. By factoring in the floating population, the total number of poor people in Chinese cities increases dramatically.12 Other studies indicate that the net rural-urban population inflow during urbanization brings about an increase in the number of urban poor people. The percentage of rural-urban migrants in poverty is slightly above 3%.13 Migrant workers are an important part of the issue of urban relative poverty. Their incomes are increasing yearly, with the monthly average income coming in at 2,864 yuan in 2014, up 255 yuan, or 9.8%, from 2013; the monthly average incomes of migrant workers in the Eastern, Central, and Western regions were 2,966, 2,761, and 2,797 yuan, respectively, up 10.2%, 9.0%, and 9.6% from 2013, according to NBS sample survey data. Nonetheless, they remained much lower than the average wage/salary of urban employees, which was 4,697 yuan per month in 2014. What’s more, migrant workers are marginalized in other aspects in addition to income. Compared with permanent urban residents, some migrants are disadvantaged in terms of living conditions, working and living environments, vocational skills, social interaction, lifestyles, etc., becoming a special social group in the overall issue of relative urban poverty. These migrants are special insofar as they form an increasingly important component of urban economies, societies, and cultures, yet the causes of their relative poverty include institutional isolation by the household registration system and other institutionalized structures, institutional factors such as urban property rights and the corresponding income distribution system, and non-institutional factors such as the inertia of traditional rules on resource allocation and the overall qualities of the floating population (see Figure 6.1). If institutional factors cannot be eliminated, it would be impossible for migrants to be able to rid themselves of relative poverty by their own means alone. This situation aggravates existing social inequality and the gap between the rich and poor in cities, adversely affecting the long-term peace and stability of the urban community. 12  Du Yang 都阳, “Zhongguo de chengshi pinkun: qushi, zhengce yu xin de wenti 中国的 城市贫困: 趋势、政策与新的问题 [Urban Poverty in China: Trends, Policy, and New Issues],” China Development Research Foundation Report 34 (2007). 13  Luo Zuoyan 骆祚炎, “Chengzhenhua jincheng zhong de renkou liudong yu chengzhen xinzeng pinkun renkou wenti fenxi 城镇化进程中的人口流动与城镇新增贫困人口 问题分析 [Analysis of Population Flow and New Urban Poor People amid Urbanization],” Population & Economics 4 (2007).

China ’ s Floating Population and Relative Poverty in Cities

111

Figure 6.1 Causes and manifestations of migrants’ relative poverty

We will analyze the status of migrants in urban relative poverty as well as the relevant risks and associated policies by using floating population survey data and NBS-released urban resident data. 2

Relative Poverty of the Floating Population

As labor wages continue to increase, the gap in average income between various groups of migrants and urban residents has been narrowing in the past five years, which has, in turn, resulted in the neglect of urban poverty arising from migrants. In fact, what has been identified as a singular “group” of migrants is actually highly differentiated, and successful individuals within the floating population can mask the distress of low-income earners, so that the phenomenon of relative deprivation still occurs frequently within the floating population. From the perspective of their basic needs for survival and development as workers, migrants’ poverty manifests itself not only in terms of income and consumption, but also in their rights and interests regarding residency, education, medical care, employment, and other related factors. 2.1 Relative Poverty in Terms of Income With the arrival of the Lewis Turning Point of the labor supply, labor wages, including those of migrant workers, have been rising rapidly in most recent years. NBS data shows that the average monthly wage of migrant workers rose from 1,340 yuan in 2008 to 3,072 yuan in 2015, with an average annual growth rate of over 10%. Most notably, the annual wage growth rate exceeded 20% from 2011 to 2012. By comparison, the wages of migrant workers tended to be much lower than those of urban workers before 2009. With the general increase in labor wages, the urban-rural gap is gradually narrowing as the wages of migrant workers have been growing faster than those of urban workers. That being said, a sizeable difference in the average wage between these two groups

112

Yang

Table 6.1 The monthly average wage gap between migrant and urban workers

Year

Migrant (in yuan)

Growth (%)

2008 2009 2010 2011 2012 2013 2014 2015

1,340 1,417 1,690 2,049 2,290 2,609 2,864 3,072

5.7 19.3 21.2 11.8 13.9 9.8 7.2

Urban (in yuan)

Growth (%)

Gap (in yuan)

2,408 2,687 3,045 3,483 3,897 4,290 4,697

11.6 13.3 14.4 11.9 10.1 9.5

1,068 1,270 1,355 1,434 1,607 1,681 1,833

Source: The average monthly wages of migrant workers were drawn from the National Migrant Workers Monitoring Survey Report 2014 《 ( 2014 年全国农 民工监测调查报告》) published by NBS; the average monthly wages of urban workers were calculated using corresponding data from China Statistical Yearbook 2015; the 2015 data were from an NBS report titled “The National Economy Grew Steadily in 2015 with Regular Progress.”

remains, with the difference in the average monthly wage coming in at around 1,833 yuan in 2014 (see Table 6.1). Given the significant differences inherent to the country’s regional development, the use of national data may mask certain realities. Regionally, the average monthly wages of urban employees are generally higher than those of migrant workers, but the gaps between them vary significantly from region to region—nearly twice as high in Beijing, Shanghai, and Tianjin; over 30% higher in Zhejiang, Chongqing, and Sichuan; and with slight gaps in Jiangxi, Hainan, Gansu, etc. It can be seen that such gaps are larger in more economically developed large cities (see Table 6.2). It is noteworthy, however, to point out that the average monthly wages of urban workers were drawn from data reported by enterprises and other organizations, and that they are generally pre-tax wages—portions paid whether in cash or in kind are included in the total wage bill, which also includes social security premiums, housing funds, and other deductions. As a result, these wages are higher than the incomes actually received by individuals. By comparison, the average monthly wages of migrants were collected through questionnaires, to which the respondents often reply with their actually-received wages, excluding taxes, social security premiums, housing funds, and other

113

China ’ s Floating Population and Relative Poverty in Cities Table 6.2 Wage gaps between migrant and urban workers in yuan

Region

Beijing Tianjin Hebei Shanxi Inner Mongolia Liaoning Jilin Heilongjiang Shanghai Jiangsu Zhejiang Anhui Fujian Jiangxi Shandong Henan Hubei Hunan Guangdong Guangxi Hainan Chongqing Sichuan Guizhou Yunnan Tibet Shaanxi Gansu Qinghai Ningxia Xinjiang

Urban average monthly wage

8,522 6,064 3,760 4,081 4,479 4,016 3,876 3,670 8,354 5,072 5,131 4,241 4,452 3,852 4,319 3,515 4,153 3,926 4,957 3,785 4,157 4,632 4,380 4,398 3,842 5,103 4,211 3,913 4,757 4,572 4,456

Migrant average monthly wage All

Non-rural

Rural

4,859 3,778 3,190 3,218 3,687 3,444 3,239 2,938 5,277 4,292 3,892 3,629 3,687 3,733 3,420 3,440 3,752 3,422 4,013 3,293 3,947 3,489 3,073 3,766 3,252 4,458 3,738 3,879 3,846 3,448 3,506

6,318 4,697 3,538 3,363 3,979 4,007 3,313 3,204 8,427 7,090 4,499 3,844 4,047 4,314 3,953 3,445 3,945 3,769 5,245 3,712 4,220 3,796 3,376 4,129 3,820 6,397 3,587 4,270 3,726 3,843 3,866

4,210 3,631 3,126 3,192 3,610 3,274 3,218 2,860 4,403 3,907 3,844 3,590 3,662 3,613 3,359 3,427 3,714 3,371 3,823 3,207 3,861 3,351 3,009 3,710 3,189 4,233 3,760 3,794 3,859 3,385 3,426

Note: The average monthly wages of urban workers were calculated just as in Table 6.1; the monthly average wages of migrants were calculated using 2014 NHFPC dynamic migrant monitoring data.

114

Yang

deductions. Keeping this reporting disparity in mind, we designed a reliable indicator of the per capita disposable income of migrant families (see Table 6.3). Residents’ disposable income is the income obtained by their families during the survey period and which can be spent at will, that is, the income actually received after the basic pension/basic medical/unemployment insurance premiums, housing funds, PIT, etc., are deducted. This indicator reflects not only the family’s income level, but also the financial burden borne by migrant families. Table 6.3 Per capita disposable incomes of migrant vs. urban and rural families in yuan/year

Region

Migrant (1)

Beijing Tianjin Hebei Shanxi Inner Mongolia Liaoning Jilin Heilongjiang Shanghai Jiangsu Zhejiang Anhui Fujian Jiangxi Shandong Henan Hubei Hunan Guangdong Guangxi Hainan Chongqing

Resident (2)

Rural hukou

Non-rural hukou

Rural hukou Non-rural hukou

Urban

Rural

34,824 24,960 23,640 18,480 20,640 25,524 21,012 19,836 34,584 31,980 32,172 24,516 29,904 26,316 24,912 28,812 23,280 27,204 30,108 20,196 21,528 26,628

58,104 35,376 30,480 22,452 27,060 34,896 25,044 22,848 73,512 53,784 40,188 28,212 35,856 33,192 28,152 32,832 27,672 33,096 41,496 30,216 27,600 33,792

28,260 21,444 18,792 16,440 19,596 23,364 19,272 18,696 27,744 26,208 24,768 22,248 24,024 21,120 22,716 23,976 21,264 21,240 24,624 18,276 19,164 21,732

48,532 31,506 24,141 24,069 28,350 29,082 23,218 22,609 48,841 34,346 40,393 24,839 30,722 24,309 29,222 23,672 24,852 26,570 32,148 24,669 24,487 25,147

18,867 17,014 10,186 8,809 9,976 11,192 10,780 10,453 21,192 14,958 19,373 9,916 12,650 10,117 11,882 9,966 10,849 10,060 12,246 8,683 8,913 9,490

53,292 32,184 25,368 20,280 25,152 32,940 22,740 21,108 66,516 47,424 31,068 25,668 28,596 26,136 26,364 27,888 25,788 25,488 36,096 26,568 25,536 28,704

115

China ’ s Floating Population and Relative Poverty in Cities Table 6.3 Per capita disposable incomes of migrant vs. urban and rural (cont.)

Region

Migrant (1)

Sichuan Guizhou Yunnan Tibet Shaanxi Gansu Qinghai Ningxia Xinjiang

Resident (2)

Rural hukou

Non-rural hukou

Rural hukou Non-rural hukou

Urban

Rural

25,680 23,280 22,824 38,724 23,520 25,476 23,112 18,432 20,448

32,412 30,684 32,280 66,480 25,644 31,656 30,972 27,180 31,164

20,172 20,112 18,912 27,672 19,932 21,948 19,368 17,136 17,904

24,234 22,548 24,299 22,016 24,366 21,804 22,307 23,285 23,214

9,348 6,671 7,456 7,359 7,932 6,277 7,283 8,410 8,724

24,456 26,580 26,160 44,832 21,900 27,744 22,968 25,068 28,128

Note: The equations are: (1) The per capita disposable income of the migrant family = monthly family income × 12 / the number of family members (excl. those staying in the place of household registration); (2) The per capita disposable income of the migrant family = monthly family income × 12 / the number of family members (incl. those staying in the place of household registration). Source: The per capita disposable incomes of urban and rural residents were from China Statistical Yearbook 2015; the per capita disposable incomes of migrant families were calculated using 2014 NHFPC dynamic migrant monitoring data

Migrants bear the costs of living not only of their family members who actually reside in the places in which they live, but also those remaining in their place of origin. Accordingly, in order to facilitate comparisons with the per inhabitant disposable income data released by NBS, the per capita disposable incomes of migrant families were calculated with the denominator including both types of family members mentioned above. As can be seen from the calculations above, a wide gap exists between the rich and poor even within the group of migrants themselves, some of whom are even more affluent than natives. The per capita disposable income of migrant families with non-rural hukous in Shanghai was 66,516 yuan, which is more than double that of migrant families with rural hukous, which was 27,744

116

Yang

yuan; this gap is 80% in Beijing and Jiangsu, and more than 40% in Tianjin, Liaoning, Guangdong, and Guangxi. Therefore, migrant incomes are characterized by a large deviation in many areas. The per capita disposable incomes of migrant families with non-rural hukous exceed those of local urban families, as exemplified by 66,516 vs. 48,841 yuan in Shanghai and 47,424 vs. 34,346 yuan in Jiangsu. The disparity between rich and poor migrants masks the relative poverty of some low-income migrant families. In most regions, migrants with rural hukous are obviously poorer in comparison to natives. In both Beijing and Shanghai, for example, the per capita disposable incomes of urban families—48,532 and 48,841 yuan, respectively, between the two cities—are over 70% higher than those of migrant families with rural hukous, or 28,260 and 27,744 yuan, respectively; similarly, the gaps in Zhejiang, Tianjin, Liaoning, and Inner Mongolia are all more than 40%. Nevertheless, migration has greatly alleviated the poverty of migrants, as the per capita disposable income of migrant households with rural hukous is much higher than that of rural residents. 2.2 Relative Poverty in Terms of Consumption Consumer spending is also an important indicator reflecting relative poverty. According to NBS data, the average monthly living expenses of non-local migrant workers in 2014 were 944 yuan, lower than the 1,664 yuan of urban residents. The share of residency expenditures in relation to migrant workers’ living expenses was 47.1%, as opposed to 22.5% for urban residents. Regionally, the per capita consumer spending of migrant households, irrespective of rural or non-rural hukou status, is lower than that of urban residents. The consumer spending gap between migrants and urban residents is very large in Beijing, Shanghai, and other big cities, as the per capita consumer spending of migrant households with rural hukous in Shanghai and Beijing is 14,878 and 16,016 yuan, respectively, less than half of that of natives, which is 35,182 and 33,718 yuan, respectively; the per capita consumer spending of migrant households with non-rural hukous in these two cities is 27,965 and 27,895 yuan, respectively, also lower than that of natives, as shown in Table 6.4. A similar phenomenon can also be seen in Tianjin, Jiangsu, Guangdong, and other provinces. Migrants’ unwillingness to spend is not due to habitual thrift, but because of lower incomes than those of natives, the need to support those family members left behind in their hometowns, and the inability to feel carefree in terms of social security. Relative poverty in terms of consumption will be directly reflected in the choices of food, clothing, residency, and mobility on the part of migrants, leading to an even stronger sense of social marginalization.

China ’ s Floating Population and Relative Poverty in Cities Table 6.4 Per capita consumer spending of migrant vs. urban and rural families in yuan/ year .

Region

Beijing Tianjin Hebei Shanxi Inner Mongolia Liaoning Jilin Heilongjiang Shanghai Jiangsu Zhejiang Anhui Fujian Jiangxi Shandong Henan Hubei Hunan Guangdong Guangxi Hainan Chongqing Sichuan Guizhou Yunnan Tibet Shaanxi Gansu Qinghai Ningxia Xinjiang

Migrant

Resident

Rural hukou

Non-rural hukou

Urban

Rural

16,016 11,778 10,448 9,464 12,450 13,445 11,620 10,147 14,878 13,279 13,276 13,300 14,679 12,260 12,371 14,031 12,693 14,420 14,748 11,545 11,527 13,321 13,324 10,941 11,886 15,718 11,797 12,741 11,637 9,313 10,452

27,895 17,060 14,791 11,505 16,654 17,576 14,721 12,813 27,965 18,915 18,286 14,954 18,703 15,026 15,073 15,707 15,253 18,752 20,921 16,108 15,504 17,383 16,536 16,007 15,910 22,689 13,800 15,867 14,859 13,593 15,626

33,718 24,290 16,204 14,637 20,885 20,520 17,156 16,467 35,182 23,476 27,242 16,107 22,204 15,142 18,323 16,185 16,681 18,335 23,612 15,045 17,514 18,280 17,760 15,255 16,268 15,669 17,546 15,942 17,492 17,216 17,685

14,535 13,739 8,248 6,992 9,972 7,801 8,140 7,830 14,820 11,820 14,498 7,981 11,056 7,548 7,962 7,277 8,681 9,025 10,043 6,675 7,029 7,983 8,301 5,970 6,030 4,822 7,252 6,148 8,235 7,677 7,365

117

118

Yang

Note: The per capita consumer spending of the migrant family = local monthly consumer spending × 12 / the number of family members (excluding those staying in the place of household registration). Source: The per capita consumer spending of residents was from China Statistical Yearbook 2015; the per capita consumer spending of migrant families was calculated using 2014 NHFPC dynamic migrant monitoring data

Another important indicator of consumption as reflective of poverty is the Engel’s coefficient, which measures the proportion of total food expenditures to the total consumer spending of individuals. In the 19th century, German statistician Ernst Engel created a law on changes in consumption structure: The less a household earns, the greater the share of household income (or total expenditure) spent on food purchases; this share falls as household income increases. To put it more broadly, the poorer a country is, the greater the share of the average per capita income (or average expenditure) used to make food purchases; this share shows a downtrend as the country becomes richer. The United Nations has an Engel’s coefficient-based criterion for classifying the SOLs of global countries; on average, an Engel’s coefficient per family of more than 60% represents poverty; 50–60%, barely enough food and clothing; 40–50%, being moderately well-off; 30–40%, being relatively rich; 20–30%, being rich; below 20%, being extreme wealth. In the 1990s, the United States was the only country with an Engel’s coefficient of less than 20%—­specifically, 16%; European countries, Japan, and Canada generally fell somewhere between 20% and 30%, meaning that they were rich; Eastern European countries were generally between 30% and 40%, that is, they were relatively rich. Using this standard, Chinese residents tend to be moderately well-off or relatively rich. Of these four groups—migrants with rural hukous, migrants with non-rural hukous, urban residents, and rural residents—the first two have higher Engel’s coefficients than the two groups of non-migrants (see Table 6.5). Migrants with rural hukous have the lowest spending power, and in terms of their Engel’s coefficient obviously fall at a higher percentage. Migrants with non-rural hukous also maintain high Engel’s coefficients, even though they are close to urban residents and much higher than rural residents when it comes to consumption level. This is because migrants typically move into medium-sized and large cities with relatively high prices, including those of food, leading to higher Engel’s coefficients. Food is the most basic and indispensable of all consumer goods. The high Engel’s coefficients among these two groups makes it difficult for migrants to spend heavily in other areas, indicating more obvious relative poverty.

119

China ’ s Floating Population and Relative Poverty in Cities Table 6.5 Engel’s coefficients for migrant vs. Urban and rural families in %

Region

Beijing Tianjin Hebei Shanxi Inner Mongolia Liaoning Jilin Heilongjiang Shanghai Jiangsu Zhejiang Anhui Fujian Jiangxi Shandong Henan Hubei Hunan Guangdong Guangxi Hainan Chongqing Sichuan Guizhou Yunnan Tibet Shaanxi Gansu Qinghai Ningxia Xinjiang

Migrant

Non-migrant

Rural hukou

Non-rural hukou

Urban

Rural

40.85 44.75 45.06 45.72 43.89 45.20 45.03 45.28 43.97 44.70 48.14 40.71 46.18 41.87 43.64 38.80 42.13 37.94 43.33 47.78 49.62 45.30 43.56 44.68 42.96 44.27 40.31 43.52 38.37 42.99 48.94

35.28 42.82 38.68 45.63 40.32 43.05 45.61 44.24 36.27 39.28 41.16 41.00 42.25 38.79 41.21 37.11 40.26 35.61 40.27 42.03 47.76 39.99 43.46 39.85 41.22 36.08 43.37 43.55 41.10 40.49 44.60

23.75 33.22 26.17 25.99 28.74 28.35 26.10 27.52 26.83 28.52 28.28 33.28 33.19 32.79 28.92 28.81 32.32 30.52 33.25 35.19 38.00 34.51 34.93 31.53 30.66 39.35 27.36 31.14 29.89 27.85 31.27

27.85 31.40 29.36 29.38 30.47 28.34 29.62 28.23 35.98 31.40 31.86 35.61 38.19 36.50 30.95 29.60 31.38 34.30 39.52 36.90 43.21 40.45 39.75 37.24 35.59 52.57 29.12 34.90 31.89 29.91 34.49

Source: The resident-specific coefficients were calculated using consumer spending data from China Statistical Yearbook 2015; the migrant-specific coefficients were calculated using 2014 NHFPC dynamic migrant monitoring data.

120

Yang

It should be noted that the Engel’s coefficient sometimes fails to reflect gaps in QOL due to differences in consumer habits, price levels, and residencerelated expenses between regions, as well as between urban and rural areas (see Table 6.6). When using the Engel’s coefficient for comparison, it is advisable to pay attention to the actual composition of individuals’ consumer expenditures and the resulting errors with respect to consumption levels and QOL. Table 6.6 Living expenses of migrant vs. non-migrant families in %

Region

Beijing Tianjin Hebei Shanxi Inner Mongolia Liaoning Jilin Heilongjiang Shanghai Jiangsu Zhejiang Anhui Fujian Jiangxi Shandong Henan Hubei Hunan Guangdong Guangxi Hainan Chongqing Sichuan Guizhou Yunnan Tibet

Migrant

Non-migrant

Rural hukou

Non-rural hukou

Urban

Rural

29.00 23.50 21.68 18.92 18.29 19.37 18.12 15.07 24.91 20.60 16.79 26.81 19.37 24.23 26.45 27.62 26.25 24.02 22.24 23.33 23.23 23.45 23.22 22.60 28.39 32.09

31.43 26.63 30.30 18.82 24.00 20.96 21.34 20.43 31.34 27.29 22.04 28.68 23.33 24.45 26.83 30.80 26.34 25.40 25.53 27.52 25.20 27.95 22.01 25.57 31.46 36.31

30.57 21.62 23.06 19.81 17.33 21.58 19.42 21.28 33.03 21.73 25.34 21.99 24.48 22.30 21.92 19.38 21.43 19.46 22.41 22.53 21.11 19.26 17.94 19.29 21.33 21.68

30.00 23.30 22.53 21.18 16.80 19.12 20.28 20.46 24.40 20.87 22.78 21.13 23.59 24.87 19.43 21.20 22.40 21.97 22.29 23.23 18.90 16.21 17.91 20.13 19.04 14.28

121

China ’ s Floating Population and Relative Poverty in Cities Table 6.6 Living expenses of migrant vs. non-migrant families in % (cont.)

Region

Shaanxi Gansu Qinghai Ningxia Xinjiang

Migrant

Non-migrant

Rural hukou

Non-rural hukou

Urban

Rural

26.31 26.59 31.66 19.96 18.48

25.34 26.92 30.54 26.41 21.62

20.63 22.19 19.70 17.59 18.45

22.43 17.56 17.20 18.08 19.18

Note: Given limited data, living expenses here only include rent and mortgage payments while excluding water, electricity, and other related costs. The calculated percentages are therefore lower than the actual ones. Source: the resident-specific percentages were calculated using consumer spending data from China Statistical Yearbook 2015; the migrant-specific percentages were calculated using 2014 NHFPC dynamic migrant monitoring data

As the price of housing rises rapidly, rent rates are increasing and, consequently, living expenses take up a growing proportion of total consumer spending, becoming an important factor affecting people’s livelihood. Stabilizing living expenses is not just an economic activity, but, more importantly, is needed in order to improve people’s livelihood. According to NBS migrant worker monitoring data, the monthly average living expenses of non-local migrant workers were 445 yuan in 2014, down 1.8% from 2013; the proportion of living expenses to living expenditures was 47.1%, down 3.6 percentage points from 2013. That compares with 22.48% in the case of urban residents. Thus, it can be seen that for those migrant workers who do not have their own housing and instead rely heavily on renting, a huge living expense has seriously affected the possibility of improvements to their QOL. In this paper, we have also used the NHFPC dynamic migrant monitoring data to calculate the proportions of resident expenses in migrants’ total consumer spending by region. Due to the limited availability of data, the percentages calculated here are lower than the actual ones. Nonetheless, migrants are very similar to urban and rural residents in terms of this indicator. In general, residence-related expenses account for a large share of total consumer spending, especially in big cities such as Beijing and Shanghai, where this share is as high as 30%, reducing consumption levels in other aspects.

