Business School, Beijing Normal University, Beijing 100875, China

Abstract Regional economic integration can enhance the overall strength and competitiveness of the zone. The Yangtze River Delta, the Pearl River Delta and the Beijing-Tianjin-Hebei economic circles are the top three zones with economic viability in China. With the development of the economy, these three zones all follow the modern "tertiary, secondary, primary" industrial structure, while the corresponding employment population structure lags behind to a certain extent. Besides, the three major special economic zones are the regions receiving most of the migrant population in China. The inflow of labor has played a double-edged role in local economic and social development. Through systematically comparing the labor market changes in transformation and upgrading of the three major special economic zones, the reform experience could be obtained: urbanization can promote urban employment, industrial agglomeration can attract different employment types, and labor market system reform can enhance labor coordination in the zone.

Key words Yangtze River Delta, Pearl River Delta, Beijing-Tianjin-Hebei region, Transformation and upgrading, Labor market, Changes

1 Introduction

In theReporttothe19thNationalCongressoftheCommunistPartyofChina, it clearly proposes that employment is pivotal to people’s well being, "We must give high priority to employment and pursue a proactive employment policy, striving to achieve fuller employment and create better quality jobs". The Yangtze River Delta, the Pearl River Delta and the Beijing-Tianjin-Hebei regions are key essential economic growth zones and industrial development centers in China. These three zones have driven large-scale employment and become the main areas of labor inflows since the reform and opening up in 1978, and they are also the main zones of labor market reform. However, due to various differences of regional culture and development patterns, the performances of these three major special economic zones are different in the industrial transformation and upgrading driving the reform of the labor market. Thus, experience summaries based on the systematic comparison are helpful for further deepening reform and promoting integrated development of the labor market.

2 Comparison of economic situation in the three major special economic zones

Before conducting researches on the labor market, this paper firstly compares the basic economic development levels of the Yangtze River Delta (referred to as Shanghai, Jiangsu, and Zhejiang in this study), the Pearl River Delta (Guangdong Province in this study) and the Beijing-Tianjin-Hebei region, as shown in Table 1. In 2016, the Yangtze River Delta took the dominant position both in the regional GDP and the per capita GDP, especially in the regional GDP. For the per capita GDP, the Pearl River Delta region obviously lagged behind, far below the level of the Yangtze River Delta and the Beijing-Tianjin-Hebei region. In the average GDP growth rate of the provinces and cities in the zone, the differences between the zones were not large. Compared with that of 2012, the data of Beijing-Tianjin-Hebei region and the Yangtze River Delta slightly declined, while the Pearl River Delta obtained considerable growth.

In the aspect of the industrial structure, the primary industry of three zones was below 5%, and Beijing-Tianjin-Hebei only constituted 1%. As for the composition of the output value of three major industries, the industrial output value of three major economic zones follows the modern "tertiary, secondary, primary" structure. Specifically, the output value of the tertiary industry in the Beijing-Tianjin-Hebei region was significantly higher than that of the secondary industry (nearly three times), while the tertiary industries in the Yangtze River Delta and the Pearl River Delta were slightly higher than that of secondary industry, indicating that the latter two regions have just completed the transition from a medium-term industrialization transitional state of the "secondary, tertiary, primary" output value structure to the modern state. However, it should be noted that the employed population composition of the three zones, is not consistent with the composition of the industrial structure. The proportion of the employed population of the secondary industry was higher in the Yangtze River Delta and the Pearl River Delta region, and the proportion of the employed population of the tertiary industry in the Beijing-Tianjin-Hebei region was much less than the proportion of the industry, indicating that the "changes in the employment structure lagged behind the adjustment of the industrial structure".

