China's Great Migration: How the Poor Built a Prosperous Nation by Bradley Gardner (review)

This book champions migrants, especially migrants in China. While Gardner's statement that "The value of an open labor market is one of the truisms of economics" (p. 165) is not exactly provocative, his notion that "China has embraced an idiosyncratic pro-migrant development policy" (p. 8) may surprise many, given a mainstream understanding, especially in the West, that China uses the draconian hukou policy to restrict migration. Moreover, his goal to show how China's experiences can help "policymakers elsewhere to consider solutions to some of the problems associated with large-scale migration and capture the substantial economic benefits" might be met with more than a few jaws dropped. What can the rest of the world possibly learn from China, when it is widely assumed that migrants there live in plight, like those in Foxconn factories who committed suicide?

Refuting myths and challenging assumptions happen to be Gardner's strong suit. In the Introduction of the book, he tells us that China's success in lifting its population out of poverty is due to the "Great Migration." By his account, between 1978 and 2012, more than 260 million economic migrants moved from China's countryside to its cities, surpassing the total number of international migrants worldwide. Drawing from the growth accounting literature, which he admits is marked by considerable disagreements, he reports that rural–urban migration alone added US$1.1 billion to the Chinese economy over the twenty years between 1990 and 2010. The eight chapters that follow elaborate the case why migration should be embraced as a tool of development policy not only in China but in other parts of the world as well.

Chapter 1, titled "Leaving the Countryside," is about how the Great Migration started. It details the early years of the Chinese Communist regime, focusing on land reforms, and the subsequent transition from an agricultural economy to an industrial economy, which also lowered barriers to migration. Gardner's narrative about historical changes is straightforward yet lively, filled with real-life stories. His explanation of hukou is among the best in the literature, due to its simplicity and its emphasis on what hukou means to real people. How the Chinese government adapted to the Great Migration is the subject of chapter 2, "Coming to the City." Here, Gardner highlights major changes that accelerated China's urban development, including the collapse of state-owned enterprises (SOEs), the 1994 fiscal reform, and increased liberalization of the labor market. He also shows convincingly the connections among conditions that explain the labor-heavy path of development, that is, China is capital poor, its intellectual property regulations are weak, but it has plenty of flexible labor that could be mobilized to scale up production quickly.

One of the two chapters on a specific city, chapter 3, is about the miracle story of how Wenzhou transformed itself from one of the poorest cities in China to where privatization first began and where millionaires were bred. The chapter tells an interesting story of how the Wenzhou people found a way out of poverty via informal-sector entrepreneurship in niches with low barriers to entry, high-volume demand, and extremely low margins. While Gardner attributes Wenzhou's success to migrants from the countryside and gives credit to diaspora and the local government's hands-off attitude, he also warns that Wenzhou needs to reinvent itself in order to remain successful.

Chapter 4, titled "The Returns on the Great Migration," is concerned with the question "To what degree has the Great Migration been responsible for China's growth" (p. 70). Gardner estimates that by improving agricultural productivity and labor reallocation, migration has contributed 33 percent to China's gross domestic product growth. In addition, migration has advanced urbanization and labor market reforms, contributing to growth in industrial productivity, human capital, and capital investment. However, he also cautions that as China's...