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The motto is 'welcome to Beijing'

Updated: 2011-02-07 10:13

By Luo Jiexin (

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Several photographs depicting a traffic-free Beijing during the Spring Festival, which were posted on popular Chinese social networking website, triggered massive controversy among Web users.

A group of netizens - who appeared to be old Beijingers, or permanent Beijing residents - hailed the azure sky, clean air and superb traffic, something local residents have experienced in the past few months, if not years. Beijingers attributed the easy urban life to the departure of a large number of migrant workers who have headed back home for the all-too-important Chinese New Year. In their online remarks, Beijingers asked migrant workers not to come back to Beijing and declared that “if you do not come back, you are making the greatest contribution to the city”.

However, the xenophobia, which is on a rise among large cities such as Beijing and Shanghai, is bad indeed.

From an economic point of view, the free flow of human resources and the influx of migrant workers to big cities, actually benefit every city dwellers.

One of the remarkable contributions made by these migrant workers is that they help slow down the consumer prices in Beijing.

A large part of the immigrants to the Chinese capital are in retail and logistics businesses. They deliver daily necessities and various kinds of food to every corner of the city, making retail businesses one of the most competitive sectors. Competition leads to the fair and efficient distribution of goods and effectively prevents the industry from being monopolized by several giant players. Thanks to their hard work and inexpensive labor, prices of food and many daily goods are free from speculation and are hence kept at a reasonable level despite excessive liquidity.

Without them, consumer prices will be much easier to be manipulated. This well explains why food prices grow rapidly during the Spring Festival. Since migrant workers leave Beijing, most of the wet markets across the city close their doors, forcing those who stay in Beijing to source their food in department stores or supermarkets. Without migrant workers, the supply of food decreases a lot and local residents’ bargain power as buyers weakens. The prices of food, eggs and vegetables in particular, are left at the hands of large supermarket chains and prices jump as a result.

The same logic also applies to the prices of a lot of services in Beijing. Thanks to these migrant workers, Beijing still remains one of the inexpensive cities in the world if housing costs are not considered. Abundant labor supply from regions such as Henan, Hebei, Sichuan and northeastern provinces makes Beijing rather competitive in terms of costs of house-keeping and catering, when compared with Shanghai.

It is true that Beijing’s natural and social resources are put on a test. And there is no doubt that Beijing is over-packed and its resources are over-stretched.

The Chinese capital houses nearly 20 million residents by the end of 2010, according to Beijing Bureau of Statistics. Among them, every four of 10 are immigrants. In fact, the percentage could be much higher because it is believed there are a lot more unregistered immigrants.

This has prompted the Beijing municipal government to vow last month that it will check the “orderless and rapid” growth of the population in the coming five years.

The best way to cure the too-rapid growth of the population, however, is not to curb the human inflows. On the contrary, the panacea is to open the city to all.

The free labor flow will promote the fair distribution of all kinds of resources and help narrow the gap of income between urban and rural areas. Only after the urban-rural differences diminish, will migrant workers stop flocking to large cities.

Indeed, differences have narrowed quite a lot in some sectors where labor forces are free to flow.

Gate-keeping service is one of such sectors. In Beijing, a skilled security guard now earns about 1,500 yuan ($227) a month, 200 to 300 yuan higher than their counterparts in second-tier cities. The gap used to be more than 500 yuan five years ago.

That is why Beijing is experiencing a shortage of trained security guards. After all, if one can earn almost the same amount of money in his hometown or somewhere near his hometown, why should he leave behind his families to find a job in Beijing?

So, there is no need to set up barriers to block outsiders from getting a post in Beijing. An open market will level the distribution of resources and outsiders will leave as soon as the capital is no long appealing to them.

The author is an independent financial analyst and business consultant.


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