Street vendors in Chinese cities since economic reform : a case study of Guangzhou

Abstract

The growth of informal employment characterizes the urbanization process in the developing countries in the previous decades. China is in the fast lane of urbanization and there are signs of casual employment in Chinese cities in the recent decade. This study chooses a prevalent phenomenon, i.e., street vending, in Chinese cities to investigate the emergence and growth mechanisms of informal employment in Chinese cities since the economic reform. The city of Guangzhou is chosen for case study. There are two theoretical frameworks in explaining the growth of street vendors in other developing countries. First, they could be interpreted as the mismatch of job opportunities against the capacity in generating employment under specific development strategy (the dualist framework and ISI strategy); or street vending, along with other informal employment opportunities, is the efficient way of doing business (the neoliberal framework). The Chinese case is unique as the country is on the course of marketization while the state remains strong. What is the role of the strong state played in contributing to or refraining from the growth of street vendors; and how the lives of street vendors are in this particular context; are the two questions to be investigated. Empirical finding shows that the revival of street vendors in Chinese cities (the first generation of street vendors since economic reform) is facilitated by a series of reform policies initiated by the state, particularly the introduction and promotion of individual business. Street vendors relieved employment pressure, met the commodity shortages in the cities, and rejuvenated urban economy in China. The returnees and the peasants in the city suburb are two major groups practicing street vending, who made fortune out of it. The current wave of street vendors is resulted from the unexpected consequences of the state’s policies, including the state’s promotion on labor dispatching regulations to lower the labor price, the land centered urbanization pushing up the rent, the persistent rural urban disparity in generating urban-bound migration, the hukou system in inferiorizing the rural migrants to the locals, and the changing labor market as more young rural migrants emerge. Street vendors in the current wave could be differentiated into developmental street vendors, who drop the low-wage income to practice street vending; and survival street vendors, who are rejected by regular job markets but have to turn to street vending. The street vendors in the recent years tend to have higher income than some regular paid jobs. Survey on their operation, commuting and accommodation shows that they could maintain they live in the city and their vibrancy is due to the abundant cheap products, as the country is the world factory; and a large number of low and lower-middle income wage workers being their clients. This study concludes that the state contributes to the growth of street vendors in Chinese cities. The strong growth momentum on the growth of street vendors suggests the current antagonistic policies against street vendors need to be reviewed.