Hukou reforms under way

Here is an interesting follow-up to yesterday’s announcement of reforms to China’s hukou system. The central government announced changes to lift household registration restrictions for people who live and work in some second- and third-tier cities. The easing policy has, in fact, been signaled since October 216 when the State Council released a proposal to allow 100 million migrant workers with countryside hukou to settle in smaller cities. In February this year, the National Development and Reform Commission suggested eliminate household restrictions for farmers-turned-urban workers in all cities except the few mega-cities.

In the GBA, Zhuhai, Huizhou, Jiangmen and Zhaoqing have been gradually relaxing their hukou policies to attract more skilled workers. The new policy means these cities will no long require yearly minimum social security contributions and can fully open their doors, according to the 21st Century Business Herald.

Major cities such as Dongguan and Foshan with populations above the 5 million level and mega cities such Guangzhou and Shenzhen with population well over 10 million will also have space to further ease their restrictions, apparently. Currently Guangzhou extends its hukou to bachelor-degree holders under 40 while Shenzhen entices all fresh college graduates. The two cities in 2018 attracted 406,000 and 498,300, respectively, new permanent residents.

In 2018, for the four consecutive year, more than million people, or 1.77 million to be precise were given permanent residency status in Guangdong province, topping the charts in China. This showed Guangdong’s reliance on the inflow of talent is greater than the other Chinese provinces. How to keep these skilled workers and turn them into the province’s permanent assets will be a priority for the development of the Greater Bay as a whole.

Zhou Zhonggao, deputy director of the Research Institute of Talent Development at the Guangdong Academy of Social Sciences, said that the State Council’s latest announcement will help rio the system of obstacles for more efficient labor allocation. The new policy will also help increase the population volume in the smaller cities surrounding the major urban cluster, further strengthen the capability of population aggregation and improve the overall competitiveness. This, coupled with the supporting policies for industrial developments as well as public services, will positively affect the GBA’s comprehensive competitiveness.

Read more here (in Chinese).

Caixin Global explains the hukou system and its social impact here.