By Wang Xiyu, Cui Chuanyi, Zhao Yang & Ma Zhongdong

Trans-regional migration has become an important form of employment for rural laborers, and has come to be referred to as the "tide of rural laborers" in recent years. A series of issues such as appraisal of the phenomenon itself and its effects on the development of the rural and the urban areas have aroused concern from many scholars and relevant departments of the Chinese Government[Zhao Yang, in 1999, discussed in great details some theoretical issues concerning migration of laborers..]

Due to the many links in the trans-regional migration of laborers, and the inter-connection of the various kinds of issues involved, the problems that have cropped up therefrom have become all the more complicated. Viewed from the angle of the urban areas, in particular, some negative effects have been created, such as conflicts between employment of rural and urban labors, and social order[ Zhao Shukai, 1995, 1996.] The Central Government has not yet formulated any unified policies or management standards on this issue[ Although the Ministry of Labor issued in November 1994 the Temporary Provisions on the Management of the Trans-provincial Migration and Employment of Rural Laborers, they are only designed as a set of make-shift emergency regulations without any specific or effective rules. In addition, they have a certain administrative and planning tint as seen in regulations promulgated before..] Local governments, especially those of some big and medium-sized cities, have promulgated a series of policy regulations in the hope of standardizing the trans-regional migration of laborers and wiping out the negative effects of this migration. Except for some short-lived effects, however, these policy regulations have failed to produce any results in anticipation or provide any solution to existing problems from a long-term point of view[ Some people have proposed, for instance, to force farmers migrated into urban areas back to their hometowns to save the market and job vacancies for urban enterprises. Nanjing returned 4,000 farmer-turned workers in 1997. Two months later, only 1,000 laid-off workers applied to fill the vacancies left over..] They have even given rise to the disorderly "vicious circle" of "migration – restriction of migration (or return of migrants) – remigration".

Modernization in China is a modernization of farmers who make up the majority of the country's population, to a great extent. This process is very much similar to that in the world's developed countries, that is, for a relatively long period of time, there will be a binary structure composed of the modern industries in the urban areas and the comparatively traditional agriculture in the rural areas. As the rural population and laborers move into non-agricultural sectors and urban areas, farmers will decrease in number and become managers of a modern agriculture.

It is our opinion that after many years of practicing a planned economic system and the system splitting the urban and the rural areas, a special binary structure, or a "dual binary structure" as has been termed or a "three-polar structure" as it is in fact, has gradually taken shape in China with the progress of the market-oriented reform11 see John Z. Ma, 1999, Cui Chuanyi, 1995, for discussions about the "dual binary structure" and the "three-polar structure" respectively.. The transfer of rural laborers and the progress of the reform are closely related to the process of gradual evolution of this special binary structure. It is imperative at present to find out solution to the problems mentioned above, and especially to determine the role to be played by governments in the massive trans-regional migration of rural laborers.

I. Background of the migration: Speciality of the binary structure in the development of China's modernization

1. The international theory about the binary structure and transfer of jobs is still of significance to the understanding of China’s current stage of development.

Concerning the transfer of the structure of employment in the process of modernization, Arthur Lewis (1954) put forward the famous theory of transfer of jobs under a binary economic structure on the basis of others' explorations. First of all, he divided the economy of a developing country into two major sections: the traditional section carrying out production according to the pre-capitalistic mode of production, which includes agriculture, some small commercial and service sectors, and the modern section adopting the capitalistic mode of production. The key point of Lewis' theory about the transfer of jobs under a binary structure is that as the traditional section has massive hidden unemployment, industrial departments would make use of the transfer of cheap and limitless labor resources from hidden unemployment in agriculture to support capital accumulation of modern industrial departments. Although some people have pointed out many defects in this theory, most people have affirmed the significance of his theory in two aspects: First, it has described the process and driving force of industrialization of an agricultural country, pointed out the imbalance of development between the two different sections, and proposed to spur economic development through expansion of the modern section. Second, it has drawn the framework of the binary structure for analyzing the economic status quo of developing countries, thus laying the foundation for the exploration of the law of economic development in developing countries from the angle of evolution of their economic structures and the transfer of jobs.