122

Yang

2.3 Relative Poverty in Terms of Other Resources In terms of income and consumer spending, migrants continue to see improvements in relative poverty, particularly as shown by a narrowing gap with urban residents, but these improvements are far from sufficient. Healthy urbanization requires that migrants live and work stably in cities without worries, which in turn requires the comprehensive reduction of the relative deprivation of social and public resources they experience. The following section describes the relative poverty experienced by migrants in such areas as residency, education, and medical care. 2.3.1 Housing Given their nomadic lifestyle and low incomes, migrants face great difficulties finding housing. This mainly manifests itself in two ways. On the one hand, rental costs and purchase prices of housing units in cities, where migrants resettle, tend to be much higher than those in their places of origin in the rural area. Consequently, they often choose to live in the so-called “village-like compact residential areas inside cities” or “village-like compact residential areas on the outskirts of cities” that, thanks to lower rental rates, currently house a growing number of migrants. Yet these areas are infamous for problems such as poor public administration and infrastructure, illegally built houses, excessively high building density, inadequate sanitation facilities, numerous fire safety hazards, and more. In addition, migrants living in these areas tend to isolate themselves from the rest of the city, with the result that they primarily interact with migrant workers very similar to themselves and have few opportunities to communicate with people elsewhere in the city. The influence of host city natives is minimal in terms of lifestyles, which further exacerbates migrant communities’ social isolation and the feelings of being excluded that already exists between the two groups. On the other hand, many migrants live in dormitories or temporary shelters due to their own financial conditions and a shortage of suitable housing resources offered by the city, making it difficult for urban community management and public services to reach this special group. Of all migrant workers in 2014, 28.3% lived in dormitories, 17.2% in makeshift sheds at their construction sites or workplaces, 36.9% in rented housing, and a mere 1% in their own housing, according to NBS migrant worker monitoring data. The increase in the proportion of migrant homeowners is mainly because a larger number of migrant workers have purchased housing in small towns and cities. The Chinese government has taken the first steps towards actively providing migrants with affordable housing, and have also begun to rebuild village-like compact residential areas inside cities or shanty towns with a large floating

China ’ s Floating Population and Relative Poverty in Cities

123

population, thereby meeting their basic housing needs. Unfortunately, however, there have been no substantial breakthroughs in the separate urban-rural support systems that are characterized by hukou-based limitations. This is, first of all, because local governments’ solutions to the housing problem of the floating population are more often ad-hoc, short-term, supplementary policies, which makes it difficult to effectively solve this problem in a sustainable manner. Migrants remain excluded from urban development planning. Secondly, there are still many problems with and limitations on including migrants in the housing support system. Many local governments set so many restrictions on the conditions for applying for affordable housing that there are few qualified migrant applicants. Third and finally, the regional and local governments lack the necessary planning and social supervision needed to correspond with the various authorities overseeing migrant housing management, particularly in such areas as construction, housing administration, public security, labor, and the community itself, nor do they include the housing conditions provided by employers in their sphere of daily regulation, nor their compliance with regulations on housing fund payments. 2.3.2 Education In order to guarantee migrant children’s equal access to compulsory education in the cities and regions to which they migrate, China has established a policy of access management primarily administered by local governments and local full-time public schools. This policy has led to improvements in the admittance of migrant children to public schools, although this policy is not without problems. First, while almost all the relevant education authorities in the receiving regions explicitly stipulate that public schools must accept migrant children at equal rates with native children, high thresholds for migrant children remain, as evidenced by hidden extra charges. Second, there is an undersupply of educational resources (such as teachers and facilities) caused by insufficient educational budgets in some areas that have large and fast-growing numbers of migrant children. Third and last, governments consistently fail to meet expectations regarding the regulation of and support for non-public schools targeting migrant children in those areas where public elementary and secondary schools cannot fully meet the schooling needs of all migrant children. Some local governments have even shut down all such non-public schools in a non-discriminative manner, resulting in further difficulties to migrant children receiving their due education. According to the 2013 NHFPC dynamic migrant monitoring data, 40% of preschool-aged migrant children did not attend kindergarten in the receiving cities, as opposed to the much lower rates of non-attendance seen in native children; there were serious delays in and

124

Yang

interruptions to schooling, as over 17% of all six-year-old migrant children did not go to school, 11% of those aged 13 to 15 were still at elementary school, and 15% of those aged 16 to 18 remained enrolled at middle school. Children’s equal access to education is an important embodiment of social fairness, and is also the main path for migrants to realize upward mobility. Although China claims to value migrant children’s education, significant improvements have been seen only in the stage of compulsory education, while high-school-age migrant children continue to face problems in continuing their studies or attaining lawful employment. Although the policy of ­allowing students with non-local hukous to take the college entrance examinations in the host cities has been on the agenda, the vast majority of regions have yet to offer equal access to the college and/or high school entrance examinations, forcing most migrant children to return to ordinary high schools in their places of household registration after they finish their compulsory education in the host cities/regions. As such, inter-regional differences in the quality of education, teaching methods, teacher competence, examination patterns, and teaching materials will directly and adversely affect their high school entrance examination scores, and, consequently, their chances of receiving a high-school education. 2.3.3 Medical Care Both national and local policies have gradually incorporated Chinese migrants into the basic public service system since the introduction of the Opinions on the Gradual Equalization of Basic Public Health Services 《 ( 关于促进基本公共 卫生服务逐步均等化的意见》) in 2009. An NHFPC survey on equity in public health services showed continuous improvements in the availability of and migrants’ utilization of maternal and child health services. Of all migrant children, those who had not received the Healthcare Handbook for Children Aged Zero to Six dropped from 17.1% in 2006 to 8.8% in 2013, What’s more, over 99% had their vaccination card; only 0.2% had not received it, meaning neartotal coverage. Specifically, the proportion of migrant children with such cards issued in their receiving cities increased from 39.1% in 2006 to 75.9% in 2013. Nevertheless, problems remain with policy implementation. First, a financial support mechanism based on resident or service population has not yet been set up. There is a serious shortage of public healthcare-specific human resources in grassroots areas housing floating populations. If the floating population were included, the standards for health service staffing in some areas would not meet the actual needs of the total population. Public healthcarespecific human resources may be incapable of meeting local needs for public health services even if these resources are allocated according to specific

China ’ s Floating Population and Relative Poverty in Cities

125

standards. Second, various existing policies are not compatible, causing a lack of plans and operational solutions targeted to the basic public health problems that specifically face migrants. In most areas, the allocation of basic public health funds does not take into account the floating population, rendering service provisions far from adequate. Moreover, migrants lack the appropriate awareness necessary for taking the initiative to use available public health services, and therefore exhibit a lower level of compliance than that of the general population. In addition, their mobility creates much higher costs of providing a full set of basic public health services in accordance with the service standards and established requirements than those for people with local hukous. What’s more, inadequate funding would make it difficult to put basic public health services in place at all. 3

Emergence of the Newly Poor in Cities

The emergence of the class of the newly poor in cities caused by rural-urban migration will likely become an increasingly serious social problem. 3.1 The Growing Rank of the Relatively Poor Domestic migration in China has continued to increase rapidly over the past five years. The size of its floating population was 221 million in 2010 and rose to 253 million by 2014, with an annual average growth of 8.0 million, or 3.39%, according to NBS statistics (see Figure 6.2). The number of non-local migrant workers also increased from 153 million in 2010 to 168 million in 2014, with an annual average increase of 3.75 million, or 2.34%. Even as absolute poverty is being rapidly eliminated, relative poverty has evolved from an indicator of urban-rural inequality into an antagonistic relationship between natives and migrants, which, in turn, is likely to become a stumbling block to further social and economic development. 3.2 Inadequate Social Security Facing relative poverty in their host cities, the ability of migrants to adequately deal with relevant risks is limited—a problem that is accompanied by fragile social security. From the NBS migrant worker monitoring data, we can see that the proportion of non-local migrant workers covered by what is commonly known in China as “the five insurances and one fund”—namely, the pension, medical, unemployment, work injury, and maternity insurances, as well as the housing fund—has been increasing annually, although it still remains very low. In 2014, the percentages of migrant workers covered by these insurances and

126

Yang

Figure 6.2 Floating population size, 2010–2014 Note: “People with place of residence different from that of household registration” refers to those whose place of residence is inconsistent with that of household registration, and/or who have been away from their place of household registration for more than six months. “Floating population” refers to the aforementioned people, excluding those whose places of residence and household registration are both in the municipal districts. “Non-local migrant workers” refers to workers whose hukous are still in rural areas, and who have been employed, for at least six months, outside the villages or towns where their households are registered.

the housing fund were 16.4%, 18.2%, 9.8%, 29.7%, 7.1%, and 5.6%, respectively. Regionally, migrant workers in the Eastern region represent the widest coverage by the five insurances and one fund (see Table 6.7)—29.8% for work injury insurance, 20.4% for medical insurance, 20% for pension insurance, 12.4% for unemployment insurance, 9.1% for maternity insurance, and 6.0% for housing fund, all of which are higher than rates seen in the Central and Western regions. Of all the industries employing large numbers of migrant workers, manufacturing and construction, respectively, see the highest and lowest rates of insurance. The insured rates of migrant workers in manufacturing are 34.2% for work injury insurance, 22.1% for medical insurance, 21.4% for pension insurance, 13.1% for unemployment insurance, and 9.3% for maternity insurance, with 5.3% of these covered by the housing fund program. In contrast, the insured rates of migrant workers in the construction industry are only 14.9% for work injury insurance, 5.4% for medical insurance, 3.9% for pension insurance, 2.1% for unemployment insurance, and 1.3% for maternity insurance, with a mere 0.9% of them covered by the housing fund program.

China ’ s Floating Population and Relative Poverty in Cities

127

Table 6.7 Percentages of migrant workers enrolled in five basic insurance programs plus housing fund, by region and industry, 2014, %

Region

Eastern Central Western

MAN CON Industry WR TWP AFS RROS

Work injury

Medical

Pension

Unemployment Maternity Housing

29.8 17.8 21.9

20.4 11.8 13.6

20.0 10.7 11.4

12.4 6.9 7.7

9.1 4.9 5.8

6.0 4.7 4.4

34.2 14.9 19.2 27.8 17.2 16.3

22.1 5.4 15.0 19.2 10.8 12.1

21.4 3.9 14.4 17.6 10.0 11.8

13.1 2.1 9.9 12.8 5.4 6.6

9.3 1.3 7.8 9.2 4.0 5.2

5.3 0.9 3.5 8.0 2.6 3.1

Note: MAN = manufacturing; CON = construction; WR = wholesale and retail; TWP = transportation, warehousing and postal services; AFS = accommodation and food services; RROS = resident, repair, and other services

The reasons for the low rates of insurance among migrant workers are varied. Under the traditional hukou management system, there are two completely different social security systems in urban and rural areas—the former, for urban residents, is relatively developed and stable, while the latter relies on familial support supplemented by financial and social assistance from the local community. As rural-urban migrants increase in number, the Chinese government hopes to gradually include them within the urban social security system, but results have proven to be contrary to their expectations. First of all, many migrants are constantly in a state of informal employment due to low education levels and lack of professional skills, and low-skilled, highintensity, and low-threshold jobs are characterized by high employee mobility. Accordingly, employers are not interested or actively engaged in paying social insurance premiums, and also experience a lack of supervision by the relevant labor authority. Second, migrants themselves have an incomplete awareness of social security, as many of them lack a correct understanding of social security programs. Coupled with strong homesickness and a weak sense of safety in the city, migrant workers do not actively participate in the urban social security system. Third and last, the incompleteness of the current social security

128

Yang

system is also a reason explaining why migrants are less willing to participate in it. Theoretically, relevant provincial authorities are responsible for the uniform management of the social security system. In most provinces, however, any kind of uniform management is actually at the level of county or city. Since many migrants frequently move between counties, cities, or even provinces for new jobs, it is very difficult to transfer and continue their social insurance programs due to different local standards. Consequently, they face the possibility that their social security premiums may be paid in vain, without the possibility of personal benefit. We must be acutely aware of the social and economic vulnerability of those who are poor. In his study of poverty and livelihood, Robert Chambers pointed out that vulnerability consists of two aspects, namely, the extrinsic aspect of being exposed to unexpected events, stress, and risks, and the intrinsic aspect of the inability to protect oneself, which means lacking the means by which to adequately deal with destructive losses.14 Vulnerability and poverty are both linked and differentiated, as poor families are more vulnerable—yet high vulnerability only means a higher likelihood of these families falling into poverty in the first place or sinking deeper into poverty. The main determinants of vulnerability include the impact of risk factors on an individual and the ability to defend against risks such as natural disasters, macroeconomic downturns, unemployment, diseases, unexpected expenditures, and changes in goods and asset prices.15 Social security is the most important method by which individuals can improve their resistance to risks. However, the coverage of rural-urban migrants by social security is so low that those who are already relatively poor in urban areas become very vulnerable. Although they can also join the rural resident security system at the same time as they partake in the urban resident system, this system is still at a stage characterized by low premiums and weak support. The high vulnerability of migrants therefore means that they are more likely to fall into poverty. 3.3 Migrant-unfriendly Cities As the process of urbanization continues, the antagonism between rural and urban areas has evolved into a rivalry between migrants and natives, with the relative poverty of migrants exacerbating this rivalry. On the one hand, 14  Robert Chambers, “Poverty and Livelihoods: Whose Reality Counts?” Environment and Urbanization 7 (1995). 15  Hu Yonghe and Jiang Yongmu 胡永和、蒋永穆, “Jiyu cuiruoxing shangsheng de zhongguo chengzhen pinkun xianxiang jiexi 基于脆弱性上升的中国城镇贫困现象解 析 [Analysis of Urban Poverty in China Based on Rising Vulnerability],” Reform of the Economic System 7 (2009).

China ’ s Floating Population and Relative Poverty in Cities

129

the long-standing urban-rural dualism has given rise to what is perceived as the natural superiority of urbanites while, at the same time, creating a huge urban-rural gap. Since China began the process of reform and opening up, existing policies and the first-mover advantages of cities have resulted in locals being privileged over migrants in terms of social resources and competition, with the resulting sense of possessing an advantageous identity. In this context, many locals may not be aware of prejudice and discrimination against migrants. They naturally view migrants as a group of outsiders, hold an unfair opinion of them, and behaviorally show discrimination against them. On the other hand, some migrants with low education levels actually are primarily engaged in dirty, tiresome, and low-wage jobs in such industries as construction, retail, restauranteering, housekeeping, and manufacturing. After entering the city, migrants and their children face a real predicament insofar as the difficulty of integrating into the urban economy is concerned. Financial distress often causes them to face the huge gap between urban prosperity and their own situation. The family’s financial status further increases their sense of inferiority and makes it difficult for them to integrate into the local community. It is the existence of relative poverty that makes migrants and people with local hukous quite alienated from and even confrontational with each other regardless of social interaction or psychological awareness, despite the fact that they live and work in the same geographical space. 4

Policy Response Options

Migrants have become a primary source of the newly poor in cities. China has entered a period that is newly-focused on improving the quality of urbanization. As such, the Chinese government should clear institutional barriers for eliminating new urban poverty, promote the urbanization of rural-urban migrants alongside clearing barriers to the reformation of the household registration system, and steadily integrate the full coverage of permanent residents by basic urban public services into the existing system, thereby facilitating the all-around development of people as well as social fairness and justice. This will enable all residents to share in the fruits of national modernization. Establishing and Improving a Uniform Social Security System Covering All of China In terms of the current lack of social security for migrants, China’s separate urban and rural social security systems are not conducive to coordinating any kind of resolution. The country’s floating population faces a situation in which 4.1

130

Yang

they either cannot, or do not want to, be included in the urban social security system, or cannot receive adequate support from the rural social security system. The fundamental solution to this problem lies in building and improving a uniform social security system covering all of China. Specifically, under the premise of equalizing basic public services across urban and rural areas, urban and rural residents should be incorporated into a nationally-­uniform social security system through the integration of existing social security systems. This uniform system is intended to cover aspects of social welfare such as employment, housing, medical care, and assisted living care for the elderly, as well as to alleviate inter-regional disparities with the intention of equalizing basic livelihood support for all, as well as to address migrants’ concerns about integrating into the local community. Building a uniform social security system covering all of China is required not only to realize social justice and to ensure the equal access of urban and rural residents to basic social security services, but also to eliminate institutional barriers to the labor market and form a single urban and rural labor market. 4.2 Accelerating the Hukou System and Social Welfare Reforms After years of exploration and policy adjustments, China has entered a critical stage of the household registration system—a system involving such aspects of the people’s livelihood as education, employment, housing, medical care, and social security, as well as land, financial, and administrative system reforms. Sluggishness on the part of any of these reforms will, in turn, hinder household registration reform. This is also the primary reason why rural-urban migrants are generally unwilling to receive local hukous. In order to make the acquisition of a local hukou more attractive, it is first of all necessary to do the following in terms of reformation: innovatively amend the land management system, improve the rural land ownership system, offer class-specific guidance on the land transfer system, explore the compensation and incentive mechanisms in place for rural residents who have transferred their land, gradually establish a single urban and rural land market, and safeguard the property rights of ruralurban migrants in order to rid them of worries about receiving local hukous in their host town or city. Secondly, the Chinese government should accelerate the pace of fiscal and tax reforms, improve central and local fiscal systems by more appropriately matching financial resources and government responsibilities, perfect the mechanism for local revenue distribution, establish a mechanism linking transfer payment with the urbanization of rural-urban migrants, enhance local governments’ ability to provide their floating populations with basic public services, and, finally, encourage them to do so.

China ’ s Floating Population and Relative Poverty in Cities

131

Ensuring Universal Coverage of Basic Public Services among Permanent Residents Most migrants within China have relocated to Southeastern coastal Chinese cities, yet the Chinese government continues to find it difficult to adapt to the country’s ongoing population migration with its current fiscal, taxation, and administrative systems. As a result, local governments are insufficiently able and/or willing to provide migrants with basic public services. The key to achieving the full welfare coverage of the floating population lies in establishing a reasonable cost-sharing mechanism among the central and local governments, enterprises, and individuals. To this end, it is first and foremost necessary to clarify the cost-sharing responsibility of the governments, enterprises, and individuals themselves. The costs of basic public services for the floating population include not only public costs paid by local and national governments, but also market costs on the side of enterprises and individuals. Specifying the responsibility of who shares what costs can prevent the governments from bearing all the costs alone, while also avoiding any increase in the corporate burden. Secondly, it is necessary to optimize the cost-sharing responsibility of the central and local governments. The Central Government should be responsible for building an inter-regional infrastructure as well as those nationally uniform portions of basic public services such as social insurance, education, medical care, and housing support; for their part, local governments should be responsible for building public facilities, as well as local public matters such as health services, alongside offering guidance on local employment and entrepreneurship. The central and local governments should, respectively, focus on the costs of inter-provincial and intra-provincial migration. Third and last, it is necessary to establish and improve a cross-regional compensation mechanism, explore the means of transactional compensation (such as transfer payments and counterpart assistance between sending and receiving regions), and accelerate basic public service coverage of inter-regional migrants in the receiving regions. 4.3

4.4 Establishing a Welfare System that Serves all Elderly and Children Improving welfare for migrant families is critical to their further integration into the receiving regions, while also laying the foundation for their transition from semi-urbanization toward full urbanization. Children and the elderly are among the migrant family members most affected by the welfare policy. Leaving their place of household registration directly affects their access to basic public welfare institutions such as schooling and medical care. Now that China has entered the middle-income stage, establishing an inclusive basic

132

Yang

welfare system for the elderly and children will improve the level of basic welfare across society as a whole and prevent the negative social effects associated with migration. To this end, first, it is necessary to establish a top-down design for this inclusive basic family welfare system as soon as possible. Covering the elderly, children, and jobless mothers, this system is intended to involve education, health, housing, poverty relief, and many other areas. Second, it is necessary to clarify the central and local governments’ responsibilities for providing family welfare, and, following the establishment of responsibilities, devise a reasonable, scientifically-sound transfer payment mechanism and ensure the implementation of the welfare system. Third, the Chinese government should enact the following: eliminate, on the basis of the current welfare system, traditional regional divisions; implement a basic family welfare system beginning with migrants; improve the continuity and coordination of relevant policies; and rapidly promote the building of relevant systems such as the inter-regional continuation of education funding and pension/medical insurance. 4.5 Accelerating Migrant Integration into Cities As migrants have become the backbone of the new face of urbanization in China, their integration into cities is consistent with the laws of socioeconomic development. For those migrants who have long lived in cities with relatively stable jobs, their local governments should help them attain citizenship so as to have access to the same basic public services and rights as those available to natives. The social integration of migrants is divided into four progressive­ stages—namely, economic, social, cultural, and psychological integration. Getting a foothold in the urban economy is a necessary cornerstone for survival and putting down roots. It involves having access to equal opportunities for employment, fair and just opportunities for improving one’s human capital, and opportunities to access equal public services. Integration at the levels of social adaptation (or behavioral adaptation) and cultural cohesion is a further requirement for urban life. Apart from providing policy support, the government should also promote an inclusive and accepting social atmosphere.

Chapter 7

Chinese Women in the Workforce: Current Condition and Problems Ma Lifang1 The opening up of the workforce to women signaled a major milestone in economic history, both globally and within China, where it signified a new independence and the capacity for wealth creation of more than half the population. From a global perspective, more economically developed regions report higher proportions of women employed, who are resultantly of greater importance in the workplace. In this sense, the history of China’s rapid economic development as a whole is also the history of Chinese women’s rise in the workplace in particular. In 1982, the female employment rate in China was 46.63%, before rising to 73% in 2015, higher than that of most other countries. More importantly, the quality of female employment has also improved in China, rising significantly along with the number of available occupations, generally higher levels of jobs available, rising incomes, and the emergence of women business leaders. China is a world leader in terms of female employment status, but these gains must be evaluated alongside the corresponding problems that remain. Women still face many difficulties in employment as a result of physiological differences with biological men and the deep-seated influence of patriarchal forces on contemporary society. These problems include unfair treatment in recruitment and promotion and a lack of guarantees for female-exclusive benefits, such as maternity leave. These problems undermine both women’s employment rights and the principle of fair and equitable employment alike. Women are likely to play an increasingly important role in the developing workplace due to changes in China’s economic structure and the growing dominance of service industries and knowledge-based economies. Management methods in this new economic pattern are characterized by a growing emphasis on traits historically associated with women—emotional ties, cooperation, respect, and understanding, and, as such, women embodying these qualities will become an important driver of economic development in the new era. 1  Ma Lifang works at Zhaopin.com.

© koninklijke brill nv, leiden, 2019 | doi:10.1163/9789004407435_008

134

Ma

Accordingly, it is important to study and discover the true status of Chinese women in the workplace and to further promote the equality and healthiness of their working environments. In line with the aforementioned objectives, from the second half of 2015 to March 2016, Chinese hiring platform Zhaopin.com conducted research on the status of Chinese women in the workplace along with IPLE-CASS and the All-China Women’s Federation (ACWF). We disseminated a questionnairebased survey to nearly 30,000 people of different age groups and from different industries in 32 major Chinese cities and collected a total of 15,876 valid replies. In this survey, we compared current gender differences in the understanding of workplace and professional psychology, and subsequently made a comparative analysis of different groups’ perception of women’s conditions in the workplace in an attempt to understand the current status of women and to find ways of improving their working environment. Subsequently, we published a report entitled “Research on the Career Development of Chinese Women: Current Status and Problems” after analyzing and studying the survey results. This report comprises three parts: the current status of women’s career development, characteristics of women’s career development, and our conclusions and recommendations. It elaborates on problems facing women in the workplace as a whole, the characteristics and laws governing women in the workplace, and follows with several recommendations for improving their status in the workplace. 1

An Analysis of Women’s Employment Status

The status of women in the workplace can be analyzed from the perspectives of their employment situation and the overall perception of their role in the workplace. The employment situation includes the share of working women in the total female population, as well as what job opportunities are available for women. The perception of the workplace is the perceived status of working women. 1.1 An Analysis of Women’s Employment Situation At the end of 2015, there were 670.48 million women across China excluding Hong Kong, Macao, and Taiwan, accounting for 48.8% of China’s total population, according to the Statistical Communiqué of the People’s Republic of China on the 2015 National Economic and Social Development (see Table 7.1). This means that there are now 334.46 million working women in China, if calculated using the proportion of working women to total female population, a statistic from the 2010 Census released in 2011.

135

Chinese Women in the Workforce Table 7.1

China’s total and working populations Tolerance of unwritten rules in the workplace in %

Indicator

Size (million)

%

Total population (by the end of 2015) Men Women Female population (2010 Census data) Working women Male population (2010 Census data) Working women

1,374.62 704.14 670.48 62.58 31.03 64.75 38.65

100.0 51.2 48.8 100.0 49.58 100.0 59.69

Source: the Statistical Communiqué of the People’s Republic of China on the 2015 National Economic and Social Development and the long forms of the 2010 Census

Agriculture, forestry, animal husbandry, and fisheries are the industries with the highest proportions of working women, followed by manufacturing and wholesale and retail (see Table 7.2). The proportions of women in the aforementioned sectors and industries (except for manufacturing) are higher than those of men. The percentage of women engaged in agriculture, forestry, animal husbandry, and fishing is 53.22%, about nine percentage points higher than that of men; the wholesale and retail sector also employ more women; the population of men engaged in the construction industry is significantly higher than that of women; the difference in the proportion between men and women is insignificant in manufacturing. Women already account for 45% of China’s total working population (women make up 47% of all white-collar workers in China, according to data from Zhaopin.com—China’s largest hiring service platform). About half of Chinese women are in the workplace, and this proportion is expected to continue rising. As increasing numbers of women enter the workplace, however, employment problems facing women have also become prominent, especially issues related to gender discrimination. During the survey, respondents were asked about whether they had been victims of gender discrimination when seeking a job; 39.3% of the female respondents and only 25% of the male respondents answered “yes,” while another 53.0% of the male respondents said they had not encountered gender discrimination at all when seeking a job (see Table 7.3), showing that women are significantly more likely to be sexually discriminated against during the employment process than men.

136

Ma

Table 7.2 Male and female worker distributions by industry

Men

%

Women

%

Total

39,597,282

100.00

31,950,707

100.00

AFAF Mining Manufacturing Public Utilities Construction TWP ICS Wholesale and Retail AFS Financial Real Estate LBS SRTSGP WEPFM ROS Education HSSSW CSE PASO Int’l organization

17,579,444 666,207 6,758,775 353,899 3,355,130 2,130,365 262,912 3,145,130 903,340 292,923 305,950 304,710 150,831 156,403 742,217 734,895 336,692 174,890 1,242,264 305

44.40 1.68 17.07 0.89 8.47 5.38 0.66 7.94 2.28 0.74 0.77 0.77 0.38 0.39 1.87 1.86 0.85 0.44 3.14 0.00

17,004,775 143,143 5,300,465 142,092 564,732 414,339 176,500 3,511,807 1,049,845 288,239 175,071 186,612 78,784 111,161 645,773 916,104 497,348 149,611 593,953 353

53.22 0.45 16.59 0.44 1.77 1.30 0.55 10.99 3.29 0.90 0.55 0.58 0.25 0.35 2.02 2.87 1.56 0.47 1.86 0.00

Note: AFAF = agriculture, forestry, animal husbandry, and fisheries; TWP = transportation, warehousing, and postal services; ICS = information transmission, computing services, and software industries; AFS = accommodation and food services; LBS = leasing and business services; SRTSGP = scientific research, technical services, and geological prospecting; WEPFM = water conservancy, environmental protection, and public facility management; ROS = resident and other services; HSSSW = health, social security, and social welfare; CSE = culture, sports, and entertainment; PASO = public administration and social organization Source: Long forms from the 2010 Census

What’s more, the distribution of the sectors where women are vulnerable to employment discrimination is skewed, with discrimination far more likely to occur in energy/mining/environmental protection, government/​​non-profit organizations (NPO), real estate/​construction, and automobile/pro d uction/​ manufacturing/processing (see Table 7.4), probably because these sectors have long been dominated by men.

