The Impacts of Fall in Exports on Livelihoods in China:Urban Unemployment, Rural Poverty and the Welfare of Rural-urban Migrants
Lead Research Organisation:
University of Nottingham
Department Name: Sch of Sociology & Social Policy
Abstract
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Organisations
Publications
Appleton S
(2014)
Understanding Urban Wage Inequality in China 1988-2008: Evidence from Quantile Analysis
in World Development
Long W
(2017)
The impact of job contact networks on wages of rural-urban migrants in China: a switching regression approach
in Journal of Chinese Economic and Business Studies
Xia Q
(2014)
The effect of the state sector on wage inequality in urban China: 1988-2007
in Journal of Chinese Economic and Business Studies
| Description | China is an authoritarian centrally controlled governance system under the name of 'socialist market system'. Its centralised governance can mobilise the most valuable resources via its state sector to manipulate the less developed market system. It could, on the one hand, encourage private sector to develop, and on the other hand, constrain the resource allocation to the promotion of private enterprises to obtain capital and free entry into the sectors that are still monopolised by the state firms. This has become more obvious since the current leadership took place in 2012. The corruption campaign has been launched under the leadership has disposed the large number of government officials who have been accused for their corrupted records and been jailed or removed from the official positions. This has been found in result of inactive local governance due to the reduced motivation to promote GDP growth, and the lack of incentives to attract foreign direction investment, or even domestic investments to boost local development. One of the issues aimed by this project is to explore how the local government would have impacts on human capital (education, child-care, healthcare), labour market (employment), and poverty alleviation in China and whether Chinese model would provide any lessens, positive or negative to Kenya or Uganda, from which, the similarly low-income countries in Sub-Saharan African countries. The governance of Uganda is similar with that of China. Despise the fact that private sector composes the large part of Ugandan economy, its government controls economic policies and through which, using the regulation strictly controls the country's economic development. The different level of economic development between China and Uganda has disguised the similar nature of their governance which was shared between the two countries. Chinese governance shows its effectiveness of control by its seemingly consultative manner to its local government branches and in the same time, mobilising the financial control through the banking sector and favouring the state firms. Without a fully developed financial market, China's large number of private firms, especially those medium and small firms, cannot be fully funded for further growth, or some which would have to declare bankruptcy. The medium and small sized firms in China is the overlooked economic portion that should be supported by the local governments and has the potential power to support China's local development. Yet, this has not been found as the case from our research of the project. We find that individual households in China greatly rely on their own income to pay for education early-childhood development and healthcare. Their employment has been put into the informal sector rather than formal jobs which are linked with the regulated safety nets. Poverty alleviation, as the central government initiative to reduce the country's absolute poverty, has become a political campaign. From our finding, the poor, absolute or relative, are still suffering from the lack of access to the sustainable livelihoods, especially when a household would have to support its member in full-time education, or someone who is seriously ill. The growth story has passed its glorious in China dropping from the two digital annual growth rate to the current low in 6%. Uganda has just experienced the fast growth of its GDP. Based on the very low starting stage of taking off, Uganda is still facing the lack of investment to boost its economic sectors such as in manufacture, construction and social sectors. We find that the lack of investment in Uganda has made it hugely relying on the investment from China. Infrastructure in Uganda has been invested by the state firms of China, with the possible debts to be paid in the future. It is unknown that how Ugandan government would be confronted with if the debts could not be cleared towards the end of loan period. The lack of teachers, doctors and jobs for the youths are found in Uganda. Although the rise of income for the trained medical professionals is regulated by the government, the brain drained problems still sustain. We find that many medical doctors trained in Uganda will find work in other parts of the world including in Kenya, and other African states which would provide them with higher salaries. Lack of medical resources is another issue that hospital facility including medicines and hospital beds provides no support to Ugandan people. We find in-patients are dwelling outdoor near the hospitals or clinics for treatment. Governance in Kenya is regarded a system of laissez faire, or democratic with low-efficiently managed bureaucracy. Although it seems a lack of effectiveness and efficiency in its governance, the system has generated a higher level of market competition. The market conditions are set fairer to all the entries in principle although arguable. Due to such a market entrance condition, China's investors