In the aspect of foreign trade dependence, the total import and export volume of the Pearl River Delta was significantly higher than that of the Yangtze River Delta, which was significantly higher than the Beijing-Tianjin-Hebei region, sufficiently demonstrating the characteristics of the export-oriented economy of the former two regions, especially the Pearl River Delta. In terms of the advantageous industries in various regions, the Yangtze River Delta was similar to the Pearl River Delta, the financial industry in the tertiary industry was more prominent, and the secondary industry was mainly labor-intensive, while that of the Pearl River Delta was mainly the trade-oriented processing light industry, and the advantage of the Yangtze River Delta was the high-tech industries and thus had higher development potential. The Beijing-Tianjin-Hebei region mainly relied on the exploitation and processing of resource products such as oil, natural gas and coal, and the research and development of cutting-edge technology. For example, Beijing has been actively integrating technology and financial industries to encourage and develop new financial model and has made great achievements in new and high-tech industries and modern service industries.

Table1ComparisonofeconomicdevelopmentlevelsamongsttheYangtzeRiverDelta,PearlRiverDelta,andBeijing-Tianjin-Hebeiregionin2016

Item/zoneYangtze River DeltaPearl River Delta Beijing-Tianjin-HebeiRegional GDP (108 yuan)/ per capita GDP (yuan)152 818.29/99 455.080 854.91/74 016.075 624.97/92 104.33Increase of average GDP of the region comparedwith the previous year∥% 7.5(8.5 in 2012)7.4(6.5 in 2012)7.6(10.4 in 2012)Output value structure ratio of three industries 4.1∶42.0∶53.94.6∶43.4∶52.01.1∶25.5∶73.4Total employment∥104 people9 881.466 279.226 346.47Ratio of employment in three industries //%13.7∶43.3∶43.021.7∶40.5∶37.823.6∶30.6∶45.9Foreign trade dependence∥%55.378.037.7Characteristic advantage industries or sectorsFinancial securities, high-tech, ma-chinery manufacturing, electronic communications, light industry, clothing, labor-intensive industries, etc.Financial foreign trade, elec-tronic appliances, automobile and building materials, textile and garment, pharmaceutical, petrochemical, forestry, labor-intensive light processing, lot-tery industries, etc.Oil and gas exploration, coal power development, gas produc-tion and supply, information technology and software develop-ment, ferrous metal mining and processing, cutting-edge technol-ogy, modern service industries, etc.

Data source:ChinaStatisticalYearbook(2017).

3 Current situations of labor market in the three major special economic zones

With the development of modern economy, changes in industrial structure and transformations in the composition of the labor market become inevitable. Currently, China’s economy has entered a period of new normal, the proportion of primary and secondary industries has gradually declined, while the proportion of tertiary industry is steadily increasing. Therefore, it is an inevitable trend to build a modern industrial development system. Besides, the development of industrial structure from low level to high level has transformed the employment structure. From the beginning year of the reform and opening up policy to the end of 2016, the proportion of employment in the primary industry nationwide dropped from 70.5% to 27.7%, while the proportion of employment in the tertiary industry rose from 12.2% to 43.5%, which shows that the tertiary industry is now dominating. The Yangtze River Delta, the Pearl River Delta and the Beijing-Tianjin-Hebei region are large-scale immigration sites at the end of the last century and the beginning of this century. They are also key industrial centers in China. The continuous and rapid growth of regional economy concentrates and absorbs the labors. According to the data of the sixth population census, the top five provinces and cities with the largest increase of inflow population from 2000 to 2010 were Guangdong, Zhejiang, Shanghai, Beijing, and Tianjin, all of which are located in these three major special economic zones[1]. In this section, this paper will analyze the labor market situation of three major special economic zones from the aspects of the employment composition and migrant population.

3.1LabormarketintheYangtzeRiverDeltaThe Yangtze River Delta is open to the domestic districts and also to the whole world, which has a high degree of marketization and rapid economic growth. According to the data on the National Bureau of Statistics website, the GDP of the Yangtze River Delta in 2016 accounted for 20.5% of the national GDP, and the total volume of import and export trade accounted for 34.7% of the whole country. Studies have shown that the labor evolution in the Yangtze River Delta follows the trend of labor transfer in three industries,i.e. Petty-Clark’s Law, and presents the multi-center spatial structure characterized by first agglomeration and then radiating diffusion[3].

