Growth at all Costs: Globalisation and the widening of urban-rural divides in China

Since the end of its economic isolation 40 years ago, The People’s Republic of China has experienced vast economic growth and become a major global centre for various sectors ranging from technology, finance, manufacturing, and critical resources Today it has become an integral member of the world economy, on which general prosperity is dependent: China is now the third largest export partner and largest import partner in goods for both the EU and the US (Eurostat, 2023; USTR, 2023). This economic integration and subsequent globalisation after the opening-up policies has also allowed China’s GDP to grow from $149.5 billion in 1978 to $17.73 trillion today, allowing over 800 million people to lift themselves out of poverty (World Bank, 2023). This statistical success story has unsurprisingly made China a common poster child of globalisation and the increased prosperity and social security it should establish.

However, in reality, the People’s Republic has become a heavily divided nation with rising inequalities between those capable of reaping the fruits of globalisation in wealthy urban centres, and those left behind in poorer rural areas. Rather than use increased access to resources and wealth to counteract this inequality, the government instead exploits it to institutionalise inequalities that enforces a power hierarchy with China’s political urban elites at the top. Urban-rural disparities as a product of globalisation are therefore emblematic of not just economic divides, but also of the CCP’s (Chinese Communist Party) authoritarian political rule and monopolisation of power and wealth.

The globalisation of the cities and neglect of the villages

Since China implemented its opening-up policy and embarked on its process of globalisation, overall income inequality in China, as measured by the Gini index, has increased from 29.1 in 1981 to 42.5 in 2005 — a score higher than other globalised nations in Europe or North America (Mazzocco, 2022; Zhang, 2012). It is estimated that this change in overall income inequality is largely the direct result of growing urban-rural disparity in the 1990s as economic growth was centred predominantly in China’s urban centres (Zhang, 2012). Further enforced by foreign and government investments into cities like Shanghai, Shenzhen, Guangzhou, Chongqing, or Beijing, it was these “first-tier” cities that accumulated the greatest amount of wealth and power in post-reform China (Johnson, 2019). Rural districts meanwhile were comparatively left behind.

While greater state revenue and economic growth did positively impact rural communities through the expansion of public services, so too did it benefit their urban counterparts. Beyond just maintaining a disparity in prosperity and living conditions between them, the consequent lower financial resources, access to education, and lower health support actually increased this disparity by reducing the competitive capabilities of rural areas. This prevents them from fully reaping the benefits of globalisation, over time compounding urban-rural disparities.

This decreasing capability of rural communities to compete with urban centres economically as China globalises is most evidently manifested in education and internet access. While disparity in areas such as public health, infrastructure investments or social security are equally important, education and the internet acts as a doorway to access information and global markets, making these areas essential to compete in and navigate globalisation.

Urban-rural disparities in education are particularly detrimental due to the difficulty of attaining better paid professions. While urban centres have a much higher rate of government and foreign investment into educational facilities and infrastructure, rural areas receive proportionally significantly less funds (Hannum, 143). Consequently, urban-rural disparities have continued to increase.

While the Action Plan for Revitalising Education of 2005 was designed to address this issue by enforcing compulsory education in rural areas and allocated 218 billion yuan over the next 5 years to improve education quality, the disparity remained (Hannum, Wang, & Adams, 2010, p.128). Despite later efforts by the government to eliminate tuition fees for poor rural families, over 90% of children “excluded” from education before attaining a primary attainment are of rural origin (Hannum, Wang, & Adams, 2010, p. 142). Consequently, this lack of education forces many individuals from rural areas to remain bound to largely agricultural markets, which will, as China continues to grow economically, only worsen their economic plight. Consequently, while rural households now a disposable income of 18,930.9 yuan every year, that of urban households is 2.5 times greater at 47,411.90 yuan every year (National Bureau of Statistics, 2022, p.6-11).

While China’s major urban centres, labelled, are consistently in red indicating a high Digital Development Index (DDI), rural communities consistently lag severely behind and are in green (Song, 2020).

A similar trend can be observed in internet access. Access to fixed-line telephones in rural districts has increased from 60% in 1995 to 100% in 2006 due to increasing investments, internet access, despite some growth, has remained a largely urban luxury (Murphy, 167). While by June 2023, rural internet penetration had risen to 60.5% thanks to the construction of new 4G mobile base stations, it still remains lower than the national average of 76.4% (Statista, 2023). Consequently, while the internet penetration rate of China’s urban centres exceeds that of first-world countries like Portugal or Poland, rural rates remain equal to third-world countries like Cambodia or Cote d’Ivoire (CSIS, 2021).

With both education and internet access as essential tools to succeed and compete in a globalised world, rural communities are at a definitive disadvantage to the inhabitants of China’s urban centres. Urban-rural disparities are a common side-effect of globalisation which often remains concentrated in the financial, trade and manufacturing hubs of major cities. In China however, globalisation accompanied by a rapid economic and ideological transition throughout the 1980s and 90s has created a unique situation in which it is increasingly difficult for rural communities to compete with their urban counterparts in a globalised economy. As a consequence, urban-rural divides in critical areas have only increased and created further disadvantages for rural individuals. For China to successfully navigate globalisation therefore, it is essential to provide the necessary tools through education and access to the world-wide web to create greater opportunities for rural communities to prosper.