137

Chinese Women in the Workforce

Table 7.3 Responses to the surveyed statement, “I’ve encountered gender discrimination when seeking a job” in %

Option

Total

Women

Men

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

20.2 18.9 25.4 18.9 17.5

20.8 18.5 25.8 19.4 15.6

14.3 11.3 21.4 13.7 39.3

Source: Zhaopin.com database, Chinese Working Women Survey 2016 Table 7.4 Responses to the surveyed statement, “I’ve encountered gender discrimination when seeking a job” (women) in %

Sector

Strongly disagree

Disagree

Neither agree Agree nor disagree

Strongly agree

ICEI Financial RE/CON BS TWRLFD CPEACFA APMP TLW Services CMES EME GN AFAF

19.7 15.9 12.4 19.4 15.2 19.1 9.3 10.6 17.2 19.6 10.3 7.9 15.0

18.5 21.0 16.1 19.4 18.0 23.5 19.4 25.5 17.8 19.6 15.4 21.1 15.0

23.8 31.2 21.7 25.2 30.3 25.0 30.2 23.4 28.4 28.9 10.3 21.1 30.0

20.0 16.7 29.0 15.5 16.1 14.7 22.5 14.9 23.1 20.6 35.9 26.3 20.0

17.9 15.2 20.7 20.4 20.4 17.6 18.6 25.5 13.6 11.3 28.2 23.7 20.0

Note: ICEI = IT, communications, electronics, and Internet; RE/CON = real estate/construction; BS = business services (including consulting, accounting, legal, advertising, public relations [PR], certification and outsourcing services); TWRLFD = trade, wholesale and retail, leasing, fastmoving consumer goods (FMCG), and durables; CPEACFA = cultural and physical education, arts and crafts, and fine art; APMP = automobile, production, manufacturing, and processing; TLW = transportation, logistics, and warehousing; services = medical care, nursing, cosmetology, health care, hotels, restaurants, tourism, and holidays; CMES = culture, media, entertainment, and sports; EME = energy, mining, and environmental protection; GN = governmental and NPO; AFAF = agriculture, forestry, animal husbandry, and fisheries Source: Zhaopin.com database, Chinese Working Women Survey 2016

138

Ma

1.2 Status of Women in the Workplace Studies of the status of women in the workplace reveal a number of real and common problems facing women today. We analyzed and assessed the real status of women in the workplace by looking at gender differences in the perception of opportunities for promotion, views of interpersonal relationships at work, and tolerance of unwritten rules in the workplace. 1.2.1 Differences in the Perception of Opportunities for Promotion Promotion is a common concern in the workplace, and is also one aspect wherein men and women feel the most profound gender differences. According to our survey, 64% of the respondents agreed that men are more likely to be promoted (see Table 7.5); 71% of them thought that hitting the glass ceiling—a phenomenon in which an individual, usually a woman, is less likely to get promoted after he/she reaches a certain level in the corporate hierarchy—occurs more often to women than men. A further analysis of the perceived gender differences in opportunities for advancement showed that female respondents generally agreed that women have significantly fewer opportunities than men, while male respondents’ opinions on this issue were relatively neutral. Specifically, 65.3% of the female respondents agreed that men are more likely to be promoted in the workplace—a proportion of responses roughly 24% higher than that of male respondents with the same opinion. Regarding the statement that hitting the glass ceiling occurs more often to women, the Table 7.5 Uneven opportunities for advancement in %

Statement Men are more likely to get promoted

Option

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Women hit the glass ceiling Strongly agree more often than men Agree Neither agree nor disagree Disagree Strongly disagree

Total

Women

Men

30.0 34.0 28.0

31.0 34.3 25.9

15.5 26.2 33.9

6.0 3.0 33.0 38.0 21.0

6.8 2.0 35.2 37.4 20.5

11.3 13.1 22.6 28.0 30.4

5.0 3.0

4.8 2.1

12.5 6.5

Source: Zhaopin.com database, Chinese Working Women Survey 2016

139

Chinese Women in the Workforce

proportion of female respondents agreeing was 72.6%, which was about 22% higher than that of the male respondents with the same view. There are also significant differences in the perception of opportunities for promotion among female groups of different ages and education levels. Female respondents aged 30 to 34 more strongly agreed that hitting the glass ceiling occurs more often to women (see Table 7.6), and that men are more likely to be promoted in the workplace. Women in this age range are in the rising stage of their careers, and promotion has logically become a major concern. As a result, they are most strongly and immediately aware of gender differences in opportunities for promotion, and are also more vulnerable to the glass ceiling phenomenon. What’s more, female respondents with higher education levels tended to be more strongly aware of gender differences in opportunities for advancement. Overall, those with a bachelor’s degree or above thought that men were more likely to get promoted, and agreed that hitting the glass ceiling occurred more often to women. Table 7.6 Uneven opportunities for advancement

Statement

Women

Mean

Men are more likely to be promoted

< 25 25–29 30–34 ≥ 35 Middle school or below High school/two-year college/technical school Three-year college/vocational high school Bachelor’s degree Master’s degree or above < 25 25–29 30–34 ≥ 35 Middle school or below High school/two-year college/technical school Three-year college/vocational high school Bachelor’s degree Master’s degree or above

3.69 3.86 4.05 3.86 3.00 3.46 3.67 3.97 4.13 3.82 3.99 4.09 3.91 3.75 3.58 3.82 4.07 4.00

Women are more likely to hit the glass ceiling than men

Note: These means were calculated using the 5-Point Scale; a higher mean denotes a higher proportion of respondents agreeing to the statement. Source: Zhaopin.com database, Chinese Working Women Survey 2016

140

Ma

From a sectoral perspective, female respondents working in the government/NPO sectors showed the highest level of agreement with the statement that men are more likely to get promoted in the workplace, followed by those in the energy/mining/environmental protection and real estate/construction sectors. Sectors where men take precedence over women in terms of advancement are usually the ones where women are less employed in the first place (see Table 7.7). According to women’s experiences with the possibility for promotion, they often encounter occupational barriers. Of the 13 sectors that were surveyed, over 70% of the female respondents acknowledged that hitting the glass ceiling occurs more often to women (see Table 7.8). Table 7.7 Responses to the surveyed statement that “men are more likely to get promoted in the workplace” by sector (women) in %

Sector

Strongly disagree

Disagree

Neither agree nor disagree

Agree

Strongly agree

ICEI Financial RE/CON BS TWRLFD CPEACFA APMP TLW Services CMES EME GN AFAF

1.8 2.9 3.2 1.9 0.9 4.4 0.8 – 1.2 3.1 2.6 – 15.0

7.7 9.4 6.5 9.7 5.2 1.5 8.5 4.3 8.3 10.3 – 2.6 –

30.8 20.3 20.3 23.3 25.6 35.3 21.7 34.0 25.4 29.9 15.4 13.2 30.0

25.4 43.5 37.3 35.9 37.4 32.4 38.0 44.7 34.3 30.9 28.2 44.7 30.0

34.4 23.9 32.7 29.1 30.8 26.5 31.0 17.0 30.8 25.8 53.8 39.5 25.0

Note: ICEI = IT, communications, electronics, and Internet; RE/CON = real estate/​construction; BS = business services (including consulting, accounting, legal, advertising, publ ic relations [PR], certification and outsourcing services); TWRLFD = trade, wholesale and retail, leasing, fastmoving consumer goods (FMCG), and durables; CPEACFA = cultural and physical educ ation, arts and crafts, and fine art; APMP = automobile production, manufacturing, and processing; TLW = transportation, logistics, and warehousing; services = medical care, nursing, cosmetology, health care, hotels, restaurants, tourism, and holidays; CMES = culture, media, entertainment, and sports; EME = energy, mining, and environmental protection; GN = governmental and NPO; AFAF = agriculture, forestry, animal husbandry, and fisheries Source: Zhaopin.com database, Chinese Working Women Survey 2016

141

Chinese Women in the Workforce

Table 7.8 Responses to the surveyed statement that “hitting the glass ceiling occurs more often to women than men” by sector (women)

Sector

Strongly disagree

Disagree

Neither agree nor disagree

Agree

Strongly agree

ICEI Financial RE/CON BS TWRLFD CPEACFA APMP TLW Services CMES EME GN AFAF

1.5 3.6 2.8 1.9 1.9 2.9 2.3 2.1 1.8 3.1 – – 5.0

6.2 2.9 6.0 5.8 5.2 4.4 3.9 6.4 4.7 3.1 – 5.3 –

21.3 23.9 20.7 21.4 13.7 20.6 21.7 14.9 21.9 21.6 12.8 21.1 20.0

33.3 39.1 37.3 47.6 44.1 36.8 30.2 44.7 34.3 39.2 28.2 36.8 40.0

37.7 30.4 33.2 23.3 35.1 35.3 41.9 31.9 37.3 33.0 59.0 36.8 35.0

Note: ICEI = IT, communications, electronics, and Internet; RE/CON = real estate/​construction; BS = business services (including consulting, accounting, legal, advertising, publ ic relations [PR], certification and outsourcing services); TWRLFD = trade, wholesale and retail, leasing, fastmoving consumer goods (FMCG), and durables; CPEACFA = cultural and physical educ ation, arts and crafts, and fine art; APMP = automobile production, manufacturing, and processing; TLW = transportation, logistics, and warehousing; services = medical care, nursing, cosmetology, health care, hotels, restaurants, tourism, and holidays; CMES = culture, media, entertainment, and sports; EME = energy, mining, and environmental protection; GN = governmental and NPO; AFAF = agriculture, forestry, animal husbandry, and fisheries Source: Zhaopin.com database, Chinese Working Women Survey 2016

1.2.2 Views of Interpersonal Relationships in the Workplace The workplace constitutes the organizational system of a group of people. Good interpersonal relationships at work reduce the communication cost of the organization, increase its operating efficiency, and allow it to effectively achieve performance targets. For individuals, good interpersonal relationships at work also allow them to feel happy while enhancing their sense of belonging and loyalty. As such, good relationships at work are considered to be one of the most important conditions for successful careers. These relationships consist of two sides—namely, interactions between colleagues on one hand and interactions between employees and company leadership on the other—or, to put it more bluntly, the relationship between superiors and subordinates.

142

Ma

Our survey indicated that, from the perspective of interpersonal relationships, respondents typically indicated high levels of agreement to statements such as: “colleagues can discuss and solve problems at work together,” that “friendships can be made in the company,” and that “colleagues will actively help when one encounters difficulties.” On the other hand, there was less consensus on statements such as: “some people will rub salt into their colleagues’ wounds” and that they “do not like participating in recreational activities such as excursions with colleagues.” This suggests that in the current workplace environment across China, professional relationships generally take place in a harmonious, cooperative, and mutually supportive atmosphere. From a gender perspective, however, working women tend to agree more strongly with the statement that colleagues can discuss and solve problems at work together. What’s more, they are more willing than their male counterparts to participate in recreational activities, such as excursions, with their colleagues (see Table 7.9). Overall, women seem to possess an obvious advantage in valuing and promoting workplace communication. Table 7.9 Views of workplace relationships and interactions in %

Statement

Option

Total

Women

Men

Colleagues can discuss and solve problems at work together

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

40.1 35.4 18.2 3.4 2.9 25.7 38.8 24.9 7.0 3.7 18.3 36.5 32.1 9.1 4.0 13.2 22.4 30.6 18.8 15.0

38.5 37.2 18.0 3.7 2.5 23.4 41.1 24.3 6.8 4.3 16.7 37.8 32.4 8.7 4.4 13.8 22.7 33.0 17.0 13.5

37.5 31.5 25.0 3.0 3.0 33.9 32.7 27.4 2.4 3.6 20.2 32.1 31.0 8.3 8.3 12.5 24.4 31.0 13.1 19.0

Friendships can be made in the company

Colleagues will actively help when I encounter difficulties

Some people will rub salt into their colleagues’ wounds

143

Chinese Women in the Workforce Table 7.9 Views of workplace relationships and interactions in % (cont.)

Statement

Option

Total

Women

Men

I’m not interested in participating in recreational activities such as excursions with my colleagues

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

6.6 6.2 27.3 26.5 33.4

6.4 7.4 25.3 27.0 33.9

7.7 11.3 22.6 26.2 32.1

Source: Zhaopin.com database, Chinese Working Women Survey 2016

In terms of the relationship between superiors and subordinates, views are generally negative. Of all the respondents, 45.0% believed that there was a lack of open and honest communication between superiors and subordinates, and that the relationship between supervisors and subordinates was usually tense. The respondents acknowledged that they were not confident in future leadership decisions, though their leaders were adequately capable of handling relationships in order to help them succeed in their jobs, and they were also aware of their superiors’ attention to their work. A comparison of women’s and men’s views of the relationship between superiors and subordinates in the workplace showed that the key difference is in how they think of the statements: “my immediate superior is capably in handling workplace relationships and is helpful to us in our work” and that “I am willing to follow my superior at work” (see Table 7.10). The male respondents more strongly felt that their leaders were helpful for their work, and were correspondingly more willing to follow them. The female respondents showed markedly negative views of the relationship between superiors and subordinates in the workplace. 1.2.3 Tolerance of Unwritten Rules in the Workplace The idea of “unwritten rules” in the workplace refers to various rules hidden behind the more enforceable written ones, such as gender discrimination in recruitment, nepotism in promotions, shirking responsibilities, rent-seeking through power, and “tunneling,” which means the transfer of assets and profits out of firms for the benefit of those controlling them. Our survey showed that, among all respondents, 56.7% were completely unable to tolerate the existence of unwritten rules in the workplace, saying that they should be resolutely resisted, while 25.5% said they could tolerate these rules, as they believed they were ultimately inevitable in the workplace.

144 Table 7.10

Ma Views of the relationship between superiors and subordinates in %

Statement

Option

Total

Women

Men

Nobody has paid attention to my growth in the past year

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

6.5 10.7 30.0 27.6 25.2

7.3 10.3 27.9 28.7 25.7

9.5 9.5 29.2 20.2 31.5

I’m willing to follow my superior at work

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

9.5 11.6 30.1 20.5 28.3

16.9 22.8 27.8 14.0 18.5

26.2 21.4 29.2 9.5 13.7

My immediate superior is able to capably handle relationships and is helpful to our work

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

18.8 23.5 27.6 12.0 18.2

16.9 22.8 27.8 14.0 18.5

26.2 21.4 29.2 9.5 13.7

My efforts were nothing but support for my superior’s promotion

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

10.9 14.3 37.7 22.9 14.3

10.6 13.9 36.9 22.9 15.7

14.9 15.5 36.3 19.0 14.3

I think it is difficult to have open and honest communication between superiors and subordinates

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

23.5 21.5 35.4 12.2 7.4

23.2 22.2 33.7 13.3 7.7

10.1 8.3 34.5 19.6 27.4

Source: Zhaopin.com database, Chinese Working Women Survey 2016

Regarding differences amongst men’s and women’s attitudes toward unwritten rules, higher proportions of female respondents than males said that they could not tolerate them, that these rules should be resolutely resisted, or, conversely, that they were actually completely tolerable (see Table 7.11), showing more obvious polarization along both ends of the spectrum.

145

Chinese Women in the Workforce Table 7.11

Tolerance of unwritten rules in the workplace in %

Statement

Total

Women

Men

They are completely intolerable and must be resisted I don’t care They are completely tolerable, as they are inevitable in the workplace

56.7 17.8 25.5

57.1 17.1 25.8

48.8 30.2 21.0

Source: Zhaopin.com database, Chinese Working Women Survey 2016

Taking age into consideration, younger workers tended to be less tolerant of unwritten rules in the workplace. Of all the respondents, 59% of those under 25 were completely intolerant of unwritten rules in the workplace, while the proportion of those aged 35 or over with the same view dropped to 51.4% (see Table 7.12). This may relate to the fact that new employees are inexperienced in unwritten rules in the workplace, while older, experienced employees are more inclined to look at this issue in a moderated, dialectical, and pluralistic manner, and therefore hold more neutral views of these rules. Income levels also indicate a positive correlation with the tolerance of unwritten rules in the workplace—namely, higher income levels tend to accompany higher levels of tolerance. Of all the respondents, fewer than half of those with a monthly income of more than 9,000 yuan said that they were totally intolerant of unwritten rules in the workplace; this proportion was 33.3% among those who earned a monthly income of 11,000 yuan or above. Both proportions were significantly higher than those in the other income level groups. Generally, high-income groups also tend to fall within a higher age range, and are more experienced in the workplace and life. As mentioned above, their views on such issues are also more permissive. Looking at it from a sectoral perspective, women in agriculture, forestry, animal husbandry, and the fishery business are least tolerant of unwritten rules in the workplace, as 70% of the female respondents considered them to be totally intolerable and that they must be resisted (see Table 7.13). This group was followed by those in energy/mining/environmental protection, and then by the service sector. By comparison, women in governmental positions and NPOs are most tolerant of unwritten rules. According to our analysis, women engaged in agriculture, forestry, animal husbandry, and fisheries are mostly manual laborers who are paid primarily on the basis of individual jobs and who work in a relatively simple environment. In the male-dominated energy/ mining/environmental protection sectors, gender preference is already an unwritten rule due to a serious imbalance in the sex ratio. In the service sector,

146 Table 7.12

Ma Tolerance of unwritten rules in the workplace by age and income in %

< 25 25–29 30–34 ≥ 35 < 3,000 yuan 3,000–4,999 yuan 5,000–6,999 yuan 7,000–8,999 yuan 9,000–10,999 yuan ≥ 11,000 yuan

They are completely I don’t intolerable and must care be resisted

They are completely tolerable, as they are inevitable in the workplace

59.0 56.2 52.4 51.4 59.7 56.7 56.6 57.6 45.2 48.5

24.6 25.9 25.6 28.6 21.4 26.2 26.8 27.1 25.8 33.3

16.4 17.9 22.0 20.0 18.9 17.1 16.6 15.3 29.0 18.2

Source: Zhaopin.com database, Chinese Working Women Survey 2016

however, the number of female employees is closer to that of males. Women in this sector are much less tolerant of unwritten rules, which suggests that it is necessary to improve the sectoral environment in order to address the issue of unwritten rules. Also, it is worth repeating that women who work in governmental positions and NPOs show greater tolerance for unwritten rules, so the issue is not necessarily exclusively tied to gender. 1.3 Gender-specific Benefits for Women Though physically weaker than men, women are responsible for conceiving, bearing, and raising children. They are therefore supposed to receive more care and attention in the workplace, along with certain exclusive benefits. The country’s national labor laws also provide for women’s employment rights during sickness, pregnancy, and maternity. The reality is, however, that most enterprises deliberately ignore such rights. Consequently, there is no reason to be optimistic about the benefits status of working women. In general, though, women are becoming increasingly aware of their rights and expect to receive their exclusive benefits (see Table 7.14). In truth, however, the current setup of gender-specific benefits for female employees in enterprises is depressing. Only 16% of the respondents said that the company offered benefits exclusively for female employees; 65.6% said the company offered no gender-specific benefits for female employees at

147

Chinese Women in the Workforce Table 7.13

ICEI Financial RE/CON BS TWRLFD CPEACFA APMP TLW Services CMES EME GN AFAF

Tolerance of unwritten rules in the workplace (women) in %

They are completely intolerable and must be resisted

I don’t care They are completely tolerable, as they are inevitable in the workplace

58.2 54.3 59.9 48.5 57.3 42.6 58.9 46.8 60.9 57.7 66.7 39.5 70.0

23.8 29.7 25.8 29.1 28.9 36.8 24.8 38.3 21.9 24.7 23.1 36.8 10.0

17.9 15.9 14.3 22.3 13.7 20.6 16.3 14.9 17.2 17.5 10.3 23.7 20.0

Note: ICEI = IT, communications, electronics, and Internet; RE/CON = real estate/construction; BS = business services (including consulting, accounting, legal, advertising, public relations [PR], certification, and outsourcing services); TWRLFD = trade, wholesale and retail, leasing, fast-moving consumer goods (FMCG), and durables; CPEACFA = cultural and physical education, arts and crafts, and fine art; APMP = automobile production, manufacturing, and processing; TLW = transportation, logistics, and warehousing; services = medical care, nursing, cosmetology, health care, hotels, restaurants, tourism, and holidays; CMES = culture, media, entertainment, and sports; EME = energy, mining, and environmental protection; GN = governmental and NPO; AFAF = agriculture, forestry, animal husbandry, and fisheries Source: Zhaopin.com database, Chinese Working Women Survey 2016

all; the remaining 18.4% said they had no idea whether the company offered such benefits or not (see Table 7.15). Of the female respondents, 66.7% thought that the company offered no gender-specific benefits for its female employees, while fewer than half of the male respondents held this view. In addition, only 15.7% of the female respondents thought that the company offered such benefits, while a higher proportion, 20.9%, of the male respondents held this view. This shows a notable gender difference in the awareness of such benefits: most female employees think they have yet to receive relevant benefits, while there is a higher proportion of male employees who believe that their women colleagues already enjoy such benefits (or having no real understanding of this issue). This difference

148 Table 7.14

Ma Views towards the statement that the company should offer gender-specific benefits for women in %

Statement

Option

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Strongly agree I’m satisfied with Gender-specific Benefits Agree Neither agree nor disagree for Women from the Disagree company Strongly disagree The company should offer Gender-specific Benefits for Women

Total

Women Men

59.6 22.6 11.8 3.0 2.9 4.4 10.2 34.6 21.8 28.9

62.9 22.3 10.2 2.3 2.2 4.7 11.0 34.8 22.3 27.3

34.5 19.6 33.3 6.0 6.5 11.3 11.9 44.0 13.7 19.0

Source: Zhaopin.com database, Chinese Working Women Survey 2016 Table 7.15

Current setup of gender-specific benefits for female employees in %

Statement

Option

Total

Men

Women

Current setup of gender-specific benefits for female employees

Unavailable No idea Available

65.6 18.4 16.0

46.5 32.6 20.9

66.7 17.6 15.7

Source: Zhaopin.com database, Chinese Working Women Survey 2016

reveals that, as the direct beneficiaries of exclusive benefits, women express higher expectations of the company’s provision of such benefits in the first place. The setup of gender-specific benefits for women varies from sector to sector. Our survey indicated that in automobile, production, manufacturing. processing, energy, mining and environmental protection the numbers of women employees who believe they already receive such benefits are the largest, even though these sectors have the lowest female representation among all sectors covered by the survey (see Table 7.16). In contrast, the culture/media/ entertainment/sports and business service sectors—those with either more women employees than male employees or a balanced sex ratio—saw the lowest percentages of women respondents saying that they had received exclusive benefits.

149

Chinese Women in the Workforce Table 7.16

ICEI Financial RE/CON BS TWRLFD CPEACFA APMP TLW Services CMES EME GN AFAF

Women’s perception of the availability of gender-specific benefits for women in different sectors in %

Unavailable

No Idea

Available

63.1 65.2 66.4 61.2 68.2 57.4 51.9 51.1 60.4 73.2 51.3 55.3 50.0

19.2 16.7 18.9 27.2 15.6 23.5 17.1 19.1 19.5 16.5 17.9 23.7 35.0

17.7 18.1 14.7 11.7 16.1 19.1 31.0 29.8 20.1 10.3 30.8 21.1 15.0

Note: ICEI = IT, communications, electronics, and Internet; RE/CON = real estate/​construction; BS = business services (including consulting, accounting, legal, advertising, publ ic relations [PR], certification, and outsourcing services); TWRLFD = trade, wholesale and retail, leasing, fast-moving consumer goods (FMCG), and durables; CPEACFA = cultural and physical education, arts and crafts, and fine art; APMP = automobile production, manufacturing, and processing; TLW = transportation, logistics, and warehousing; services = medical care, nursing, cosmetology, health care, hotels, restaurants, tourism, and holidays; CMES = culture, media, entertainment, and sports; EME = energy, mining, and environmental protection; GN = governmental and NPO; AFAF = agriculture, forestry, animal husbandry, and fisheries Source: Zhaopin.com database, Chinese Working Women Survey 2016

2

Women and Career Development

2.1 Career Planning Career planning is an important step towards the achievement of both career goals and ultimate success in life. It also indicates the current values prevalent in a given society. It used to be generally believed that career planning was a process exclusive to men, and that women wanted nothing but a stable job. As positions available to women change with their growing role in the workplace, however, career planning has become an increasingly important process for both men and women alike. The following survey results outlining women’s career planning reflect the current value orientation, career preferences, and employment level of working women in China.

150 Table 7.17

Ma Ideal careers for women in %

Ideal Career

Total

Women

Men

Enjoy working due to being able to use my initiative and creativity Earn income to improve my quality of life Leverage my abilities to embody personal values Get promoted Become a member of the team/company to gain a sense of belonging Be able to embody my influence on the team or company through work Be able to contribute to social development through work Others

33.8

34.4

18.5

33.7 16.0 4.8 4.2

32.0 17.1 5.3 4.9

42.3 13.1 3.0 6.0

4.5

3.7

8.3

2.6

2.3

7.7

0.4

0.3

1.2

Source: Zhaopin.com database, Chinese Working Women Survey 2016

Like men, contemporary working women want their professional value to be recognized, although they put more emphasis on happiness and enjoyment than do males. Therefore, the option “enjoy working due to being able to use my own initiative and creativity” was the most chosen ideal career for the women respondents, followed by “earn income to improve my quality of life,” while the response “leverage my abilities to embody personal values” was the third most chosen ideal career for women respondents, but at significantly lower rates than the top two choices (see Table 7.17). For the married women respondents, earning income to improve their quality of life was the preferred career trajectory. Married women typically assume more family responsibilities than their unmarried counterparts, and they are also desperate to improve the quality of life for themselves and their families. Therefore, a higher proportion of married women chose earning income as their preferred career path (see Table 7.18). Working women believe that achieving a good work-life balance and obtaining a sense of safety and stability are the two most important goals of career planning. In addition, getting a job to pursue independence, self-fulfillment, and becoming a leader or manager are also important career goals for women. From these choices, we see that women are paying increased attention to their own needs and becoming more aggressive in the workplace, as they have

151

Chinese Women in the Workforce Table 7.18

Women’s ideal careers by marital status in %

Ideal Career

Married

Unmarried

Enjoy working due to being able to use my initiative and creativity Earn income to improve my quality of life Leverage my abilities to embody personal values Get promoted Become a member of the team/company to gain a sense of belonging Be able to embody my influence on the team or company through work Be able to contribute to social development through work Others

35.6

29.8

30.1 17.9 5.3 5.9

37.7 15.2 5.2 2.1

3.3

5.2

1.7

4.2

0.2

0.6

Source: Zhaopin.com database, Chinese Working Women Survey 2016

begun hoping to show their personal value through business achievements, including such ambitious achievements as becoming managers and bosses. There are, however, apparent gender differences in terms of career planning. Comparatively, women are hungry for a balance between, and the stability of, life and work, whereas men are more concerned with whether or not they can become a leader, manager, or expert in their field while trying to pursue a balance between life and work, but unlike women, they do not care about job stability. Differences in career goals between men and women indicate that most women still focus their career goals on safety and stability, while men are more willing to take risks in pursuit of personal accomplishments (see Table 7.19). 2.2 Features of Female Leadership The growing influence of female leaders in both politics and business circles cannot be underestimated. Women already represent 23.6% of the NPC deputies and 21% of the 2016 China Rich List, released by Hurun Reports. As women increasingly participate in economic activities, their leadership will only become more prominent and important in the future. What’s more, the transition toward a sharing-dominated economic development pattern will also bring with it even more possibilities for women to leverage their leadership.