From Table 2, it can be seen that since 2005, the proportion of primary industry and secondary industry in the Yangtze River Delta has gradually declined, and the proportion of tertiary industry has been rising. Specifically, the industrial structure of Shanghai has developed to a relatively high level, and the proportion of the secondary industry has dropped significantly. Since 2005, the secondary and tertiary industries have been keeping pace with each other, and then the proportion of tertiary industry increased rapidly, exceeding the national average, which is consistent with the position of Shanghai as an international economic, financial, and trade center. The economic development of Zhejiang and Jiangsu mainly relied on the growth of the secondary industry in 2005. By 2016, the proportion of the tertiary industry was close to the national average level of 58.2%. In 2016, the proportion of the secondary industry in the whole country was 37.4%. Compared with the other two zones, the Yangtze River Delta had a higher level of industrialization.

With the adjustment of the industrial structure, the employment structure also underwent corresponding changes. In general, as for the changes in employment composition caused by transformation of industrial structure, Shanghai, Zhejiang, and Jiangsu were basically in the similar situation: the primary industry gradually declined, the tertiary industry gradually rose, and the proportion of the secondary industry employment slightly fluctuated, while the proportion of Jiangsu even significantly rose. In the past ten years, the employment structure of Shanghai always maintained the "tertiary, secondary, primary" modernization pattern and has been continuously rising, while Zhejiang and Jiangsu still remained in the period of transition from "secondary, tertiary, primary" industrialization to modernization. Shanghai mainly developed the service industry. Jiangsu and Zhejiang were still important manufacturing provinces in China, characterized by industrialization and service.

Table2CompositionofGDPandemploymentcompositionoftheYangtzeRiverDelta%

ZoneYearGDP compositionPrimary industrySecondary industryTertiary industryEmployment compositionPrimary industrySecondary industryTertiary industryShanghai2005201020161.00.70.447.542.329.851.557.069.87.13.43.337.340.732.955.655.963.8Zhejiang2005201020166.74.94.253.451.144.839.944.051.024.516.012.445.149.847.430.434.240.2Jiangsu2005201020168.06.15.456.652.544.135.441.450.530.922.317.737.242.043.031.935.739.3

Data source:ChinaStatisticalYearbook(2017),StatisticalYearbookofShanghai(2017),StatisticalYearbookofZhejiang(2017), andStatisticalYearbookofJiangsu(2017).

Since the 1990s, the integrated development in the Yangtze River Delta has been accelerating, and the transportation and commercial networks within the urban agglomeration have been further improved. For seeking employment opportunities, the internal migrant population has become more flexible and faster. After 2005, the inter-provincial net migration pattern of large city clusters changed. The Yangtze River Delta has surpassed the Pearl River Delta to become the region with the largest number of inter-provincial populations among the three largest city clusters[4]. Besides, because the cost of living in the outer suburbs is lower than that in the downtown, the large urban migrant population in the Yangtze River Delta has a continuously growing trend of moving to the outer suburbs. The fifth population census shows that the migrant population in the Yangtze River Delta is mainly rural labor, and the education levels are mainly primary school, junior middle school and high school. Most of them are engaged in industries of manufacturing and processing, construction, and business services[5], in other words, the external migrant population is mainly engaged in non-professional and service industries. The outstanding characteristics of these industries are low salary, low employment skill requirements, high work intensity and long time. Although they are meeting the demands of social development, engagement of a large number of migrant workers in low-level work is contradictory to the expectation for industrial transformation and upgrading of the Yangtze River Delta, because transformation and upgrading have higher requirements for the quality of labor. With the deepening of the economic transformation reform under the new normal, many local governments have issued preferential policies to attract high-tech labors. According to the 2010 population census, the proportion of various managers and professional technicians in the permanent population of the Yangtze River Delta increased, and the occupational composition has developed to a high-end, technological type.

