Farmers' citizenization should not be entangled in financial cost

The State Council recently issued "opinions on further promoting the Reform of the Household Registration system", and the reform of China's Household Registration system is on its way again. However, some commentators believe that the reform of the household registration system is still very difficult, such as financial cost is one of the thorny issues.

According to the Urban Blue Book released by the Chinese Academy of Social Sciences in 2013, the per capita public cost of citizenization of agricultural migrant population in the eastern, central and western regions of China is 176000 yuan, 104000 yuan and 106000 yuan respectively, while the national average cost is 131000 yuan. The Urban Blue Book predicts that the urbanization rate will reach about 68 per cent by 2030, when about 390 million agricultural migrants will need to be citizenized, which means that the government's public costs will be about 51.1 trillion yuan.

According to the analysis, the citizenization public cost of the agricultural transferred population mainly focuses on the increased financial investment in urban infrastructure construction, maintenance and public services. it mainly includes investment in urban construction and maintenance, public service management, social security, compulsory education for migrant children, indemnificatory housing and so on.

In view of the current financial situation and the trend of slowing economic growth, the citizenization cost of farmers predicted by the Chinese Academy of Social Sciences is indeed not a small problem that can be ignored. From the official data released by the Ministry of Finance, we can see that from January to June this year, the national fiscal revenue totaled 7.4638 trillion yuan, an increase of 604.8 billion yuan, or 8.8 percent, over the same period last year. Based on the fiscal revenue situation in the first half of the year, it is estimated that there will be no problem that the national fiscal revenue for the whole year will reach about 15 trillion yuan. Even with this figure as the average base, the country's total fiscal revenue will reach 240 trillion yuan over the 16 years from mid-2014 to mid-2030. Because of the predictability of economic growth, the total fiscal revenue over the past 16 years will certainly be significantly higher than this figure.

51.1 trillion yuan is indeed not a small sum in absolute terms, and it is impossible for governments at all levels to reduce all kinds of rigid fiscal expenditure, coupled with flexible expenditure to deal with various problems, it is relatively difficult to completely solve such a large financial burden by relying solely on government revenue. However, the view that the so-called 51.1 trillion yuan will be a huge financial burden often focuses on the consideration of the input needed for farmers' citizenization, while neglecting that farmers' citizenization is also a process of productivity transfer and production value creation.

In fact, the citizenization of farmers is not only input but no output. Peasant citizens have been creating value. The reason why they are willing to transfer from rural areas to cities is that they can create more value in cities and get more returns. Citizenization of farmers is not the first government input to create value, many migrant workers have been continuing to create value before receiving the benefits of government financial investment. Therefore, we may say that a considerable part of the so-called huge financial burden will be filled by the added value generated by a large number of "new citizens" relative to their time as farmers.

The reporter believes that the citizenization of farmers should not be statically entangled in the absolute number of financial costs, but should dynamically see the value added in the process of transformation. The citizenization of farmers can drive the society to create more wealth, which also means that the government revenue will have a more solid foundation. In addition, in addition to the value-added wealth creation brought about by farmers' citizenization, with the improvement of farmers' income and the change of consumption environment and consciousness, the expansion of consumption is also a boost to economic development and will become an important fulcrum for expanding domestic demand.

It should be emphasized that seeking truth from facts is the "compass" for us to formulate, understand, and implement policies, and the ultimate goal of citizenization of farmers is certainly not to increase the burden, but for the better development of the country and a better life for the people.