From Overseas Press

Asian giants face the risks of urbanization

(Agencies)
Updated: 2010-08-04 13:58

Urbanization, along with growth in the labor force, advances in education, an increase in the number of women in the work force and a favorable age structure may generate at least four percentage points of G.D.P. growth annually between now and 2030, Goldman Sachs estimates.

A golden age beckons, if India can create about 40 million industrial jobs over the next decade, about 40 percent of all new jobs in the country.

"For potential to meet reality, however, would require a massive overhaul of India's archaic labor laws and heavy investment in education and skills training," Mr. Poddar writes.

Ordinary Chinese might not bet on India's getting its act together. Visitors typically return from India shocked by the seeming chaos of daily life and the all-too-visible poverty.

Yet it is worth remembering that China has paid a price for its meteoric ascent: Its shiny cities have been built by a floating population of migrant workers who are treated as second-class citizens.

The migrants, whose ranks reached a record 211 million in 2009, are largely denied access to education, health care and housing in the distant cities where they toil long hours on building sites and in factories.

As a means of social control, the Chinese registration system — "hukou" — has its uses. Beijing was relieved when 20 million migrants who had lost their jobs during the global financial crisis quietly went back to the villages where they were officially registered. They were absorbed the way a sponge sucks up water.

Yet political and economic pressure for change to the registration system is growing.

Shanghai and other cities have begun to extend more rights to migrants, and the government says it will make it easier for rural people to settle in smaller cities — the sort of places to which coastal manufacturers are relocating because costs are lower.

"There is a huge debate raging about urbanization and land reform, but it looks as if the party is moving in favor of small-town urbanization," said Stephen Green, head of China research at Standard Chartered Bank in Shanghai.