to Kenya are diverse - from different players in both state and private sectors. Agriculture, food processing, social sectors including healthcare and education have all attracted investors from China and other countries. Privately provided education and healthcare institutions are found in supporting the large cohort of the country's middle class and, the steady development in manufacture, agriculture and service sector provide opportunities for low-skilled workers in Kenya. Although it can be debated that the grounding of economic development of Kenya is higher than that of Uganda, the current level of Kenya's development is therefore benefited from its past capital accumulation, the market system based on its fairer condition to entre will have a long-lasting effect on the future economic development. We find that, the proportion of private sector in Kenya is high and the jobs provided by it are more sustainable. This has enhanced Kenya's general livelihoods, service sector and the labour market. The overall governance of Kenya might not be efficient but the lack of intervention to its economic sectoral development has indeed allowed a protection of all players competing on the fair ground. In summary, the most significant achievement of this project is our investigation into the relationship between central and local governments in the three selected countries, and how their impacts on the local economic growth and social development. We find that, authoritarian governments only would work effectively by mobilising the resources to deal with emergency or crisis temporarily but would have negative effects on a fully developed market system. Without the latter, low-skilled workers would be pushed into the low-income jobs due to the lack of opportunities, or even unemployment, or a lack of security to obtain sustainable livelihoods (China's rural-urban migrants and Uganda's large number of youth unemployment). The balance between the effective government intervention and market efficiency should be met and this would be the true lessons to be learnt by all three selected countries. This is to say, Kenya should improve its effectiveness in governance by reducing its lack of efficiency in implementing its regulation and policies in favour of attracting further investment to Kenya and financing further to its public goods. The fundamental issue with Ugandan governance is the lacking diversity in attracting foreign direct investment from other sources apart from China. Although there are some 'special economic zones' located in Uganda with a reduction of taxation on foreign capital, they are mainly targeting at the Chinese investment. China's socialist market system has met its bottle-neck, further reforms should be implemented in order to gradually reduce the monopoly of the state sector and enhance its private businesses. Social developments in terms of education, healthcare and job availability of the three selected countries, are various due to their economic capacity as well as their different mechanisms to provisions. The commonality among them is that there is no solid welfare provision is established to support the poor and the vulnerable. |
| Exploitation Route | The finding from our research on the methods to control corruptions among the selected countries (China, UK, Kenya and Uganda) will be taken forward to the policymaking communities. This will improve the quality of governance by providing some fundamental understanding to human behaviour in bribery, truth-telling and social just. This will be supported by our forthcoming research paper titled "Truth-telling in the midst of corruption". The on-going analysis of healthcare data collected from the selected countries will provide evidence-based policy suggestions on how the governments could play proactive role healthcare provision and hence, benefit the poor and the vulnerable; and the mechanisms to generate resources to facilitate justified service to a universally accepted model. The findings from the existing research on the improvement of governance, and its impact on economic growth, social development and the extend to which Chinese lessons should bee learnt by low-income African countries have been disseminated during the research period. This can be further communicated to the international policy makers including the World Bank, UNDP, ILO and UNIDO etc, and the governments of the countries concerned. |
| Sectors | Agriculture, Food and Drink,Communities and Social Services/Policy,Financial Services, and Management Consultancy,Other |
| Description | In the project dissemination taking place in Uganda September 2019, government officials from 9 low-income countries including Ethiopia, Rwanda, Kenya, Uganda and etc were attended. The focus of Chinese growth story has been acknowledged but its less share in pro-poor in social development is also understood. The belt-and-route of China's current initiatives to form a tie with those African countries becomes a topical issue that further research will be developed. It is promised that our findings will be used to assist the policy-makers of these countries in the area of making growth pro-poor. Our research on healthcare reform in China (with the drafted paper titled 'Primary healthcare provision in China: lessons learnt from the UK') has attracted the attention of China's National Health Commission. We are in the middle to negotiation to set up an executive PhD programme to train the Commission's mid-range administrators in health economics and healthcare management. |
| First Year Of Impact | 2019 |
| Sector | Financial Services, and Management Consultancy,Government, Democracy and Justice,Other |
| Impact Types | Policy & public services |