Migrant workers’ citizenization creates demand for consumption*

CHEN Changsheng ，XU Zhaoyuan  and CUI Xiaoyong

The State Council Development Research Center
Abstract:

This paper examines the mechanism and avenues through which China’s current urbanization pattern acts upon economic growth. Drawing distinctions among rural residents, migrant workers and urban citizens, this paper proves that citizenization will promote balanced and sound economic growth by reducing income gaps and enlarging urban size and human capital. The mechanism and influences are simulated using the CGE model, and the result suggests that an increase of 10 million urban citizens (7 million migrant workers plus their dependents) can push the economic growth rate up one percentage point. Citizenization will promote China’s domestic consumption and fixed-asset investments, reduce dependence on international trade and create greater demand for services, all important means for transforming China’s growth pattern awareness.

Key Words:

Rural migrant workers, citizenization, economic growth, CGE model

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