Agricultural surplus labor is a special group emerging in China's economic and social restructuring, with its number increasing after the reform and opening up. Now, they work in all industries and regions across the nation, becoming an important impetus to China's industrialization and urbanization. However, due to China's long-term household registration system, which makes a distinction between city and countryside, rural migrant workers who work in cities are still identified as farmers and cannot get equal rights as city residents. People in this group come and go between cities and their hometowns in rural areas, which prevents them from enjoying a stable life in the city and does not help decrease the number of farmers and stabilize agricultural labor on the land. The situation of agricultural surplus labor living on the edge of cities and not being integrated into the cities will result in many social conflicts. The acceptance of eligible agricultural surplus labor as permanent urban residents will help the country deal with issues concerning agriculture, rural areas and farmers, and is also beneficial to the process of industrialization, urbanization and modernization, and even the overall situation of reform, development and social stability.

According to the "National Plan on New Urbanization", three problems need to be addressed to realize urbanization of agricultural surplus labor in an orderly way.

First, reform the household registration system. The country now is implementing two household registration systems in different provinces. One makes no distinction between city and countryside in terms of household registration, with more than 20 provinces in China using the unified household registration system. The other is a residence permit system, which was adopted by Guangdong province in 2010 and allows the floating population to enjoy seven public services, including employment, social insurance, legal aid, family planning, and health care.

Reviewing the real situation in many places, we find that public services and welfare that are attached to the registration system still had no substantial changes even after implementation of the unified household registration system. There remain differences in subsistence allowances, affordable housing security and social insurance between urban and rural residents.

When designing policies for pilot implementation, agricultural surplus labor are expected to have equal rights as urban residents if they have a steady job, income and residence and have lived in the city for a number of years. However, due to the many restrictions, a large number of them find it hard to really settle down in city. What's more, reforms in household registration system in many places only cover people from its own district (the county or at best its prefecture-level city), and there are many limitations for those coming from different administrative districts. What’s more, the reform of household registration system in big cities are not open. The household registration system that stands in the way of citizenship for rural residents keeps urbanization at a standstill and prevents agricultural surplus labor from getting equal rights and opportunities in the city.

The national urbanization plan proposes that the country should implement different registration systems according to the capacity and development potential of different cities and towns. This can help show where the agricultural surplus labor registration as permanent urban residents can go. The plan proposes that household registration be open or be controlled according to the scale of towns and cities. Cities with a population of 500,000 to 1 million will open in an orderly way; with 1 million to 5 million, impose some restrictions, and with more than 5 million residents, household registration should be strictly controlled. This is a major breakthrough the country has made in the household registration system reform. According to the plan, governments can formulate registration conditions according to the city's population rather than administrative level, which would make it easier for agricultural surplus labor to settle down and obtain registration in cities. The plan also requires local governments to formulate registration standards according to local conditions, to give full play to the responsibility of government and have an influence on people’s expectations and choices.

Guangdong province's experience reminds us that the residence permit system could help agricultural surplus labor, especially those who come from different districts, gradually settle down in large or medium-sized cities. We could implement this system. Based on residence permits and adhering to the principles of equal rights and duties, the country could solve the issues of the floating population concerning employment, school attendance, public health, rent and purchase of houses, and social security, laying the foundation for breaking the dual structure of city and countryside.

Second, the country should work to ensure that agricultural surplus labor have access to basic urban public services. In the long run, with the dual structure of city and countryside, there has been a big difference in public services between urban and rural residents. Public service system differs sharply from city to countryside. Along with rapid urbanization, rural migrant workers, despite working and living in cities, some even bringing their families with them, could not get the same welfare and social benefits as urban residents. The major problems are as follows:

Agricultural surplus labor cannot get enough services from public employment service agencies and cannot enjoy re-employment security in the place they live. Children of agricultural surplus labor can't get free compulsory education, with 20 percent of children studying in private schools or schools for rural migrant workers` children, where school facilities and teachers might be of poor quality. Also, children of agricultural surplus labor cannot receive quality preschool education and have difficulty taking the senior high school and college entrance examination. They are not entitled to good medical care services due to an imperfect system, leading to great difficulties in going to a hospital in a different city and the high cost of medical treatment. In some places, the floating population cannot enjoy equal public health service and the vaccine coverage rate for their children is relatively low. They are still not covered by social insurance and housing security in the city they work. The process of giving citizenship to agricultural surplus labor is essentially requiring equal public service for all people. In essence, agricultural surplus labor need to enjoy all the urban services, and that can only be realized by transforming the household registration system.

Currently, the country's major task in improving and reforming the basic public service system in cities includes: improving public employment service, more and better skills training and vocational education, improving agricultural surplus labor's ability to find jobs and helping them find better jobs. The country should provide education to children of agricultural surplus labor by enrolling them in public schools and require the local government to shoulder major responsibilities, such as providing them with equal compulsory education, preschool education, and equal opportunities to take the high school and college entrance examinations through reforms. Local government should shoulder their administrative responsibility and provide basic public health services to agricultural surplus labor and their children, increasing the coverage rate concerning endowment and medical insurance, involving them in the urban housing and social security system. The country will improve the policy for transition between urban and rural social insurance system to realize a smooth transition of urban and rural endowment and medical insurances across different regions. A social aid system should also be established to benefit agricultural surplus labor. By increasing and improving public services for agricultural surplus labor, the country will finally wipe out the difference in benefits attached to different registered permanent residences.

Third, share the cost of urbanization of agricultural surplus labor into permanent urban residents. The cost for the process will last for a long time. In the short run, the costs are for providing education to children of agricultural surplus labor, public health, subsistence allowance and affordable housing. In the long run, according to the current pension system, the government will subsidize them after their retirement. As the number of agricultural surplus labor increases, the government will have to invest more in constructing city infrastructure. Government could bear these costs only if a rational cost-sharing system could be established among central and local governments, governments and companies, companies and individuals. Now the country's cost-sharing system for agricultural surplus labor still has room for improvement. The responsibility distribution of public services between central and local government is not appropriate. To ensure agricultural surplus labor have equal access to basic urban public services, central government should increase general transfer payment to local governments, and take the public service cost, the number of migrant workers, and local governments' efforts in providing equal public service into account. Local governments, adhering to the principle of "people first" and emphasizing investment in improving people`s livelihood, should optimize their expenditure mix and increase investment in public service, to establish a basic public service system that is well-functioning, efficient and covers both city and countryside with a rational layout and at appropriate levels.

Author: Han Jun, vice-minister of Development Research Center of the State Council

Source: People's Daily, March 18, 2014.