China’s supply of cheap exports was made possible by a deep well of migrant labour guaranteed by the hukou system, which ties the social rights of peasants to their birthplace, and puts them at a disadvantage in the cities to which they migrate for work. The result is that a city such as Guangzhou (formerly known as Canton), the largest in Guangdong, has become like Saudi Arabia: it has a GDP per capita on a par with a middle-income country, but academics estimate that only three million of the 15 million people who work in Guangzhou every day are officially registered inhabitants. The rest have had no rights to housing, education, or healthcare and live on subsistence wages. In Saudi Arabia the cheap migrant labourers are attracted by the oil wealth; but in Guangdong the labourers are the sources as well as the byproduct of the wealth. Reform of these conditions is painfully slow.
China, the new Saudi Arabia?
Could parts of China be increasingly looking like Saudi Arabia? That's what a recent ECFR study seems to indicate: