Chapter 65 Spatial distribution of economic activities in Japan and China

Relaxing Hukou: Increased labor mobility and China’s economic geography

“…A simple illustration of this fact is that the Gini-coefficient for the Chinese city size distribution was 0.43 in 2000. Compared to a world-average Gini-coefficient of 0.564, this indicates a more evenly sized city size distribution in China (Fujita et al, 2004(Fujita et al, , p. 2955.…”

“…The Chinese government alternated between periods of more and less restrictive migration policies (Zhao, 2004, Fujita et al, 2004, Chan and Buckingham, 2008World Bank, 2008, ch 5, andChan, 2009) but ever since the 1950s the so called Hukou system has been a main feature of its internal migration policies. Although the system might have become somewhat less restrictive over time it is still very much a prominent characteristic of the Chinese labor market (see f.i.…”

“…Although the system has become less stringent and more differentiated, the fact that temporary and illegal migration flows to the main cities have been surging shows that the (Fujita et al, 2004(Fujita et al, , p. 2957. Chan (2008) estimates that between 1982 and 2006, the annual volume of Hukou migrants amounted to 17-20 million people.…”

“…Chan (2008) estimates that between 1982 and 2006, the annual volume of Hukou migrants amounted to 17-20 million people. The impact of the labor mobility restrictions is clear from the stability of this annual official migration flows (Fujita et al, 2004(Fujita et al, , p. 2957. This stability also suggests that neither the scrapping of the functional Hukou nor the decentralization of the migration policy has had a substantial impact on the flow of permanent (official) migrants to the cities.…”

“…4 What are the consequences of the Hukou system for China? Au and Henderson (2006a,b) forcefully argue that Chinese cities are too small as a consequence of the migration restrictions and that the agglomeration rents associated with urbanization are therefore underutilized (see also Fujita et al, 2004). 5 The associated welfare losses of the lack of labor mobility are considerable (Whalley and Zhang, 2007).…”