China’s Urban Future: Can Inclusive Services Be Delivered Under Fiscal Decentralization?

Title: 1305 | China’s Urban Future: Can Inclusive Services Be Delivered Under Fiscal Decentralization?
Area: China and Inner Asia
Stream: Urban Studies
Presentation Type: Panel Presentation
Lei Yu, Asia Institute, University of Melbourne, Australia (organizer, presenter, chair)
Xiao (Monica) Tan, School of Social and Political Sciences, University of Melbourne, Australia (presenter)
Suping Lou, Shandong University, China (presenter)


Since the turn of the century, the Chinese government has vastly increased funding for social welfare programs, with the share of expenditure on social services rising to 40% of a budget that has grown 5-fold over this period. This has been aimed at reversing rising income and regional inequalities, as well as boosting domestic consumption and rebalancing the economy. It also reflects the need to accommodate the increasingly urban and diversified society.

The improvements in services have been extraordinary. Average education attainment for the population aged 15 and above has risen from 5.3 years in 1982 to 9.6 years in 2017. Virtually every citizen is covered by a medical insurance scheme and a public pension program, albeit benefit levels vary. Since 2007, the government has vowed to ensure that every person has adequate housing by launching massive programs of public rental housing construction and shantytown renovation.

However, there are significant gaps in the delivery of outcomes. This panel of three papers provides insights into these gaps, focusing on the government’s efforts in the provision of affordable housing and essential public health services for migrant workers, and the role of residence permits in facilitating access. In examining the evolution of policy and practice across localities, these papers highlight the role of fiscal decentralisation, incentive mechanisms and governance institutions in explaining the considerable challenge ahead in China’s efforts to build a social welfare system for all.

Panel Abstracts:
Inclusive Public Housing for Migrant Workers in Chinese cities
2007 marked a turning point in China’s housing policy – a transition from prioritising private homeownership to addressing low-income housing needs, with the government committing to inclusive service delivery, striving towards “adequate housing for all” (住有所居). Accommodating housing needs and public services accessibility for migrant workers has become an important part of the policy agenda, particularly in large cities with a massive influx of migration from the countryside. This paper illustrates the progress and limit of the service expansion towards ‘social inclusion’, revealing how and by whom housing assistance for migrant workers is organised, financed and delivered at the municipal level. The empirical data draws on in-depth documentary analysis and fieldwork interviews and observations in Chongqing, Guangzhou and Jinan. A comparative case study method is employed to identify and explain the divergent policy practices across localities. This acknowledges the diversity of conditions in different regions, and the adaptive process of policy implementation in alignment with local needs and resources. The findings suggest that, despite the commitment to inclusiveness, the delivery of housing assistance by city governments to migrant workers has been selective, giving priority to the ‘productive’ effects of housing policy over its role in providing social protection.

Financing Essential Public Health Services: Obstacles and Challenges in Reaching Migrant Workers
Making public services available for all urban residents has been an important part of China’s New-Type Urbanisation Plan (2014-2020). One important category of these services is essential public health services, which are primarily delivered by grassroots-level health facilities, with different levels of government sharing the cost. Drawing on existing literature, government documents and fieldwork, the paper discusses the current outcomes in the provision of essential public health services and identifies the main problems in service delivery. Through analysis of funding documents of different levels of government, this paper illustrates how the subsidy gets passed down from the central government to the grassroots level, a process which is significantly shaped by the existing administrative structure. Together, the weaknesses of the health care system and the fragmented financing system pose significant obstacles and challenges in delivering essential public health services to migrant workers. As a result, despite the central government’s call for extending services to migrant workers, this task is very difficult to implement.

The Residence Permit System and Access to Urban Public Services: A Case Study of Jinan
The urban-rural divide and hukou-based public services provision has long been criticised. Since the early 2000s, the Chinese central government has committed to a transition towards a people-oriented urbanisation, expanding the access of essential public services to all urban long-term residents, including rural to urban migrant workers. The introduction of the ‘residence permit’(居住证) system forms part of this effort. In practice, however, whether the residence permit system is effective in improving rural migrant workers’ access to public services is unknown. This paper uses in-depth case studies in Jinan to examine this relationship. The findings show only a weak correlation between the possession of a residence permit and access to essential services including public housing, compulsory education, and essential health services. In fact, residence permit holders are not automatically entitled to all services - other criteria often exist such as participation in a pension program. In some cases, a residence permit is not required. The paper concludes with a discussion on the value and significance of the residence permit system and its implications for policy advice and improvement

This panel is on Tuesday - Session 04 - Room 6

Go to Room 6