Migrations, or the uncomfortable part about fighting poverty

Mr. Chen, like most of his friends, visits Italy as often as he can. The 31-year old fashion designer generally makes the trip from the city of Wenzhou on the southeast coast of China to the center of the Mediterranean at least twice a year. Because of difficulties getting visas, he has to travel in tour groups of 20-odd people, all of which, by an odd coincidence, are also fashion designers. One friend of his who runs a small garment business makes the trip five times a year. Poorer workers from Wenzhou often make the trip and never come back.


It is this last group that attracts the most controversy. Because whereas the businessmen and the designers bring cash into the Italian economy, and ease the way for Italian companies to take advantage of the quickly growing Chinese clothing market (where Italian brands are quite strong), competing with low-cost Chinese labor is a whole other matter. While Chinese firms rarely operate in the same industry as Italian firms, and provide low-cost inputs and access to larger markets that allows for Italian firms to expand and hire more workers, so-existence with poor immigrants who will take work at what the Italians consider to be extra-ordinarily low prices has made local unions and politicans nervous.


In China, people feel largely the same way.


Every year millions of poor Chinese hop on a train and ride out east to find a job in one of the large growing Chinese cities on the East coast. Despite the size of this migration, urban poverty of the sort that blights India and Brazil, is more or less invisible in the richer parts of the country due to China's hukou laws. A form of household registration which imposes substantial costs on those who migrate permanently to the city. Different cities enforce their anti-migration laws differently. Wenzhou, with its overwhelming need for factory labor, largely lets people migrate as they please, and has the slums to prove it. Beijing with its hordes of tourists likes to keep the country's poor out of sight. Dealing with an influx of economic migrants is difficult no matter where you are.


The progress of China's poor over the past three decades has been nothing short of extraordinary. It is estimated that over 600 million Chinese people left extreme poverty (under $1.25 a day) between 1981 and 2005. In the shorter time-span of 2001-2010, roughly the amount of time China has been a member of the WTO, the number of people living in extreme poverty in East Asia dropped from 365 million to 117 million. Nearly all of those who have lifted themselves out of poverty have done so while migrating from the countryside to the city, sometimes temporarily and sometimes permanently, sometimes to a city nearby, sometime to cities continents away. 


This blog will largely be about the changes in the global economy that are occuring in order to account for those migrants who, often under the radar, and usually unappreciated, are fighting their way out of poverty. I will focus on China, as it is clearly the most representative example of this trend is developing, and also where I have spent the majority of my career, but I expect to also be covering similar forces at work in Africa, South East Asia, and other emerging marks. I will also look at the policy response from developed countries, like Italy, who suddenly find the global economy changing much faster than they are comfortable with.


A world without poverty is closer than many of us realize, it will also look considerably different than most of us think.

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