152

Ma

Table 7.19 Planned career goals by gender in %

Career goal

Total

Women

Men

Obtaining work-life balance Securing a sense of safety and stability Getting a job for independence Self-fulfillment Becoming a leader or manager Accomplishing an int’l career Taking on competitive challenges Contributing to society by serving others Becoming a technologist

62.9 42.4 37.4 30.6 24.6 9.7 8.7 5.1 6.4

64.5 43.1 39.1 29.9 24.3 8.6 7.3 4.9 4.8

61.3 29.8 29.2 26.8 29.8 6.0 7.7 11.9 19.6

Source: Zhaopin.com database, Chinese Working Women Survey 2016

The advantages of female leadership—and its associated development and training—will be important issues for future enterprises to consider. This survey showed that the overwhelming majority of respondents acknowledged that women can be leaders. Of all respondents, 64.6% thought that women already play an important role in the workplace, and 88.4% agreed that women had the potential to join the rank of senior management. When asked about whether or not women can be senior managers, 90.3% of women respondents answered “yes.” In contrast, only 59.6% of the men respondents answered “yes”; 29.8% were neutral; the remaining 10.8% answered “no.” Despite this disparity, both the male and female respondents agreed to the statement that women now already play an important role in the workplace (see Table 7.20). This indicates that although women possess certain opportunities and positions in the workplace, men are still largely prejudiced against women in managerial positions. By inviting the respondents to evaluate differences in temperament between female and male leaders, we discovered that respondents consider female leaders to be more emotional and empathetic, whereas male leaders are perceived as more resolute and adventurous. That being said, individuals in the workplace also claimed that aside from what can be attributed to individual characteristics, there are no obvious difference between male and female leaders in terms of temperament. Even so, of all the respondents, 75.2% thought that female leaders better matched the characteristic of being emotional; 62.6% thought that male leaders better matched the characteristic of being resolute; and 67.4% believed that male leaders were characterized by

153

Chinese Women in the Workforce Table 7.20

Views of female leadership in the workplace in %

Statement

Option

Total

Women Men

Women now already play an important role in the workplace

Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree

29.0 35.6 25.0 7.4 2.9 65.1 23.3 8.2 1.5 2.0

27.8 36.3 26.1 7.4 2.4 65.3 25.0 7.4 0.9 1.4

I think women can be competent executives

28.0 29.8 32.7 4.8 4.8 29.2 30.4 29.8 4.8 6.0

Source: Zhaopin.com database, Chinese Working Women Survey 2016

being adventurous (see Table 7.21). Under the belief that they possess behavior and personality traits different from those of men, women have brought to the workplace a diversity of leadership styles and ways of thinking, allowing them to make greater contributions to people-oriented management and team harmony within modern enterprises. Gender differences are measurable across seven qualities of leadership, according to views of leaders’ temperament tendencies. The male respondents thought that male leaders were more resolute, adventurous, optimistic, active, tolerant, successful, and logical than their female counterparts, and that female leaders were more emotional than their male counterparts. The women respondents, on the other hand, thought that male leaders were only more resolute and adventurous than their female counterparts, and that while also believing female leaders to be more emotional than their male counterparts, considered there to be no significant differences across other dimensions. Having the opportunity to assume a leadership role represents a great advancement and success for women in the workplace. In addition to holding a leadership position, though, what variables do the general public value in assessing the success of a woman? The survey results showed that whether or not a woman has her own distinctive worldview and her perceived ability to spread positive values are the two most important variables used by respondents in determining a woman’s professional success. By inviting female respondents to rate the importance of the aforementioned variables, we saw that having her own distinctive worldview became the most important

154

Ma

Table 7.21 Significant gender differences in views towards leadership characteristics in %

Characteristic

Option

Men

Women

Resolute

Male leaders Female leaders No difference Male leaders Female leaders No difference Male leaders Female leaders No difference Male leaders Female leaders No difference Male leaders Female leaders No difference Male leaders Female leaders No difference Male leaders Female leaders No difference

68.5 8.3 23.2 76.2 6.5 17.3 38.7 26.2 35.1 11.3 61.9 26.8 35.1 34.5 30.4 48.8 9.5 41.7 40.5 21.4 38.1

62.5 6.7 30.7 67.8 5.7 26.5 23.0 25.8 51.2 4.5 73.8 21.7 37.2 26.9 35.8 36.4 8.5 55.1 32.7 15.8 51.5

Adventurous

Optimistic and Active

Emotional

Tolerant

Successful

Logical

Source: Zhaopin.com database, Chinese Working Women Survey 2016

variable in the minds of female respondents, with an importance index as high as 4.53; it was followed by the spreading of positive values, with an importance index of 4.52; both caring for herself and people around her and having a respectable personality and charm took third place, with an importance index of 4.47. In contrast, marrying an excellent man was the least important variable in the minds of the women respondents, with an importance index of just 3.69. In addition, the importance indices related to having a happy family and having a certain social influence/status were 4.07 and 4.06, respectively, relatively low figures. In the opinion of the female respondents, the most important thing for successful women was to have an independent and complete personality and to realize their value in the workplace and the larger society. On the contrary, having a happy family or an excellent partner was not an appropriate metric for measuring their success (see Table 7.22).

155

Chinese Women in the Workforce Table 7.22

Gender differences in views towards female leaders’ success variables

Variable

Women

Men

Distinctive worldview Spreading positive values Caring for herself and the people around her Respectable personality and charm Strong sense of responsibility and empathy Certain achievements in her field A happy family Having a certain social influence/status An excellent partner

4.53 4.52 4.47 4.47 4.35 4.33 4.07 4.06 3.69

4.04 4.17 4.11 3.98 4.01 3.81 3.87 3.53 3.45

Note: These numbers were means calculated using the 5-Point Scale; a higher mean denotes a higher level of agreement. Source: Zhaopin.com database, Chinese Working Women Survey 2016

There are also gender differences apparent in how women’s success is evaluated. Compared with the female respondents—who thought that the primary feature of successful women should be having their own distinctive ­worldview—male respondents believed that the ability to spread positive values was the central feature defining successful women; this assessment was followed by “caring for themselves and the people around them;” “having their own distinctive worldview” only ranked third. In addition, in the minds of the male respondents, having a strong sense of social responsibility and empathy was important. This shows that men put more emphasis on personal appeal and influence when they evaluate women’s success, while women are more concerned about whether or not they have a complete and independent personality. Of course, though there are stark differences, men and women also share certain commonalities in their responses—they both consider having a certain social influence/status and having an excellent partner to be the least important variables for defining a woman’s success (see Table 7.22). 3

Conclusions and Suggestions

In summarizing the aforementioned findings, we see that a significant gap remains between the desirable state of the workforce on one hand and issues such as gender discrimination, unwritten rules in the workforce and promotions, and the availability of exclusive benefits for female employees

156

Ma

on the other. This disparity remains despite the overwhelming majority of people having (or at least expressing) no doubt about the capabilities of women in the workplace, who are generally held to be competent in terms of managerial positions. In addition to discriminatory external workplace practices, women are relatively conservative in terms of job objectives and career planning, leading to an even wider gap. This suggests that China’s deep-rooted gender awareness and the historical gender roles of men and women are still in place. We also discovered that the career development of women at many companies has been hindered by corporate management systems and styles strongly characterized by male chauvinism. At the same time, the government has yet to further improve legislation to protect women’s rights and interests. We offer the following methods and suggestions specific to the aforementioned problems. 3.1 Providing Stronger Protection with Better Legislation Women formally entered the workplace much later than men. As a result, laws and regulations aiming to protect women’s labor rights were made very late. On June 28, 1988, China released the Regulations on Protecting Women Workers ( 女职工劳动保护规定》)—the first ever set of regulations protecting wom《 en’s rights and interests in the workplace. It was followed by the Law of the People’s Republic of China on the Protection of Rights and Interests of Women ( 中华人民共和国妇女权益保障法》) released on April 3, 1992, and the Special 《 Regulations on Protecting Women Workers 《 ( 女职工劳动保护特别规定》) on April 18, 2012. As a result of these laws, it may be safe to say that, at least legally, women’s rights and interests in the workplace are protected. That being said, it is often difficult to define, under the current legislation, many instances and types of cases where women’s rights and interests are infringed upon in the workplace while remaining legally unviolated. Take employment discrimination, for example. During the process of recruitment, many companies explicitly state that men are preferable candidates, or deliberately raise the existing thresholds for women candidates, as they fear that what are referred to as the so-called “gender” losses will arise from legal rights and benefits related to pregnancy, maternity, breast-feeding, and other women-specific forms of protection. Some companies also raise their hiring requirements predicated on women’s looks, build, marital status, etc., constituting another kind of discrimination. Similarly, when it comes to being considered for promotion, women are usually passed over as candidates for important jobs or positions due to fears that they could not fully work after childbirth. As such, many women encounter career bottlenecks after reaching their 30s. Regarding the ubiquitous and aforementioned problems facing women both in terms of the job search and the workplace, although China’s

Chinese Women in the Workforce

157

existing laws contain provisions outlining the basic prohibition of gender discrimination in employment, they fail to actually protect them from such discrimination, primarily due to imprecision or even complete lack of quantifiable definitions, rules for implementation, and ultimate legal responsibility in cases of discrimination. Moreover, most working women are not fully aware of the need to safeguard their rights, or are quietly tolerant of such phenomena. Consequently, gender discrimination has become a widespread phenomenon that has greatly damaged working women’s rights and interests. We suggest that the State should step up its efforts at the legislative level by carefully analyzing the actual current situation of female employment in the country and formulating appropriate and implementable laws and regulations against gender discrimination in employment. At the same time, it should learn from other countries in order to set up appropriate relief measures and mechanisms to guarantee that women suffering from employment discrimination will receive effective remedies—a process that will, in turn, reduce the cost of safeguarding their rights, thereby removing the root cause of discrimination against them in the workplace. At the same time, the State should make policies that give enterprises the government subsidies, tax breaks, and/ or other stimuli necessary in order to reduce the employment costs specific to female employees. Besides government regulation and control, trade unions and women’s federations as worker representatives should leverage their abilities, functions, and value in offering education and training to raise women’s awareness of how to best legally protect their own rights and benefits whenever necessary. 3.2 Social Support System and Work-Life Balance According to our survey, the importance of women in the workplace has been almost unanimously recognized, but their leadership competency remains insufficiently valued, especially within male-dominated organizations. In addition to these external evaluations of their abilities, women are also more inclined to seek stability in planning their own career goals. Under the influence of and pressure from existing social prejudice, some women have work-related concerns centering around personal and professional success. As a result, they have a weaker desire for self-development and generally attain less significant positions in the workplace than they might have otherwise. Additionally, as they grow older or get married, the responsibility of balancing multiple roles makes it difficult for many women to balance family and work. After childbirth in particular, many women find it necessary to reduce their efforts in, or even give up, their jobs in order to take care of their families. Therefore, dealing with this issue and easing the pressure from

158

Ma

the conflict between women’s roles also requires efforts on the part of both families and society. In terms of family, every member—including the woman herself—must establish a healthy view of the interrelationship between family and work responsibilities, one that allows women to participate in both. For women themselves, balancing family and work may present a significant challenge. It requires that women who work outside the home have equal enthusiasm for family and work, making them active and capable at work while also being affectionate at home. In order to properly plan for what may be expected of them at work, women must practice efficient time management. In addition, women need support and help from the rest of the family. Family is a concept shared by all members, each of whom are equal in such respects as assuming the responsibility for housework. By incorporating this view towards the family, other family members can reduce the pressure on the woman in the family, and, in doing so, provide the most ideal level of support for her while creating the optimal conditions for job performance outside the home. Therefore, it is only by establishing harmonious family relationships that professional women can perform better in the workplace. In terms of the more broadly-defined society, all members and participants—especially the government—should create better social conditions for alleviating the conflict between women’s roles in the home and the workplace. An important method of promoting women’s work-life balance is to free them from all aspects of housework. Though it is considered a traditional duty of family members, particularly female members, in the contemporary era housework can be done by service providers. This promises to be an important approach to the reduction of the existing burden on family members. Given the current level of economic development in China, housework services have become a reality. In the future, an increasing number of working women will be freed from housework in order to spend more time and energy on their jobs. Taking Their Interests and Needs Seriously, Providing Them with Greater Benefits It is the duty of society as a whole and the government and enterprises in particular to safeguard the legal rights of female employees, reduce and remove difficulties in employment caused by their physiological characteristics, and protect their health. Several social security and welfare systems targeting women have been legalized in such facets as obtaining leave for obstetric examinations, maternity leave, breast-feeding, and maternal allowances. Women’s rights and vested interests in these issues have been effectively protected under the law. By comparison, however, the establishment and implementation of 3.3

Chinese Women in the Workforce

159

benefits and services exclusive to female employees are unsatisfactory, yet it is precisely these benefits that best reflect employers’ concern for their female employees. Our survey results show that women are generally unsatisfied with the current establishment and implementation of corporate benefits exclusive to them. According to their career plans, women show more stability and loyalty to their companies than men. Employers will be better able to foster female employees’ sense of identification with the company and higher levels of loyalty if they commit to supporting women-specific benefits. Leveraging Women’s Advantages at Work and Enhancing Their Leadership Thanks to the ongoing development of societal gender roles, particularly in terms of the high level of their participation in the workplace, a contemporary image of career women has developed. As American sociologists Laurie Davidson and Laura Kramer Gordon point out, it is possible for women to redefine their gender roles if they can shift their public image from one of a busy housewife into one for whom housework is only pursued in tandem or alongside success in the workplace. In fact, with the growing penetration of women into higher education, the number of highly-educated women is already drawing alongside the number of highly-educated men. They are eager to promote their own value and, in pursuit of this goal, are endeavoring to rid the public of the stereotype that women are a disadvantaged group in society. Contemporary women have already proved their achievements in both studies and work. They bring diverse ways of working and thinking to the workplace, thanks to the same capabilities as men plus their own unique behavior and personality traits. Socialized to be meticulous, women tend to approach issues in a more thoughtful and comprehensive manner than men; a willingness to share and skillful communication enables them to integrate into, or set up, a team more quickly; and being emotional, empathetic, and patient, along with other stereotypical female qualities, makes them better able to perceive changes in the environment and problems with interpersonal interaction. For female leaders, these qualities help them better understand and attend to their subordinates’ emotional needs. According to Maslow’s hierarchy of needs, human needs at higher levels include a sense of belonging, esteem, and love. Emotional empathy, as provided by female leadership, is more useful for strengthening interpersonal relationships when more basic needs are already satisfied. An in-depth analysis of women’s advantages regarding personality, work, etc., helps them identify the right position for themselves in the workplace and 3.4

160

Ma

enhance their leadership. Women also have disadvantages, however, according to survey data. They are significantly less resolute and adventurous than men, for example. Consequently, they tend to be less ambitious when planning their careers, be satisfied with less, and lack confidence in their career development, despite their lofty aspirations. In order for women to gain career advancement and fight against male supremacy at the leadership and decision-making levels, they should strive to leverage their strengths and avoid weaknesses in their work while continuously improving their overall abilities. Social development is an eternal theme for humans as a whole. Women contribute to social development by working on their own behalf and through partnerships with the broader society. We see that women contribute great value and create wealth across all facets of society, though many obstacles to their path to independence and development remain, many of which are either the result of long-term patriarchal control or biological limitations. Ultimately, however, women’s agency and abilities will be fully embodied and recognized across all aspects and in all fields. References Davidson, Laurie and Laura Kramer Gordon. Xingbie shehuixue 性别社会学 [The Sociology of Gender], trans. Cheng Zhimin, et al. (Chongqing: Chongqing Publishing House, 1989). Luo Xiaoge 骆晓戈. Nüxingxue 女性学 [Women’s Studies] (Changsha: Hunan University Press, 2009). Popenoe, David. Shehuixue 社会学 [Sociology], trans. Li Qiang, et al. (Beijing: China Renmin University Press, 1999). Tan Lin 谭琳 and Chen Weimin 陈卫民. Nüxing yu jiating—shehui xingbie shijiao de fenxi 女性与家庭—社会性别视角的分析 [Women and the Family: a Gender Perspective] (Tianjin: Tianjin People’s Publishing House, 2001).

Chapter 8

Building a Universal Social Security System for the Elderly Cheng Jie1 Universal access to basic old-age security (OAS) is an important aspect of China’s strategy for building a comprehensively and moderately prosperous society. The focus of rapid development since the beginning of the 21st century, China has built a modern OAS system covering both urban and rural residents and centered around two core programs: the old-age insurance system for rural residents (NOAIS4RR), which has been consolidated into a newly-created oldage insurance scheme for rural and urban residents (OAIS4RUR), and the basic old-age insurance scheme for urban employees (OAIS4UE), which together institutionally provide full coverage for the elderly. The Chinese government is accelerating its program of full coverage for eligible citizens while also gradually increasing OAS benefits. Nonetheless, China has entered a phase of more rapid transition in terms of its demographic, economic, and social structures, a process illustrated by increased population aging, accelerated urbanization, and slower economic growth. Reforms in key related areas have thus entered a critical, challenging stage. The OAS system is facing increasingly serious challenges, particularly in terms of equity and sustainability. Building a Universal OAS system is central to tackling relevant conflicts and challenges. Current problems with China’s OAS system primarily manifest themselves in several aspects. First, the OAS systems for both urban and rural residents and for urban employees were designed to achieve two different objectives, but are often conflated. Secondly, utilizing a single system for both the floating and local populations, which aims to ensure fair access to residents’ rights, faces great difficulties in eliminating the urban-rural divide that manifests in huge inequalities in treatment and access. Third, there are deep-seated institutional conflicts between the OAS systems for corporate employees and those for government organ/public institution employees. Consequently, differentiated benefits remain despite the fact that these two systems have been ­consolidated—and with great difficulty, at that. The conflicts between these two groups of employees are further reflected in the gap between corporate 1  Cheng Jie is an Associate Researcher at IPLE-CASS.

© koninklijke brill nv, leiden, 2019 | doi:10.1163/9789004407435_009

162

Cheng

and occupational annuities. A Universal OAS system is intended to allow everyone equal access to OAS programs while at the same time reasonably assuming their respective responsibilities. It should be able to both guarantee basic, decent living for the elderly and allow productive people to stay active in the labor market. It should be able to maintain social stability and justice and ensure the sustainability of the labor market and the economy alike. Adhering to the concept of universal development, giving priority to fairness and justice, properly handling key benefits and conflicts, and taking the path to universal OAS development is an inherent requirement for the reformation and development of a social security system with Chinese characteristics. 1

Residency-status vs. Employment: Two Different Systems, Two Types of Security Programs

There is one essential difference between OAIS4RUR and OAIS4UE. The former is closer to a type of social welfare, whereas the latter belongs to the category of social insurance. They are almost not directly comparable, despite the fact that both are referred to as “insurance” and the corresponding benefits as a “pension,” with the basic model combining individual accounts with social pooling. The primary difference lies in that OAIS4RUR is dominated by the government and relies on financial input from both central and local governments to subsidize individual contributions and pension payments in a near-inclusive way. The insured rural citizens and urban non-employees only pay in small contributions. By comparison, OAIS4UE largely relies on contributions by individuals and their employers, as the central and local governments only offer subsidies targeting small numbers of areas and employees in need. Therefore, OAIS4UE epitomizes risk burden-sharing mechanisms in the ordinary sense, whereas OAIS4RUR is almost solely based upon transfer payments and thus should more properly belong to the category of a social welfare policy. Since one is really welfare and the other insurance, a direct comparison of the two systems would most likely cause confusion and misunderstanding. The most heated discussion around this issue centers on the gap between the levels of urban and rural pensions. The general public, the media, and even some scholars are accustomed to directly comparing these levels, showing an absolute gap of up to 23 times between the two systems (see Table 8.1). They thus conclude that there is a disproportionately huge gap between the urban and rural OAS systems, and that the phenomenon of China’s urban-rural dualism continues to solidify. Given the very different natures of these two systems,

Building a Universal Social Security System for the Elderly

163

however, it is obviously unscientific to compare them in such a simple manner. From a fundraising perspective, the per capita annual funds raised for OAIS4RUR were only 645 yuan in 2014, whereas that figure for OAIS4UE was nearly 10,000 yuan. The level of funds capable of being raised largely determines that of what level of pension may be offered; higher OAIS4UE pensions come from higher premiums paid. From a cost-benefit point of view, OAIS4RUR benefits are, in fact, more costeffective despite lower absolute amounts. First of all, OAIS4RUR relies mainly on government subsidies, with very small proportions of individual contributions. The average individual contribution was only 186 yuan in 2014, for example, reflecting the fact that the majority of insured residents have chosen the lowest possible contribution (of 100 yuan per year). Individual contributions make up only 28.8% of the total funds raised. On the side of OAIS4UE, however, premiums are entirely paid, in principle, by individuals and their employers; the central and local governments only subsidize certain groups of people in need, not all insured employees. As a result, individuals and their employers accounted for 80.7% of the total funds raised in 2014, even with these subsidies factored in. For urban and rural residents covered by OAIS4RUR, pensioners receive both a high percentage of contribution subsidies and basic pension subsidies from multiple levels of government. OAIS4RUR is clearly more cost-effective than OAIS4UE, though the current security level is relatively low. Furthermore, the attractiveness of OAIS4RUR is even clearer from a lifetime cost-benefit perspective. Allowing that life expectancy is 75 years, the lifetime pension benefit of an OAIS4RUR-covered person is about 16,500 yuan, whereas that of an OAIS4UE-covered person is nearly 380,000 yuan, which is 23 times as much as the former, according to 2014 standard-based static estimation that does not consider such factors as urban and rural resident incomes, employee wages/salaries, and consumer prices. With the cumulative total contributions of individuals and their employers factored in, however, the ratio of the total contribution of an OAIS4RUR pensioner to the average pension per capita equals 2.5, which means that it takes him/her only two-and-a-half years to recover the costs, as opposed to nearly eight years, or even up to ten years if government subsidies are not taken into account, on the side of an OAIS4UE pensioner. From another perspective, the ratio of lifetime pension benefits for OAIS4RUR pensioners to the total amounts paid by them and their employers is around 5.9—that is, an input-output ratio close to six times. That compares with less than twice, or merely 1.5 times, if government subsidies are not considered, on the side of OAIS4UE pensioners. A comparative analysis combining systemic natures with cost benefits should illustrate which of the two systems is more cost-effective and attractive.

164

Cheng

Table 8.1 OAIS4RUR vs. OAIS4UE according to 2014 standard-based static estimations in yuan/year

OAIS4RUR

OAIS4UE

Basic Model

Universal gov’t subsidies for individual contributions and pensions

Individual and employer contributions, plus subsidies targeting small numbers of areas and employees in need

Per Capita Funds Raised Incl. Gov’t Subsidies Individual and Employer Contributions

645 459 186

9,913 1,390 8,004

Notes: A small portion of funds raised for OAIS4UE comes from fund interests and return on investment; estimations were made with the same method used to calculate pension benefits; people can probably receive average pension benefits after paying contributions for a cumulative total of 15 years in the case of OAIS4RUR or 25 years in the case of OAIS4UE. Source: Estimation based on relevant data from Statistical Communiqué on the 2014 Human Resources and Social Security Development 《 ( 2014 年度人力资 源和社会保障事业发展统计公报》)

The huge difference in coverage between these two systems reflects their different natures. It was not until 2009 that the pilot NOAIS4RR was implemented. While, in principle, participation in this system was voluntary, it saw a rapid increase in actual coverage. Later, in 2011, the pilot OAIS4RUR was ­implemented—at this point its coverage was already close to 60%, surpassing that of OAIS4UE, which had been in place for more than a decade. In 2014, there were already 500 million OAIS4RUR-covered people across China, suggesting valid coverage of over 90% (see Figure 8.1). How and why is it possible for a voluntary, participation-based insurance system to so quickly reach full coverage? The institutional arrangements characterized by government dominance and subsidies likely serve as the intrinsic impetus apart from the traditional advantages of China’s administrative system and its capacity for implementation by grass-roots authorities. In stark contrast, the actual coverage of OAIS4UE has been increasing by only one to two percentage points per year, with valid coverage of about 65% in 2014. This means that OAIS4UE still has a long way to go before reaching full coverage, despite it being established more than a decade ago due to the state-owned enterprise (SOE) ownership reform, and in addition to the fact that it, in principle, requires compulsory participation.

