14 - Regions with Net Outward Migration: Issues and Challenges

Summary

INTRODUCTION

For three decades, China has sustained hyper economic growth above 9 per cent per annum. With this rate of growth, total income is doubled every eight years in a nation that accounts for one-fifth of the global population. Hundreds of millions of people have been lifted out of poverty. Wealth creation at such a scale and speed has never occurred elsewhere in the world's history.

A disturbing feature of China's hyper economic growth, however, has been its uneven occurrence across the country's vast regions. It is well observed that income disparity between the rich coastal regions and the poor inland regions has been widened over the past decades. Fast economic growth has so far failed to lead to convergence of per capita income among different areas in China.

There has emerged a rich literature about the causes of China's regional income-development disparity since the mid-1990s. Most studies attempt to associate such disparity with variances in public policies, geographic conditions, economic openness, quality of governance, advance of market- oriented reforms, or other institutional factors.

The focus of this chapter is on the link between demographic structures and levels of per capita incomes. In particular, it inquires into the impact of labour migration on income growth via changes of demographic structures. What motivates this research is the observation of a salient fact: the poor, inland regions have been the major sources of fast growing “floating population” of lower-paid migrant workers. With massive net outward migrations, the demographic structures in those provincial economies have increasingly become unfavourable for growth. This raises a serious concern about the chance for these regions to catch up with the rich ones.

The next section brings out some observations of the migration patterns across Chinese provincial economies. The following two sections then look into the social-economic consequences of labour migration in the context of uneven demographic transitions across China.