This theory of Lewis is still of great help to the understanding of the current stage of development in China. We think, however, that to bring the binary structure into correspondence with the urban and the rural economies in a strict way does not conform with the reality in China. It is too simplified, in particular, when it is used as an example for the analysis of the phenomenon of the "tide of rural laborers". The economic characteristics of the "dual binary structure" have already become noticeable in many developing countries, and the binary character of rural and urban economies stand side by side, at the same time, with the binary character of the economic elements within each section (J.Z.Ma, 1999). As a matter of fact, the rural economy is composed of two parts with different economic features: the traditional, labor-force excessive and self-sufficient part T (traditional sector), which is characterized by low incomes and high risks of agricultural production, and part N (nontraditional sector) which includes small private enterprises and industries specialized in planting, services and labor-intensive sectors. In the same way, the urban economy is also composed of two parts: the modern part F (formal part), which is standardized and high in productivity, providing stable employment in usual cases, and high and stable incomes; and part I (informal part), which includes privately-run labor-intensive services and other industries. Those working in this part earn comparatively low and unstable incomes, and income levels usually appears as Wf > Wi > Wn > Wt. Just as we will point out below, the trans-regional migration of rural laborers in China has taken place under a special binary structure as mentioned above, and the direction of migration usually goes progressively from part T with comparatively low incomes to part N, Part I or even Part F.[ Except for comparatively low wage earners, actual incomes of the owners of small private enterprises in the nontraditional sector in the rural areas may be higher than those earned by labors working in the informal part in urban areas. This is exactly the basis of our theory and evidence for explaining why farmers have returned to their hometowns to start undertakings of their own, see Zhao Yang, 1999.. ]For a rural household that can eke out a living, migration and transfer of jobs are often subject to restrictions of limited resources endowed upon it. These resources include: (1). physical resources; (2). human resources including the level of education, technology, market experience, and ability to start new business; and (3). social resources.

2. Compared with the general experience and theories about development of a binary structure, there are some features in China that call for attention.

(1) The problem of uneven development in China is more outstanding than other countries for quite a long period of time. The unevenness between modern industries in urban areas and traditional agriculture in rural areas as pinpointed in the theory of binary structure is not only a phenomenon in China, but also a more prominent issue. There are three factors in such unevenness that call for our attention. First of all, China is a big developing country with a vast territory. Great differences exist between the regions in the western mountainous areas to the coastal plain areas in terms of their natural conditions, economy, society, and history, therefore, a balanced development is impossible. During the process of development from a traditional farming society to a modern industrial society, the combination of the differences between industry and agriculture, between urban and rural areas, and among different regions has demonstrated itself noticeably as the differences of regional development in the eastern, the central and the western areas. Second, China is a country developing at a later stage in the world. The disintegration of the feudal natural economy in recent times is both the result of exchange of division of labor in itself and development of a petty commodity economy, and also related to the inflow of foreign capital. Its early-stage modern industry had the characteristic of being inserted to a certain extent, and the development of the modern industry was comparatively concentrated in the coastal cities and always closely related with opening up to the outside world and the economy of developed countries. This has also aggravated development disparities. In the third place, the difference between modern industry and traditional agriculture has been intensified due to the strategy of priority development of heavy industries and other systems concerned after the foundation of P. R. China.

(2) Integration of the planned economic system with the strategy of priority development of heavy industries. From 1952 to 1978, China objectively chose the development model of binary structure in order to alleviate poverty and achieve modernization of the country. For the industrial allocation of the national economy and the transfer of jobs, however, the system of a planned economy with centralized decision-making by the Central Government was followed. This was different from the practice under market mechanisms followed by other developing countries. In addition, the strategy of priority development of heavy industries was implemented. In 1952, the GDP per capita in China was only slightly more than over US$50, the proportion of industry was less than 10 percent, the average per capita possession of grain was only 285 kilograms, and the rate of employment in agriculture accounted for as big as 83.5 percent. In order to develop capital-intensive heavy industries on this basis, the capital needed could not be supplied by light industries and had to be extracted from agriculture. The policy of unified purchase and marketing of agricultural products at low prices had to be implemented as a result. The Central Government resorted to the price scissors of industrial products and agricultural products and the agriculture tax to extract funds from agriculture for the development of industries, and kept rural labor surplus where they were. According to estimates by experts concerned, the total sum of funds extracted from agriculture between 1952 and 1978 were 607.8 billion yuan (see the book Support to and Protection of the Chinese Agriculture, 1997, China Agricultural Publishing House). Restriction on migration of rural labors into cities was designed to maintain supply of the non-agricultural population in the urban area and the low cost of industry under circumstances of limited financial resources. (3) Two kinds of permanent residence registration system – registration of permanent rural and urban residences and a series of other systems widely separating the urban and the rural areas for the purpose of restricting the flow and migration of the rural population and labors. As a result of the registration system, the rural population was put in a position of inequality in terms of grain supply, employment in non-agricultural sectors, housing, education, and some other social benefits. This created a binary social structure of urban and rural areas beyond a binary economic structure. This system blocked the passage for "utilization of labor transfer suffering hidden unemployment in agriculture to support the capital accumulation by modern industrial sectors". This planned economy and relevant development strategy, and the measures to separate the urban and the rural areas resulted in the disparities between the urban and the rural areas and between agriculture and industry, a difference apart from that resulting mainly from the different modes of production followed in modern and traditional sectors respectively in a market economy. The system led later to the imbalance of economic structures, weakness of agriculture, and poverty in rural areas. This system and the measures focused attention on the pooling of capital, but ignored labor resources. By 1978, the proportion of agricultural output against the country’s total output dropped to 32 percent, but that of labors working in agriculture remained as big as 76 percent and the absolute number of agricultural workers doubled compared with the 1953 figure. In urban areas, employment was guaranteed for all. It was estimated that the "labor surplus in work" accounted for 20-30 percent of the total number of people employed by enterprises. The contradiction of hidden unemployment became all the more serious in both urban and rural areas as a result11 Study Report of the World Bank, 1995.

