China’s hukou system impinges on development and civic rights

Author: Jason Young, Victoria University of Wellington

Since the early 1980s, hundreds of millions of migrants have entered urban areas without full urban status. In conjunction with local industries these migrants put increasing pressure on the state to abolish the hukou system, which requires Chinese citizens to hold a valid residency permit. The state has responded by liberalising two key areas of hukou management but failed to address the fundamental issue of civic inequality.

Today, hukou remains an important governing instrument to promote economic development, maintain social stability and manage migration and urbanisation but these blunt development tools increasingly threaten to dampen the growing dynamism of Chinese society and economy. Balancing stability, management and control on the one hand and dynamism, growth and civic equality on the other is becoming increasingly difficult under the confines of this development model. The last few decades of hukou reform encapsulate this Chinese governing dilemma.

The hukou system was a fundamental feature of China’s imperial bureaucracy, but one that did not fall along with the dynastic governing structure. After the 1911 Revolution, warlords, the Republican Government and Japanese occupying forces alike all utilised hukou. After the establishment of New China in 1949, hukou was again employed to bring order to a China ravaged by the tumultuous first half of the 20th century. The Hukou Registration Regulation appeared in 1958, regulating residency, mobility and dividing agricultural and non-agricultural populations. The establishment of socialism became the new priority and much effort was put into dividing, organising and administering the population in service of the planned economy. Movement between locations, especially movement from rural to urban, was controlled and hukou permit holders were required to reside or be employed in non-agricultural areas.

During the 1950s, 60s and early 70s Chinese officials institutionalised a tight division of rural and urban societies, and migration and population mobility were severely hampered. With the slow advent of a new economic orthodoxy beginning in the late 1970s, migration from rural to urban areas began to grow. An increasing amount of agricultural hukou holders engaged in non-agricultural employment. The state eventually adapted to this trend and introduced temporary residency permits in 1984 allowing citizens to move outside of their hukou zone and gain employment and temporary housing without transferring their permanent hukou location. This revolutionised the Chinese economy as increasing numbers of migrants exited an agricultural sector characterised by underemployment.

Whilst these migrants could now legally survive ‘outside the plan’ they were relegated to a ‘temporary’ status with acute institutional implications. From 1978 to 2007, the non-agricultural hukou population grew from under 200 million to 431 million, whilst the urban population grew to 600 million. A new ‘temporary’ urban class has been created by the combination of reform era economics and only partial liberalisation of the hukou system.

The second major reform trend involved the liberalisation and commodification of hukou transfers for elite migrants, some local nongmin swept up by the urban sprawl and migrants willing to migrate to less densely urbanised areas. These reforms encapsulated the state’s development agenda by targeting migrants of particular value to urban areas (the wealthy, the educated and the talented) and through special hukou transfer policies that encourage migrants with fewer skills or material resources to migrate to less densely populated urban areas.

These moves, in conjunction with the freeing up of the ‘temporary’ labour class, have played a significant role in China’s urbanisation and move to economic conditions characterised by a large proportion of the population engaged in non-agricultural employment, however, this has not been without cost.

The denial of residency status and government entitlements significantly disadvantages most migrants and relegates them to a second-tier ‘temporary’ institutional status.

With urbanisation and socio-economic development now reaching a critical stage, the Chinese state needs to move away from this heavy handed approach to development and push through deep reform of the hukou system. This should include an end to hukou dualism (agricultural/non-agricultural), a lessoning of the distinction between local and non-local hukou entitlements and the introduction of a more transparent, liberal and accountable process for inward hukou transfers. The continual institutional discrimination of non-local and particularly agricultural hukou holders threatens the construction of a harmonious and egalitarian society as urban classes solidify along hukou non-hukou lines.

China’s current and future development relies on careful phasing out of this system if socio-economic development is to continue and major political upheaval in the form of an emergent civic rights movement is to be avoided.

Jason Young is a lecturer on East Asian politics in the School of History, Philosophy, Political Science and International Relations at the Victoria University of Wellington.