The Political Economy of Urban Protectionist Employment Policies in China

    1. Introduction
    One of the major features of Chinese development strategy in the prereform era was the rigid segmentation of the rural and urban sectors. This was enforced through strict control of rural-urban migration. Since the late 1970s, peasants have been allowed to move to cities, however, there remain many barriers in rural-to-urban labor mobility. Many urban jobs are off limit to rural migrants. Rural and urban labor markets are by and large segmented. The large gaps in per capita income between the rural and urban sectors and disparities in output and employment shares are indicative of the significant barriers in rural-to-urban labor flows1. The suppression of rural-to-urban migration was part of a package of the Chinese development strategy pursued under an orthodox central planning framework (Chan 1994). It is generally expected as the Chinese economy becomes more marketized, rural-urban labor mobility will also increase accordingly. The reality, however, does not appear to be the case. While peasant migrants can now take up certain jobs in the cities, they still cannot permanently settle in the cities except the very wealthy -- those who can afford to "purchase" an urban hukou (household registration) status (see Chan and Zhang 1999). Despite the reforms of the hukou system, becoming a fullstatus urban citizen, i.e. converting to a full urban hukou status in substantive terms, is still very much a dream for the ordinary peasant.
    Solinger (1999) has pointed out two conditions under which asubstantive change of the hukou system, such as any rural-urban conversion of the hukou status, may be possible. The first is when there is a significant increase in the urban demand migrant labor. The second is when the jobs of urban workers are relatively secure. It is quite obvious that the first condition cannot act independently because while the condition of labor demand changes all the time, it takes a much longer time for any employment discriminatory policy and related institutions to change. As will be argued later, the condition for change will only come when there is a change in the type of labor associated with the orthodox, Soviet-type development strategy and its institutions. There is also some uncertainty in the second factor. Many studies have shown that even when the local urban workers' jobs (the "primary market") are secure with good benefits, labor market segmentation continues to exist. The substantial differences in labor benefits and welfare between the primary and secondary markets, ironically,speaks to the existence of segmentation (Piore 1970; Bhattachcharya 1985).
    This paper takes a broader perspective and attempts to seek explanations of China’s current labor market segmentation from perspective beyond the hukou system. We will distinguish the different factors that condition the labor markets in China in the pre-reform and reform eras. Examples will be drawn from current employment policies in Beijing Municipality to illustrate the political economy of the current labor market segmentation policies……
    View Online
    文章出处：Workingpaper,No.2