3.2LabormarketinthePearlRiverDeltaThe Pearl River Delta is the zone with the largest labor mobility in China. The large number of labor inflows positively promotes the economic development. In 2016, the number of employed people in Guangdong Province was 62.7922 million, increasing by 25% compared with 2005. According to Table 3, since 2005, the industrial structure of the Pearl River Delta has been continuously optimized and upgraded. The ratio of the primary industry and the secondary industry to GDP declined year by year, while the ratio of the tertiary industry to GDP gradually increased, and at the end of 2013, the tertiary industry surpassed the secondary industry[6]and realized the transformation of the "tertiary, secondary, primary" industrial structure.

From the perspective of employment composition, the Pearl River Delta still followed the "secondary, tertiary, primary" pattern, but the proportion of employment in the primary industry declined year by year, and the proportion of employment in the tertiary industry increased year by year, while the proportion of employment in the secondary industry went through the process from rise to fall, showing that it still takes some time for the Pearl River Delta to realize the modernization transformation of the employment structure.

After the reform and opening up, Guangdong Province, as the pioneer of China’s economic growth, has become one of the most attractive centers for the floating population. A large amount of overseas funds have been invested in labor-intensive industries, and the large-scale labor demand market has attracted numerous laborers from other provinces to flow into Guangdong. From 1990 to 2005, the inter-provincial net migration of the Pearl River Delta has been ranked first among the three city clusters. The inter-provincial net migration population has increased from 4.105 million to 21.043 million, up to 5.1 times over 15 years[7], so the Pearl River Delta is the largest population migration center in China. Since 2008, due to the global financial crisis, the benefit of labor-intensive enterprises in the Pearl River Delta has been declining, many enterprises reduced or even stopped production. As a result, some migrant workers have to go back to their hometown or move to other places to seek better employment opportunities. In recent years, due to industrial transformation and upgrading and the shrinking of the foreign trade market, the growth of demand for migrant workers in labor-intensive industries becomes slow in the Pearl River Delta. According to the data of the fifth and sixth national population censuses, the appeal of Guangdong to the floating population generally declined, especially to the labors engaged in manufacturing, professional and technical industries, while the salary and treatment of civil servants are better, so the appeal of administrative jobs is rising[8].

Table3CompositionofGDPandemploymentcompositionofthePearlRiverDelta%

Zone YearGDP compositionPrimary industrySecondary industryTertiary industryEmployment compositionPrimary industrySecondary industryTertiary industryGuangdong2005201020166.35.04.650.449.642.843.345.452.632.124.421.738.142.440.529.833.237.8

Data source:StatisticalYearbookofGuangdong(2017).

3.3LabormarketintheBeijing-Tianjin-Hebeiregion

At this stage, the coordinated development for the Beijing-Tianjin-Hebei region has become a national strategy, which has made the demand for geopolitical cooperation of the Beijing-Tianjin-Hebei labors more prominent, and it is necessary to build a labor market integration pattern. The economic development of Beijing and Tianjin was fast. The output value of the primary industry in both cities was lower than 1%. The proportion of tertiary industry in Beijing increased year by year and exceeded 80% in 2016. The proportion of tertiary industry in Tianjin increases rapidly in recent years and has surpassed the secondary industry. Besides, the labor resource structure of the two cities can also conform to the trend of industrial structure adjustment, and the structural characteristics of the employed population matches the regional functional orientation to a certain extent[9]. The structural transformation of Beijing was the earliest in the three major special economic zones. According to the data of relevant years ofStatisticalYearbookofBeijing, Beijing completed the adjustment of the industrial structure from "secondary, tertiary, primary" to "tertiary, secondary, primary" as early as 1994, and the employment structure was also transformed, realizing consistency. The proportion of employment in the tertiary industry in Tianjin has also surpassed that of the secondary industry, but the proportion of employment in the primary industry was still much higher than that in Beijing and Shanghai. The industrial composition and employment composition of Hebei Province still kept the industrialization pattern of "secondary, tertiary, primary". The industrial transformation was the slowest among the three districts. The development of the tertiary industry was slow, and the number of jobs and employment opportunities was relatively small, leading to particularly prominent problem of difficult employment. In summary, as a political, economic and cultural center, Beijing has the most obvious industrial structure upgrade， the economic development is fast, and modernization and informatization degree is high. As an important port city, Tianjin’s industrial structure has been gradually adjusted with economic development, and along with the transformation, the industrialization characteristics of the economic structure have been gradually weakened. The optimization and upgrading of industrial structure in Hebei Province are slow, but there are still a large market potential and a space for employment release.

