Migrant workers wait for a train in Lanzhou, Gansu province. (Photo/Xinhua)
Over the next 20 years, up to 500 million people from rural areas in China will need to be integrated into the country's cities, a demographic shift that will come at a cost of at least 40-50 trillion yuan (US$6.3 trillion-$7.85 trillion), according to a blue paper entitled the China Urban Development Report (2012), published Aug. 14 by the Chinese Academy of Social Sciences.
The report says China is rapidly transforming itself from a rural to an urban society. If the country's urbanization rate grows at between 0.8 to 1 percentage points per year in the future, it will stand at more than 60% by 2020. This suggests that within the next 20 years, more than 200 million rural residents will migrate to cities and towns for work. If the number of people originally from rural areas who have already migrated to cities and towns but have not yet been integrated into the urban population is added, a total of 400-500 million people from the countryside will need to be integrated.
Preliminary estimates in the report put the average cost of providing social insurance and public services to these people at 100,000 yuan (US$15,700) per capita, a total of 40-50 trillion yuan (US$6.3 trillion-$7.85 trillion).
China has a long way to go before it becomes an urbanized society, says Wei Houkai, a researcher at the Institute for Urban and Environmental Studies under the academy.
A large number of migrant workers and farmers who live in the outskirts of cities and do not own "hukous" or permanent residence permits have not really been integrated into the cities and continue with their rural way of life and consumption patterns; their degree of urbanization is low, Wei noted.
The blue paper also said that in 2011, China's urban population grew to 691 million, an urbanization rate of 51.27%. This meant that the permanent urban population has now exceeded the permanent rural population for the first time in the country's history.
According to figures from the Ministry of Human Resources and Social Security, China had 235 million migrant workers in 2011, including 159 million migrant workers outside their hometowns, representing 23% of the total population in cities and towns.
Among these migrant workers, only 40 million were covered under pension and medical insurance schemes, while 210 million had no social insurance. This put them at a disadvantage compared to urban residents when it came to receiving medical care and pension, the report said.
One of the major aims of the government's policy reforms will be to provide migrant workers with the same social welfare benefits as urban residents, the report added.