December 07, 2009
Free to Shop
The Work Conference embraced the concept, mostly imposed on China by Western partners, that consumption must be a driving (if not the driving) force in the Chinese economy. The conference said the goal was for consumption to replace public spending. Yet a more rapid settlement of migrants to China's growing mega cities will only increase the need for more infrastructure - roads, railroads, subways, housing, electricity, etc., which is reflected in the dominance of investment as a major force in China's economy. Stocks in property companies rose today, some analysts say on the news. But rural migrants are at the bottom of the elaborate class structure in China and usually too poor and too conservative to quickly become materialistic consumers.
The hukou system began in the early 1950s as a way to prevent Chinese cities from becoming overrun by poor rural migrants and end up like the major cities of the so-called developing world, that is overwhelmed by slums and unplanned development. The system became a major component of the centrally planned economy at the height of Mao's dictatorship and ultimately held back China's cities. Since 2001 it has been relaxed to varying degrees at the Provincial level and in national policy. Also as with so many laws in China it is often completely ignored....
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