BOFIT Viikkokatsaus / BOFIT Weekly 2019/17

The National Development and Reform Commission (NDRC) last week announced that this year all cities with populations of 1 to 3 million shall grant hukou status to anyone requesting it. For cities of 3–5 million inhabitants, the rules on petitioning for hukou status will be eased. For cities with populations of more than 5 million, the requirements for obtaining household registration shall be clarified so that more people have the opportunity to obtain hukou rights.

China has moved slowly in dismantling the hukou system. The latest reforms are part of a broader package approved already in autumn 2013 and an implementation plan published in spring 2014 (BOFIT Weekly 14/2014). Ending the hukou system is a critical reform as it makes it easier to move around and increases the equality between the rural and urban population. The government hopes it will accelerate urbanisation and sustain economic growth. As of end-2018, about 60 % of the Chinese lived in cities.

Hukou status is determined by place of birth. Changing status to another jurisdiction is difficult, especially if a person wants to move from the countryside to a city. Hukou complicates access of internal migrants to public services such as healthcare and education for their children because the services are tied to hukou status. Services, however, can usually be accessed today by paying additional fees. Some cities have arranged services specifically for the migrant community.

Even if the hukou system complicates moving around the country, it hasn’t prevented people from moving to places with better job prospects. The National Bureau of Statistics reports that China had 288 million internal migrants in 2018. The average age of an internal migrant is 40 and about two-thirds are men. Roughly speaking, half of China’s migrant workforce find jobs in the service sector, 30 % in manufacturing and 20 % in construction.