Recent hukou policies will increase inequality among the migrant population
The Beijing municipal government announced on September 19 that it would abolish the distinction between urban and rural residents in its household registration system.
The previous month, the city had announced it would trial a points-based scheme for awarding hukous from 2017.
The hukou system, originally intended to prevent population movement and tie Chinese citizens to their places of origin through a hereditary registration system, has become a means merely of reducing cities’ financial and demographic burdens by limiting migrants’ access to welfare services in the cities they move to. The latest rounds of reform contribute to fragmentation of the hukou system and heterogeneity within the migrant population.
The hukou system’s complexity produces substantial diversity among migrants, or ‘non-local hukou holders’, who reached 277.47 million in 2015 according to official statistics. Recent reforms increase this diversity by introducing varying guidelines depending on the city size and location. In major cities, institutional factors are now coupled with socio-economic inequalities among migrants, so that ‘migrants’ is less and less useful as a single population category.
Subsidiary impacts
- The urban-rural distinction, though officially abolished in 2014, has yet to be abolished in practice and still entails institutional and socio-economic inequalities in the Chinese population and among migrants.
- Relaxation of hukou contraints since the early 2000s favoured migration towards small cities while tightening population control in large cities.
- Since the early 2000s, reforms opening social welfare, housing and education to targeted migrant categories increase socio-economic inequalities among migrants and exacerbate discrimination against informal workers.
- Current reforms granting a local hukou through a points-based system aim to selectively integrate migrants and better monitor the non-local hukou population.
Analysis
Unequally worthy hukous
The hukou (household registration) system confers three attributes upon every Chinese citizen:
- an ‘urban’ versus ‘rural’ status distinction;
- a municipal affiliation; and
- a provincial affiliation.
These formal affiliations are hereditary and determine a citizen’s welfare entitlements. They apply regardless of where the person actually lives and works; if a person moves to a different city, they remain registered in their ‘hometown’.
China’s welfare system is fragmented and decentralised. For example, a citizen with a hukou for the city of Suzhou enjoys welfare provisions granted by the municipal government of Suzhou and the provincial government of Jiangsu (the province in which Suzhou is located). If a such a person moves away from Suzhou, they will remain registered in Suzhou and will not be eligible for welfare entitlements in their new home.
Hukous attached to economically developed provinces and municipalities offer more generous welfare provisions than hukous from less developed areas, leading to a wide range of different welfare entitlements among Chinese citizens.
The hukou system also institutionalised a rural-urban divide. All hukous are classified as either ‘urban’ or ‘rural’. Those categorised as ‘urban’ were (and often still are) entitled to public amenities and social services such as health care, housing, pensions and education. Those classified as ‘rural’ enjoy few social welfare benefits, but are instead granted certain rights to the use of rural land.
Urban-rural divide
The State Council officially abolished the much-criticised rural-urban division in 2014, but implementation of the reform has been slow, especially in large cities.
For example, it took Beijing municipality until earlier this month to announce that it would abolish its rural-urban distinction, giving its ‘rural’ residents from the Beijing suburbs access to the same public services as its urban hukou holders.
In most areas, this reform did not deprive rural residents of their special land-use rights. This creates specific challenges in cases when rural land is expropriated as cities expand. Up to now, expropriated rural residents were usually given an urban hukou – a practice estimated to have led to more than 100 million peasants losing their land, moving to newly built urban amenities and shifting (often forcedly) to urban hukou.
With the removal of the rural-urban distinction, the national government will need to redefine and clarify land ownership. Many fear that that there is now little incentive for the authorities not to expropriate land, since they no longer have to offer an urban hukou in return. Chinese experts therefore call for creating a non hukou-based land ownership system that would protect farmers from illicit land-grabbing.
In this legal context, migrants who move to rural areas, accounting for a significant proportion of all migrants (over 17 percent of all interprovincial migration in 2005), also face specific challenges related to the lack of land-use rights at the destination.
These challenges are faced by a large proportion of migrants, be they peasants undertaking agricultural work in more developed regions, women marrying outside their villages or migrants working in city suburbs that are still categorised as rural land.
Small and large cities
As well as abolishing the rural-urban divide, the 2014 reform deepened long-established efforts to direct migrants towards small cities rather than large ones, in order to mitigate demographic and fiscal pressure on the megacities.
