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April 9, 2013

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Migrants to strain services spending

SHANGHAI'S public services will come under great pressure as the increasing number of migrant workers from other parts of China demand the same services as local residents, a report released by Fudan University yesterday stated.

Migrant workers now do not have the same rights to services such as education, social insurance and medical services in Shanghai, due to the nation's permanent residence register system, hukou, that local government finances are based on. "It is almost impossible for Shanghai to afford the public services for such a great number of migrants in the near term," said Ren Yuan, a professor with the university who conducted the survey.

The report comes as China is loosening its curbs on the decades-old hukou system.

Ren said Shanghai's current fiscal expenditures account for nearly 20 percent of its GDP, the largest proportion among all cities in the Yangtze River Delta.

The expenditure would be more than 26 percent of the GDP if migrants enjoyed equal services, which would be a near impossibility to achieve in one step, Ren said. However, "the city government should take gradual steps to move forward," Ren said.

According to the report, Shanghai has a migrant population of 9 million.

The biggest proportion of migrants - nearly 30 percent - come from Anhui Province, and coming next, at 21.7 percent, are those from Zhejiang and Jiangsu provinces.

Shanghai's public service expenditures per capita topped all cities in the Yangtze River Delta region, which consists of Shanghai, Jiangsu and Zhejiang, in aspects from education, social insurances and medical services.

Shanghai's social insurance expenditure was 2,567 yuan (US$413) per capita in 2010, well over three times that of Nanjing, the capital city of Jiangsu, which spent 726 yuan per capita.

"The gap of social insurance is getting smaller after Shanghai required companies to pay social insurance for migrant workers," Ren said. "However, in most aspects of social welfare, the public finance pressure will grow bigger, for example education and medical services, in those cities with a large influx of migrants." Ren suggested the city attract investment for educational and health services.


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