Building a Universal Social Security System for the Elderly

165

Figure 8.1 Changes in the coverage of OAIS4RUR vs. OAIS4UE Note: OAIS4RUR and OAIS4UE are represented by the rural old-age insurance and the basic old-age insurance for urban employees, respectively. The insurance coverage of rural residents was estimated using the proportion of the total number of insured people in China’s overall population holding rural hukous (excluding children under 16 and students aged 16 or above); the number of rural citizens who should be insured falls somewhere between 550 and 600 million. The old-age insurance coverage of urban employees was estimated using the proportion of the number of insured employees to the total number of urban employees overall. There is a certain difference between the rough insurance coverage estimated here and the actual coverage, because such insurance does not apply to some urban employees, such as those employed by government organs and public institutions before the insurance systems for different types of urban employees were consolidated. Source: Estimation based on relevant data from China Statistical Yearbooks published in previous years

In short, voluntary participation-based institutional arrangements are nearer to the goal of full coverage than the compulsory participation-based ones. The differences in both institutional arrangements and the nature of these two systems should be the basis for our objective evaluation of systemic effects. Having two pension-based insurance systems with different natures is an appropriate choice for China in order to set about establishing a universal OAS system, but does not mean that the ongoing reformation of the country’s social security system has been completed. As a large developing country, China faces the significant challenge of how to best include hundreds of millions of rural citizens and urban non-employees into the OAS system. It can be said that these two sets of institutional arrangements—with their enormous differences both in nature and level of benefits—mark an important first step toward the aim of establishing an OAS system that covers both urban and rural

166

Cheng

residents such that they all share in the fruits of the ongoing reformation and development in China. The availability of pension benefits in and of itself is a big step forward, despite their being relatively low for urban and rural residents (especially the latter, as they are equivalent to only about 10% of the per capita net income of rural residents). What is more crucial is that a system mainly based on government subsidies has raised OAS programs for urban and rural residents to the level of public welfare and national strategy so that they differ from social insurance based on the sharing of risk burden, underscoring the government’s policy of providing protection for vulnerable groups. That said, China will not remain mired in urban-rural dualism forever and is unlikely to stagnate at the current stage of development. As urbanization continues, the proportions of rural residents and agricultural workers to the overall population will continue to decline. Population and labor force mobility between urban and rural areas, between regions, and between sectors/industries will also ramp up. Accordingly, OAIS4RUR—which covers as many as 500 million people—will obviously be unable to maintain its place as China’s dominant OAS system in the future, and a growing number of people will need fair access to OAIS4UE, with its higher benefits and stronger social insurance properties. This is an important issue that must be immediately addressed through the pension insurance system reform. This reform must first address the question of why only rural citizens and urban non-employees are eligible for State-subsidized basic pensions, whereas OAIS4UE-covered employees have no access to them, despite all of them being Chinese citizens. This appears to be contrary to the ideal of equal citizen treatment and the equity of rights. Will the policies originally designed to support disadvantaged groups lead them to contentment with low-level welfare? There were indeed signs in some OAS system reform and pilot projects that the NOAIS4RR policy tended to make the insured remain in the less productive agricultural and rural sectors (Cheng Jie, 2014). Why does the basic pension for urban and rural residents exceed 500 yuan per month in some places, such as Beijing and Shanghai, while only reaching the State-specified minimum level of 55 yuan per month in other places, despite all recipients being residents? The inequalities apparent within the State-led OAIS4RUR also deserve our attention. At present, this system has not been able to effectively promote the cross-regional integration of OAS programs in China (Zhang Zhanxin, 2014). For this reason, we must think carefully about the connotation and scope of civil rights and may also need to learn from foreign experience. It may then be right to ask, is an inclusive national pension system covering all Chinese residents more in line with the concept of universal development than a two-tiered system?

Building a Universal Social Security System for the Elderly

2

167

Migrants vs. Local Workers: a Single System, Two Different Kinds of Outcomes

How should the floating population be best included in the social security system? This is an important issue that has arisen from the rapid urbanization and mass migration that has developed across China since the beginning of the 21st century. Chinese scholars and policy makers once discussed and tried to design a separate pension insurance system for migrants in towns and cities, with policies such as the Measures for Migrant Workers to Participate in Basic Old-Age Insurance Programs 《 ( 农民工参加基本养老保险办法》) formulated at the national level also entering the stage of soliciting opinions from across society. Some local governments also piloted comprehensive social insurance policies for migrant workers alongside other initiatives. Before 2006, there was great controversy over whether it was necessary to set up a separate social insurance program for migrant workers. The official promulgation and enforcement of the new Labor Contract Law in 2008 set a milestone in the ­­market-oriented employment reform, as it eliminated institutionalized discrimination against migrant workers during employment. The official promulgation of the Social Insurance Law in 2010 finally brought an end to this controversy. According to Article 59 of this law, rural residents who enter cities for employment shall participate in social insurance programs in accordance with its provisions, setting a milestone in the inclusive social insurance reform (Zhang Zhanxin, 2015). Including migrants within the urban social insurance system lines up with the stated ideal of universal development and marks a step forward by the country’s socioeconomic integration-oriented reforms. Since the reformation of the existing urban social insurance system has not yet been completed and social pooling at the national level has yet to be fully realized, however, a degree of serious mismatching remains between the low transferability of the social insurance system and the high mobility of the labor force. Consequently, migrant and local workers find themselves in totally different situations, though the same institutional arrangements for pensionbased insurance apply to both groups in the urban labor market. There is a huge and widening gap in insurance coverage between ruralurban migrants and locals. In 2014, for example, overall national estimates put the total pension-based insurance coverage of urban employees at about 65%, as opposed to 20% on the side of rural-urban migrants, showing a gap of more than 40 percentage points (see Figure 8.2). In terms of overall trends, the insurance coverage of urban workers shows a steady increase over time, whereas that of rural-urban migrants is rising very slowly. Now that migrants have been institutionally allowed to participate in urban pension insurance programs,

168

Cheng

Figure 8.2 Changes in insurance coverage of migrant vs. urban workers Notes: “Migrants” refers to NBS-defined laborers who still have rural hukous but are locally employed in non-agricultural industries or have been working elsewhere for at least six months; that is, migrant workers in the general sense, including non-local and local ones; “insurance coverage” refers to the proportion of migrant workers covered by OAIS4UE in the total number of migrant workers across the country. Source: Migrant data came from National Migrant Workers Monitoring Survey Reports published by the NBS in previous years; migrant worker insurance data came from Statistical Communiqués on Human Resources and Social Security Development published in previous years; urban employee data was estimated using relevant data from China Statistical Yearbooks published in previous years

and the compulsory nature of their participation has been emphasized by relevant laws such as the Labor Contract Law, why are there still no significant changes in the actual insurance coverage of rural-urban migrants? And why is there such a wide gap between legal equality and de facto equality? The direct causes for such a disparity include migrants’ low willingness to be insured, high mobility between urban and rural areas and between regions, and low employment stability. Moreover, migrants are mostly employed in such industries as service and construction, where self-employment is common and the proportion of informal employment is high, making it more difficult for migrants to become insured. Being insured does not mean that migrant workers are bound to benefit, however, precisely because the present urban pension insurance programs do not fit the employment characteristics of rural-urban migrants (Zhu Ling, 2009). There are two key obstacles related to existing deep-rooted institutional factors. First and foremost, the current system design and policy arrangements

Building a Universal Social Security System for the Elderly

169

of the country’s old-age insurance system demonstrate low levels of social pooling. Given the low transferability of insurance accounts, migrants who return home or move between regions can only take away the money in their personal accounts and part of the money from their socially-pooled accounts. They have to bear the high operational costs of transfer and continuation, as well as huge losses of benefits during migration. As a result, this has caused serious distortions in the labor market and human resource allocation. Such distortions result in significant losses in terms of productivity and economic growth (Cheng Jie, 2015). Second of all, the transitional cost of the pension insurance systems has not yet been fully absorbed. Given the existing historical burden of unfulfilled pensions, it is impossible to establish any kind of pension insurance reserves for individual accounts, resulting in a huge number of empty accounts. As a result, the model of combining social pooling with individual accounts has been changed into that of payment upon reception. Fund raising that relies fully on current-period contributions paid by individuals and their employers inevitably results in unacceptably high levels of individual contributions and a corresponding financial burden. For migrants unable to remain stable despite either job or location, participating in the current urban pension insurance programs is more of a burden than it is a measure of either security or benefits. Institutional problems have manifested in the large-scale cancellation of insurance by migrant workers in recent years, and, most recently, the discontinuation of premium payments and the dispatching of labor to circumvent social security. This problematic urban-rural dualism remains a major obstacle to the effective inclusion of the floating population in the urban pension insurance system. The country’s social security and welfare systems are still largely dependent on hukous and personal identities, yet despite that, urban-rural integration has made great progress, and the impact of hukous and personal identities on the free migration and employment of rural laborers is gradually decreasing. The OAS system designed for rural residents is more inclined to encourage them to stay in rural areas and agriculture. It has strengthened, to a certain extent, their professional identity as farmers, though with a higher level of welfare than this group has historically received. On the other hand, the OAS system designed for urban residents features policy arrangements that tend to reinforce the identity of urban resident, though in principle it allows migrants to join in. In 2014, the urban old-age insurance coverage of rural-urban migrants, specifically, migrant workers, was 27.1%, which was measurably lower than that of locals with non-rural hukous in urban areas, according to an NHFPC

170

Cheng

Table 8.2 Insurance coverage of migrants vs. locals in urban areas in %

Locals

Total Men Women Employees Employers Self-employed

Migrants

Rural

Non-rural

Rural-Urban

Urban-Urban

23.4 23.8 22.7 40.6 28.8 6.1

58.7 59.1 58.1 73.1 49.8 27.5

27.1 27.7 26.2 37.2 16.2 9.6

58.7 60.7 56.1 71.0 47.2 23.7

Note: Migrant monitoring covered 31 provinces, autonomous regions, and municipalities directly under the Central Government across China, in which about 200,000 migrant samples were studied. The urban integration-themed survey was conducted in eight selected cities, comprising Beijing (specifically, Chaoyang District), Qingdao, Xiamen, Jiaxing, Shenzhen, Zhongshan, Zhengzhou, and Chengdu. To ensure comparability, data taken from samples in these eight cities was used to calculate the insurance coverage levels of migrants and locals in urban areas. The sample sizes of these two groups were both 2,000 per city, for a total of about 16,000. Source: The 2014 national migrant monitoring survey and urban integrationthemed survey by the NHFPC

migrant monitoring survey (see Table 8.2). Nonetheless, the insurance coverage of urban-urban migrants with non-rural hukous also reached 58.7%, which was equal to that of locals with non-rural hukous in urban areas. In addition, the urban old-age insurance coverage of people with local rural hukous was not high, only 23.4%, similar to that of migrant workers. This reveals that the urban OAS system still essentially rejects the identity of farmer, while it does not completely reject the identity of non-local. Given the existing institutional arrangements, urban pension insurance is more of a burden on rural-urban migrants than a boon. Contrary to what might be expected, their being forced away from the urban social security system does not entail avoiding related costs. On the one hand, the fact of rural-urban migrants being unable to join the urban social security system means that they are only able to benefit from a relatively low level of rural security, and that, furthermore, it is difficult for them to be included in a social insurance system that shares a broader range of risks and thus a higher level of security. Consequently, it will be difficult for them to live a decent life when they are old, and they will inevitably suffer certain losses in the long run. On the other hand, being able to reduce costs by avoiding urban social security premiums

Building a Universal Social Security System for the Elderly

171

in the short term does not mean that rural-urban migrants can enjoy their own lives free from ponderous financial burdens, as those who are employed in the formal sector, in particular, still need to be covered by the urban social security system as per relevant laws and regulations. According to the aforementioned survey, the insurance coverage of migrant workers employed was close to 40%. As the labor market improves over time, the proportion of workers in the formal sector will gradually increase, and so will the insurance coverage mentioned above. This, of course, will also mean further intensification of the already-existing conflicts involving the pension insurance systems. A society with universal development requires us to reform the social security pattern that has, until now, been characterized for migrants and urban natives as “one system, two situations” as soon as possible. The key challenge to be addressed in this reform lies in the fact that the traditional concept of urban-rural dualism has led to a lack of compatibility between the urban and rural OAS systems. In order for rural-urban migrants to truly benefit from the further reformation and development of the urban OAS system, the need to speed up the national integration-oriented social security reform still remains. 3

Enterprises vs. Government Organs and Public Institutions: a Single System, Different Benefits

The equity of pensions has long been regarded as a major flaw of the urban pension insurance system. The reform of dual pension insurance systems has been difficult, but is, ultimately, a national imperative. The pension insurance system for urban workers needs to support the ongoing SOE ownership reform. Currently, insured contributors face a heavy burden of payment, yet retirees are faced with low benefits and, in the early stages of this reform, do not even receive their pensions on time. In stark contrast, government organs and public institutions have basically adopted the retirement system, suggesting that their employees need not pay premiums, which are entirely included in government budgets, with a pension replacement rate of almost 100%. According to research estimates (Hou Huili and Cheng Jie, 2015), the dual pension insurance systems contribute 30–50% of the difference in pensions of urban retirees, thus becoming the primary source of pension inequality. What’s more, overprotection is a problem when it comes to OAS for the public sector, especially civil servants. It has become the most prominent manifestation of the division of China’s social security systems. As a result, the entire OAS system is both impartial and inefficient (Zhu Ling, 2010). Around 2000, the average pension difference between the urban retirees of companies and those of

172

Cheng

Figure 8.3 Changes in the average pensions of retirees of companies vs. those of government organs/public institutions Note: The average pension of corporate retirees refers to the average pension of those covered by basic old-age insurance for urban employees; that is, the total pension expenditure/the number of corporate retirees. The pension of retirees of government organs and public institutions was measured by the average retirement income; that is, the total retirement expenditure/the number of retirees. Pre-2006 data can be directly obtained through China Labor Statistical Yearbooks; data from subsequent years are no longer published and were estimated with retirement expenditures of government and public institutions in the National Public Expenditure Balance Sheets. Data from the years 2016 to 2020 were predicted values, with an assumption that all pensions will rise annually by 6.5% in accordance with relevant policies of the State Council. Source: The numbers were calculated with relevant data from China Statistical Yearbooks and China Labor Statistics Yearbooks ( 中国劳动统计年鉴》) published by NBS and National Public 《 Expenditure Balance Sheets 《 ( 全国公共财政支出决算表》), which were published by MOF in previous years

government organs and public institutions was about 1.5 times; in the following years, retirees of government organs and public institutions only saw their retirement incomes continue to grow. In contrast, pensions in the corporate sector grew slowly, or, in many cases, were not even distributed on time at all. The pension gap between the two sectors doubled in 2005 (see Figure 8.3). The widening pension gap exacerbated the already strong dissatisfaction of urban residents with the dual pension insurance systems. On the one hand, policymakers tried to promote the consolidation of the pension systems, despite the pilot reform being sluggish, since it was against existing vested interests. On the other hand, the pensions of corporate retirees were increased in order to reduce the pension gap and ease the resulting conflicts. Starting from 2005 on, pensions within the corporate sector grew annually by 10%, leading to an

Building a Universal Social Security System for the Elderly

173

average pension of 2,270 yuan by 2015. The pension gap between the dual systems therefore narrowed from double (around 2005) to only 1.3 times in 2013. Fully relying on any kind of more rapid increases in pensions within the corporate sector has, however, also created new conflicts. Pension growth has clearly surpassed the growth of the economy and that of labor productivity. Adjustments to pension benefits have departed from the actual state of economic development and therefore are apparently unsustainable. Moreover, the government has responded to the benefit demands of stakeholders by means of bargaining instead of by defining clear rules, resulting in benefit comparison and competition. The domino effect has encouraged even more individuals and groups to compete for special treatment so that the pension insurance system rules have been crippled in terms of system sustainability and inter-generational equity (Social Security Research Group, the Institute of Economics, Chinese Academy of Social Sciences, 2013). As a result, policymakers have been caught in a dilemma and have had to review the ­benefits-adjusting program. They decided to reduce the pension benefit growth rate to 6.5% from 2016 onward in order to suit the new phase of economic development. At the same time, the pensions of government organs and public institutions have been equally adjusted. The groundwork for this decision was the consolidation of the pension insurance systems for enterprises and government organs/public institutions, which was officially launched in 2015. Consolidating the two systems into a single one set a milestone in the pension insurance system reform. That being said, system consolidation does not necessarily mean the equal sharing of benefits. First of all, the retirement benefits of both enterprises and government organs/public institutions are basically stable, and system consolidation means there is no room for any further reduction in the differences in pensions through differentiated policies. From 2016 onward, adjustments to the benefits of retirees from enterprises and government organs/public institutions will be uniformly incorporated into OAIS4UE. Assuming that the economic growth during the 13th Five-year Plan period will remain somewhere between 6% and 7%, it is reasonable to believe that retirees of both enterprises and government organs/public institutions will see their pensions continue to annually increase by 6.5%, meaning that the pension gap between these two types of organizations will remain around roughly 1.3 times throughout this period. The absolute gap will increase from 680 yuan in 2015 to 930 yuan in 2020 (see Figure 8.3). From the point of view of the relatively disadvantaged corporate sector, therefore, institutional equity from the pension insurance system reform seems to be at the cost of no further reduction in the existing pension gap. It remains necessary to carefully discuss

174

Cheng

whether such a pattern is fair and reasonable and whether it meets the reformation’s basic principle of benefits sharing. Secondly, consolidation has led to a single system with two separate funds, meaning that employees in the corporate and public sectors will still be covered by two different and separate social security systems for the foreseeable future. After consolidation, however, the pension insurance system for urban employees will also apply to those of government organs/public institutions, as the same fundraising method and rates are adopted. Nonetheless, the pension fund for employees of government organs/public institutions is completely independent and managed following a closed protocol, which can be categorized as fund pooling within these organizations. Given that national pension insurance fund pooling has yet to be realized in China, this is equivalent to an extra pension fund pooled at the provincial level, with the difference lying in the fact that contributions that would otherwise be paid by employees and their employers are both from government funds. Public dissatisfaction with the coexistence of two separate social security systems is not about actually these systems themselves, but, essentially, about the huge gap in treatment between them. Relevant conflicts will remain if these two systems are consolidated into a single system without the resultant fair treatment between them. Ultimately, it is not easy to completely resolve such conflicts, and the issue of fair treatment continues to hinder the ongoing pension insurance system reformation from making greater strides. The Decision on Reforming the Pension Insurance System for the Staff of Government Departments and Public Institutions 《 ( 关于机关事业单位工作人员养老保险改革的决定》) was released by the State Council as early as the beginning of 2015, when it was decided that systemic consolidation would start on October 1, 2014. Up till now, however, specific insurance rates and contribution bases have not yet been finalized. As a result, most government organs and public institutions—as well as their personnel—can only prepay contributions for the time being until the final program comes out, at which point they will be partly refunded or, conversely, need to pay additional amounts of money. The long delay in releasing the program reflects the difficulty of the reform process overall, as well as the complex conflicts involved. One of the major challenges to reformation lies in the fact that, according to the current pension insurance system for urban workers and its operating methods, it is difficult to guarantee that the pension benefits of retirees will not drop (as the replacement rate under the existing system is only 59%) in the future, unless there are significant changes to the salary system of government organs and public institutions being made. In the meantime, maintaining or even raising the benefits after the reform is an important condition for the establishment of a smooth reform

Building a Universal Social Security System for the Elderly

175

progress. It seems that both the policymakers and government organs/public institutions have reached a consensus on this principle. It was precisely for the purpose of old-age insurance system reform that the basic salaries in the public sector were adjusted in 2016 so as to raise contribution bases and contribute to the amount of funds raised. Now, however, this pre-existing consensus may lead to new conflicts with corporate employees. The fundamental solution to these conflicts is the need to realize uniform fund raising and compatibility between different groups under a single system. The key to unifying systems in different regions, sectors, and industries lies in the sharing of both risks and benefits. This requires insurance fund raising to be uniform at a high level. Insurance accounts are supposed to move freely with their owners for seamless continuation. By having a separate insurance fund, government agencies and public institutions can avoid potential risks from the pension fund gap in the urban corporate sector, but at the same time they have no access to potential benefits from the latter, thanks to long-term improvements in productivity and capacity of risk diversification. Therefore, the pension insurance system reform has not been completed, even though it has been successful in unifying separate systems. The pattern of two separate funds with differentiated benefits still runs counter to the goals and principles of the universal OAS system. This reform should keep moving toward a single system with uniform fund raising and risks/benefits sharing. 4

Corporate vs. Occupational Annuities: Two Systems, Two Kinds of Outcome

Annuities as an important supplement to basic pension insurance are often regarded as pillars of the pension insurance system. Shortly after China began to reform the pension insurance system for urban workers, pilot corporate annuity projects were also launched. These projects have since been developing slowly, with the expected supplemental functions yet to be brought into full play, despite the fact that several supporting administrative measures and policy incentives were introduced after 2000. Occupational annuities are a product of the reformation of the pension insurance system for government organs and public institutions, aimed at ensuring that those affected by the reform will actually receive pensions no lower than the currently-­established levels. As early as 2008, pilot occupational annuity programs targeting only public institutions were proposed in the pilot scheme of pension insurance system reforms across five provinces and municipalities. Much like the pilot projects that were part of the pension insurance system reform, the pilot

176

Cheng

occupational annuity projects made no substantial progress until early 2015, when the dual-system reform made significant progress. Under the relevant policies and regulations, government agencies and public institutions began to establish occupational annuities across the country from October 1, 2014 onward. There are differences in type between corporate and occupational annuities, as they essentially belong to two different annuity systems, despite both being labelled an “annuity.” First, corporate annuities are on a voluntary basis, whereas occupational annuities are mandatory, government-led institutional arrangements. Second, they differ in funding method. Corporate annuities have no fixed contribution base or proportion. In principle, it is required that annual corporate contributions should not exceed 1/12, or about 8.3%, of the corporate payroll in the previous year, and that the upper limit for the total amount of corporate and individual contributions should be 1/6, or about 16.6%. Occupational annuities are the same as basic old-age insurance in terms of contribution base and payment method, and the contribution percentage is uniformly determined. The proportion of occupational annuities paid by the employer is 8% of the payroll, while that of employees is 4% of their respective contribution wages/salaries. Third, they differ in fund operating mode. Corporate annuity funds are made on a full accumulation basis and managed by means of individual accounts. In other words, both individual and corporate contributions are truly and fully paid. By comparison, occupational annuity funds are on a half accumulation basis—that is, individual contributions are fully accumulated, while corporate contributions of organizations fully funded by the government are in the form of ­bookkeeping— or, put more plainly, empty accounts. Annuity systems of two separate types are bound to be very different in terms of development. The corporate annuity system was implemented earlier, but it has since been teetering. As of 2015, there were only 75,000 companies that had set up corporate annuities, while the Third National Economic Census reported that there were 8.2 million enterprises of all kinds in China. Given this, corporate annuity coverage was estimated to cover only 0.9% of all enterprises. In 2015, 23.16 million employees were covered by corporate annuities, suggesting that coverage in the broad sense (i.e., the number of workers participating in the corporate annuity system divided by the total number of urban employees) was only 5.7%, as opposed to 65% coverage of urban employees covered by basic old-age insurance. What’s more, corporate annuity coverage in the narrow sense (i.e., the number of employees participating in the corporate annuity system divided by the total number of employees covered by urban basic old-age insurance) was only about 9% (see Figure 8.4).