Since the early 2000s, numerous local reforms facilitated hukou registration in new places of residence in towns and small cities. Even though gradually and unequally implemented, they had had widespread effects: a large majority of migrants (about 68 percent of long-distance migrants) settled in small or medium-sized cities at prefecture level or below, while just around 10% work in major municipalities such as Beijing and Shanghai.
In 2015, most of the migration was short-distance: about 40% of migrants worked in a city close to their home area, while only 30% of the total migrant population was trans-province.
Overall, the reform is expected to help an additional 100 million rural migrants settle in towns and cities by 2020, by which point it is planned that 60% of China’s population will be urban.
In contrast, the threshold to obtain a local hukou is still very high in megacities such as Beijing, Shanghai, Shenzhen and eleven other metropolises, due to fiscal, demographic and environmental pressures. In these cities, population control has been tightened instead.
Unequal welfare systems
Hukou reforms have gradually separated social welfare systems from hukou status, opening urban social insurance systems to migrants. However, even as these reforms reduced the impact of hukou status on migrants’ socio-economic situation, they also emphasised other factors of differentiation, increasing inequalities between different types of migrant and blurring the existing categories of population.
In particular, a system known as ‘Five Insurances, One Fund’ links some social insurances (unemployment insurance, health insurance, pensions, work injury insurance and housing subsidies) to work contracts, based on employer and employee contributions. This worsened inequalities between formal and informal workers. Nonuniform contribution standards, and the large degree of discretion, also resulted in unequal social welfare provision. Meanwhile, the guarantee system for low-income people is still mainly based on the hukou, with urban provisions such as the urban minimum living guarantee clearly exceeding ones such as the rural minimum living guarantee and the Five Rural Guarantees.
The ‘Fine Insurances, One Fund’ system is also undermined by very low participation rates. Despite implementation of the Labour Contract Law in 2008, requiring companies to sign contracts and providing greater job security than the old contract law issued in 1994, only 36% of migrant workers had signed a formal employment contract with their employer even by 2015. As a result, in 2012 only 14.3% received retirement benefits, 24% work-related injury insurance, 16.9 medical insurance, 8.4% unemployment and 6.1% maternity benefits.
Recent reforms in education and housing accentuate these inequalities. In April 2014, Beijing municipal officials issued a policy requiring children without local hukou to provide at least five extra documents to gain admission to a public school in the capital, including parents' working certificates, residency permits and documents signed by hometown authorities. While this allows migrant children to have access to city schools, it also makes access to education more difficult for informal workers.
Towards selective integration
Following pilot reforms in Shanghai in 2004, Zhongshan in 2009 and Guangzhou in 2010, Beijing municipality recently adopted a points system to draw talented migrants and exclude low-skilled migrants.
Beijing’s migrants will have to meet four basic requirements to apply for a hukou: they must have residence permits in the city; be paying their social insurance in Beijing for seven consecutive years; have no criminal record, and lastly, and be younger than the retirement age of 50 (for men) and 60 (for women).
Hukous will then be given to the migrants who have the highest number of points, based on criteria such as age, education level and other factors yet to be defined. No more than 10,000 migrants are expected to obtain Beijing hukous annually.
In other cities such as Shanghai and Shenzhen, the old ‘temporary residence permit’ held by migrants was replaced by a sophisticated system of “residence cards”, allowing for the issuance of multiple types of registration. In Shanghai, migrants are now categorized into different kinds of residence cards, according different treatments to migrants depending on their skills, education, age, profession and wealth. In this system, unskilled workers are given ‘transient residence card’ and only have limited access to social welfare.
New regulations therefore tend to favour wealthy and well-educated migrants, deepening the divide within the migrant population. Institutionalised discrimination anchored in the hukou system remains and is increasingly coupled with socio-economic inequalities.
This residential permit system, introduced in many big cities, also enables local governments to collect and computerise more extensive information, and to better monitor and manage the non-local hukou population. The new registration contains much more extensive personal information than the previous temporary card system, and municipal hukou management authorities increasingly cooperate nationwide, making population control much easier.
This article was first written for the Oxford Analytica Daily Brief, which is the copyright holder.