Friday, June 17, 2016

Brave New Worlds: India and China

65 million Indians live in urban slums, and 300 million live under the World Bank poverty line, which is a depressingly low $1.25 each day. Almost a third of the rural Indians and a quarter of its city dwellers are this destitute. According to the latest World Bank data, in 2011, approximately 84 million Chinese lived on less than $1.25 per day, many of those in the rural interior of the country.

While the GDP per person in Shanghai and Beijing is close to that of Portugal or the Czech Republic, the per capita GDP of interior provinces like Xinjiang is closer to that of Congo. As a result, hundreds of millions of migrant workers left their farms over the past three decades in search of higher incomes in the giant metropolises near the coast. Until recently the government attempted to ignore this enormous migrant community of nearly 220 million people. Instead, it tried to push them back to their villages by refusing to provide them with any services at all in the cities.

Income disparity is a serious concern in both India and China. Yet China’s urban poverty feels very different from the slums of Delhi. Indian slums are more desperately poor. Yet they also function as complete communities, with families of the same caste or religious group shopping from the same street vendors and going to the same schools, and at times living in the same slum for generations 93 percent of India’s workforce is in the “informal sector.” That includes virtually all of the urban unskilled poor, who recycle trash from landfills, drive rickshaws, or clean toilets in wealthy houses. Their Chinese counterparts often work for giant factories for formal employers. The former peasants now get meager paychecks from factories each month. Unfortunately, the factory towns tend to be lonely places without much community: Xian and Qian say they don’t have many friends because workers come from different regions, often speak different dialects, and the turnover at the factories is so high that it is hard to form lasting bonds.

Xian and Qian do not live in a slum. Their dorm room, for which they each pay 100 yuan ($16) in rent a month, has eight bunk beds covered in polyester blankets. Suitcases under the beds hold the women’s few possessions. A blanket covers the one filthy window at all times, because five of the roommates work at night, and the others during the day, so someone is always sleeping. Xian last saw her husband three months ago because he lives in a similar men’s dorm attached to a different factory across town. Her one-year-old daughter lives with her husband’s parents in their home village in Hunan. She only sees the little girl once a year during the spring festival, and says, “she hardly recognizes me.” Migrant workers endure long separations from their partners and children in order to make enough money to send home. The Economist estimates that 61 million Chinese children are left with relatives in villages while their parents work in big city factories. Factory life is all-consuming, and there is not much room for personal lives.

India cannot even begin to create a Western-style social safety net—most of its poor don’t have paychecks or even bank accounts. As a result, most assistance comes in the form of subsidized food, fuel, and in some lucky cases, free healthcare and housing. India has welfare are highly inefficient and often corrupt. In China, most workers have formal jobs with paychecks. China was until a few years ago reluctant to create any social safety net at all for the migrant poor at the bottom of the scale, because they wanted them to move back to the countryside. Now the government may have no choice.


Xian, Qian, and their young colleagues at the factories are bombarded with information from advertising and social media that shows other Chinese making more money, buying houses, building families, and creating what President Xi calls the “Chinese dream.” Through social media, the poor  increasingly see that China’s boom times are leaving them behind. These workers are causing the stirrings of a labor unrest movement in China that has the government very worried.

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