Building a Universal Social Security System for the Elderly

177

Figure 8.4 Changes in corporate annuity coverage by number and percentage Note: Annuity coverage 1 refers to the proportion of employees participating in the corporate annuity system to the number of employees covered by urban basic old-age insurance, that is, coverage in the narrow sense; annuity coverage 2 refers to the proportion of employees participating in the corporate annuity system to the total number of urban employees, namely, coverage in the broad sense. Source: Calculations based on relevant data from Statistical Communiqués on Human Resources and Social Security Development and China Statistical Yearbooks published in previous years

The evolution of corporate annuities in the 21st century can be roughly divided into two stages. From 2000 to 2007, the number of enterprises participating in the corporate annuity system hovered around 20,000, with fewer than ten million employees covered, despite the rapid growth of both the economy and the number of urban employees overall. In fact, we see that actual coverage was almost at a standstill. In 2008, the number of participating enterprises increased to 33,000, with over ten million employees covered. The corporate annuity fund grew to nearly 200 billion yuan. Actual coverage began to gradually increase, yet still maintained a slow pace. From 2008 to 2015, corporate annuity coverage rose by fewer than three percentage points. The slow development of corporate annuities has, to some extent, been caused by a notable lack of consistent and complete annuity tax policies, and especially by the long-term taxed-exempt-exempt (TEE) policy regarding individual contributions (Zheng Bingwen, 2010). With that said, it is generally more fully attributed to an excessive burden on enterprises arising from the social insurance system. With insufficient stimuli, most enterprises lack either the motivation or ability to establish corporate annuities after they pay as much as 40% of all social security contributions. Aiming to accelerate the development

178

Cheng

of corporate annuities, a preferential policy of deferred PIT has been implemented since 2014, yet with limited incentivized effect. Moreover, this policy is on an exempt-­exempt-taxed (EET) basis, that is, exemption is available during purchase and fund utilization, before taxation during pension reception. Under China’s current tax system, however, a tax of up to 45% is deducted when workers receive corporate annuities all at once. Uncertainties as to expected benefits have therefore resulted in an insufficient incentivized effect of the policy. The occupational annuity system was implemented relatively late, and some government organs and institutions have yet to apply them. Mandatory in nature, this system is intended to support the reformation of the pension insurance system for government organs and public institutions. With its funding mainly stemming from governments at all levels, the occupational annuity system is executed entirely under the auspices of the government. The occupational annuity system will foreseeably achieve the goal of full coverage within the next few years. In contrast, the corporate annuity system is unlikely to make rapid progress within the next few years even with relevant tax incentives if no major breakthrough is made in the ongoing reformation of the pension insurance system for urban workers and the burden of contributions paid for basic old-age insurance does not also drop sharply. The 13th Five-year Plan period may see a coverage gap anywhere from 10% to as much as 100%; specifically, corporate and occupational annuities will find themselves in embarrassingly different situations. For its part, the occupational annuity fund is large and can easily reach the level of its corporate counterpart. The occupational annuity system was implemented in tandem with the reformation of the pension insurance system and in accordance with the government’s ongoing reformation plan. In October 2014, various government agencies and public institutions set about implementing the annuity system among nearly 40 million employees. The average salary of these employees in the same year was about 58,000 yuan, an estimate based on NBS-released relevant wage/salary data, as well as the average salaries in state-owned scientific research, education, health and social security, public administration, and social organizations. The total amount of occupational annuity fund raised in 2014 was nearly 280 billion yuan, which was estimated with employer and employee proportions of 8% and 4%, respectively. Only the individual contributions are accrued by actual payments, whereas contributions of organizations fully funded by the government are in the form of empty accounts, as mentioned earlier. Accordingly, the investable part of occupational annuities is largely made up of individual contributions, accounting for 100 to 150 billion yuan per year. The cumulative total of the corporate annuity fund was

Building a Universal Social Security System for the Elderly

179

950 billion yuan in 2015. It is therefore estimated that the occupational annuity fund will catch up with its corporate annuity counterpart at some point in the 13th Five-year Plan period, and that the former’s investable part also will be considerable in scale, or about half of the corporate annuity fund. Given the huge difference in potential user group size, the occupational annuity fund being compared to the corporate annuity fund in scale actually indicates the lack of an inter-group sharing mechanism. An even tougher challenge lies in the fact that both types of annuities may face structural problems and unbalanced interests. The corporate annuity system actually covers monopolistic SOEs. Originally designed to be a supplement to pension insurance, it has changed over time into little more than a benefits policy for these same special enterprises. That being said, most private companies are financially unable to participate in the corporate annuity system because they are already burdened with mandatory contributions to basic old-age insurance. More importantly, they have been calling for a reduction in the basic pension insurance burden given ongoing difficulties in business operations amid the current economic downturn. In response to this situation, since 2015 policymakers have been phasing in corporate tax reductions. Unemployment and pension insurance rates have thus been reduced by one to two percentage points, but this is merely a drop in the bucket for the current private economy, hardly an adequate incentive for the corporate annuity system as a whole. In stark contrast, monopolistic SOEs have taken full advantage of the corporate annuity policy by turning monopoly-based excess profits into employee benefits, which can be viewed as compensations for the limitations placed on SOE salaries in recent years. Facts also show that SOEs make up a significantly higher percentage than private companies when it comes to the number of companies that have set up corporate annuities, and that these annuities are characterized by high concentrations and serious structural imbalance. Although central SOEs with corporate annuities in place make up fewer than 8% of all participating companies, relevant data shows that they account for over 50% of all employees covered and of the total corporate annuity fund balance. Industries with an accumulated corporate annuity of over 100 million yuan are mostly monopolistic ones such as electricity, petrochemicals, petroleum, and telecommunications. The corporate annuity system has even been censured as a “club of monopolistic industries” (Zheng Bingwen, 2016). With regards to occupational annuity, we also wonder whether it will eventually change into a de facto benefit policy for the public sector—most people outside it will not be able to share the supplemental annuities, whereas the internal annuity benefits will eventually be paid as taxes by ordinary people. Both annuity systems will inevitably become the focus of new equity-specific

180

Cheng

disputes regarding the OAS system if the reformation of the annuity system does not move towards universal development. 5

Toward Universal OAS

In what direction should—or could—universal OAS go? Ideally, it should satisfy the following goals: Let all people, regardless of regions, sectors, industries, or occupations, equally share the right to, and responsibility for, OAS; let people of different generations share the right to OAS in a sustainable manner, while at the same time shouldering corresponding responsibilities; and, finally, it should not only enable the elderly to enjoy a decent life, but also maintain the vitality of the labor market, the economy, and society as a whole. For the purpose of universal development, it is necessary for the OAS system reform to follow four basic principles. First, it should set the right priorities for equity. In order to realize full equity, the government should first address institutional inequality and unfair rules—this is a necessary prerequisite to effectively protecting the country’s vulnerable groups and redistribute social welfare. In the case of misguided priorities, an equity-oriented policy made with good intentions will probably fail to produce desirable results, and may instead even cause new equity-related conflicts. Equity-oriented efforts should therefore be both reasonable and effective. Second, set up a common system with different security levels. A universal OAS system does not need to offer absolutely even treatment, as the key is to let all people access a uniform system and policy in the same, selective manner. Reasonable differences in treatment also embody the fairness of the system. An OAS system compatible with the market economy should highlight the basic feature of systemic fairness, but is not supposed to distribute social security in an absolutely even manner (Zhu Ling, 2014). Third, the transferability of benefits and production factor mobility are equally important. Mobility is the embodiment of the value of production factors and is also the guarantee of system benefits. A uniform set of institutional rules that lacks full benefits transferability cannot guarantee the sharing of social security benefits. A basic principle within this context is that the OAS system is regarded as a free-flowing production factor, every bit as important as labor and capital. The EU thought of the social security system itself as a production factor in response to population aging and social security system modernization (European Commission, 1997).

Building a Universal Social Security System for the Elderly

181

Fourth, integrate the system with existing external resources. The OAS system is not just an independent internal system, but is closely linked with both the labor market and economic and social systems. A sustainable, universal OAS system inevitably requires coordination and integration with external resources. It is supposed to be a stabilizer of the economy and the society, a stimulus for economic development, and a regulator of income distribution. Accordingly, any pension insurance system reform should also be included into the overall socioeconomic system, and fundamentally rely on the continuous growth of productivity and economic development (Cheng Jie, 2015). The government should adhere to the concept of universal development as well as to the objectives and principles of the pension insurance system reform; accelerate substantial system consolidation; further adapt the OAS system to the existing labor market and the country’s economic development; base this reform upon the three pillars of the OAS system; and address deep-seated, complex problems with inter-group equity by devising policy incentives that are simple, fair, and inclusive. In order to do this, it is first necessary to take the national pension as the basis upon which to share and shape the OAS system. Though similar in concept to the national pension, the current urban and rural resident pension insurance system does not target all Chinese nationals. It features low security levels, significant regional disparities, and problems with institutional linkage and trans-regional transference. In order to realize the goal of full coverage with basic benefits, the national pension as the primary pillar of social security should be shared by all citizens in as fair a manner as possible. In fact, the government is supposed to safeguard this basic civil right. A national pension program based upon the current urban minimum living allowance can serve as the primary pillar of such a program. In 2014, there were 212 million people 60+ years old in China, each of whom ought to receive an annual pension of 3,180 yuan in accordance with the urban minimum living allowance standard. That would translate into an annual fiscal burden of about 670 billion yuan, or only 1.1% of China’s GDP/4.8% of the national revenue, in the same year. A World Bank research group (Dorfman, et al., 2013) also proposed a national pension scheme based upon 28% of the urban minimum living allowance or the average urban employee wage/salary (i.e., the average standard of OECD countries), which some estimates also indicate is financially viable. Such a national pension scheme is simple yet fair, as it equally covers all urban and rural residents and employees. Since it is consistent with the basic concept of universal development, the national pension scheme should serve as the basis for sharing the future OAS system. This would help make up for the deficiencies

182

Cheng

for urban and rural residents in the current pension insurance system. At the same time, an income replacement rate of about 20% brought in by a national pension would create more possibilities for reducing the contribution rates of the secondary pillar. Second, a more inclusive and transferable urban employee pension insurance system should be put at the core of OAS system sharing. A decent post-retirement life with a relatively high level of benefits must still rely on a solid secondary pillar. At present, the pension insurance system for urban workers faces numerous complicated problems. It must solve legacy problems while meeting new challenges arising from population aging and accelerated urbanization. At the same time, however, it should be reformed in a clear direction, namely, following the path of universal development and establishing a more inclusive and transferable pension insurance system. All people in the urban labor market, irrespective of rural or urban hukous, locals or migrants, or employees inside or outside the public sector, should, without exception, be included under a single institutional framework. Just as important as systemic unification is the full and free connection of the pension insurance system between urban and rural areas, between regions, and between sectors. Pension insurance accounts should be as fully mobile as the labor force. System consolidation should not remain at the policy level; rather, more attention should be paid to practical aspects in order to reduce the institutional costs of labor force flow and the transfer of pension insurance. As the national production factor market drives efficiency enhancement and economic growth, likewise, nationally-coordinated pension insurance is the driving force for efficiency enhancement and the sharing of the pension insurance system. The dual-system reform is expected to make a substantial breakthrough in the 13th Five-year Plan period. This reform has taken a crucial step forward, yet it has not been completed. It is necessary to further remove resistance against this reform from vested interests within the public sector and to avoid an unchanging or even widening gap in treatment after system consolidation. The current separate, closed fund operations should be replaced with uniform ones as soon as possible. What’s more, the government should not just unify separate systems but should ensure equitable and reasonable treatment so as to completely eliminate the existing obstacles to human resources flow between the public and market sectors. After separating the national pension function from OAIS4RUR, the government should properly link personal social insurance accounts with the basic old-age insurance system for urban workers, so as to ensure free bidirectional account flow and to protect the insured from losses of OAS benefits during job changes or migration between urban

Building a Universal Social Security System for the Elderly

183

and rural areas. Given that employment formalization is a long-term trend and a general law of economic development, the government should shift its policy focus in expanding OAIS4UE coverage from self-employed workers by instead encouraging them to join OAIS4RUR, and then, in case of changes in the employment mode, guide them to OAIS4UE. A subsidy policy similar to the one for contributions to OAIS4RUR can be applied to OAIS4UE, with a focus on supporting disadvantaged groups. Compared with post-retirement pension subsidies, pre-retirement contribution subsidies constitute a stronger incentive for individuals to buy pension insurance and, in the long run, will help improve the adequacy of pension benefits corresponding to contributions (Dorfman, et al., 2013). Third, an annuity system with fair rules that functions as part of a universal OAS system must be implemented. The current annuity systems will likely trigger future disputes over the fairness of the OAS system. Both corporate and occupational annuities are intended to be supplemental to insurance, but, in actuality, function very differently. Corporate annuities are not shared by the majority of workers, but instead have almost become a type of special benefit to certain stakeholders. Occupational annuities, which mandatorily guarantee post-retirement benefits for employees of government organs and public institutions, may also cause new conflicts typical of the dual pension insurance systems. Given the institutional arrangements for occupational annuities, the partial bookkeeping-based management method faces the potential risk of degeneration. Occupation annuities will likely be criticized as a privilege and another instance of dual systems, and as such, Chinese policymakers should stay alert to this possibility (Zheng Bingwen, 2015). The key to annuity system reform lies in establishing a system with fair rules so as to ensure that those who receive annuities have actually created corresponding value, and to also avoid annuities becoming merely the exclusive benefits of monopolies and administrative authorities. The coverage of corporate annuities needs to be gradually increased. More effective incentives for consideration include faster improvements in deferred taxation and other stimuli, an appropriately lowered threshold for corporate annuities, and a further reduction in the social security tax burden on enterprises. At the same time, it is necessary to stringently regulate the annuity policy of state-owned monopolies and, in particular, to exclude from the annuity system those enterprises with poor management, continuous annual losses, and lack of significant improvements in labor productivity. The occupational annuity system, which has just been launched, needs to be implemented with extra care—in particular, the partial bookkeeping-based management method requires

184

Cheng

careful consideration. Relevant authorities should strictly regulate the annuity operation mode and establish a scientifically-sound set of annuity standards that are dynamically adjusted when necessary, keeping the average labor productivity and wage/salary of urban workers in mind. In the meantime, they should improve methods of linking occupational annuities with corporate ones as soon as possible. References Cheng Jie 程杰 and Gao Wenshu 高文书. “Shisanwu shiqi yanglao baoxian zhidu yu laodongli shichang de shiyingxing ‘十三五’ 时期养老保险制度与劳动力市场的适 应性 [On the Adaptability of the Pension Insurance System to the Labor Market in the 13th Five-year Plan Period].” Reform 8 (2015): 84–95. Cheng Jie 程洁. “Yanglao baozhang de laodong gongji xiaoying 养老保障的劳动供给 效应 [Study on the Labor Supply Effect of Old-Age Security].” Economic Research Journal 10 (2014). Cheng Jie 程洁. “Yanglaojin de laodongli shichang niuqu 养老金的劳动力市场扭曲 [Study of Labor Market Distortion Caused by Pensions].” Studies in Labor Economics 6 (2015). Dorfman, Mark C., Philip O’Keefe, Wang Dewen, and Cheng Jie. “China’s Pension Schemes for Rural and Urban Residents.” In Matching Contributions for Pensions, ed. Richard Hinz, Robert Holzmann, David Tuesta, and Noriyuki Takayama (Washington, DC: The World Bank, 2013). Dorfman, Mark C., Robert Holzmann, Philip O’Keefe, Wang Dewen, Yvonne Sin, and Richard Hinz. China’s Pension System: A Vision (Washington, DC: The World Bank, 2013). European Commission. Modernising and Improving Social Protection in the European Union: Communication from the Commission, March 1997. Hou Huili 侯慧丽 and Cheng Jie 程杰. “Laolinghua shehui zhong yanglaojin daiji dainei shouruchaju yu yanglaojin zaifenpei 老龄化社会中养老金代际代内收入差 距与养老金再分配 [On Inter- and Intra-Generational Pension Gaps and Pension Redistribution in an Aging Society].” Population and Development 1 (2015). Zhang Zhanxin 张展新. “Jumin yanglaobaoxian gaige de chengxiang zhenghe chengxiao yu quyu fenge wenti 居民养老保险改革的城乡整合成效与区域分割问题 [Study of Urban-Rural Integration Results and Regional Segmentation in Resident Pension Insurance System Reform].” Studies in Labor Economics 4 (2014). Zhang Zhanxin 张展新. “Shuangchong zhuanxing, jundenghua gaige yu nongmingong diwei tisheng 双重转型、均等化改革与农民工地位提升 [Double Transformation,

Building a Universal Social Security System for the Elderly

185

Equalization-Oriented Reform and Improvement in the Status of Migrant Workers].” Studies in Labor Economics 6 (2015). Zheng Bingwen 郑秉文. Zhongguo yanglaojin fazhan baogao (2015): “disan zhizhu” shangye yanglaobaoxian dingceng sheji 中国养老金发展报告（2015）: “第三 支柱” 商业养老保险顶层设计 [China Pension Report 2015] (Beijing: Economic Management Press, 2016). Zheng Bingwen 郑秉文. “Jiguan shiye danwei yanglaojin binggui gaige: cong suipianhua dao dayitong 机关事业单位养老金并轨改革: 从 ‘碎片化’ 到 ‘大一统’ [Pension Insurance System Consolidation in Government Organs and Public Institutions: from Fragmentation to Unification].” Chinese Journal of Population Science 1 (2015). Zheng Bingwen 郑秉文. “Zhongguo qiye nianjin fazhan zhihou de zhengce yinsu fenxi—jianlun bufen TEE shuiyou moshi de xuanze 中国企业年金发展滞后的政 策因素分析—兼论 ‘部分 TEE’ 税优模式的选择 [Analysis of Policy Factors for Slow Corporate Annuity Development in China and Partial-TEE Incentive Option].” Chinese Journal of Population Science 2 (2010). Social Security Research Group, the Institute of Economics, Chinese Academy of Social Sciences. “Duoguizhi shehui yanglao baozhang tixi de zhuanxing lujing 多轨 制社会养老保障体系的转型路径 [The Transformational Path of Multiple Old-Age Security Systems in China].” Economic Research Journal 12 (2013). Zhu Ling 朱玲. “Chengzhen zhigong yanglao baoxian zhidu dui nongcun qianyi gongren shengji de yingxiang 城镇职工养老保险制度对农村迁移工人生计的影响 [Impact of the Urban Employee Pension Insurance System on the Livelihood of Rural Migrant Workers].” Comparative Studies 5 (2009). Zhu Ling 朱玲. “Jianli yu shichang xiang shiying de shehuibaozhang tixi 建立与市场 相适应的社会保障体系 [On How to Establish a Market-Oriented Social Security System].” Studies in Labor Economics 4 (2014). Zhu Ling 朱玲. “Zhongguo shehuibaozhang tixi de gongpingxing yu kechixuxing yanjiu 中国社会保障体系的公平性与可持续性研究 [Study on the Equity and Sustainability of China’s Social Security System].” Chinese Journal of Population Science 5 (2010).

Chapter 9

Dating and Marriage for College-Educated Single Women in the Cities Wu Yaowu1 Since its implementation in the 1980s, one of the more negative effects of China’s stringent population control policy has been an unbalanced sex ratio. Many Chinese families, especially rural ones, rely on gender selection techniques to realize their dream of having a boy. The sex-ratio imbalance has long been left uncorrected due to the household contract responsibility system’s demand for male laborers and the traditional model of old-age care, which is largely reliant on sons. Products of this imbalance make up the population of singles of marriageable age, drawing public attention to the marriage squeeze caused by a plethora of excess men. As a result of urban-rural income inequalities and the traditional planned economic system, an urban-rural split represented by the hukou system remains and has led to separate rural and urban singles of marriageable age. This split has further exacerbated the already-existing sexratio imbalance among singles of marriageable age in China. The sex-ratio imbalance occurs primarily in the countryside. To make already-dire matters worse, amidst the process of rapid urbanization in China, a large number of rural women of marrying age within the urban labor market are also moving towards finding spouses among urban singles of marriageable ­­ age. This has further reduced the number of women among rural singles of marriageable age, where there is already an excess of men due to the sex-ratio imbalance, adding to the current imbalance in this same market. Overrepresentation of men constitutes the biggest problem with rural date market. Imbalance also exists in the urban dating market, primarily because of rapid structural changes in the educational levels of young people. China’s population has historically been characterized by men having higher levels of education than women. When it comes to young people, however, the number of women who have received higher education is beginning to catch up with or even overtake the number of men, due to Chinese colleges and universities having expanded their scale of enrollment in 1999. These college-educated 1  Wu Yaowu is a Researcher at IPLE-CASS.

© koninklijke brill nv, leiden, 2019 | doi:10.1163/9789004407435_010

Dating and Marriage for College-Educated Single Women

187

women are mostly in the urban dating market, where it is difficult for them to find a spouse due to the traditional, dominant spouse combination type that stipulates that men are supposed to be higher than women in terms of education level. These same women are still active within the urban labor market as it evolves in favor of skilled workers and thus leads to higher returns on education (Wu Yaowu, 2010). They have become less interested in getting married because of a relative reduction in their benefits from marriage. A combination of the aforementioned factors has resulted in a number of “excess” women with high education levels in the population of urban singles of marriageable age. The fact that many urban women of marrying age have failed to find a spouse adversely affects the countryside, too, where men of marrying age are suffering from a lower marriage rate as a result of being squeezed out of appropriate marriage matches, according to an overall analysis of Chinese people of marrying age as a whole. As a result, by researching and addressing the issue of single women in the urban dating market, we are simultaneously trying to work out a solution to the issue of excess men in the countryside. In this paper, we will focus our analysis on the status of college-educated women in the urban dating market. 1

Urban Singles of Marriageable Age

1.1 Changes in the Sex Ration of the College-educated Population We tend to think of people who have completed a three-year college program or above as having received or being in the process of receiving higher education. By observing sex-ratio changes in this group by age range, we can see a rising proportion of women in younger age cohorts, routinely exceeding a 50% sex-ratio from the age of 28 on (see Figure 9.1). By comparison, the percentage of women in the age range from 45 to 64 still only makes up somewhere between 30% and 40% of people with high education levels among marriageable singles. Universities constitute an important part of the population of singles of marriageable age, as many people with high education levels initially meet their future spouses there. From this sex-ratio change alone we can see the reason for the appearance of a large number of unmarried urban women with high education levels: The male-to-female ratio of university students has dropped from 2:1 to 1:1 or even lower. Similar sex-ratio changes have also occurred in developed countries when they aggressively developed higher education (Goldin, and Katz, 2008). But compared with other countries, China has seen faster changes in a shorter

188

Wu

Figure 9.1 Changes in the sex-ratio of Chinese with high education levels Source: 2010 Census data

period of time, making it impossible for its people to change their marriage matching-specific mindset in a comparably timely manner. This will necessarily impact the population of singles of marriageable age. 1.2 Educational Impact on Dating Choices Under China’s current marriage law, women aged 20 or older are allowed to get married. As marriage is preceded by the search for a mate, there tends to be significant temporal overlap between the pursuit of higher education and prime years for getting married. This means that women who choose to pursue higher education tend to be less active in mate search and marry later than other women. For women of marrying age between 25 to 34, for example, a longer period of education, such as graduate education (whether in-progress or completed), will have an especially significant impact on marriage choices. With regards to samples of women with educational levels at the bachelor’s degree point or lower, Table 9.1 shows no difference in marriage rates between those who already graduated and the total samples overall for the years 2000 and 2005. Nearly all women in this age range have gone through the same stages of education. That contrasts significantly with the group of women holding master’s or doctoral degrees: The marriage rate of those who have already graduated dropped from 89.2% in 2000 to 76% in 2005; when including those who were still in the process of pursuing their degree, however, this rate dropped from 85.4% to 69.9%. We may conclude that education has a significant impact on the marriage choices being made by college-educated women. What’s more, the inverse relationship between women’s educational level and marriage rate is a stark fact, and this rate presents a continuous downtrend:

189

Dating and Marriage for College-Educated Single Women Table 9.1 Marital status of women aged 25 to 34 in %

Education

Illiterate Elementary Middle High Three-Year College Bachelor Master or Higher Total

Total samples

Graduated

2000

2005

2000

2005

93.6 96.5 94.4 91.5 89.7 88.3 85.4 93.4

91.5 96.1 94.0 88.7 86.3 82.0 69.9 91.4

93.6 96.5 94.4 91.5 89.7 88.5 89.2 93.4

91.5 96.1 94.0 88.7 86.5 82.5 76.0 91.5

Source: 2000 Census and 2005 1%-population sample survey data

there were notably fewer married women in the group of college-educated women in 2005 than in 2000. Differences in the age at which individuals are first married offer important information on spousal matching. We may understand the odds against college-educated women in the population of singles of marriageable age through analyzing their ages at the time of their first marriage, as shown in Figure 9.2. First of all, this age is directly proportional to education level. More schooling always postpones active mate search and first marriage. Second, the age at which a first marriage takes place is relatively stable. There was no significant change in the age at which a first marriage took place within each educational level cohort from 2000 to 2005. Further observation indicates that this age has increased slightly in the group of women aged 25 to 34: it rose by 0.1 to 0.2 years in groups ranging from those holding a high school to a bachelor’s degree, and by 0.6 years in the group of those holding at least a master’s degree. From the fact that women with master’s or higher degrees tend to experience their first marriage between the ages of 25.2 and 25.3, we can deduce another important fact: those who have successfully found a spouse were active in dating market at the same time that they were studying for their degrees. Chinese higher education organizations would need to change their program designs if they intended to address students’ success in both the labor and the dating markets. They should actively provide students with this message: the university or graduate school is not just a place for learning, they are also places where they should try to look for a mate, and eventually, their spouse.

190

Wu

Figure 9.2 Women’s ages at the time of their first marriage by education level Source: 2000 Census and 2005 1%-population sample survey data

2

Rural Citizens in the Urban Dating Market

It is an empirical fact that rural-urban migrants enter not just the labor market of the city to which they migrate, but also its dating market. Within this pattern, rural women marrying urban men remains the dominant force. By studying the hukou status of urban couples, we may roughly understand how attractive the urban dating market is to rural women (see Table 9.2). Of all young urban couples, wives aged 22 to 34 with rural hukous vs. their husbands’ non-rural hukous accounted for 6.9%, 5.4%, and 5.6% of all wives in this age range in 1990, 2000, and 2005, respectively; those with non-rural hukous vs. their husbands’ rural hukous, 1.3%, 2.8%, and 3.4%, respectively. As such, it can be inferred that rural women are more active than their male counterparts in the urban dating market. Both Beijing and Shanghai are known for having China’s tightest control over the urban hukou system. Taking into account all local families surveyed in 2000 and 2005, for example, those consisting of husband and wife with non-rural and rural hukous, respectively, made up 6.6% and 7%, as opposed to merely 2% and 2.9% in the case of families with the wife having a non-rural hukou and the husband a rural one. This is understandable, because only a very small number of rural-urban male migrants with financial success in the host town or city are able to overcome restrictions on hukous and housing and marry women with a non-rural hukou.

