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National Chengchi University

Department of Social Sciences

IMAS/ Fall 2012

Political Development of Mainland China

Professor Chien-min Chao

The Hukou System: Why China Does Not Want to Abolish It

Filippo Maranzana De Filippis

Student ID # 101926032

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The Hukou System: Why China Does Not Want To Abolish It

Introduction

On March 20, 2003 Sun Zhigang, 27, died in the medical clinic of a detention

center as a result of police brutality. Sun was a Wuhan university graduate

and fashion designer who had gone to Guangzhou to work. Three days

earlier, as he walked on the street, police asked for his resident permit and

identity card. He had not applied for the permit and he had forgotten the ID

card (which contains the place of registration but does not give the right to

live or work in some area). His residence permit – the hukou - was with his

family in Hubei.

China’s population today is divided into two classes: rural and urban. Between them there is

an undistinguished “floating” population of about 200 million people who travel from their

official place of residency – the village – to the big coastal cities in search of work and better

opportunities. They have no civic rights, no social benefits and no access to public services.

They are just conveniently cheap labour for the expanding manufacturing industries that

exploit and treat them like modern coolies. They also are Chinese but, as a matter of fact,

are perceived as second class citizens.

This sort of “apartheid” has been institutionalized with the introduction of the household

registration system – the hukou – which officially identifies a person as a resident of an area,

rural or urban. The initial purpose of it was to limit mass migration from the countryside to

the cities, and ensure some structural stability to the country on its recovery.

Over the last two decades, there have been many calls for reforms of the hukou system,

both from within and outside of the country; and the government itself has repeatedly

announced them. In the end, nothing has really changed for the better, in some cases things

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have worsened for the migrants, especially since the central authorities have delegated

some of these issues to the cities. The Chinese saying “The thunder is loud, but the

raindrops are tiny” (leisheng da, yudian xiao) rightly describes what has happened in this

round of tentative hukou reforms.

The internal mass migration in China started over thirty years ago, when the Chinese

leadership announced dramatic reforms towards market economy and the opening to

foreign investors. That first generation of migrants has endured hardships and deprivations

that the second generation – more educated and aware of its own rights – is not willing to

bear, and it has shown so by being very vocal towards local authorities and the government.

This paper will try to explain what has gone wrong during the reform process, and why it

is believed that the Chinese government – well-intentioned as it might be - is not really

interested in abolishing the hukou system to restore equality among all its citizens. The

reasons for that are many and complex, pertaining the political, social and economic levels,

all interlocked and intertwined to one other.

First I will start by describing the political and economic context in which the household

registration system was introduced, and the different social impact it had on urban and rural

population. Then I will explore its main structure and functions, and how they changed over

time to adapt to new circumstances. Finally I will illustrate all the tentative reforms

proposed so far, and conclude by suggesting possible explanations for their failure.

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History

The household registration system known as hukou - or more properly huji – is not the PRC’s

invention, nor is it totally new to China. Its ancient history can be traced back to the baojia

system of population registration and mutual surveillance said to be invented by Wang

Anshi, chancellor of the Song dynasty (AD 960-1279). The scheme of the baojia system was

simple. Every ten households were arranged into one pai; every ten pai constituted a jia;

and every ten jia formed a bao. Each baojia was made responsible for supplying the

government with a certain number of trained and armed militiamen.

During the Ming dynasty (1368–1644), the baojia system was extended to the whole

country, and often coincided with the lijia system, which had been established for the

collection of land and labor taxes. But it also began to assume the separate function of

overseeing the moral conduct of members of the community. In late imperial China, baojia

became the system of police control, a device to watch and check the number, movements,

and activities of people, through agents selected from local inhabitants.

Closer antecedents of the hukou can be seen in the last century’s techniques of social

control established in areas under Guomindang and Japanese rule, and in the Communist-

led revolutionary base areas.1 Very significant are also the direct influence of the Soviet

propiska (internal passport) system and the role of the Soviet advisers in creating a social

order that could be mobilized in the service of socialist developmental priorities. Michael

1 Lynn White records the existence in Japanese-occupied Shanghai of a system of citizen’s cards (liangmin

zheng) and in Guomindang-ruled post-war Shanghai of identity cards (shenfen zheng). In the early 1950s the Shanghai government issued residents’ cards (jumin zheng) on a household basis (Cheng, Selden 1994).

