Thinking about urbanisation in China and India.

Mr. Chen, pictured below, is part of a group of migrant workers from Sichuan on whose backs a sweeping wave of urbanisation is spreading across Hainan, a rich island province in China’s south that is being promoted as a tourism paradise.

I was reminded of him when I read this interesting piece by Ashutosh Varshney in the Indian Express, titled “Moving to the City”, looking at urbanisation in India and China. I recommend reading it in full, here.

Varshney is an authority on India’s urbanisation experience. His last point is interesting:

"The Chinese government appears to be saying to its rural folk: we promise you a manufacturing job, but you are not free. In contrast, India is telling its rural citizens: you are free to move, but we can’t promise you a job."

It is an interesting suggestion, but I think a bit too black and white. We had an interesting exchange on Twitter : see https://mobile.twitter.com/#!/ananthkrishnan/status/239189806142345218 but it isn’t the best medium for such a conversation. I hope to meet him when he’s next in Beijing.

As he points out in our conversation on Twitter, freedom to move is constitutionally guaranteed in India. In China, migrants lose access to social benefits when they move out of their hometowns. But I wonder, does it matter on the ground? In India, how many migrant workers can, in any case, avail of access to low-cost housing and decent healthcare? Migrant workers in China have to pay for healthcare in cities, but when they do, I have to say, they receive better social services.

As Varshney’s piece points out, China’s urbanisation rates are far higher than India’s. That is because China has made a policy decision to move people out of the countryside. In the long-run, the government envisages less hands on the farm, bigger plots of land and more mechanisation.

Is it a model that India can follow? If we are to create a future for our farmers in urban India, how equipped are our cities? Or, can we make agriculture viable enough to follow a different path, and is that sustainable in the long run? Does it make sense to have a disproportionate segment of the population continue to be employed in a sector of the economy that contributes less and less to the national income? Difficult questions and a debate central to India’s future. Alas, it is rare to find it being discussed in the media. Varshney’s piece was a much needed addition to the debate.

It is important to also remember the costs of China’s urbanisation and the sacrifices borne by people like Mr. Chen. As I reported recently, inequality in China between urban and rural areas is rising . The urban-rural income gap, in 2011, was 68 per cent higher than in 1985. The simple solution, according to many Chinese economists, is to boost social spending and ease Hukou restrictions. Easier said than done with ballooning deficits for local governments.

I wonder how Mr. Chen would respond if I posed Varshney’s question to him. Would you choose to be “free” to move - according to the Consitution, at least — without the guarantee of work, or “unfree” but with a job? I think I can guess the answer.