Table4CompositionofGDPandemploymentcompositionoftheBeijing-Tianjin-Hebeiregion%

Zone YearGDP compositionPrimary industrySecondary industryTertiary industryEmployment compositionPrimary industrySecondary industryTertiary industryBeijing2005201020161.30.90.529.124.019.369.675.180.27.16.04.126.319.615.866.674.480.1Tianjin2005201020162.81.51.254.952.842.442.345.756.415.110.17.241.941.534.043.048.458.8Hebei20052010201613.912.510.952.852.647.633.334.941.543.937.932.729.232.334.126.929.833.2

Data source: relevant years ofStatisticalYearbookofBeijing,StatisticalYearbookofTianjin, andStatisticalYearbookofHebei.

From 2005 to 2012, the integration level of labor market in Beijing-Tianjin-Hebei showed a growing trend, and the degree of market integration gradually increased. The urban macro-industrial structure, inter-city administrative barrier, and commodity market integration were main factors influencing the integration of labor market in Beijing-Tianjin-Hebei[10]. According to the data of the sixth national census, the number of floating population in Beijing was 7.045 million, accounting for 42% of the total population of Beijing-Tianjin-Hebei, and the population of Beijing and Tianjin accounted for 60% of this zone[11]. From the perspective of population flow direction, for both the flow within the zone and between zones, Beijing and Tianjin are main gathering areas of floating labors, while Hebei Province is the main area of labor outflow. The sum of the outflow of labors from Hebei Province to Beijing and Tianjin has exceeded 85%. The labor flow in the Beijing-Tianjin-Hebei region is characterized by large and one-way flow, significant regional differences in external appeal and labor quality, and obvious trend of family flow; in the future, Beijing and Tianjin will still face high pressure of large labor inflow[12]. As for the employment situation of the floating population, according to the dynamic monitoring by National Population and Family Planning Commission in 2015, the migrant workers in the Beijing-Tianjin-Hebei region were mainly engaged in business and service industries, accounting for 59.5% of the total floating population, followed by the migrant workers engaged in production and transportation equipment operators and professional and technical personnel, accounting for 32.4%[13].

4 Summary of labor market reform experience in the three major special economic zones

The balanced development of the labor market in the three major special economic zones is benefited from a series of institutional reforms of urban and rural employment. The supply-side reform and further transformation and upgrading of economic structure requires more for the reform and development of the labor market. In this section, this paper will summarize three main factors of the labor market reform in the three major special economic zones, expecting to provide helpful references.

4.1UrbanizationdrivingurbanemploymentSince the urban development policy of "strictly control the scale of mega-cities, rationally develop medium-sized and small cities, actively develop small towns" was implemented in 1980, China’s urbanization rate had reached 57.4% in the end of 2016[14]. As the most developed region in China’s economy, the urbanization rate of the three major special economic zones exceeded 63% (Beijing, Tianjin, and Shanghai exceeded 80%), much higher than the national average level. The high level of urbanization means that the economic development level is high, the income of urban and rural residents is also high, and the appeal to labors of other provinces is obviously enhanced. In addition, the high level of urbanization means that the zone has high modernization and industrialization level, and also significant demand for labors. Furthermore, the cost of labor migration also declined with the urbanization process.

From 2005 to 2016, China’s urbanization rate increased by 14.4%. The growth rates of the Yangtze River Delta, Pearl River Delta and Beijing-Tianjin-Hebei region increased by 13.1%, 8.5% and 14.6% respectively. Meanwhile, the employment population of the Yangtze River Delta, the Pearl River Delta, and the Beijing-Tianjin-Hebei region increased by 15.7%, 25.0% and 27.2% respectively; the number of urban employees was larger than that of rural employees. According to the data of the sixth population census, nearly half of the floating population had moved to the three major special economic zones (the population flowing into the Pearl River Delta, the Yangtze River Delta, and the Beijing-Tianjin-Hebei region accounted for 15.5%, 20.0% and 8% of the national inflow population respectively). In summary, urbanization development has created a large number of employment opportunities within the urban area. With the development of industrialization, the labors are gradually shifting to the secondary and tertiary industries. As a result, the labors shift from rural areas to urban areas, and the population will gradually gather in the cities. It can be said that urbanization development has further promoted employment in related cities[15].