191

Dating and Marriage for College-Educated Single Women Table 9.2 Marital status of women by hukou type in %

Couple

Rural Wife/Urban Husband Urban Wife/Rural Husband

Nationwide

Beijing and Shanghai

1990

2000

2005

2000

2005

6.9 1.3

5.4 2.8

5.6 3.4

6.6 2

7 2.9

Note: Women here were 22 to 34 years old. Source: 2000 and 2005 Census data

The more common occurrence remains the situation in which women with a rural hukou marry men with a non-rural hukou whom they have found in the urban dating market. This means that rural women are squeezing out their urban counterparts on this market. Under the traditional spouse combination type of men holding higher levels of education than women, less-­educated rural women boast a comparative advantage over their better-educated urban counterparts. In contrast, the vast majority of rural men working in urban areas have no place in the urban dating market and are forced to seek spouses back home. Rural women’s participation in the urban dating scene has a limited impact on local urban women due to the significant gaps in educational level between them. Yet it has a much more severe impact on single men in the countryside, a fact which plays a leading role in the sex-ratio imbalance among people of marrying age. Consequently, men are being further squeezed out of the rural dating market, where there are already more men than women. Additionally, since urbanization mainly attracts rural families, single men end up representing an even higher share of the shrinking rural population. Table 9.3 shows the education levels of women aged 22 and 34 in the urban dating market and that of their husbands. Numbers in the second and third columns represent the number of married women’s years of education under different spouse combination types. In 2000, women with a rural hukou like that of their husbands received 7.64 years of education on average; those with a rural hukou vs. the urban hukou of their husbands, 8.83 years, or 1.2 years more than the first type of women. That compares with 8.01 and 9.46 years in 2005. This indicates that rural women who are able to marry an urban man tend to be better educated. On the side of women with a rural hukou who have married men with a non-rural hukou, their husbands received measurably fewer years of education

192

Wu

Table 9.3 Years of education by spouse combination type in years

2000

Women with rural hukou Women with non-rural hukou

2005

Women with rural hukou Women with non-rural hukou

Married women Husband with rural hukou

Married men

Husband with Husband with Husband with non-rural rural hukou non-rural hukou hukou

7.64

8.83

8.45

10.18

9.56

11.19

9.47

11.81

Married women Husband with rural hukou

Married men

Husband with Husband with Husband with non-rural rural hukou non-rural hukou hukou

8.01

9.46

8.66

10.85

10.19

11.77

9.85

12.28

Note: Women here were 22 to 34 years old. Source: 2000 and 2005 Census data

than men with a non-rural hukou who have married urban women with a nonrural hukou. In 2000, the two types of husbands received 10.18 and 11.81 years of education on average, respectively, with a gap of 1.63 years between them. In 2005, these numbers were 10.85 and 12.28 years, respectively, with a gap of 1.43 years. We may safely say that the best urban men will choose the best urban women, and that uncompetitive men in the urban dating market will choose those rural women who are searching for spouses in the same market, and who largely constitute the group of best-educated rural women. Women who select rural men for marriage feature the second highest overall education level. Given the aforementioned spouse combination types, it is imaginable that a sizeable group of men unable to find spouses will appear in the countryside. These losers in dating market are also the least competitive in the labor market.

193

Dating and Marriage for College-Educated Single Women

3

Education Matching and Subjective Well-being

The traditional spouse combination type must be eliminated to ensure that more college-educated women are willing to marry and, thus, to lower the percentage of single women at a time when women maintain higher education levels than men and have become dominant in higher education. Unfortunately, however, there was no significant change in this spouse combination type from 2000 to 2010, according to data from 2000 and 2010 ACWF sample surveys on women’s social status (see Table 9.4). Of all married women who received higher education, the percentage of those with a higher education level than that of their husbands was 34.2% in 2000, dropping slightly to 32.4% in 2010. Of all married men who received higher education, the percentage of those with a higher education level than that of their wives was 93.3% in 2000, a figure that dropped by only 1.7 percentage points, to 91.6%, in 2010. Given a limited sample size, we are still unable to assert that this conclusion is stable, although it is consistent with national population census results. Table 9.4 Education level of spouses in % and people

Women

Men

Secondary University Total

Secondary

University Total

23.0 58.0 19.0 981

28.4 64.9 6.7 299

24.2 59.6 16.1 1,280

24.9 52.3 22.8 832

40.4 51.2 8.4 838

32.7 51.7 15.6 1,670

2000 Same Husband higher Wife higher Observed value

32.5 37.7 29.8 806

50.3 15.5 34.2 166

35.6 33.9 30.5 971 2010

Same Husband higher Wife higher Observed value

34.4 30.4 35.2 874

49.1 18.5 32.4 876

41.8 24.4 33.8 1,750

Note: The samples here were 25 to 40 years old. Source: Data from 2000 and 2010 surveys on women’s social status

194

Wu

The expansion of Chinese colleges and universities has been hindered by government quotas on high school students in more recent years. The Central Government has thus begun to further require high school education in an attempt to remove this bottleneck. It is expected that the government will succeed in this area thanks to its financial strength and capacity for implementation, and that as a result, Chinese higher education organizations will continue to expand. While this is required for changing China’s economic growth pattern, its influence on the dating market has yet to receive attention. Following the further expansion of higher education in China, even greater numbers of unmarried women will appear as long as the traditional spouse combination type continues to be rejected by a significant number of women with high education levels. Several surveys have asked the question of whether or not women who have received higher education lack a sense of happiness under different education matching patterns. In order for the respondents to better describe their wellbeing status, both 2000 and 2010 surveys on women’s social status included eight subjective questions, such as “Have any of the following things happened to you in the past month? ex: Can’t fall asleep.” The options and corresponding number of responses included, “No, 0; occasionally, 1; sometimes, 2; often, 33; no comment, 9.” We then defined those who selected “No comment” as “Lost,” those who selected “No” as “1,” and those who selected any other option as “0.” The total score of the respondent for these eight questions was viewed as her subjective well-being. Table 9.5 presents the overall subjective well-being scores of the respondents under different matching patterns. We only compared two groups, that is, women who had received secondary and higher education, respectively. It turned out that in both 2000 and 2010, women within the second group had lower subjective well-being scores than those of the first group. Women within the second group whose husbands had higher education levels than theirs— that is, the traditional spouse combination type—did not have high subjective well-being scores, and, in fact, had scores that were significantly lower than the mean in 2000 and slightly lower than those of 2010. The highest scores belonged to women with the same education level as that of their husbands. Matching of men and women from the same social class is the dominant pattern in all nations globally. Following these survey results, we can cautiously infer that China also follows this pattern. What happens when women are better educated than their husbands? Their subjective well-being scores were higher than the mean in 2000 but lower than the mean in 2010. The sample size of women who had received higher education in 2010 might be too small in size for micro-empirical studies.

Dating and Marriage for College-Educated Single Women

195

Table 9.5 Subjective well-being by combination of educational level of spouses (overall score)

Women Secondary

University

Men Total

Secondary

University

Total

2000 Same Husband higher Wife higher Total

5.74 5.82

5.53 4.53

5.69 5.72

6.44 6.15

6.30 6.49

6.40 6.24

5.57 5.72

5.66 5.42

5.59 5.67

5.96 6.18

6.33 6.42

5.99 6.24

2010 Same Husband higher Wife higher Total

5.97 5.65

5.74 5.55

5.83 5.61

6.66 6.37

6.29 6.25

6.43 6.31

6.00 5.88

5.53 5.64

5.78 5.76

6.44 6.46

6.40 6.28

6.43 6.37

Note: The samples here were twenty-five to forty years old. Source: Data from 2000 and 2010 surveys on women’s social status

Since the robustness of the results was affected by sample size reduction due to observation by year, we blended the data of 2000 and 2010 to calculate the subjective well-being scores of married women who had received higher education. The highest score, or 5.71 points, belonged to women with the same education level as that of their husbands, followed by those better educated than their husbands (at 5.55 points) and those less educated than their husbands (at 5.41 points). Women who had received higher education saw lower subjective wellbeing scores than those who had only received secondary education. We cannot assert that this is caused by marriage, but men who had received higher education had almost the same subjective well-being scores as those who had only received secondary education. The causes for this still require further study. Another important result was gender differences in subjective wellbeing scores. Men had significantly higher well-being scores across the board than women, irrespective of education level or matching pattern. If women’s

196

Wu

failure to obtain high subjective well-being from marriage is the cause of their opting to stay single, how, then, was the subjective well-being of unmarried women, especially those with high education levels? Contrary to what might be expected, it was even lower, or only 4.97 points. In contrast, single men who had received higher education saw almost the same score as that of their married counterparts, with scores of 6.3 and 6.32 points, respectively. From the subjective well-being scores of women who have graduated from colleges or universities, we can most likely conclude that unmarried women have the lowest subjective well-being, and that married women have lower subjective well-being than both women who have only received secondary education and men who have received higher education. 4

Women’s View of Housework

Housework generally entails a higher cost in terms of time for women with high education levels and high incomes. In order to save time spent at home, they will often seek housekeeping services or assistance from other family members. While also having fewer children than previous generations, these college-educated mothers still need to take care of and educate their children in order to increase the latter’s human capital. This scenario indicates that college-educated women show a different pattern in nurturing children than their less-educated counterparts. In terms of the pattern of nurturing infants aged three or below, only 23.7% of married women aged 20 to 49 with an education level of three-year college or above assumed, or had their spouses assume, this responsibility, as opposed to 62.2% for the group of women with an education level of two-year college or below, according to data from the 2010 third ACWF survey on Chinese women’s social status (see Figure 9.3). The need for and desire to have children depends not just on the women themselves, but also on their husbands and the couples’ family members. As a result, those women who are unwilling to bear children will often refuse to marry in the first place out of a desire to avoid bearing and raising children. This choice is indirectly influenced by higher education. Cohabitation, which is increasingly common nowadays, may somewhat serve as an alternative to traditional marriage. It is an indisputable fact that women are becoming the dominant force among those with high education levels. This is also the main contributor to declining levels of marriage amongst those same highly-educated women. We can thus infer that changing the traditional spouse combination type will be necessary for addressing the issue of the increasing number of single

Dating and Marriage for College-Educated Single Women

197

Figure 9.3 Urban married women aged 20 to 49 in terms of how they nurture children aged three or below Source: Calculations based on data from the third ACWF survey on Chinese women’s social status

­ omen—a change that will take a great deal of time. Increased instances w of women having higher levels of education than their husbands will likely appear only after both men and women have accepted a new marriage pattern. Otherwise, a large number of single, college-educated women will remain unmarried if men lacking in higher education remain unwilling to marry them, even if these women are willing to marry the former. 5

Women Candidates for and Holders of Master’s and Doctoral Degrees: a Group Deserving of Special Attention

The imbalance in the dating market caused by changes in the mix of education levels has had a significant impact on women candidates for and holders of master’s and doctoral degrees—that is, the best-educated women. Regarding the marital status of these women, Table 9.6 shows that the marriage rates of both them and their male counterparts fell significantly between 2000 and 2010, with fewer than 50% of graduate degree-holding women being married in 2010. The marriage rate of women aged 25 to 34 dropped most significantly.2 Due to the annually-varying numbers of graduate students enrolled, however, total sample size estimates are less accurate than data from individual years. 2  2000, 2005, and 2010 Census data were all NBS aggregates.

198

Wu

Table 9.6 Percentages of married candidates for and holders of master’s and doctoral degrees by age group in %

Age

2000

2005

2010

2000

Women 20–24 25–29 30–34 35–39 40–44 45–49 50–54 55–59 60–64 ≥ 65 Total

5.2 59.1 87.8 90.5 87.9 88.2 77.4 94.1 68.8 77.5 63.3

3.3 45.5 85.7 91.9 92.8 94.0 88.4 90.9 86.8 74.8 62.0

2005

2010

Men 1.6 36.7 81.6 88.8 90.6 90.9 88.8 89.5 88.8 72.9 49.4

1.4 42.2 83.3 94.4 95.1 93.9 90.3 92.7 92.2 85.0 70.5

1.8 34.8 84.2 95.1 97.4 97.9 95.9 95.5 95.8 95.7 76.2

1.0 27.9 78.3 92.0 95.9 97.1 96.7 96.8 95.5 89.5 60.1

Source: Census data of relevant years

It is notable that the number of graduate students aged 30 to 34 and from 35 to 39 are both declining. The percentage of married women in these two age ranges dropped more significantly in the 2005–2010 period than in the 2000– 2005 period. Accordingly, the real post-2005 downtrend would be underestimated if the marital trend of women candidates for and holders of master’s and doctoral degrees was analyzed using data of the 2000–2005 period. In other words, the current status of these women in dating market may be even worse than the estimations presented in this paper. Marital choices vary with age. An accurate assessment on long-term variations of marriage rates requires a significant length of observation. Given the currently available data, it is advisable to interpret any estimations with care. What’s more, it is necessary to select certain age ranges in order to ensure that estimations are consistent with reality and that the sample size is adequate. Some graduate students are too young to be sampled. In short, the strategy for selecting age ranges should take into account both the efficiency of estimation and the sample size. University expansion in China has narrowed several gender gaps among those who have received or are receiving higher education, especially graduate students, as shown in Figure 9.4. In 2010, women already outnumbered men in

Dating and Marriage for College-Educated Single Women

199

Figure 9.4 Percentages of women candidates for and holders of master’s and doctoral degrees and their variations Source: Census data from relevant years

the age range from 20 to 29; that is, women constituted the majority of incoming and new graduate students. It is easy for women aged 35 or above to find a matching spouse, primarily because men account for a larger share of candidates for and holders of master’s and doctoral degrees and they tend to prefer spouses with the same or slightly lower education levels. But the sex ratio remains unfavorable for women age 34 or below. It will be more difficult for women candidates for and holders of master’s and doctoral degrees to find a matching spouse if the spouse combination type remains unchanged. An increase in education level means that they will face the risks of older age and fewer spousal candidates at the same time. How do people with different education levels match one another on the population of singles of marriageable age? According to the marital stratification hypothesis, both men and women normally prefer the opposite sex in the same social stratum (Choo and Siow, 2006; Schwartz and Mare, 2005). If the number of men in a given social stratum decreases, however, they will marry more women from higher social strata. After World War I, for example, many Frenchwomen had to marry men from lower social strata due to the decreased number of young Frenchmen overall (Abramitzky, et al., 2011). Table 9.7 shows that the basic spouse combination type from 2000 to 2005 consisted of a man’s education level being higher than or the same as that of his wife, with the education level serving as a proxy variable of his social stratum. This preference also exists among women who have received higher education, with no signs of change. Of all women with a three-year college

200

Wu

Table 9.7 Education levels of married people aged 25 to 44 in %

Education

Wife Same

Husband

Husband higher

Same

Wife higher

32.4 28.6 17.3

6.0 1.5 –

39.6 36.3 22.6

9.4 2.1 –

2000 Three-Year College Bachelor Master or Higher

45.9 56.7 48.1

23.3 7.7 – 2005

Three-Year College Bachelor Master or Higher

47.5 57.6 48.6

26.1 7.4 –

Source: 2000 Census and 2005 1%-population sample survey data

educational level, the proportion of those whose husbands had the same or a higher education level was 69.2% in 2000 and 73.6% in 2005; for women with a bachelor’s degree, this proportion was 64.4% in 2000 and 65% in 2005; for women candidates for or holders of master’s or doctoral degrees, this proportion was 48.1% in 2000 and 48.6% in 2005. These women still required that their future husbands held the same or higher education level; barring that, they may opt to remain single. On the other hand, men indicated a willingness to find a spouse with a lower education level than theirs. The higher a man’s educational level, the more likely it was that his wife had a lower level of education than him. Although the expansion of Chinese universities has changed the sex ratio of the group of people who have received or are receiving higher education, women’s spousal selection patterns remain unchanged, making it more likely that their attempts at matching will be met with failure. With the growing number of women graduates, men’s matching pattern in the population of singles of marriageable age has started to change. Of all men surveyed with a three-years’ college education, the percentage of those whose wives had the same or higher education level rose from 38.4% to 49%; for men with a bachelor’s degree, this percentage rose from 30.1% to 38.4%; for male candidates for or holders of master’s or doctoral degrees, this percentage also grew from 17.3% to 22.6%.

Dating and Marriage for College-Educated Single Women

201

Five years is not too long a time to search for a mate in the dating market, although we can cautiously conclude that men have begun adjusting their spousal selection pattern to the changing environment, in contrast to the lack of such an expectation change on the part of women. This may be the reason why the phenomenon of unmarried women is more noteworthy than that of excess men. Will women adapt over time to the changing supply and demand relationship in the dating market? This question has yet to be answered through new a data analysis of large samples. 6

Conclusions and Implications

China’s urban dating market has changed considerably over the past 30 years. Marital choices are affected by factors including the sex-ratio imbalance caused by China’s population control policy, education-level changes that favor women as a result of university expansion, the technical evolution of the urban labor market towards a preference for skilled workers, and the participation of rural women of marrying age as new competitors in the dating market. A combination of these factors has contributed to the appearance of and increase in unmarried women in urban areas; college-educated women are under greater professional and familial pressure and see a lower marriage rate as a result. What’s more, rural men with low education levels have consequently been suffering from being squeezed out of the dating market. The history of higher education in developed countries shows that women will continue to become dominant and display increasing participation in the labor market thanks to rising education levels (Goldin, Katz, and Kuziemko, 2006). The sex structure of higher education in China has reversed within a shorter period of time than typically seen in developed countries. Chinese women’s participation in the labor market has long been at a high level globally, a tradition that will encourage women with high education levels to participate in the labor market and to take on very competitive jobs and positions. This will reduce their time at home. On the whole, unmarried women who have received higher education are largely successes on the labor market (Bertrand, Goldin, and Katz, 2010), with Chinese women being no exception. College-educated women are now much more likely to stay unmarried. What losses will China suffer at a time when its working-age population is shrinking, and with TFR much lower than the replacement level? It will first suffer from a decline in the number of newborn babies, particularly those that might be born into what may be potentially the best families. The inter-­generational transmission of human capital within the family structure therefore runs the

202

Wu

risk of being interrupted by a group of people with the greatest biological and sociological advantages who are unwilling to bear children—that is, bettereducated parents are more valuable in terms of a child’s education (Currie, and Moretti, 2003). From a micro perspective, these unmarried people, when they are old, will face higher physical and mental health risks due to lack of family care and comfort, even if they are able to accumulate adequate retirement funds to keep them financially solvent. What policy implications can be drawn from these research conclusions on the urban dating market? To begin with, it has become the de facto situation that women hold the dominant position at the stage of higher education in developed countries. Chinese authorities and organizations should then devise their own corresponding measures in response to this new global paradigm, such as by providing university students with marital and reproductive education, thus helping them prepare for entering the dating market and having a family after they graduate. It is necessary to help those young people who are still willing to marry avoid failing to find a spouse due to inadequate partner choices on the dating market and/or inappropriate expectations—both of which might be avoided by providing individuals with sufficient knowledge and information before they begin their search for a partner. Secondly, it is advisable to pay attention to, and guide, changes in the country’s spouse combination types. When deciding on marriage matching, individuals should give more consideration to the comparative advantages of doing housework than they have previously. Women with competitive advantages in the market should be encouraged to marry men with housework-related advantages yet a lower education level. References Abramitzky, Adeline Delavande and Luis Vasconcelos. “Marrying Up: The Role of Sex Ratio in Assortative Matching.” American Economic Journal: Applied Economics 3 (2011): 124–157. Bertrand, Marianne, Claudia Goldin, and Lawrence Katz. “Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors.” American Economic Journal: Applied Economics 2 (2010): 228–255. Choo, Eugene and Aloysius Siow. “Who Marries Whom and Why?” Journal of Political Economy, 114 (1) (2006): 175–201. Currie, Janet and Enrico Moretti. “Mother’s Education and the Intergenerational Transmission of Human Capital: Evidence from College Openings.” The Quarterly Journal of Economics 118 (4) (2003): 1,495–1,532.

Dating and Marriage for College-Educated Single Women

203

Goldin, Claudia and Lawrence Katz. The Race Between Education and Technology (Cambridge, MA: Harvard University Press, 2008). Goldin, Claudia, Lawrence Katz, and Ilyana Kuziemko. “The Homecoming of American College Women: The Reversal of the College Gender Gap.” The Journal of Economic Perspectives 20 (No. 4) (2006): 133–156. Schwartz, Christine and Robert Mare. “Trends in Educational Assortative Marriage from 1940 to 2003.” Demography 42 (2005): 621–46.

Index 12th Five-year Plan 31 13th Five-year Plan 34, 43, 61, 103, 106, 109, 173, 178–179, 182 14th Five-year Plan 61 15th Five-year Plan 61 18th Session of the 12th NPC Standing Committee 19 18th Session of the Standing Committee of the 12th National People’s Congress  5 1964 Census 2 2000 Census 189–190, 200 2005 Census 191–192 2007 World Population Data Sheet 10 2008 financial crisis 92 2010 Census 6–7, 43, 45–46, 134–136, 188, 197 2010 Chinese General Social Survey  30 5-Point Scale 139, 155 absolute poverty 106–109, 125 accounting computerization 75 administrative costs 19 administrative interference 104 administrative system 130–131, 164 admittance of migrant children to public school 123 affordable housing 31, 122–123 age distribution 46 age structure 68, 72–73, 76 age-appropriate population 39 age-structure effect 26 aging countries  11 aging population 2, 10, 14, 24, 73 agricultural sector 85 All-China Women’s Federation 134 Amendment to the Population and Family Planning Law  34 Amendment to the Population and Family Planning Law (the Draft) 19 Americas 109 An Open Letter to All Communist Party Members and Communist Youth League Members on the Control of Population Growth of Our Country 3 annual fiscal burden 181

annual growth rate 52, 54, 111 annuity system 176–180, 183 annuity tax 177 Anthony Giddens 69 Asian countries 85 Australia 84, 99 average growth rate 14 average income 108, 110–111 average level of income 108 average monthly living expense 116 average monthly wage 111–113 average resident income 94 average wage 96, 110–113 baby boom generation 16 bachelor’s degree 139, 188–189, 200 basic national condition 82 basic necessities 107 basic old-age insurance for urban employees 165, 172 basic old-age insurance system 182 basic pension insurance 175, 179 basic public health fund 125 basic public service 68, 80, 105, 124, 130–132 basic public service delivery mechanism 80 basic public service system 105, 124 basic public welfare institution 131 behavioral adaptation 132 benefits exclusively for female employee 146 benefits from marriage 187 benefits transferability 180 biostatistics 20 birth control  1–6, 17–19, 21–25, 32–33, 61–62 birth intervals 3–4 birth level 19 birth rate 2, 4, 14, 18, 20, 28, 43 birth restrictions 6–7, 9, 22, 24 breast-feeding 156, 158 buffer period 1, 19 burden on enterprise 177, 183 business administration 75 business crisis 16 business tax 104

206 Cai Yifei 39 n. 1 Canada 99, 118 candidates for and holders of master’s and doctoral degrees 197–199 capacity for implementation 164, 194 capital gain 95–96 capital input 12 capital market 104 capital-exporting country 15 care services for infants 30–31 career bottleneck 156 career development 28, 105, 134, 156, 160 career goal 149–152, 157 Career planning 149–151, 156 career preference 149 central SOE 179 Chen Youhua 21 child care 28 child development 32–33, 36 childbearing age 12, 18, 20–21, 24, 26–27, 33, 60 childcare centers 32 children’s education 28–29, 37, 54, 124 children-specific costs 28 China Industrial Economics 94 China Labor Statistics Yearbooks 172 China Population and Development Research Center  26 China Report of the Development on Aging Cause 2013  7 China Rich List 151 China Statistical Yearbook 90, 112, 115, 118–119, 121, 165, 168, 172, 177 China Statistical Yearbook for the Regional Economy 52 Chinese citizen 166 Chinese colleges and universities 186, 194 Chinese national 181 Chinese people of marrying age 187 Chinese policymaker 183 Chinese population 40 Chinese Premier 32, 38 Chinese society 109 Chinese Working Women Survey 2016  137–141, 143–155 city-based dualistic structure 109 civil right 166, 181 Club of Rome 8

Index coefficient of variation 93 cohort component method 40, 43, 45 college age students 61 college entrance examination 124 common good 37 communication between superiors and subordinates 143–144 communication cost 141 communications engineering 75 comparative advantage 191, 202 compensation and incentive mechanisms 130 comprehensively and moderately prosperous society 161 compulsory education 80, 105, 123–124 compulsory participation 164–165 constant price 106 consumer goods 118, 137, 140–141, 147, 149 consumer market 14 consumer spending 116–119, 121–122 contemporary women 159 contribution base 174–176 contribution rate 182 corporate annuities 176–179, 183 corporate annuity coverage 176–177 corporate annuity policy 179 corporate annuity system 176–179 corporate benefit 159 corporate contribution 176 corporate employee 161, 175 corporate management system 156 corporate payroll 176 corporate tax reduction 179 cost of education 37 costs of living 115 cost-sharing mechanism 131 cost-sharing responsibility 131 county town 58 CPC Central Committee 80, 106 CPC Central Committee’s Proposal on Formulating the 13th Five-Year Plan (2016-2020) on National Economic and Social Development 106 CPC Committee 2 CPC Committee of the Family Planning Commission 4 cross-regional compensation mechanism 131

Index cultural cohesion 132 Cultural Revolution 3 current-period contribution 169 Czech Republic 29 dating choice 188 dating market 186–187, 189–192, 194, 197–198, 201–202 Decision of the CPC Central Committee and the State Council on the Full Implementation of the Two-Child Policy and the Reform and Improvement of Family Planning Service Management  32 Decision on Reforming the Pension Insurance System for the Staff of Government Departments and Public Institutions 174 Deepa Narayan 108 deferred taxation 183 deindustrialization 15 demographic change 47 demographic conditions 17 demographic dividend 13–14 demographic group 5 demographic problem 4, 6, 12, 23 demographic situation 1–2, 17, 39–40 demographic structure 4–5, 10, 21–22, 24, 26, 68, 73 demographic transition 13–14, 28 demographic window of opportunity 22 Denmark 36, 99 dependency burden 15 dependency ratio 13–14, 16–17, 22 developed countries 95–102, 187, 201–202 developing countries 17, 98–99 developmental factor 88 developmental stage 82 direct tax 98 Directive on Promoting Family Planning 2 discontinuation of premium payment 169 dispatching of labor 169 distributive inequity 104 early education service 35 East Asia 10, 13 East Asian economies 13 East Asian miracle 13 East Asian Miracle: Economic Growth and Public Policy 13

207 e-commerce 75 econometric model fitting 40 economic and social development 40, 45, 85, 106, 134–135 economic and social structures 65 economic basis 102 economic burden 14 economic development pattern 75, 102, 104, 151 economic gap 94 economic globalization 15 Economic Growth and Income Inequality 84 economic growth pattern 24, 194 economic growth rate 12, 102 economic structure 102, 133 economic systems 24 economic take-off 14 economically developed region 133 economies of scale 77 education level 67, 71, 81, 89, 127, 129, 139, 187, 189, 191–197, 199–202 education resources 37, 59, 61 education supply 105 educational background 29–30 educational barriers 60 educational budget 123 educational expense 29 educational fairness 61 educational materials 40 educational resources 123 educational spending 29, 31, 37 educational stage  41, 43 educational system 39–40 elderly care service 24 elderly population 11–12, 14–16, 22, 39 elementary school 124 elementary school student 6, 54 elementary school teacher 58 elementary school-age population 41, 43, 47 elementary schoolers 61 empirical studies 194 employee wage 163, 181 employment discrimination 136, 156–157 employment potential 31 employment situation 134 employment stability 77–78, 168

