China's economic migrants, a tale of misery and hope

By Alan Wheatley, China Economics Editor - Analysis

BEIJING (Reuters) - The millions of migrant workers who have fought atrocious winter weather to get home for Lunar New Year personify China's rise as the workshop of the world.

Yet what is striking is not that so many laborers have quit the land for long hours and low pay in factories in far-off cities, but that so few have made the trek.

Official figures last year showed there were 150 million migrant workers. But some 737 million Chinese, or 56 percent of the population, still lived in the countryside at the end of 2006, a high figure compared with other countries at a similar stage of development.

Speeding up urbanization would tap a rich seam of growth because the productivity of Chinese agriculture is just one-sixth of that in the rest of the economy.

"There's still ample scope in China in the coming decades for greater reallocation of labor, including through increased migration," said Louis Kuijs, senior economist in the World Bank's Beijing office.

For China, leaving the land is a ticket to higher living standards, no matter how menial city jobs may be, because urban incomes are more than three times higher than rural incomes.

With fewer farmers, agricultural productivity would rise too, reversing a worrying widening in the rural-urban income gap. And for the rest of the world, the efficiency gains unlocked by urbanization would help keep a lid on Made in China prices.

Work by Kuijs and Jianwu He at the Development Research Centre, a Chinese government think-tank, sheds light on the relatively small role played by migration so far in China's industrial revolution.