The Atlantic Cities: Why China's Urbanization Isn't Creating a Middle Class
The rapid rate of development in China manifests itself most clearly in its cities. With some populations rising into the tens of millions, China’s cities are the economic powerhouses of the country, and are helping to create a whole new era of financial prosperity. For some observers, this translates into 1.3 billion people who now have the money to afford the sort of commercial goods many of the country’s factories had previously been producing for the affluent populations of other countries. China is seeing its own affluence rise, and some surmise that this will translate into a Western-style nation of relatively well-off consumers; that, as this report from the McKinsey Global Institute suggests, China’s middle class is emerging to help propel the country’s economic success even higher.
The only problem is that this middle class doesn’t actually exist. And unless decades-old rules change, it won't.
In a recent paper published in the journal Eurasian Geography and Economics, geographer and University of Washington professor Kam Wing Chan argues that all of the country’s urban growth and prosperity is not actually filtering down to the majority of the rising urban population. The reason is that the majority of the urban population is prevented from fully participating in the booming urban economy because of a Mao-era rule that draws a harsh line between those from urban areas and those from rural ones.
Established in 1958, hukou establishes a two-tiered population structure of rural and urban citizens. Urban citizens are given access to social services and welfare programs, including public education and affordable housing. Rural residents are not. Status is hereditary, meaning that once a family is in one tier it will always remain in that tier. This has been a problem for many rural residents who want to leave their agricultural lifestyles to earn the higher wages in cities working in factories or construction, but who are faced with slum-like living conditions and an effective low ceiling over their social and economic mobility. ...