China's parliament pledges to tackle rural-urban divide

At the National People’s Congress, which serves as China’s annual parliament, the message this week has been all about easing the income gap between rich and poor, which in China is largely a rural-urban divide.

In the past three decades, China has focused on rapid urbanisation and China’s cities have expanded by nearly 500 million people, which is the equivalent of adding the populations of the US, Britain, France and Italy.

“Urbanisation is a historical task in China’s modernisation drive,” said outgoing premier Wen Jiabao as he delivered the government’s work report this week at the opening session of the parliament.

To keep its vast urbanisation project on track in a “healthy and orderly way”, China’s new leaders are planning to upgrade their scheme of household registrations, the dreaded “hukou” system, and replace it with more streamlined residence permits.

Much of China’s freshly minted wealth is concentrated among a small number in the cities of the coast and the south, but little is trickling back to the poor heartland.

Rural residents

The hukou system, which dates back to 1958, prevents many of the 800 million Chinese who are registered as rural residents from settling in cities and enjoying basic urban welfare, such as medical cover or equal access to education for their children, which forces many to leave their children behind when they move to the city.

Mr Wen promised the government would “accelerate the reform” of this system and “expand the coverage of basic public services in urban areas to all their permanent residents”.

Inferior welfare

The rural residents who work in the city make up the majority of the workforce which has built China’s glittering new cities and motorways, who staff its restaurants and guard the office towers, receive inferior welfare and civic services than their urban counterparts.

People wishing to do everything from getting married to applying for a passport, have to go home to where their hukou is registered first. Social stratification is increasing and without reform of the system, migrants are deterred from settling in cities and a two-tier society is emerging.

The government hopes that 60 per cent of the population of 1.3 billion will be urban residents by 2020 and will build homes, roads, hospitals and schools to accommodate them.

Yesterday, China’s top economic planning agency, the National Reform and Development Commission (NDRC) discussed some of the nuts and bolts of how that is going to happen.

“Urbanisation is the biggest potential force driving China’s domestic demand in the years ahead,” head of the NDRC, Zhang Ping, said. Guidelines for urbanisation would be launched during the first half of this year, he said.

“We need to pay more attention to the quality of urbanisation and align the process with China’s environmental capability and resources,” he said.

China’s urbanisation rate rose by 1.3 percentage points to 52.57 per cent last year.