Why China needs its slums

The latest Economist looks at the plight of many China migrant workers whose cheap urban housing is being flattened, No place to call home

To prepare for the Olympic Games next year, Beijing's authorities are removing ..eyesores. Old villages surrounded by the expanding city are being demolished. With them goes cheap housing, vital to the city's huge pool of migrant workers. China does not like to admit it has slums. But it does, and it will find it needs them.

In the past two years or so, cities across China have announced plans to “transform” these “villages within cities”. Because of the Olympics in August 2008, Beijing faces a particularly tight deadline. The aim is to “renovate” (ie, usually, flatten) 171 urban villages by the end of this year. Between 2005, when the campaign was launched, and the end of last year, 114 of them were thus transformed.

Officials have given few details of the number of people affected. A state-controlled newspaper in 2005 said 33,935 households in 231 villages would be moved out. But these are only the “permanent residents”, ie, the villages' original inhabitants. They are heavily outnumbered by rural migrants, most of whom work as traders or in the city's service and construction industries. Their numbers have soared as Beijing has boomed.

In a city of fast-rising house prices, the former villages offer affordable accommodation. Rents are as low as 200 yuan ($25) a month. The villagers of Liguanzhuang, a cluster of shabby single-storey brick houses in the north-east of the city, can afford to sit around moaning. They lost their fields several years ago, but their houses are large by city standards. They have roofed over their courtyards and partitioned their homes into tiny, dark rooms, which they rent out. Conditions in the village are grim. The only lavatories are foul-smelling public ones. But the slumlords are making an easy living.

Breaking the usual taboo, Qiu Baoxing, a deputy minister of construction, admitted in a magazine article in May that many villages within cities had become “Chinese-style slums”. They are indeed distinctive. In spite of the rapid influx of rural labour into the cities (by official estimates an average of 8.4m people a year between 2001 and 2005, bringing the total to around 120m), they have not spawned huge shanty towns. This is mainly because of controls on the use of rural land for construction. Instead, scattered villages within cities, often behind walls built to hide their squalor, and old state-owned apartment buildings have filled the gap.

...The eventual goal of Beijing's onslaught is still unclear. A government survey in 2002 found 332 villages with a total population of more than 800,000 migrants in the eight urban districts of the city proper—nearly one-third of the total migrant population. Bao Lufang of the Beijing Academy of Social Sciences says the government should refrain from demolishing all of them because of the vital role they play in encouraging migration.

In 2005, the government reckoned that by the end of this year, it would have had to spend 15.5 billion yuan ($2 billion) on dealing with the villages. As registered urban residents, the house-owners are entitled to urban levels of compensation. In Liguanzhuang they complain that this will be far from enough. Moving would deprive them of their rental income.

No plans have been announced for helping the migrants find new homes. In a recent study, Miss Bao wrote that fewer than 10% of those surveyed said they would return to their home provinces if they were forced out of their present accommodation by demolition. More than 45% said they would just move somewhere else around the capital. But most likely it would have to be farther out. Beijing's registered residents may notice that hiring good help is getting pricier.

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