208 empty nesters 7 Engel’s coefficient 118–120 entrance examination 124 environmental pollution 8 environmental pressure 8 environmental problems 8 environmental protection 136–137, 140–141, 145, 147–149 equal citizen treatment 166 ethnic minorities 4 EU member countries 17 European Commission 180 European Debt Crisis 16–17 European Union  17 Eurozone 17 exit and entry document 81 expenditure cap 110 extra-curricular educational services 37 fair access to residents’ rights 161 fair and equitable employment 133 fair rule 183 fair treatment 174 fairness in education 40 family planning 3, 5, 19 family planning authorities 2–3 Family Planning Commission 2, 4, 27–28 family planning committees 3 family policy reform 32–33 family structure 201 family support policies 32–33 family welfare 132 family-planning policy 1–5, 7–10, 12, 18, 23 family-planning regulations 4 fast-moving consumer goods 137, 140–141, 147, 149 feelings of being excluded 122 female employment 34–35, 133, 157 female employment rate 133 female labor force participation 36 female leader 151–155, 159 Female Leadership 152–153, 159 female-exclusive benefit 133 Feng Guanggang 101 fertility behavior  25, 27 fertility control 3 fertility indicators 24 fertility policy  3

Index fertility rate  2 fertility rebound 19 fetal gender identification 12 Fifth National Population Census of the People’s Republic of China  6 Fifth Plenary Session of the 18th CPC Central Committee 106 financial management 75 financial stress 27–28, 30 first-mover advantage 129 fiscal deficits 102 fiscal expenditure 101 five insurances and one fund 125–126 floating population 30–31, 58, 64, 68, 75–77, 79–80, 109–111, 122–126, 129–131, 167, 169 flying geese paradigm 93 foreign investment 93 formal schooling 36 Four Asian Tigers 85 France 11, 17, 29, 84, 98 full coverage with basic benefits 181 further social development 78 Gao Wenshu 39 Gary Fields 85 gender awareness 156 gender difference 134, 138–139, 147, 151, 153–155, 195 gender discrimination 135, 137, 143, 155, 157 gender equality 32–33 gender preference 23, 145 gender selection technique 186 gender structure 23 Gender-specific Benefits for Women 148–149 general hospital 34 Germany 29, 84, 98 Gini coefficient 82–84, 86–88, 90–91, 93, 98–99, 101 glass ceiling 138–141 global 118, 133, 202 government agencies 175–176, 178 government departments 70, 78, 174 government officials 8 government organ 161, 165, 171–175, 178, 183 government quota 194 government subsidies 157, 163, 166 government work report 32

Index graduate education 188 grass-roots authorities 164 graying 11 Greece 17 growth curve method  46 He Lixin 100 Health and Family Planning Commission of Shandong Province 27–28 health care 14, 32, 137, 140–141, 147, 149 health problems 125 Healthcare Handbook for Children Aged Zero to Six 124 Henan Provincial Regulations on Population and Family Planning  18 hidden income 88, 100 high school 66, 105, 124, 139, 189, 194 high school-age population 41 high schoolers  61 high welfare trap 17 high-end industries 77, 93 high-income bracket 89 high-income group 90, 145 highly-educated women 159, 196 high-welfare system 17 Hiroshi Sato 100 hollowing-out 15 Hong Kong 85, 134 host society 109 Hou Huili 100, 171 household contract responsibility system 186 household income 118 household registration 18, 64–67, 69, 71, 73, 76–78, 81, 131 household registration reform 64, 66–68, 76, 78, 130 household registration system 64–69, 72, 75–76, 79, 110, 129–130 housekeeping service 196 housing fund 112, 114, 123, 125–126 housing fund program 126 Huang Wenzheng 20 hukou 115–121, 18, 24, 43, 45–46, 61, 64–69, 71, 73–76, 78–81, 114, 123–127, 129–130, 169–170, 182, 186, 190–192 hukou quota 66 hukou system reform 24, 67

209 human capital 71–72, 76, 95, 105, 132, 196, 201 Human Development Report 1996 86 human resources 8, 13, 73, 77, 98, 124, 182 human resources flow 182 Hurun Reports 151 importance index 154 incentivized effect 178 incidences of poverty 106, 110 inclusive and transferable pension insurance system 182 inclusive and transferable urban employee pension insurance system 182 inclusive basic family welfare system 132 inclusive basic welfare system 131 inclusive national pension system 166 inclusive social insurance reform 167 income distribution 30, 38, 82, 84–86, 91 income distribution reform 82–83 income distribution system 83, 110 income earner 105, 111 income gap 71, 82–93, 95–96, 98–104 income level 91, 114, 145 income redistribution 96, 99 individual ability 89 individual contribution 162–164, 169, 176, 178 industrial capital 15 industrial economies 16 industrial restructuring 74, 78 industrial structure 12, 24 industrial transformation 11 industrial upgrading 75–76, 78 industrialization 8, 20, 45, 70, 84–85, 95 industrialized countries 109 infant care class 36 informal employment 127, 168 information engineering 75 information technology 75 in-hospital delivery 33 initial income distribution 38, 96 initial value 45 input-output ratio 163 Institute of Economics, Chinese Academy of Social Sciences 173 institutional arrangement 164–165, 167, 170, 176, 183

210 institutional barriers 95, 129–130 institutional conflict 161 institutional isolation 110 institutional linkage 181 institutional reform 82 institutionalized risk 70 Insurance account 169, 175, 182 insurance coverage 165, 167–171 insurance fund 174–175 insurance fund raising 175 insured contributor 171 interest rate 104 inter-generational distribution of income 16 inter-generational support structure 16 inter-generational transmission 201 inter-group equity 181 inter-group income gap 88 Interim Measures for Household Registration of Migrant Workers in Shenzhen City (SFHB [2012] No. 40) 66 Interim Regulations on Residential permits 80 international community 10 international economics and trade 75 International Labor Organization 34 international migration 41 interpersonal interaction 159 interpersonal relationship 138, 141–142, 159 interpersonal relationships at work 138, 141 inter-provincial difference 54 inter-regional continuation of education funding 132 inter-regional difference 124 inter-regional disparities 76, 78, 130 inter-regional gap 45, 71–73, 77 inter-regional imbalance 62 interrelationship between family and work responsibilities 158 intra-group gap 89 intra-group income gap 89 inverse relationship 188 investment-driven growth pattern 95 Italy 17, 29, 84 Japan 11, 14–15, 25, 29, 101, 118 Japanese economy 14 job objective 156

Index job performance 158 job stability 151 Johns Hopkins University 20 kindergarten education 52 kindergarten population 52 knowledge-based economies 133 Kuznets curve 82–86, 90 labor authority 127 labor contract law 104, 167–168 labor costs 12, 15, 17 labor force 65, 74, 77–78, 89, 91, 95, 166–167, 182 labor input 13 labor market 77, 130, 162, 167, 169, 171, 180–182, 186–187, 190, 192, 201 labor mobility 65, 86 labor productivity 96, 173, 183–184 labor resources 95 labor shortage 12 labor supply 15, 96, 111 labor-intensive industries 12, 103 land management system 130 land market 130 land transfer system 130 large and ultra-large cities 66 large-scale cancellation of insurance 169 late birth 39 late childbirth 4 late marriage 3–4, 24 Law of the People’s Republic of China on the Protection of Rights and Interests of Women 156 least square 43, 46 legal aid 81 legal service 81 less-developed region 73 levels of education 71–72, 105, 191, 197 Lewis Turning Point 7–8, 12, 111 Li Keqiang 32, 38 Liang Jianzhang 20 life expectancy 15–16, 40, 43, 46, 163 lifetime pension benefit 163 limitations on household registration 67 living environment 20, 110 living standards 40 local people’s congress 4

Index logistic model 46 logistics management 75 low fertility trap 10, 24 lowest-earning group 89 low-fertility countries 28 low-level welfare 166 low-skilled worker 96 Lu Jiehua 21 Ma Xiaohong 19 Ma Yinchu 3 macroeconomy 103 male chauvinism 156 male leader 152–154 male supremacy 160 male/female ratio 41 male-to-female ratio 187 Malthusian trap  8 mandatory contribution 179 marginal product of capital 95 marital status 151, 156, 189, 191, 197 market economic system 65, 95 market economy 67, 70, 180 market environment 104 market mechanism 89, 96 marketization 65, 71 market-oriented employment reform 167 marriage law 188 marriage match 187–188, 202 marriage rate 187–188, 197–198, 201 married men 191–193 married people 200 Maslow’s hierarchy of needs 159 Master’s and Doctoral Degrees 197–199 master’s degree 139, 189 maternal allowance 158 maternity and paternity leave 34 maternity and reproductive health services 33 maternity insurance 125–126 maternity leave 34, 133, 158 Matthew Effect 59, 89–90 means of production 8 Measures for Migrant Workers to Participate in Basic Old-Age Insurance Programs 167 median value 20 medical and healthcare workers 33

211 medical care 15, 111, 122, 130–131, 137, 140–141, 147, 149 medical costs 14, 20, 28 medical institutions 33 medical insurance 126, 132 medical service systems 24 medical services 11, 33–34 medical treatment 24 medium-sized and large cities 66, 118 member states 17 method of least squares 43 method of repeated forecasting 42 Mexico 29 micro-empirical studies 194 middle and high school students 41 middle school 58, 61, 124 middle school-age population 41, 46–47 middle-income group 89 migrant children 123–124 migrant inflow 64 migrant integration 132 migrant population 45 migrant workers 24, 65–66, 68, 73, 91–92, 110–112, 116, 121–122, 125–127, 167–171 migrants with non-rural hukous 118, 170 migrants with rural hukou 116, 118 minimum living allowance line 108, 110 minimum standard of living 108 Ministry of Education  37, 58 Ministry of Finance  37, 58 Ministry of Health 2 modernization 6, 20, 129, 180 monopolistic SOE 179 multi-level approach 65 municipal district 126 municipalities directly under the Central Government 2, 4, 18, 34, 46, 170 Nanjing University 21 National Bureau of Statistics  6 National Development and Reform Commission  37 National finances 16 National Health and Family Planning Commission  18 national integration-oriented social security reform 171

212 National Migrant Workers Monitoring Survey Report 2014 112 National New-Type Urbanization Plan (2014-2020) 64, 80 National Outline for Medium and Long-Term Education Reform and Development (2010-2020) 37 national pension 166, 181–182 national pension function 182 national pension insurance fund pooling 174 national pension scheme 181 national population policy 39 national power 24 national production factor market 182 National Public Expenditure Balance Sheets 172 national revenue 181 national standards for poverty 106 native children 123 neoclassical economy 95 nepotism 143 net population inflow 45–46, 76 net rural-urban population inflow 110 Netherlands 29 new normal 103 New Population Theory  3 New Zealand 99 newborn population 40, 54, 61–62 Newly Poor 125, 129 newly poor in cities 125, 129 new-type urbanization 65 non-agricultural sector 85, 91 non-local migrant workers 91, 116, 121, 125–126 non-profit organizations 136 non-public school 123 non-rural hukou 114–116, 118, 169–170, 190–192 Nordic countries 16, 36 Northeastern China 58 OAIS4RUR-covered 163–164 OAIS4UE pensioner 163 OAS benefit 161, 182 OAS system 161–162, 165–166, 169–171, 175, 180–183 objective criterion 108

Index obstetric examination 158 obstetric resources 33 obstetric services 33 obstetrics department 33 occupational annuities 162, 175–176, 178, 183–184 occupational annuity fund 176, 178–179 occupational annuity system 178, 183 occupational barrier 140 OECD countries 84, 99, 181 old-age care 186 old-age insurance scheme for rural and urban residents 161 old-age insurance system 169, 175 old-age insurance system for rural residents 161 old-age security 161 one-child families 7, 22 one-child policy 1, 4, 7, 17, 25, 39 operating efficiency 141 Opinions of the State Council on Further Promoting the Reform of the Household Registration System 64 Opinions of the State Council on the Current Development of Pre-School Education 37 Opinions on Developing Elementary and Secondary School Staffing Standards 58 Opinions on Implementing the Phase II Three-Year Action Plan for Pre-School Education 37 Opinions on Promoting the Reform of Household Registration Management System in Small Towns 65 Opinions on the Gradual Equalization of Basic Public Health Services 124 Organization for Economic Cooperation and Development 34 overabundance 7 overall population 165–166 overall regional impoverishment 106 overall socioeconomic system 181 overcapacity 103 PADIS-INT 40 parameter value 46 parental leave 34 partial bookkeeping-based management method 183

Index participating companies 179 paternity leave 34 path to urbanization 68, 76 payment upon reception 169 payroll tax 104 peak period 18, 21 peak year 47 peak-clipping effect 98 Pearl River Delta region 54, 58 Pediatric Care Services 33 pediatric service 34 Peking University 21 Peking University’s Institute of Social Science Survey  38 pension 12, 14–17, 76, 114, 125, 162–164, 171–175, 181 pension benefit 163–164, 166, 173–174, 183 pension expenditures 17 pension insurance reserve 169 pension insurance system  101, 166–167, 169, 171–175, 178, 181–183 pension insurance system for government organs and public institutions 175, 178 pension insurance system for urban workers 171, 175, 178, 182 pension insurance system reform 166, 173, 175, 181 pension system 166, 172 pension-based insurance 165, 167 people of marrying age 187, 191 people-oriented management 153 people’s basic livelihood 105 people’s livelihood 33, 98, 101, 121, 130 per capita annual fund 163 per capita consumer spending 116–118 per capita disposable income 29, 93, 114–116 per capita GNP 86 per capita net income 93, 106, 166 per capita resources 8 performance target 141 permanent residence 71, 79 personal income  38 personal income tax 31, 99 personal income tax system 38, 99 personality development 5 Peter Townsend 107 physiological characteristic 158

213 pilot corporate annuity projects 175 pilot occupational annuity programs 175 planned economic system 70, 186 point-based household registration system 64–67, 75–76, 79 points system 64, 66, 68–69, 71–79, 81 Poland 29 policy arrangement 168–169 policymakers 8, 172–173, 175, 179, 183 population aging 7, 11, 13–16, 19, 21, 23–24, 160, 180, 182 population aging coefficient 15 Population and Family Planning Law of the People’s Republic of China  5 Population Development 20, 23, 40 population mobilization 80 population of singles of marriageable age 186, 188–189, 199–200 population policy 25, 39 population quality 4 postal service 127, 136 post-industrial stage 45 post-retirement benefit 183 post-retirement pension subsidies 183 poverty alleviation 106, 109 poverty eradication 109 poverty incidences 110 poverty line 107–109 poverty relief 132 poverty standard 106 poverty threshold 107 poverty-stricken counties 106 prefectural cities 52, 58 prefectural city  54 pregnancy termination techniques 12 prenatal examination 33 pre-retirement contribution subsidies  183 pre-school age population pre-school children pre-school education  37 pre-school-age population pre-tax wage 112 primary industries 93 prime childbearing years 19 principle of benefits sharing 174 private capital 104 private companies 179

214 production factor 90, 95, 102, 180 production factor mobility 180 production-factor market 104 productive capacity 13, 96 productivity 8, 13–15, 17, 24, 35, 96, 169, 173, 175, 181, 183–184 professional infant care service 35–36 professional skill 127 Professor of Sociology 21 profit margin 104 provincial-level administrative regions  2, 45–46, 54 provincial-level area 45 Provisional Regulations of the Ministry of Public Security on the Management of Temporary Residents in Urban Areas 80 psychological integration 132 public administration 75, 122, 136, 178 public educational institutions 30 public facility management 136 public relations 137, 140–141, 147, 149 public school 123 public sector 171, 174–175, 179, 182 public service system 105, 124 public spending 101 purchasing power parity 106 Qu Yue 93 quality of life 2, 106, 150–151 real economy 14–15 receiving city 73, 81 redistribution system 65, 99 reform and opening up 42, 67, 80, 83, 91, 102, 106, 129 reform of dual pension insurance systems 171 reform of the hukou management system 66 regional disparities 130, 181 regional distribution 11 Regulations on Protecting Women Workers 156 relationship between superiors and subordinates 141, 143–144 relative deprivation 108, 111, 122 relative poverty 107–111, 116, 118, 122, 125, 128–129

Index rent-seeking through power 143 replacement level 19, 201 replacement rate 171, 174, 182 Report on Family Planning Work  3 Report on the First Meeting of the State Council Leading Group on Family Planning  3 Report on the Status of Family Planning Work  4 Report on the Work of the Government (2016) 38 reproductive behavior 23–24 reproductive cost 38 reproductive rights 24 reproductive services 32 Research on the Career Development of Chinese Women: Current Status and Problems 134 residence-related expense 120–121 residency expenditures 116 resident income 91, 93, 163 residential permit 65–66, 79–81 residential permit system 80–81 Residents’ disposable income 114 Resolution on Adjusting and Improving the Birth Control Policy  18 resource allocation 110, 169 responsibility of balancing multiple roles 157 retirement income 172 retirement system 171 return on education 89 return on investment 164 returns on capital 95 returns on education 187 right to bear children 19 right to OAS 180 Risk Burden Sharing 162 risk burden-sharing mechanism 162 risk society 69–70 risk-sharing mechanism 70 rural dating market 191 rural hukou 114–116, 118, 165, 168–170, 190–192 rural land ownership system 130 rural migrants 42, 68, 71, 78–79 rural migrants into urban areas 42 rural old-age insurance 165

Index rural resident 91, 116, 118–119, 121, 128, 130, 161, 163, 165–167, 169, 181–182 rural singles of marriageable age 186 rural women of marrying age 186, 201 rural worker 105 rural-urban migrant 109–110, 127–130, 167–171, 190 sample survey 110, 189–190, 193, 200 savings rates 13 scale of enrollment 186 school district 37 school-age children 60–61 school-age population 39, 41–42 Second National Population Census of the People’s Republic of China 2 secondary education 32, 195–196 secondary school 66, 71, 123 secondary sector 102 secondary vocational school 61 security level 163, 180–181 Seebohm Rowntree 107 segmented assimilation theory 109 selective two-child policy 1, 5, 9, 18, 20–21, 25–28, 31, 39 self-fulfillment 150, 152 sense of belonging 141, 150–151, 159 sense of happiness 194 sense of identification 159 sense of responsibility 155 sense of safety 127, 150, 152 sense of social marginalization 116 service industries 95, 97, 133 sex ratio at birth service sector 97, 145, 148 sex-ratio change 187 sex-ratio imbalance 186, 191, 201 Shanghai Municipal Commission of Health and Family Planning 18, 29 shanty town 122 sharing of social security benefits 180 sharing-dominated economic development pattern 151 Simon Kuznets 84 simulation analysis system 84 Singapore 85 single institutional framework 182 single urban and rural land market 130

215 single women 187, 193, 196 singles of marriageable age 186–189, 199–200 Sixth National Population Census of the People’s Republic of China 6 Sixth Session of the Twelfth NPC Standing Committee 18 small and medium-sized cities 64, 71 social adaptation 132 social conflict 70, 109 social development 65, 78, 85, 106, 134–135, 150–151, 160 social disparities 70 social exclusion 108 social forces social inequality 65, 70, 110 social insurance 14, 67, 78, 105, 127–128, 131, 162, 166–167, 170, 177, 182 Social Insurance Law 167 social insurance program 167 social insurance system 105, 167, 170, 177 social interaction 110, 129 social networking platforms 27 social organization 136, 178 social policy spending 98 social pooling 162, 167, 169 social prejudice 157 social redistribution mechanism 16 social responsibilities 36 social risks 70, 76 social security 12, 15, 32, 66, 75, 79–80, 88, 100, 116, 125, 127–130, 169, 178, 180–181 social security and welfare system 158, 169 social security premium 112, 128, 170 social security spending 15 social security system 11, 100–101, 127–130, 162, 165, 167, 170–171, 174, 180 social status 193–197 social stratification 78, 109 social stratum 199 social structure 161 social supervision 123 Social Support System 157 social transformation 20 social welfare 130, 162, 180 social welfare system 16 socially-pooled account 169 societal organization 75

216 societal problems 11 societal risks 7, 70–71, 75 socioeconomic developments 4 socioeconomic integration-oriented reform 167 socioeconomic progress 8 South Korea 29, 84–85 Southern China 54, 58–59, 61 Southern Europe 16 Spain 17, 29 spatial distribution 52, 54 Special Regulations on Protecting Women Workers 156 spending power 118 spousal candidate 199 spouse combination type 187, 191–194, 196, 199, 202 standard for poverty 106 standards of living 106 State Commission Office of Public Sectors Reform 58 State Council 64–66, 74, 78, 80, 83, 172, 174 state expenditures 16 state leaders 3 state-owned enterprise 164 state-owned monopolies 183 State-specified minimum level 166 State-subsidized basic pension 166 Statistical Communiqué of the People’s Republic of China on the 2015 National Economic and Social Development 134–135 Statistical Communiqué on the 2014 Human Resources and Social Security Development 164 Statistical Communiqués on Human Resources and Social Security Development 168, 177 statistical unit 52, 54 steering group for family planning 3 structural change 186 structural imbalance 179 student-teacher ratios  54 subjective well-being 194–196 subsidy policy 183 supplemental annuities 179 supply and demand relationship 16, 201 supply-side reform 101, 103 supply-side structural reform 101

Index survival with dignity 108 sustainability 24, 161–162, 173 Switzerland  11 system consolidation 173, 181–182 systemic fairness 180 Taiwan 85, 134 target population 19–20 tax burden 105, 183 tax evasion 100 tax relief 38 tax revenue 99 taxation system 98, 100 taxed-exempt-exempt 177 technical school 139 technical secondary school 66 technical skills training system 105 temporary residential permit 80 terms and conditions 65 tertiary sector 102 The Decision of the Communist Party of China Central Committee on Some Major Issues Concerning Comprehensively Deepening Reforms 5 The Limits to Growth  8 The National Economy Grew Steadily in 2015 with Regular Progress 112 Theil Index 93 Third National Economic Census 176 Third Plenary Session 1, 5, 25 Third Plenary Session of the 18th CPC Central Committee 5, 25 three-year college 139, 187, 189, 196, 199–200 threshold of relative poverty 108 time management 158 time-series extrapolation 40 top-down design 132 total female population 134 total fertility rate  2 total household income 29 transactional compensation 131 transfer payment 130–132, 162 transfer payment mechanism 132 transferability of benefits 180 transferability of insurance account 169 trans-regional transference 181 trend extrapolation  43 tripartite coordination mechanism 104

217

Index tunneling 143 Turkey 29 Two Systems, Two Kinds of Outcome 79, 161–165, 173–174 two-child families 22 Two-child Policy 1, 4–5, 9, 17–21 two-year college 139, 196 Ulrich Beck 69 underdeveloped region 72, 76–77 Unemployment 17, 75, 125, 128 unemployment insurance 114, 126 unemployment insurance premium 114 unemployment rates 17 unfulfilled pension 169 uniform management 128 uniform set of institutional rules 180 uniform social security system covering all of China 130 United Kingdom 11, 29, 84, 98–99 United Nations 10, 118 United Nations Development Programme 86 United States 11, 84, 98–99, 109, 118 universal OAS development 162 Universal OAS system 161–162, 165, 175, 180–181, 183 Universal Social Security System for the Elderly 161 universal two-child policy 1, 19–23, 25, 31–34, 37–41, 62 university student 187, 202 university-age population 41–42, 44 unmarried urban women 187 unmarried women 194, 196, 201 unwritten rule 138, 143–147, 155 unwritten rules in the workplace 138, 143, 145–147 upper class 76–77 upward mobility 124 urban and rural populations 42–43 urban dating market 186–187, 190–192, 201–202 urban employee 110, 112, 161, 165, 167–168, 172, 174, 176–177, 181–182 urban households 29 urban hukou 74, 76, 78, 182, 190–191 urban minimum living allowance 181

urban poor 109–110 urban relative poverty 109–111 urban resident 110–111, 116, 118, 121–122, 127–128, 161, 169, 172 Urban Singles of Marriageable Age 186 urban social insurance system 167 urban women of marrying age 187 urbanization 20, 24, 40, 42–44, 60–61, 64–65, 68–69, 71, 73–74, 76–77, 79, 81, 85–86, 89, 109–110, 122, 128–132, 161, 166–167, 182, 186, 191 urban-rural dualism 65, 68, 73, 91, 109, 129, 162, 166, 169, 171 urban-rural gap 73–74, 88, 91, 111, 129 urban-rural migration 43 urban-rural population structure 42 U-shaped trend 13, 47, 84 valley-filling effect 98 value orientation 149 value-added tax 104 village-like compact residential areas inside cities 122 village-like compact residential areas on the outskirts of cities 122 vocational high school 139 vocational qualification 81 vocational skill 105, 110 vocational skills training 105 vocational training 105 vulnerable group 166, 180 Wang Yanzhong 101 Wang Zhiyong 39 water conservancy 136 welfare policies 16, 34 welfare system 132, 158, 169 Western China 29 Western Europe 16 Western European countries 16 white-collar worker 135 women and children’s hospitals 32 women business leader 133 women employees 148 women of marrying age 12, 186–188, 201 Women’s Advantages at Work 159 women’s employment 32, 133, 146 women’s federation 134, 157

218 women’s rights and interests 156–157 women-specific benefits 159 work injury 125 work injury insurance 126 worker representative 157 working age population 7, 201 working environment 134 working women 134–135, 137–155, 157–158 work-life balance 150, 152, 158 workplace environment 142 World Bank 13, 106, 108, 181 World Development Indicators 103 World War I 199

Index Yang Cuiying 101 Yang Ge 1 year of the sheep 26 year-over-year 12 youth population 12, 44 Zhang Juwei 89 Zhang Xinfeng 19 Zhao Wen 82 n. 1 Zhaopin.com 134–135, 137–141, 143–155 Zheng Bingwen 177, 179, 183 Zheng Zhenzhen 19, 30