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Showing posts from August, 2014

I understand China less well than I thought I did

China has been urbanizing quite a bit, and one important reason that this hasn't happened even faster is the  internal passport system  that restricts who can move to the city.  Usually when you have some poorish country undergoing urbanization and industrialization you find that people in the cities are being paid about twice as much as they would earn in the countryside, since that tends to be what's required for young people to leave the only life they've ever known in large numbers.  This is still a pitiful amount by Western standards, though, the masses still living out in the countryside who are willing to move to the city at that price prevent wages from getting any higher until urbanization has run it's course.  And of course rural wages tend to start increasing at the tail end of this because the amount of land in the countryside available per person goes up. Except that in China, the government has slowed the rate at which people leave the countryside for th