Waidi Ren and Hukuo: The Two-Tiered Society in China

Waidi ren, or ‘outsiders’, are the rural unskilled who migrate to China’s booming cities illegally, and are forming a permanent underclass:

Andrew Jacobs, China Takes Aim at Rural Influx

According to the Beijing Bureau of Statistics, more than one-third of the capital’s 19.6 million residents are migrants from China’s rural hinterland, a figure that has grown by about 6 million just since 2000.

Numbers like these worry the governing Communist Party, which has a particular aversion to the specter of urban slums and their potential as cauldrons for social instability.

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Known derisively as “waidi ren,” or outsiders, the migrants are the cut-rate muscle that makes it eminently affordable for better-off Chinese to dine out, hire full-time nannies and ride new subway lines in places like Shanghai, Guangzhou and Shenzhen.

“The middle class hates to see that kind of poverty, but they can’t live without their cheap labor,” said Kam Wing Chan, a professor at the University of Washington who studies China’s rural-migrant policies.

To manage the huge population flows — and its own fears — the government relies on an internal passport and registration system dating from the Mao years that ties access to education, health care and pensions to the birthplace of a person’s parent. The hukou system, as it is called, has created a two-tiered population in many Chinese cities: those with legal residency and those without.

Though urbanization is a central tenet of the party’s latest five-year economic plan for the country, Mr. Chan says, the 250 million rural migrants who are expected to move to cities in the next 15 years could become a source of social unrest unless the hukou system is reformed. “Having that many second-class citizens in Chinese cities is dangerous,” he said.

Obtaining an urban residence permit, called a hukou, is possible only for those with deep pockets or top-notch connections, so struggling migrants live in a gray zone of pay-as-you-go medical care, dingy rented rooms and unregistered schools where the education is middling at best. Byzantine property ownership and bank-loan rules mean that most rural hukou holders are frozen out of the housing market even if they can afford a down payment on an apartment.

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In a rare act of coordinated defiance, more than a dozen newspapers across the country jointly published an editorial last year calling on the government to take on the nettlesome process of reform. “We believe in people born to be free and people possessing the right to migrate freely,” the editorial declared. Within hours, however, the editorial was pulled from the papers’ Web sites and several editors were punished.

Since then, some Chinese scholars have been reluctant to speak out on the issue — indeed, a half-dozen experts on the subject each declined to comment for this article. Others, who were willing to discuss the matter, warned that the status quo was producing the very situation China’s leaders want to avoid.

As income gaps widen and inflation takes its toll on the paltry incomes of big-city migrants, many workers are becoming increasingly bitter. “The system as it stands now is only feeding instability,” said Jia Xijin, a public policy expert at Tsinghua University. “Rural and urban residents contribute to our nation, and they both pay taxes. But they don’t equally benefit. The injustice is glaring.”

One of the problems inherent in China’s urbanization arising from the desire to slow the migration of rural citizens to the cities, but factory owners need low-cost workers. The Chinese leadership is caught in a dilemma of growth. If migration is unfettered, the rural countrysides would be hollowed out even faster that they are now, with 25% of Beijings inhabitants are waidi ren. Inevitably, these outsiders will demand higher pay, and the cost of Chinese products will climb.

In terms of urbanization, Beijing has two sides: the legal districts, with middle class and upper class Beijingers, and the illegal zones, where waidi ren live in substandard housing, with their kids denied access to subsidized schools, and no access to health care. But these have to be relatively close together, since the waidi ren work as nannies, cooks, and factory workers, coming into daily contact with legal citizens, their bosses and customers.

This is a frail system, and will fail, especially when the kids come of age. They won’t tolerate being shut out.