Friday, November 4, 2011

Book Review: Urban Poverty in China


Urban Poverty in China by Fulong Wu, Chris Webster, Shenjing He and Yuting Liu 2010 Cheltenham, UK: Edward Elgar 259 pp ISBN: 978 1 84720 969 6
 This book originates from an ESRC DFID funded project, which allowed the authors, based at Cardiff University in the UK and Sun Yat-Sen University and South China University of Technology in Guangzhou, China to survey over 1800 households in twenty five neighbourhoods across the six cities of Harbin, capital of the northeast province of Heilongjiang; Nanjing, capital of a fast growing eastern coastal province, Jiangsu; Wuhan, capital of Hubei province in central China; Xi’an, capital of Shaanxi in the northwest; Kunming, capital of Yunnan in the southwest and Guangzhou, capital of the booming southern coastal province of Guangdong.
It presents a granular look inside the poor neighbourhoods of these cities, even as it offers a broader perspective into the evolution and determinants of urban poverty in China. After the introduction, Chapter 2 analyses other poverty studies and lays out the study’s survey method. Chapter 3 further describes the poverty experience of different social groups, while Chapter 4 focuses on neighbourhoods and tries to understand how poverty is contingent on their nature.  The authors present the salient characteristics of each of the 25 neighbourhoods, adding to the granularity of the description. Finally, in Chapter 5 they explore the relationship of poverty with reference to changes in entitlements, especially to land, as also housing, education and health care. The authors’ emphasis is on discovering the different pathways into poverty with special attention to the role of spatial and institutional factors. One such critical institutional factor they identify is the indeterminacy over peri-urban village land, which provides many opportunities for rent-seeking, unfair practice and corruption, and results in socially and environmentally inefficient transactions that affects the livelihoods of many people.
The authors identify four types of urban poor, viz. (i) the working poor, (ii) unemployed or laid-off from former SOEs, (iii) retirees and (iv) the new rural migrants. They also classify the neighbourhoods into three, viz. (a) the old urban neighbourhoods that existed before communist rule, (b) workers’ villages that were work unit (danwei 单位) living quarters, since sold, often to former workers and (c) the ‘villages within the city’ (chengzhongcun), i.e., areas of informal housing development in former rural villages that have been incorporated into the city.
In 1992, almost 93% of urban workers were state employees and rural-urban migration was limited by the hukou. The beginning of urban poverty is traced to the downsizing of state owned enterprises (SOE) and the de facto relaxation of hukou () restrictions. Prior to the 1990s, only those who had a job were allowed to stay in the city and the person’s danwei took care of his needs. Thus, while living conditions did vary depending on the nature of the danwei, everyone had a job, the basic necessities, schooling for their children, hospitals for their illness and a place to stay. SOE restructuring (the number of state sector workers fell by 66 million from 1995 to 2004) created a class of urban residents who no longer enjoyed such support. Concomitantly, tolerance of rural to urban migration to provide labour to a rapidly growing economy brought market-dependent people into cities, without pre-allocated jobs or housing.
Many of the laid-off SOE workers could not be retrained for the new urban economy and remained unemployed or entered the informal sector, without the non-monetary benefits available to them earlier. Some are recipients of support from the Minimum Living Security Standard (MLSS) scheme or di bao. This provides a small amount and caters only to the three non-migrant categories of urban poor.  Unlike India, where the eligibility is by a national census of people below the poverty line, the selection of recipients in China is at a local level. 
Even though hukou restrictions are no longer strictly enforced, rural migrants cannot access redistributive schemes such as di bao. Their “mode of integration” into the urban economy is largely through market exchange, which is possible because they have a sufficient degree of education (migrants have an average of over 7 years of education; low in China, but conversely, half the rural migrants are illiterate in India) and are willing to work for lower wages. The quantitative results suggest that a rural migrant is less likely to be poor than a laid-off worker, perhaps because rural migrants are doubly self-selected, both in choosing to migrate and in choosing to stay. Interestingly, being a member of the Communist Party of China has a strong effect in reducing the probability of poverty, presumably through the network it provides.
Education fees for their children are a major burden for rural migrants. Many Chinese cities impose both a quota and a price on places in state-run school for migrants’ children. Therefore, most rural migrants prefer to leave their children at home to study. Of those who do not, many purchase education in the low-cost, informal and typically low-quality private education sector that runs the risk of being abruptly closed. Lately, after the Compulsory Education Law of the People’s Republic of China was revised in 2006, the local governments are being pushed to remove such fees. Apart from the moral imperative, the lack of access to equal quality education for children of rural migrants, vis-à-vis other urban social groups, risks the perpetuation of stratification across generations and the lowering of the average quality of the labour force.
Healthcare is another area where rural migrants are institutionally disadvantaged, but other groups are also affected, since healthcare coverage is often not continued for workers whose former SOE employer ceases to exist or becomes financially strained. The authors provide insight into the negative effect that healthcare episodes have on people’s savings and ability to work with the help of quantitative analysis and evocative vignettes and interviews.
One effect of the urban hukou is the big gap in housing quality between poor urban households, who retain their allotted houses and rural migrants, with little difference between poor and non-poor migrants.  Since rural migrants have few, if any, entitlements in the city, and since housing ‘starvation’ is not permitted in China, i.e., homelessness and squatting is forbidden; without a house, their only choice is to move to a lower-cost town or return to their own villages, where they have some security in the form of agricultural land, which is usually contracted-out when they migrate. Migrants mostly rent houses in the Chinese counterpart of slums, i.e., urban villages or degraded densely populated inner urban areas that are typically excluded from a process of spatially selective urban development. To the extent that some are ‘homeowners’, this is largely self-built houses in urban villages and not legally recognized by the local authority. Demand for housing in urban villages also provides livelihood to those dispossessed by urban development.  A common strategy by landless former farmers is to develop tenement buildings on housing plots and rent them to migrants.  The authors provide instances of a variety of individual and collective arrangements through which this is achieved.
However, despite poorer housing conditions than other groups, rural migrants report similar levels of perceived satisfaction. It seems that they substitute other forms of satisfaction, such as earning higher incomes, saving, surviving, and building a future for their children. This is also seen more broadly when the authors compare self-perceptions of poverty with measures based on the official poverty line for that city. For urban villages, the rate of poverty perception is comparatively lower than the official poverty rate while the converse is true for both workers’ villages and old urban neighbourhoods, which have the highest di bao coverage rate.
At first glance, urban poverty in China, with its recent origins and concentration in laid-off SOE workers and rural migrants, appears different from other countries like India. Yet, there are many similarities. Urban poor in India, whether migrants or not, are equally unable to access publicly provided health and education services and resort to private providers in much the same manner.  Their housing situation is worse, as India lacks the kind of stock built by the erstwhile danweis, but they also congregate spatially in disadvantaged neighbourhoods and many landlords in urban villages similarly make money by renting accommodation to migrants.
The book illustrates the complexity of urban poverty and the dangers of applying a simple model of individual demographic and socioeconomic attributes. Of particular interest is the trade-off between housing and other forms of consumption by migrants in urban villages; a lesson that programs for building ‘slum-free cities’ such as those currently being discussed in India needs to be designed to ensure that opportunities for such substitution are not reduced.
Its mixture of quantitative analysis and rich qualitative description sets this book apart. Readers seeking an insight into urban poverty in China and elsewhere will benefit significantly from a careful reading of this book. One only wishes the authors had studied smaller cities as well.

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