Beijing's municipal government announced April 25 that will issue 600,000 free multifunctional identity cards to migrant workers in the city's construction industry in 2007. Large construction projects that last for longer than six months in duration, cover more than 5,000 square meters (about 54,000 square feet) or cost more than 5 million yuan (about $647,000) are obliged to provide at least 95 percent of their migrant workers with this card. Migrant workers can use the cards for banking and as an identity document. The program's stated objective is to prevent nonpayment of wages, a key source of urban social unrest. The identity card plan ties into a series of economic, social and political programs that the government of President Hu Jintao and Premier Wen Jiabao has struggled to perfect to address social stresses that have emerged and grown to dangerous proportions since Deng Xiaoping first opened up China's economy in 1978 with the phrase "to get rich is glorious." The subsequent ever-widening wealth gap and resulting rural-urban frictions sit atop Beijing's list of most dangerous social instabilities. Anything with the potential to spark mass unrest
among China's 900 million rural residents has a far greater chance of toppling the Chinese Communist Party than any credible military conflict. This ambitious scheme aims to fulfill multiple objectives, the most important of which is keeping track of the country's 150 million to 200 million floating migrant workers. These comprise approximately 12 percent of the nation's population, and make up a key chunk of all rural residents. Beijing is home to an estimated 3.57 million floating workers (about 19 percent of the capital's total population), while Shanghai has 2 million and the southern province of Guangdong — where much of China's manufacturing activity is concentrated — has a whopping 26 million. At present, the Beijing trial is only offering cards for about one-fifth of the city's migrant population. China has an antiquated system known as "hukou"
for monitoring its 1.3 billion people. This two-tiered urban-rural residence registration system dates back to the 1950s. The Ministry of Public Security has made proposals for a unified registration system; local and provincial pilot tests in the past few years have shown promising results. The new unified system still fails to track rising numbers of internal migrants who do not live where they are registered, however. Once rolled out from Beijing, the new identity card system should help the government cover this gap in its tight monitoring of Chinese citizens by feeding information on each internal migrant's movement to the public security and labor departments. Moreover, it will give the central government a better idea of how much money flows through this gray sub-economy, since each card will come with a deposit account into which wages will have to be deposited. By holding employers responsible for timely wage deposits into bank accounts linked to these migrant worker cards, city governments will face less financial pressure to supply social services for unpaid migrants. It is likely that the new state-owned Postal Savings Bank of China, set up last month, will provide accounts for Beijing's migrant workers in this initial pilot program. The Postal Savings Bank was spun off from the Chinese Postal Service, taking with it the majority of Chinese farmers' savings. Beijing hopes this scheme will raise operational costs for property developers, who in turn will push up prices for local governments that have been commissioning multiple construction projects more for prestige than for function. Commissioning skyscrapers destined to remain empty or half-finished (which dot downtown Beijing) has contributed to the capital's overheated property market and soaring housing prices, a key source of anger among China's urban population. China's stability hinges on continued economic development and job generation. If China's hukou system can be unified, a key obstacle to continued economic growth will have been removed. This obstacle is the regional mismatch of labor supply and demand. Interior villages with excess workers cannot find enough jobs for them, while coastal cities with booming industries cannot find enough workers for them. The migrant workforce is neither nimble nor well informed, and does not always move where labor needs are greatest. As a result, most migrant labor floats toward, and concentrates in, known labor hotspots — usually cities like Shanghai, Beijing or Shenzhen. By better monitoring how many migrant workers are in which city, the Chinese government should be better positioned to identify which cities have enough or too many migrant workers and which ones have room to accept more — and, at least in theory, should be able to begin shuttling workers where they are urgently needed. While this is a step in the right direction, not all questions have been answered. The most obvious unanswered question is how these cards can be used to direct migrant workers away from cities with labor surpluses to cities where labor is in short supply. In one possible solution, Beijing could fund less popular migrant destinations; the local governments experiencing labor shortages could then make benefit payments into migrant worker card accounts. Another unanswered question relates to the fact that Beijing's new cards will only be issued to people already on the ground, leaving the issue of new migrant inflows unaddressed. No details have been offered so far on how — or if — migrant workers will be taxed or receive financial assistance for benefits currently reserved only for urban citizens, such as healthcare and schooling. Ultimately, Beijing's new identity card initiative is a token first step toward true reform of the hukou system. Numerous other challenges remain, and opposition to change in the family registration system remains strong, particularly in the cities. More important, Beijing finally can keep tabs on its own 3 million-plus floating migrant population, which may one day enable the government to keep tabs on the 150 million-plus people floating nationwide. For now, a system for the capital, where social stability is paramount, will have to suffice.