China could be on the verge of reversing hukou, a legacy of Mao


Insights from the East include Read, the South China Morning Post and the National Strategy

The news

Chinese economists are urging the government to reform hukou — an archaic residency registration system set up decades ago under Mao to halt the mass migration of rural Chinese to cities.

Several cities have already made changes to the system to make it easier for migrant workers to bring their families to the cities and access social services there.

Under the hukou system, people are limited to receiving social services such as healthcare and education depending on where they are registered to live, a policy that has left residents of rural areas disenfranchised. The program is very unpopular and has forced migrant workers to make the choice to leave children and families with relatives to work in the cities for higher wages.


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Hukou reform could prevent negative social consequences

Source: The East has been read

The residency system means millions of migrant parents leave their children at home with relatives while they work in the cities, but researchers fear this could be unforeseen. long-term social consequences for future generations, according to the Chinese newsletter The East is Read. Economists at Peking University found that “left-behind” children have a slightly higher chance of committing a crime in adulthood if only one parent is a migrant worker, and a 12.1% higher chance of gambling. Although the hukou system does not appear to have “immediate effects,” the researchers said, “these problems may manifest through increased criminal behavior, which will impact society in the long term.”

Hukou reforms could boost economic recovery

Sources: South China Morning Post, Natixis

China’s economic problems are partly the result of a population unwilling to spend money on consumer goods, and reform of the hukou system would be “more than $281.1 billion in consumption,” said an economist who advises the Chinese central bank. Migrant workers could see their purchasing power increase by 30% due to the significant improvements to their social safety net that urban residency would bring, he said. China’s major cities also have “room for improvement in terms of growth capacity” as the country’s overall population declines, the South China Morning Post reported, and hukou reforms could mean that “Urbanization could be completed before 2035,” said one economist.

The Chinese real estate crisis needs a solution

Source: National Strategy

Debt-ridden Chinese real estate developers like Evergrande have left millions of vacant buildings behind, and Beijing has considered city-specific hukou reforms to reduce the inventory of housing there. “The idea that the population has a resource rather than a burdenis beginning to drive authorities’ residency policies, wrote an analyst for the National Strategy, a WeChat economics blog. But hukou reforms may not be enough to solve the housing crisis because “once (registration) is open to everyone, it will quickly lose its value,” the analyst said, especially if migrant workers try to apply for registration in top-tier cities such as Shanghai and Beijing.

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