4.2IndustrialagglomerationattractingdifferenttypesofemploymentWith the rapid development of China’s economy, the phenomenon of industrial agglomeration that has emerged gradually in the process of urbanization is particularly prominent in the three major special economic zones. Such kind of industrial agglomeration is mainly manifested in the concentration of geographical location and the cluster of similar enterprises. The typical example of the former is the accumulation of manufacturing in the eastern coastal areas such as the Yangtze River Delta and the Pearl River Delta, while the latter is represented by the high-tech industrial zones of the three major special economic zones. Although the proportion of manufacturing employment in the Yangtze River Delta and the Pearl River Delta has declined in recent years, these two zones are still the gathering places of China’s manufacturing industry. Besides, the three major special economic zones (except Hebei Province) are the regions with the fastest development and the most concentrated distribution of China’s high-tech industries, gathering more than half of China’s high-technology industries.

The type of agglomeration industry that moves into the land will also have a significant impact on the level of human capital of the floating population. Most of the floating population is labor seeking jobs. Most of the industries in the Yangtze River Delta and Pearl River Delta are labor-intensive industries, such as processing and manufacturing industries. Products are also mainly small commodities, and the qualification level of employed personnel is not high, thus the floating population with low education level in these areas has more employment opportunities. In Beijing, Shanghai, and Tianjin where the tertiary industries are developed, the high-tech industry has developed rapidly and concentrated, accordingly attracting a large number of highly educated laborers. In terms of the education level of the employed population, the proportions of people with higher education in Beijing, Tianjin and Shanghai were 54.1%, 34.3% and 44.6% respectively.

4.3LabormarketsystemreformpromotinglaborcoordinationwithinthezoneThe gradual establishment of the labor market in the three major special economic zones is benefited from a series of institutional reforms of urban and rural employment. The goal of overall planning urban and rural employment is to eliminate the classification of urban and rural laborers, and to form urban and rural integrated regional labor market. From 2006 to 2008, all areas launched pilot projects for overall planning g urban and rural employment. The pilot areas are representative and have been creatively explored in employment management systems and policies, and their experience is highly valuable in the overall implementation of the coordination work[16]. For example, all areas generally abolished discriminatory policies of urban household registration priority during recruitment of enterprises, and formulated an equal employment policy in urban and rural areas. In addition to the guidance of the central-government policies, all provinces and cities had active responses and cancelled the previous policy of restricting migrant labors[17], especially the governments of the core metropolitan areas in the Yangtze River Delta and the Pearl River Delta actively promoted the integration of regional human resources market and labor market.

In the process of reforming urban and rural employment, the reform of the comprehensive supporting system in the public employment services and social security medical insurance is carried out simultaneously. Although the public employment service in China started late and the development lagged behind, after the implementation of the overall employment reform, the local government actively formulated and improved the vocational training and other policies to provide protection for the whole personnel, especially the skills training of farmers, so as to comprehensively improve the quality of urban and rural labors. For example, with the aid of "training vouchers", Jiangsu Province implemented a service guarantee system in which farmers independently choose to participate in specific types of training, to realize support policies and integrate resources in parallel, and improve the quality of training and public services.

In the recent decade, the reform of China’s social security system is also improving. With the continuous advancement of the government’s integration of urban and rural labors, the three major special economic zones have generally realized the integration of floating labors into the local urban labors in the social insurance system, and all areas have made different levels of improvement in the social security system. Beijing and Zhejiang also improve the medical insurance system, and become one of the earliest cities and provinces realizing the social security for migrant workers. Although the transfer of insurance is still a crucial issue, it also provides a guarantee for the floating labors, and the participation rate of migrant workers has also increased.