¹ The hukou system was introduced in 1958 by National People's Congress, “Hukou dengji tiaoli” [“Regulations on Hukou (January 9, 1958) (P.R.C.). It was a system of social control and administration on the basis of households whose members in both rural and urban areas had to register themselves at the local police office as legal residents. Without official permission they would not be able to move from their areas of registration. Under the hukou system only urban hukou holders could access state-subsidized housing, food, education, medical care, and employment; rural hukou holders had no such entitlements. Many opportunities were also not equally available to rural hukou holders. It is not this article's intention to delve into the details of the hukou system, however. For comprehensive accounts of its origin, function and socio-economic consequences, see Cheng, Tiejun & Seiden, Mark, “The Origins and Social Consequences of China's Hukou System” (1994) China Quarterly 646Google Scholar; Dutton, Michael R., Policing and Punishment in China (Hong Kong: Cambridge University Press, 1992)Google Scholar; Chan, Kam Wing, Cities with Invisible Walls: reinterpreting urbanization in post-1949 China (Hong Kong: Oxford University Press, 1994).Google Scholar

² See Shue, Vivienne, “State Sprawl: the Regulatory State and Social Life in a Small Chinese City” in Davis, Deborah et al. eds., Urban Spaces and Contemporary China (New York: Cambridge University Press, 1995) 90.Google Scholar See also Peerenboom, Randall, China's Long March toward Rule of Law (New York: Cambridge University Press, 2002) 188.CrossRefGoogle Scholar

³ This number is from the National Statistics Bureau, according to Singtao Ribao [Singtao Daily, China section] (7 October 2002), online: Singtao Ribao http:/www.singtao.com/yesterday/chi/1007eo03.html For a comprehensive discussion of the number of migrant population, see Solinger, Dorothy, Contesting Citizenship in Urban China: Peasant Migrants, the State and the Logic of the Market (Berkeley: University of California Press, 1999) at 18–21.Google Scholar

⁴ Ministry of Public Security, P.R.C., “Chengzheng Zhangzhu Renkou De Zhangxian Guiding” [Provisional Regulations on the Management of the Population Living Temporarily in Cities and Towns] (July 13, 1985).

⁵ Lingdian Gongsi [The Horizon market Research and Analysis Company], 2000 “Liebian: guancha minggong de shenghuo fangshi” [Disruption: An Observation of Migrants' Living Mode] at 7. This category includes both those who had or those who did not have fixed business sites. On the other hand, those who were employed by Beijing employers constitute 42 percent. The article is available by contacting the author through http://www.Horizonkey.com.

⁶ See Ma, Laurence & Xiang, Biao, “Native Place, Migration and the Emergence of Peasant Enclaves in Beijing” (1998) 155 China Quarterly 546.CrossRefGoogle Scholar

⁷ Because the private sector was regarded as the tail of capitalism, it has been treated unfavorably by the state, in terms of limited goods supply channels, business premises and credits. For the changing attitude of the state toward the private sector, see Young, Susan, Private Business and Economic Reform in China (Armonk, New York, London: M.E. Sharpe, 1995) at 33–63.Google Scholar

⁸ Despite its hardly precise definition, sociologically, Guanxi has been widely studied as a phenomenon that is not necessarily unique to China. See Gold, Thomas, Guthrie, Doug & Wank, David, eds., Social Connections in China: Institutions, Culture, and the Changing Nature of Guanxi (New York: Cambridge University Press, 2002).CrossRefGoogle Scholar

⁹ Dorothy Solinger describes a “symbiotic relationship” between entrepreneurs running larger private firms and officials staffing the lower bureaucracy; entrepreneurs give officials income through bribes and other payments, while officials give entrepreneurs access to capital in the state structure: Solinger, Dorothy, “Urban Entrepreneurs and the State: the Merger of State and Society” in Rosenbaum, Arthur, ed., State and Society in China: the Consequences of Reform (Boulder, Colo.: Westview Press, 1992) 121.Google Scholar

¹⁰ Wank, David, “Bureaucratic Patronage and Private Business: Changing Networks of Power in Urban China” in Walder, Andrew G., ed., The Waning of the Communist State (Berkeley: University of California Press, 1995) 163.Google Scholar

¹¹ Wank, ibid., at 163, 167.

¹² See Young, supra note 7, at 96–97.

