A Head Count to Reveal China's Secrets

On Nov. 1, more than 6 million government workers will go door-to-door in China asking residents to fill out census questionnaires. For 10 days they will scour 31 provinces, 330 cities, 2,800 counties, and 680,000 villages to find out the true composition of the 1.3 billion population. The Public Security, Labor, and Housing Ministries and Family Planning Bureau will all help. To rally support, a massive educational campaign is under way. "Carry Out the Census, Build a Harmonious Society" reads one giant green banner in a South Beijing alleyway.

The most daunting challenge will be getting accurate numbers for migrant workers, the uprooted rural Chinese who move ceaselessly between village and city looking for work. Estimates of the migrant population range from 140 million to well over 200 million. With no fixed abode and often fearful of authorities (the household registration system restricts where people can legally live and work), these Chinese have little incentive to oblige the authorities. Special measures will be needed, says Feng Nailin, vice-director of the census effort. They include public promises of no retaliation against those who have not registered their residence properly. Census takers will visit warehouses, factories, and construction sites, where migrant workers can commonly be found.

Ten years ago the vast majority of Chinese worked for the government, either as civil servants or in one of tens of thousands of state enterprises. Today many more Chinese work in the private sector and are less inclined to open up when Beijing comes knocking. Many fear revealing too much could catch the attention of the tax bureau or the police (underpayment of taxes is common). A confidentiality agreement will be shown to respondents. "Information will flow one way—from [other ministries] to us, not the other way around," says Feng, who adds that people will not be questioned about their income.

With more Chinese having children in defiance of the one-child rule, the mainland now has perhaps millions of unregistered children, mostly in rural areas. People are loath to own up to the real size of their families, especially when fines for extra children can cost several months of a family's income. Fines for breaking family planning policy will be lowered for those who come clean during the census, and authorities will let poor families pay on an installment basis.

The World Bank expects the census to reveal that China is adding only 6.5 million new people annually, a very small number for such a huge population. The census will also confirm that the number of women of childbearing age, those from 15 to 49 years old, peaked in 2008, according to researchers at ad agency Ogilvy & Mather China. That means fewer young people will have to provide for ever more retirees. "China has to start asking: How are we going to pay for supporting these elderly?" says Louis Kuijs, economist at the World Bank in Beijing.

The workforce—those from 15 to 64 years old—will plateau at almost 1 billion in 2015 and then start to shrink, figures the World Bank. These trends will help drive labor costs higher. "Over the next 10 years, this will become a serious problem," says Zhang Juwei, deputy director of the Institute of Population and Labor Economics at the Chinese Academy of Social Sciences.

All the census data will be put to good use by China's policymakers, says Vice-Director Feng. Knowing where migrant workers live and work and how many children Chinese have could speed revisions to China's household registration system and its one-child policy. Ordinary Chinese are less sanguine. In an online poll on sina.com, one-third of respondents felt it was unsafe to let census takers into their homes.

Foreign investors are also eager to glean insights from the census. With some 13 million new urban residents every year, the census is expected to reveal that close to 45 percent of Chinese live in cities, up from 36 percent in 2000. Even more interesting will be data likely confirming that most of China's fastest-growing cities are smaller ones in the interior. "To the extent the census gives more information on regional and local differences, that is interesting for anyone doing business in China," says Christian Murck, president of the American Chamber of Commerce in China.

The results of the head count could change what and how companies market in China, says Kunal Sinha, chief knowledge officer at Shanghai-based chief knowledge officer at Ogilvy & Mather China. Advertising on trains might be wise, given the growing buying power of migrants. And if families are larger than most thought? "That has huge implications on everything from package sizes of milk, jam, and cookies to how much a family spends at McDonald's (MCD) or KFC (YUM)," says Sinha. "If we get a grip on the number of children, this would be very valuable."

The bottom line: The Chinese 2010 census will tackle the hard tasks of tracking down migrant workers and counting unregistered children.

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