“For the sake of public security”: The Hukou System and institutionalising urban-rural divides:

With this increasing division in prosperity and opportunity among urban-rural lines, millions of rural individuals have left for the cities over the past decades as poor migrants. Known as China’s “floating population”, these internal migrants now total 375 million individuals, and comprise 36% of the population in urban centres like Shenzhen (Jaramillo, 2022; Jieh-min, 2010, p.72). However, this influx of poor rural migrants in China’s wealthy urban centres is perceived by local governments and populations as a symptom of social instability, and by extent a threat to prosperity and authority (Jaramillo, 2022). With local authorities seeking to exploit these fears of the influx of migrants, while also seeking to reduce potential competitors to their wealth, they are increasingly pushed to institutionalise urban-rural divides. Consequently, rural individuals have effectively become second-class citizens compared to their urban counterparts, solidifying tier-one cities as the primary beneficiaries of globalisation.

This process is centred around the Hukou, or House-hold Registration, system. As Chinese citizens are registered with their home locality at birth, and only a very limited number of individuals can switch even after moving to a new locality, rural individuals find it practically impossible to obtain the much coveted urban registry in tier-one cities like Beijing or Shanghai (Jaramillo, 2022). Beyond just status, the hukou system determines where individuals can receive health care, what employment options they have, what pension they are entitled to, what terms they receive on loans, and what public schools they can attend (Jaramillo, 2022). With globalisation having already widened urban-rural disparities in health care, financial security, and education as explained above, the Hukou System consolidates this further on a legal level.

The classroom of a migrant school (left) and state school (right) in Hefei. The disparity in educational facilities and quality that is provided based on rural or urban Hukou status is clear (Wall Street Journal, 2013; Hefei No. 7 Public School, 2015).

The classroom of a migrant school (left) and state school (right) in Hefei. The disparity in educational facilities and quality that is provided based on rural or urban Hukou status is clear (Wall Street Journal, 2013; Hefei No. 7 Public School, 2015).

The “Measures of Detaining and Repatriating” exemplifies this most clearly. Originally introduced as law in 1982 to remove poor migrants from the cities to create an ideal image of clean and modern cities, public protests following the killing of a university student, Sun Zhigang, in 2003 in Guangzhou by police for failing to present the necessary hukou ID, have led to increasing calls of its abolition (Jieh-Min, 2010, p.55-57). Though authorities responded to this public uproar by announcing policy changes, in reality, the hukou system did not reform or change. Instead, the government simply adapted and rebranded it to supposedly improve the treatment of rural migrants, while actually re-enforcing their differential citizenship status.

Subsequently, local government officials began depicting even minor reforms to the Hukou System as a threat to the security of urban residents: according to a previous director of civil affairs in Guangdong Province, while reforms create a more “human-centered” approach, “it is necessary to link public security up with detention and deportation” (Jieh-min, 2010, p.58). With urban authorities having constructed a power hierarchy through the hukou system that clearly benefits them, restructuring it is not in their personal interest. For a supposedly infringed state of public security therefore, rural migrants are systematically disadvantaged to continue safeguarding the political power and wealth of urban elites.

With greater local political resistance, the central government under Xi Jinping is particularly weary of alienating its primary support base in China’s powerful and prosperous tier-one cities. Consequently, it does not interfere in district government policies designed to actively exclude rural migrants from the prosperity of urban centres, and at times even encourages it.

Shanghai and Dongguan have subsequently allowed for rural migrants to change their rural hukou status and adopt their tier-one hukou ones as a façade of reform. However, for rural migrants to qualify for this hukou change, they have to navigate a complicated points system related to education status and wealth that only a select few individuals can even meet (Chan & Brien, 105). Despite its outward experience as a positive change, this fundamentally re-enforces and consolidates rural-urban divisions. While cities like Beijing or Chengdu now grant access to better health and social services for individuals with a rural hukou status, they simultaneously require specific documents that are bureaucratically difficult to obtain, or refuse to accept rural insurance at hospitals (Chan & O’Brien, 2019, p.105).

Ultimately, with the heightened urban-rural divides emerging from China’s globalisation, urban officials have successfully institutionalised this disparity to maintain their dominant power status by depicting it as a necessity for “public security”. With rural migrants depicted as a threat to urban prosperity, this form of corruption will therefore continue to keep the fruits of globalisation as a luxury accessible only in China’s cities (Jaramillo, 2022).

Conclusion

It is widely agreed that globalisation has great transformative capabilities by bringing greater wealth and innovation to various communities across the globe. In China however, rural disadvantages have been left largely unaddressed, cementing urban-rural divides as urban authorities exploit rural disparities for their own gain. As China has started navigating globalisation, inequalities have grown.

Though China’s central government has announced sweeping reforms of the hukou system in 2005, 2013 and as recently as 2022 to address this issue, these plans never materialise (Jaramillo, 2022). With China’s recent political turmoil after nation-wide protests against the Zero-Covid Policy, and slowing economic growth due to reduced trade, high levels of debt and the collapse of China’s massive real-estate market, Xi cannot afford to risk antagonising the urban elites (Jaramillo, 2022). Fears of instability will therefore stand in the way of any reforms that could provide rural communities with an equal footing to benefit from globalisation. Growth at all costs, especially to the detriment of rural communities, continues to define China’s process of globalisation.

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