¹³ For more Guanxi-based strategies employed by private entrepreneurs that develop to compensate for or circumvent the handicaps and constraints of private-sector membership such as difficulties in capital access, see Tsai, Kellee, Back-Alley Banking: Private Entrepreneurs in China (Ithaca and London: Cornell University Press, 2002).Google Scholar

¹⁴ Xin, Katherine and Pearce, Jone, “Guangxi: Connections as Substitutes for Formal Institutional Support” (1996) 39:6Academy of Management Journal 1641.Google Scholar

¹⁵ Susan Young, supra note 12.

¹⁶ See Zhang, Li, Strangers in the City: Space, Power, and Identity in China's Floating Population (Palo Alto: Stanford University Press, 2001).Google Scholar

¹⁷ The unit of Chinese currency; currently 1 US dollar is equal to 8.3 yuan.

¹⁸ Xiang, , “Taobi, Lianhe, he biaoda: zhejiangcun de gushi” [Escape, Ally and Voice: A Story of ‘Zhejiang Village’, Zhongguo Shehui Kexue Jikan] (1998) 22 Chinese Soc. Sci. Q. 91.Google Scholar

¹⁹ Ibid.

²⁰ See Scott, James, Weapons of the Weak (New Haven: Yale University Press, 1989).Google Scholar

²¹ The word “migrants” does not precisely characterize the group of people we are discussing. As the people moving from rural to urban areas do not have an urban hukou, they are not supposed to permanently settle down in the cities. A more exact word would be “floaters”, meaning these people are floating and moving.

²² Their interview evidence is cited separately in the text.

²³ For detailed accounts of why Beijing wanted to exclude migrants, and how these legal regulations and policies evolved, see He, Xin F., “Regulating Rural-Urban Migrants in Beijing” (2003) 35:2Stan. J. Int'l L. 177.Google Scholar

²⁴ Beijing wailan wugong renyuan guanli banfa.

²⁵ Article 16 of Beijing waidi laijing renyuan guanli banfa, [the Management Measures on Migrants Conducting Business in Beijing].

²⁶ These regulations are as follows:

1. Beijing, China, Beijingshi waidi laijing renyuan huji guanli guiding [Beijing Regulation on Management of the Hukou of Migrants] (1995);

2. Beijing, China, Beijingshi waidi laijing renyuan zhuling fangwu guanli guiding [Beijing Regulation on Management of Housing Rental for Migrants] (1995);

3. Beijing, China, Beijingshi waidi laijing renyuan huji zhuling fangwu zhi'an guatili guiding [Beijing Regulation on Management of the Public Security of the Rented Houses for Migrants] (1995);

4. Beijing, China, Beijingshi waidi laijing renyuan wugong guanti guiding [Beijing Regulation on Management of Employment] (1995);

5. Beijing, China, Beijingshi waidi laijing renyuan jingshang guanti guiding [Beijing Regulation on Management of the Business Activities of Migrants] (1995);

6. Beijing, China, Beijingshi waidi laijing renyuan jihua shengyu guanti guiding [Beijing Regulation on Management of the Family Planning of Migrants] (1995);

7. Beijing, China, Beijingshi jimao shichanguanli guiding [Beijing Regulation on Management of Centralized Marketplaces] (1995);

8. Beijing, China, Beijingshi waidi laijing renyuan chongshi jiating fuwu gongzhu guanli guiding [Beijing Regulation on the Management of Domestic Service by Migrants] (1995);

9. Beijing, China, Beijingshi waidi laijing wugong jingshang renyuan mubiao guanli zherenzhi guiding [Beijing Regulation on the Management Responsibility of Migrants] (1995); and

10. Beijing, China, Beijingshi waidi laijing renyuan guanli fiiwumei zhengshou guiding [Beijing Regulation on the Management of Regulation Fees of Migrant Laborers and Businessmen] (1995).

²⁷ For a detailed illustration of these fees and durations, see He, Xin F., Why Do They Not Obey the Law? (D. Jur. Dissertation, Stanford University, 2003) [unpublished].Google Scholar

²⁸ Beijing Statistic Bureau, Beijing, China, Beijing Wulai Renko 2001 Nian De Xianchuan Ge Bianhua Moshi, [Current Situation and Changing Patterns of Migrants in Beijing in 2001]Google Scholar, online: Beijing Statistics Bureau http://chall.bjstats.gov.cn:77/tjbgpc/htm/z12002-04.htm.

