Han Jun

Research Report No 42, 2008

I. New Features and New Trends Related to Rural Migrant Workers

Rural migrant workers are a special concept during the transformation of China's economic society, referring to those who have rural residence registration but are engaged in non-agricultural sectors and live on wages. The rural migrant workers in a broad sense are those working in secondary and tertiary industries in counties and the trans-regional migrant workers, whereas rural migrant workers in a narrow sense usually refer to those trans-regional migrant workers. There are about 120 million rural migrant workers in China, plus rural laborers working at the local township enterprises, the number of rural migrant workers has totaled 200 million. Rural migrant workers have made special contributions in improving rural economies and accelerating industrialization and urbanization.

1. Oversupply of rural migrant workers remains unchanged and the structural contradictions between supply and demand have become more and more conspicuous　　

In terms of total number, at present, supply of rural laborers is still inadequate to meet the demand in China. Currently, among 490 million rural laborers, about 200 million have shifted to non-agricultural sectors. With the present production capacity, agriculture calls for about 180 million perennial laborers, thus, there are over 100 million surplus laborers in rural areas who are mainly middle-aged or elderly people and are mostly scattered in central and western China. These surplus laborers are not fully employed with surplus working time. As a result, shifting the rural surplus laborers is still an arduous task.

Although in general a surplus of rural laborers still exists in China, the structural contradictions between labor supply and demand have turned out conspicuous. Supply of skilled rural laborers is seriously insufficient and supply of rural laborers under 30 years of age is evidently inadequate. The number of new labor forces in rural areas has presented an obvious downward trend. The total number of rural laborers showed an annual average growth rate of 1.5% during 1985~2005 and 2.5% in the late 1980s and the rate has remained 1.1% from 1990s up to now. From 2002 onward, supply of skilled technical workers on China’s labor market has become completely inadequate to meet the demand. Since 2003, a shortage of general laborers began to turn up in economically developed coastal areas in east China. In 2004, such a shortage even became more serious, particularly in the Pearl River Delta area, the southeastern part of Fujian Province and the southeastern part of Zhejiang Province where processing and manufacturing industries are concentrated. After 2005 the shortage of laborers began to extend to some inland areas. In 2006, the task force under the Development Research Center of the State Council made a survey across China on the employment of rural laborers. The survey covered 17 provinces,municipalities and regions, 20 cities at the prefectural level, 57 cities at the county level, 166 townships and 2,749 villages. People under survey in 74.3% of the villages thought that almost all healthy and capable adult laborers were out for work, and this percentage was 71.6%, 76% and 76.4% respectively in China’s eastern, central and western regions. The number of unemployed adult laborers throughout China accounted for 17.8% on average. In terms of China's eastern, central and western regions, the unemployment rate in eastern regions was 11.3%, being the lowest, that of the central regions registered 20.4%, the second lowest, and that of the western regions turned out 26.1%, being the highest. Our basic judgment is that a surplus of adult laborers is still there in China, but through 20-odd years’ incessant labor shifting, more and more surplus rural labor youths are being employed. We cannot look on the rural labor supply and demand abstractly from the perspective of an aggregate number, instead, we should pay close attention to the supply and demand from a structural point of view. The rural labor supply-demand situation is changing from a long-tern "supply exceeding demand" to "a surplus yet inadequate supply". "Surplus" means the supply still exceeds demand when the total number of laborers is measured by the working time; whereas "inadequate" means the supply of young and skilled laborers is gradually becoming inadequate to meet the demand.

2. Leaving home for work is still a main cause for the shift of rural migrant workers and the return of rural migrant workers to their hometowns is obviously accelerating

A tendency shows that flows of rural laborers are on the increase in China and that the number of jobs of various kinds taken up by rural laborers is expanding. Therefore, leaving home for jobs is still a main cause for the shift of rural laborers. According to the latest survey jointly made by the Office of Rural Migrant Workers' Affairs of the State Council and the task force of Research Department of Rural Economy of the State Council in over 100 demonstration counties for labor transfer across China, from 2000 to 2006, the number of rural migrant workers leaving their counties for jobs increased by 7％ annually and the ratio of rural laborers working outside against the total rural laborers accounted for as high as 44.6%. The number of laborers shifted from each county to other provinces increased from 52.0% in 2000 to 58.3％ in 2006 on average. The number of people transferred from most provinces in central and western regions to other provinces for employment surpassed the number of people being employed locally.

As labor-intensive industries in economically developed coastal areas have quickened their shift toward central and western regions, and as conditions for development in central and western regions have improved, more and more rural migrant workers are returning to their hometowns for employment or to start their own businesses at an evident accelerated pace. According to the sample surveys made in 301 villages scattered in more than 100 labor service demonstration counties, the farmers who returned to their hometowns in 2006 accounted for 23% of total rural migrant workers and made up 10％ of the total rural laborers. What merits special attention is that in recent years a vigorous upsurge set off by rural migrant workers returning home to start their own businesses is on the rise. The above-mentioned surveys suggest that rural migrant workers returning to start businesses made up 16.06% of all rural migrant workers who have returned back to their native hometowns. Starting businesses by rural migrant workers in their hometowns enabled many more rural laborers to get employed locally. The surveys also suggested that every rural-worker enterpriser had provided job opportunities to 38 people on average and the number of the enterprisers and people employed by them accounted for 18% of the laborers who remained in the villages. According to surveys in one hundred counties, we have preliminarily figured out that the number of rural migrant workers who returned to start their own businesses totaled about 8 million, who had created 30 million job opportunities. Although in general far more rural migrant workers come out for jobs than those who return home and far more rural migrant workers choose to migrate to other places for survival than those who find jobs locally, a new pattern of rural migrant workers employed in urban areas or seeking jobs or starting businesses in their hometowns is beginning to take shape.

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