THE DEREGULATION OF PEOPLE FLOWS IN CHINA: DID THE STRUCTURE OF MIGRATION CHANGE?* by

Since the late 1970s, China’s government has gradually eased restrictions on internal migration. The easing of restrictions, along with rapid growth of the Chinese economy, the forces of globalization, and substantial increases in foreign direct investment and local construction spending, have greatly stimulated internal migration. The recent availability of Chinese migration data for three different periods – 1985-90, 1995-2000 and 2000-05 – allows us to pose two fundamental questions: (1) How well does a traditional modified gravity model of migration account for variations in interprovincial migration within and across periods; and (2) as economic reforms in China have deepened, has the structure of migration changed? We estimate different versions of a modified gravity model of interprovincial migration and make two contributions. First, we evaluate the robustness of the model within and across periods. Second, we analyze the influences of provincial differences in fixed asset investment and foreign direct investment on migration, variables never considered in earlier research. Data from the National Census and China Statistical Press are used. Across models and periods, the strongest determinants of migration are distance, provincial differences in climate, past migration flows and provincial differences in per capita incomes. The most important determinants of migration today are distance, the risk of unemployment in the source province, climatic differences, having friends, family and other connections from your home province already residing in the destination province, the location of the destination province and provincial differences in foreign direct investment. The evidence also indicates that higher relative FDI in the destination attracts migrants, but higher construction spending appears to deter them. As more data on the Chinese case become available, further research is necessary to address model specification, simultaneity and data measurement issues.