²⁹ See Wang, Chun-guang, Shehui Liudong he Shehui Conggou: Jingcheng “Zhejiangcun Yanjiu, [Social Mobilization and Social Reconstruction: A Research on “Zhejiang Village” in Capital Beijing] (Hangzhou: Zhejiang People's Press, 1995) at 87–88.Google Scholar The social composition of the enclave was highly diversified. The population was composed of both permanent suburban residents and migrants who rented rooms from the locals. Several social groups resided together in this large area, including Zhejiang migrants (56,000), original local Beijing residents (14,000), and migrants from Anhui, Hubei, Henan, Shandong, and Sichuan provinces (40,000) who were mostly wage laborers performing sewing, sales, or security work for Zhejiang employers. Zhejiang migrants constitute the largest group, and as a whole they were economically more powerful than the locals and migrants from other places. For a more detailed description of “Zhejiang Village”, see also Li Zhang, supra note 16. For the composition of the population of “Zhejiang Village”, see Laurence Ma & Biao Xiang, supra note 6.

³⁰ It has no fixed geographic boundaries and spreads over several large suburban neighborhoods in the Fengtai district in the south part of the city. Different people hold various views about the extent of “Zhejiang Village”. Some refer to a cluster of some 25 pre-existing local natural villages now densely populated by Zhejiang migrants. Others refer to the entire region where these migrants can be found, which extends to Muxiyuan flyover on the third ring road in the north, the Nanyuan airport in the south, Majiabao in the west, and Xiaohongmen in the east. See Li Zhang, Strangers in the City, supra note 16, at 19.

³¹ See Johnson, Marguerite, “Bright Lights, Pink City” Time Magazine (21 February 1994) 47.Google Scholar According to Beja and Bonnin, migrants' share of the market in several products was in the range of 40–50 percent; but for leather jackets, it was up to 70–80 percent and as high as 90 percent for buttons and zippers. See Beja, Jean Philippe & Bonnin, Michel, “The Destruction of the ‘Village’” (1995) 2 China Perspective 25.Google Scholar

³² See Xiang, Biao, “Chuantong he xin shehui kongjian de xingcheng: yige zhongguo wailai renkou jujuqu de lishi” [The Formation of Traditional and New Social Spaces: A History of A Migrant Enclave of China] (1998) 2 Zhanlue yu guangli [Strategy and Management] 109, footnote 10.Google Scholar

³³ In 1993, 46 percent of migrants in Beijing did not have the permit. See Gongsi, Lingdian [The Horizon market Research and Analysis Company] “Zhuyao Chengshi Wending xing de fenxi he yuche” [1993–94: Analysis and Prediction on the Stability in Major Cities] (1994) 2 Shehui xue yanjiu [Social Research] at 25, 28.Google Scholar

³⁴ He, supra note 23.

³⁵ He, Xin F., Legal Evasion as a Means of Development, (JSM thesis, Stanford University, 2000)Google Scholar [unpublished].

³⁶ Young, supra note 12.

³⁷ See Gongshang guanti gaifan xing wenjian xunbia [Selection of Industrial and Commercial Administrative Documents] (1988) 4 Beijing shi gongshang ju [Beijing ICB] at 299.

³⁸ Ibid.

³⁹ Chengxiang geti gongshanghu zhangxing guanli guiding shishi xize.

⁴⁰ Interview on July 17, 2001.

⁴¹ Xianmin, Shi, Tizhi de Tupuo [The Breakthrough of the Institution] (Beijing: China Press of Social Sciences, 1993).Google Scholar

⁴² Xiang, supra note 18.

⁴³ Walder, Andrew, “Urban Industrial Workers: Some Observations on the 1980s” in Rosenbaum, Arthur, ed., State and Society in China: the Consequences of Reform (Boulder: Westview Press, 1992) 110.Google Scholar

⁴⁴ See Walder, ibid.

⁴⁵ See Wang, Hangsheng, et al., “‘Zhejiang Village’: A Unique Way for the Chinese Peasants to Enter into the City” (1997) 1 Shehuixue yanjiu [Sociological Research] 61.Google Scholar

⁴⁶ Interview on December 12, 2002.

⁴⁷ See “Provisional Administrative Regulation on Commercial and Service Business's Renting Stalls in Beijing,” supra note 37, at 298. As rented stalls were usually perceived as places selling garments with fake trademarks, the ICB tried to put a “rented” sign on these stalls to make it easy to check out the “problematic spots” and alert consumers.

⁴⁸ Interview with a migrant on July 15, 1999.

