Informal Economy in Shanghai’s Suburban Villages: Local Society and the Dilemma of Governance

Abstract

The rise of the informal economy has profoundly changed the social structure of rural society in Shanghai’s suburbs, leading to the phenomenon of the “defamiliarization” of the “society of the familiar.” As a result, local governments have lost the conventional resources and means to govern the risks posed by migrants working in the informal economy and, what is more, the model of minimalist governance itself has failed. In order to deal effectively with the risks to governance posed by the informal economy, local governments have tried persistently to strengthen their control over rural society through the expansion of administrative power and village organizations under their high-pressure system of governance. The goal of governance has been to compress and transform the production space of the informal economy, and integrate the large number of informal workers into the formal administrative management system. However, informal workers, who cannot be formalized because of the inherently informal nature of their work, face the prospect of eventually losing their livelihood space. Their lives have become more precarious and unstable since informal economic activity has continued to shrink.