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Arguments - Data Quality

Data on city growth and rural-urban migration are highly problematic in China. There are gross inconsistencies in the Chinese classification system for urban, rural, and city populations, because the system mixes territorial and functional definitions. The definitions have also been changed several times. Official household registration data often do not reflect the actual place of residence, indicating a problem of illegal migration.

Description of the Problem
The distinction between rural and urban populations is one of the most notorious fields for statistical artifacts – and not just in China. It is extremely difficult to find a consistent classification that accurately represents the situation.
Unfortunately, the urban-rural classification system in China is extremely inconsistent and confusing. Before we can use Chinese urban-rural statistics, we have to consider the following problems:
WB00860_.gif (262 bytes) Chinese urbanization statistics use several different methods for classification.
WB00860_.gif (262 bytes) The definitions of "urban" and "rural" have changed several times in China over the past decades. It is therefore extremely difficult – if not impossible – to generate time series of urban-rural statistics. 
WB00860_.gif (262 bytes) The boundaries of towns and cities are frequently defined according to political and administrative considerations. In China, many cities and towns include large rural areas (counties) where farmers still cultivate crops.
WB00860_.gif (262 bytes) There are frequent reclassifications. Many rural townships have been designated as towns in recent years. This has "created" urban populations without any major change in the people’s place of residence, labor force participation, or lifestyle.
WB00860_.gif (262 bytes) A growing number of people in China do not live where they are officially registered. A wave of "illegal" rural-urban migrants is flooding all major Chinese cities. This "floating population" is estimated to be in the range of many millions.
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Definitions Charts & Tables
In China at least four different concepts have been used simultaneously to classify the population, creating a whole range of overlapping classifications and incompatible statistics (see Figure 1). Many authors have tried to sort out the various definitions and have suggested improvements (see, e.g., Kirkby, 1985; Ma and Cui, 1987; Ran and Berry, 1989; Goldstein, 1990; Chan, 1994; Shen and Spence, 1995; Zhang, L. et al. , 1998). One of the clearest analyses of urbanization definitions in China (available in English) is by Jianfa Shen (Shen, 1995). To understand the maze of China's urbanization statistics, it is necessary to distinguish the following classification schemes: Agricultural vs. Nonagricultural Population
Figure 1
1. County - city/town
The easiest and most straightforward definition is the distinction between the population living in counties (excluding people living in towns within these counties) and the population living in cities and towns (excluding people living in the counties within cities). As can be concluded from this territorial definition, counties can include cities and towns - so we cannot simply substitute the total county population for the rural population. Also, cities can include counties, so we cannot substitute the city population for the urban population.
2. Registered agricultural - nonagricultural population
This functional classification also seems to be simple and clear, but only until we learn that, in China, the agricultural population does not necessarily work in the agricultural sector or live in rural areas.
The distinction between agricultural and nonagricultural population is made by local residence registration committees. These committees are a legacy of the communist system. Their function was (and still is) to control rural-urban migration and organize state supplies for urban residents. All residents are classified as either belonging to the agricultural population or to the nonagricultural population. The agricultural population usually (but not always) works in the agricultural sector; the nonagricultural population usually (but not always) works in industry, the service sector, or the administration. However, the distinction does not simply characterize an individual's likely position in the labor force. It also determines the person's privileges. For the nonagricultural population, the government assumes the responsibility of providing jobs, housing, education, grain, and other benefits. In contrast, the population that is registered as agricultural is more or less responsible for itself. Obviously, nonagricultural population status has become a privilege that is not given to everyone living in an urban area. In fact, many cities have a surprisingly low percentage of nonagricultural population (see Figure 2), usually because cities include rural counties with agricultural population, but also because rural-urban migrants are sometimes allowed to live in the city provided they supply their own grain. These migrants are classified as agricultural by the residence committees so the government can avoid financial responsibility for them.
Agricultural and Non-agricultural Population in Chinese Cities
Figure 2
3. Actual agricultural - nonagricultural employment
While the registration status of nonagricultural or agricultural basically describes a person's legal rights and the state's obligations, the actual agricultural or nonagricultural employment defines a person's position in the labor force. The population in nonagricultural employment is significantly larger than the population with nonagricultural registration status, mainly because former farmers and rural laborers have found jobs in township industries or service sectors without being a nonagricultural resident. Since the 1978 economic reforms, the government has encouraged these employment changes, but is not prepared to provide the privileges of the nonagricultural resident status.
4. Registration with villagers committees - residents committees
People in townships are registered with villagers committees. They are automatically classified as agricultural population. People in towns are registered either with villagers committees, and thus are classified as agricultural population, or with residents committees, and thus are classified as nonagricultural population (with the privileges mentioned above). The bottom line of this distinction is as follows: if you are born in a Chinese village, you are automatically registered with the villagers committee as a member of the nonagricultural population.
Change of definitions
Chinese statisticians have not only introduced a confusing maze of incompatible urban-rural definitions, but they have also changed these definitions several times since the foundation of the People’s Republic of China (see Figure 3). This makes it almost impossible to compile consistent time series of urbanization in China.
As Jianfa Shen has demonstrated, there are huge differences in China's rural (and consequently urban) population size depending on the definitions used. For instance, according to the pre-1982 definition, China's rural population in 1990 would have been 932 million; with the 1982 census definition it was only 535 million; and with the 1990 census definition it would have been 842 million people (see Table 1). The number of rural residents (measured as the agricultural population) would have been 896 million. Obviously, these statistical inconsistencies make it almost impossible to get a clear and realistic picture of urbanization trends in China. 
Changing Definition of City and Town
Figure 3

Rural Population in China by Selected Definitions
Table 1

Floating population
In addition to the classification problems outlined above, there is the problem of "illegal" migrants. These are people from rural areas who move to the cities in search of work and a better life and stay there - at least temporarily. Chinese demographers call these migrants the "floating population," suggesting that these people will eventually return to their villages.
No one knows how large the floating population really is. There are gross differences in estimates: official sources speak of 2 or 3 million for each of the larger cities, such as Beijing or Shanghai. However, foreign China experts, such as Kenneth Lieberthal, consider a floating population of 100 million people to be possible (Lieberthal, 1995b, p. 303). The floating population problem is a good example of China's tendency to ignore or underestimate trends that are not consistent with the official state doctrine. With the strict Chinese household registration system it should be easy to identify and control the floating population. In principle, the floating population from rural areas remains registered in their home villages as part of the agricultural population. They are not entitled to the privileges of subsidized food and housing reserved for urban residents. Employers must get permission from the ministry of labor or their local labor offices to hire migrant workers, and they must register these workers. In other words, the state authorities have legal and administrative means to send migrant workers back to rural areas once they are no longer needed.

However, in reality, there is a substantial number of people who fall through the cracks of the system, or who simply ignore it. Many cities have also relaxed the rules and are tolerating large numbers of migrant workers to satisfy the labor demand in certain sectors, especially demand for unskilled labor in the construction industry and in certain service sectors (restaurants, textile wholesalers).
With growing pressure from the huge army of unemployed rural laborers and increasing demand for cheap labor in the cities, the number of unregistered city residents will grow, despite frequent crackdowns by city administrations and attempts to send some of these people back to their villages. The floating population is a consequence of China's economic reforms and it is unlikely that administrative or coercive measures will be able to stop the wave of rural-urban migrants in the long run (see: Scharping, 1997; Chan and Zhang, 1998; Zhang and Zhao, 1998).
Related Arguments

Urbanization:   Trends     Impact    Data Quality    Prediction Error    Intervention Possibilities    Intervention Costs