⁴⁹ There was a distinction between an enterprise license and a petty entrepreneurship license (getihu). Most migrant entrepreneurs only needed the latter. Unlike an enterprise license, an application for a getihu license did not need to include a large amount of initial registered capital. In fact, most migrant entrepreneurs could only afford to apply for a getihu license. See article 23 of Gongsi Fa [the Company Law of the PRC], promulgated in 1993, stating that the minimum registered capital for a company conducting retailing business and wholesale business is 300,000 and 500,000 yuan, respectively. For a getihu license, there was no minimum requirement for registered capital. Most petty enterprises had only a couple of thousand yuan as registered capital.

⁵⁰ See Ma & Xiang, supra note 6, footnote 76.

⁵¹ From an interview with an ICB official on July 16, 2001.

⁵² See supra note 47, at 303.

⁵³ See Mnookin, Robert & Kornhauser, Lewis, “Bargaining in the Shadow of the Law: The Case of Divorce” (1979) 88 Yale L.J. 950.CrossRefGoogle Scholar

⁵⁴ Art. 382 of Xingfa [the Criminal Code], PRC.

⁵⁵ Lii, Xiaobo, Cadre and Corruption (Palo Alto: Stanford University Press, 2000) at 12–14.Google Scholar

⁵⁶ See “Shangpin jiaoyi shichang dengji he guanti zhangxing guiding” [“Provisional Regulation on the Registration and Administration on Merchandise Transaction Market”] in Beijing ICB, ed., Beijing gongshang guifang xing wenjian huibian [Compilation of Beijing Industrial and Commercial Regulative Documents] (Beijing: Jing Chen chubanshe, 1995) 384.Google Scholar

⁵⁷ See “Guanyu shengpi shichang jianshe quanxian de tongzhi” [The Notice regarding the Authority on Permitting Constructing Markets] in “Shangpin jiaoyi shichang dengji he guanti zhangxing guiding”, ibid. 362.

⁵⁸ For a detailed description of how the market was built, see Xiang, , Kuayue bianjie de shequ [A Community Beyond Boundaries], (Beijing: Shanlian Shudian: 2000) 315Google Scholar; Jeong, Jong-ho, Renegotiating with the State: the Challenge of Floating Population and the Emergence of New Urban Space in Contemporary China (Ph. D dissertation, UMI Dissertation Services, Yale University, 2000) [unpublished] at 57–58.Google Scholar

⁵⁹ Interview with an official of Fengtai district ICB on July 10, 1999.

⁶⁰ Interview with a migrant at Longqiu market on July 13, 1999, and my classmate who was an ICB official.

⁶¹ Telephone interview with a Beijing municipal ICB official on October 15, 1999.

⁶² See “Guanyu shichang yu gongshang guanli bumen fenli de tongzi” [A Notice about Separation of Market and ICBs] in Gongshang guanti gaifan xing wenjian xunbia, supra note 37.

⁶³ Interview with an official of Fendai district ICB on July 10, 1999.

⁶⁴ Interview with a migrant on December 7, 2002.

⁶⁵ Ibid.

⁶⁶ See Choi, Ëun Kyong and Zhou, Kate Xiao, “Entrepreneurs and Politics in the Chinese Transitional Economy” (2001) 2 China Review 111.Google Scholar

⁶⁷ Fernandes, Edesio and Varley, Ann, eds., Illegal cities: law and urban change in developing countries (London, New York: Zed Books, 1998).Google Scholar

⁶⁸ Nee, Victor, “Peasant Entrepreneurship and the Politics of Regulations in China” in Nee, Victor et al. , eds., Remaking the Economic Institutions of Socialism: China and Eastern Europe (Palo: Alto: Stanford University Press, 1989) 177.Google Scholar

⁶⁹ See e.g., Xiaobo Lii, supra note 55 at 252.

⁷⁰ See Solinger, supra note 3. See also, Woo, Margaret, “Law and the Gendered Citizen” in Goldman, Merle and Perry, Elizabeth, eds., Changing Meaning of Citizenship in Modern China (Cambridge, Massachusetts, London, England: Harvard University Press, 2002) 314Google Scholar; Yu Xingzhong, “Citizenship, Ideology, and the PRC Constitution”, ibid. 303.

⁷¹ See “Huji zhidu buhui quxiao” [Hukou System Will not be Revoked] Beijing Youth Daily (26 February 2002); also (25 February 2002), online: PDT http://news.sina.com.cn/c/2002-02-26/0834485672.html.