3. Changes in the special binary structure and employment of farmers in the market-oriented reforms

The economic restructuring being carried out since 1978 has gradually changed the traditional system of a planned economy that had restricted economic development and job transfer of farmers. It has also gradually changed the basis for the integration of the planned economy with the binary structure.

Table 1 Reforms and the transformation of the mechanism for the transfer of jobs by the rural population22 taken from the 20 Years of Reforms and Transfer of Jobs by the Rural Population by Cui Chuanyi, 1998

Time	Contents of reform	Influence upon the mechanism of employment	Role in the cause of transfer of jobs
1978-1984	Introduction of the household contract system in agriculture, with farmers contracting land for growing crops on their own accord	(1). Rural households have the decision-making power over the employment of their laborers and incomes, thus emancipating laborers. (2). Individual households have become the mainstream forces in the organization of investment, employment and development of a household-based economy. (3). In order to guarantee the employment and income earning of their laborers, individual households have become the mainstream market forces supplying laborers to society.	(4).Increase of employment in agriculture and development of diversified production. (5). Solution of land, grain and clothing and feeding problems, thus laying the basis for the transfer of rural laborers into non-agricultural sectors.
1984-1988	Creation of new businesses and development of township enterprises mainly by communities and household groups on their own accord by making use of the market vacancies left over from state plans.	(1). Creation of mainstream investment and employment bodies of diversified ownership in non-agricultural sectors. (2). Flexible in employment, township enterprises have become the mainstream forces in the employment of laborers via markets.	(3). Blazing of the trail of rural industrialization and localization of transfer into non-agricultural sectors, and shaking off of yokes restricting the development of rural industries. (4). Development of small towns as carriers of transfer of jobs.
1989-1994	Trans-regional migration of rural laborers for jobs (thus breaking the split of the urban and the rural areas and the practice of planned employment)	(1). Creation of open urban and rural labor markets and change of the tradition of administrative and planned arrangements. (2). Break of split of the urban and the rural areas and disposition of resources on a larger scale.	(3). Opening of social space for transfer (both at home and abroad). (4). Integration of transfer into non-agricultural sectors and urbanization, and creation of new mechanisms for the development of cities.

As a result, three forms of employment have been developed for the employment of the rural population, namely, employment in household-based undertakings, self-employment by starting enterprises, and seeking jobs in urban areas to fit in with economic sectors of various kinds of ownership and move into competitive market employment. By now, a three-dimensional pattern of employment in a great agriculture, in township enterprises, and in either urban or rural areas by migrating between different regions has been created[ According to statistics from the State Statistical Bureau in 1999, the proportion of labors working in agriculture dropped from 73.8 percent to 60.1 percent from 1978 to 1988. The drop in these 10 years is 1.41 times the figure in the preceding 26 years. From 1988 to 1998, the proportion further dropped to 49.8 percent.. ]

II. Current situation and trends of trans-regional migration for jobs 1. Four phases of trans-regional migration for jobs

(1) From 1978 to 1984, the main issue in rural areas was contracting of land to individual households and development of agriculture. It was still rare and without organization for farmers to leave their hometowns for job-seeking. It was characterized by resuming the migration in history after nearly 30 years of practice of a planned economy. While township enterprises and household-based industries developed, however, eastern coastal provinces took the lead to go in for construction projects, handicraft and commercial undertakings in other parts of the country. It was estimated that during the early period of the reform, less than 2 million people left their hometowns to seek jobs across the country.

(2) The period from 1985 to 1988 was a period of gradual widening of the gap between different regions, steady acceleration of labor migration, and expansion of markets. Due to lasting stagnation of growth in planting sector of agriculture, township enterprises became the main point of growth. These enterprises developed comparatively more rapidly, however, mainly in the eastern coastal areas and in areas around big and medium-sized cities that boasted relatively better conditions and had opened themselves to the outside world earlier. In these areas, rural labors were transferred into local non-agricultural sectors at a fairly fast pace. In the central and western rural areas with poorer conditions, however, it was difficult for township enterprises to start. As a result, the gaps between different regions in terms of economic development widened. Since regions differed from each other in incomes and situation of employment, it was natural for trans-regional labor migration to gain momentum. The characteristics of this period included: 1). Trans-regional migration into ever farther areas and gradual opening of new channels for employment in outside areas. 2). Small proportions of rural labors going beyond their hometown counties to seek jobs, fast speed of growth, and faster speed in the growth of job-seeking in areas beyond provincial borders than that of job-seeking beyond county but within provincial borders. 3). Migration outside of the original management systems. According to a report from Foshan City, "labors came to work in the city from other parts of the country on their own accord between 1984 and 1987. Migration of labors in a provincial range was