April 17, 2010

Hukou system

Filed under: Uncategorized — ktetaichinh @ 10:58 pm

<1956: free movements 1958-1978- strict control >1978- loosen trade balance with us = $268 billion in 2009, 180 million “floating population”, in that, 149 migrant workers (usually work in contruction, restaurant, service, manufacturing) Shenzhen: absorbs the most migrant workers real minimal wage (1994- 2006) almost nonchanged – large supply – hukou system: discriminate against migrant – poor human capital, education Choice 1- Household operation: means agricultural production only 13% of land arable, = 1/8 of US level after 1988, household can contract land from state depends on # of members in one household small area of land + many farmers: lesss efficient to buy a machine to farm 2- rural entrepreneurship the development of TVEs employment access to domestic loans is hard 3- migrating is the only optimal choice left 2007-2008 Labor Law Reform – labor contract law – labor dispute meditation/ arbitration (# of cases double in 2007-2008, in that 47% workers won, 14% for employers, 39% partial) China law is closer to EU law, more protective, weak local enforcement, uneven compliance Reform impact: higher cost – tougher penalty – higher risk of litigation by workers, workers have more power – catalyst for official implementation campaign, so that if employers go bankrupt, local officials will not be the one who hold the bag

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