OAKLAND, CAChinas economic miracle has lifted over 720 million Chinese people out of poverty and transformed the global economy, yet its causes still elude policymakers and development consultants around the world.
Finally, the puzzles missing pieces are explained in the new Independent Institute book Chinas Great Migration: How the Poor Built a Prosperous Nation, by Bradley M. Gardner.
Gardner, a U.S. Foreign Service Officer and former China analyst for The Economist Intelligence Unit, traces the roots of Chinas economic rise to the greatest migration in human history: the exodus of more than 260 million people from the countryside to the city.
Internal migration is directly responsible for an estimated one-fifth of Chinas economic growth, and its indirect contributions to the economy may be far greater. Simply giving poor people access to larger markets for their labor increased global economic output by at least $1.1 trillion over 20 yearsgrowth roughly equivalent to the size of Mexicos economy.
It has also prompted officials to enact wide-ranging market-oriented and privatization reformstax reform, social services reform, land reform, and infrastructure developmentwhich have accommodated and amplified economic growth.
Along with his original analysis of Chinas transformation, Gardner offers valuable predictions and lessons for policymakers in China and beyond:
- Chinas internal migration is expected to level out in the mid-2020s. Economic growth will grind to a halt unless problems caused by capital-hogging state enterprises, an inefficient state-owned financial sector, and a sprawling unchecked one-party state are corrected.
- Strong rural land property rightsand the ease of selling or leasing rural landwould further strengthen Chinese labor markets, helping rural dwellers and urban migrants earn more money.
- Although mass migration has strained Chinas social services to the point of collapse, recent experimentation with pre-paid social services would be a solution.
- Better urban development policies could help countries adapt to slow population growth and capture more of the benefits from migration.
Bradley M. Gardner is a Research Fellow at the Independent Institute and a Foreign Service Officer with the U.S. Department of State. Previously he worked in China forThe Economist Intelligence Unit, served as Managing Editor of China International Business, and was Editor-in-Chief for China Offshore/Invest In.
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