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Dutton rightly noticed that: “The hierarchical systems founded on and built around the

family register linked the order of the family to the order of the state.”2

The Early Period (1949-1952)

In September 1949, just a few weeks before the proclamation of People’s Republic of China

(PRC), the Chinese People’s Political Consultative Conference met in Beijing to issue a

Common Program that would form the basis of China’s first constitution, formally ratified by

the National People’s Congress in 1954.

The new constitution granted unprecedented freedoms and rights, among which were

freedom of residence and migration. Article 5 read: “The people of the People’s Republic of

China shall have freedom of thought, speech, publication, assembly, association,

correspondence, person, domicile, moving from one place to another, religious belief and

the freedom to hold processions and demonstrations.”3 To be sure, freedom of domicile and

movement were also codified in 1911 Republic of China’s charter, but that was a provisional

constitution.

Later on, Article 90 of the 1954 constitution confirmed “freedom of residence and

freedom to change their residence.”4 This reiterated a historical practice in which no

governments under Qing dynasty, Guomindang, warlords or Japanese rule had prevented

internal migration, except in frontline zones. During the early 1950s people in the PRC

enjoyed free movement into and out of cities, as well as throughout the countryside,

contributing to the economic recovery and restoration of trade.

2 Michael Dutton, Policing and Punishment in China. From Patriarchy to the People (Cambridge: Cambridge

University Press), p. 25. 3 Mark Selden, The People's Republic of China. A Documentary History of Revolutionary China (New York:

Monthly Review Press, 1979), p. 188. 4 Documents of the First Session of the First National People’s Congress of the People’s Republic of China

(Peking: Foreign Languages Press, 1955), p. 160.

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The first post-war years saw many large cities swollen with unemployed people and

refugees, prompting the government to address the problems in two ways, indicative of its

differentiating approach to city and countryside. First, it accepted the responsibility to feed

the urban unemployed. As Mao put it in a June 1950 speech to the CCP Central Committee,

“we should set aside two billion catties5 of grain to solve the problem of feeding the

unemployed workers […]”.6 Second, since 1949 it arranged for hundreds of thousands of

wartime refugees and jobless urban residents from overpopulated cities, such as Beijing,

Shanghai and others, to resettle in the countryside.

One of the most fervent supporters of this policy was the then Shanghai Party secretary

Rao Shushi. In his report to the party, he called for the transfer of Shanghai industry to

inland locations, in order to help the repatriation of millions of refugees and peasants who

took refuge in the city during the war. Rao made explicit several important principles that

would eventually be incorporated in the hukou system. One was the distinction between

producers and consumers, that is between productive and unproductive persons; the other

was made clear by the central government’s plans to transfer industry and personnel away

from metropolitan areas, in conformity with certain economic criteria; the third one was the

state’s prerogative to return migrants to their native places (Cheng , Selden 1994).

At that time, the government’s intention to proceed with large-scale repatriation as a

solution to problems of unemployment and hunger became very clear. But state policies

emphasized voluntary programs, persuasion and the distribution of incentives to achieve

population relocation.

5 catties (shijin): 500 gr.

6 Michael Kau and John Leung (eds.), The Writings of Mao Zedong, 1949-1976, Vol. 1 (Armonk: M. E. Sharpe,

1986), p. 104.

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Two basic reasons explain why people willingly accepted relocation, and why the whole

process was conducted smoothly in those years. First, relocation was on a voluntary basis,

with the important exception of criminals and class enemies. Compulsory relocation was

reserved then for cases of “ideological re-education” and “questionable elements” (Selden

1994), especially former Guomindang officials and landlords who had fled to the cities

during the civil war or land reform. Second, relocation was associated with land distribution

and state subsidies. These incentives, plus free transport, attracted many unemployed and

poor urban residents, particularly recent migrants from the countryside. Most importantly,

there were no barriers to re-entry to the cities (Cheng 1994).

In 1951 the Ministry of Public Security issued “Regulations Governing the Urban

Population”. This document is seen as the first one to initiate a process towards a gradual

restriction of freedom of residence and movement for Chinese people. It divided urban

households into six categories, each one subject to a particular regulation:

1. residential households

2. industrial and commercial households

3. public residents (living in hotels, inns etc.)

4. floating households (living in boats and ships)

5. temple households

6. alien (foreign residents).

Article 5 stipulated that “all those who move should first notify the local public security

organ of change of residence, cancel the census record of the former abode, and apply for a

change-of-residence permit” (Cheng 1994). Anyhow, with the exception of those under

police investigation, anyone who applied for a permit could still have it and then register

anywhere else, including Beijing and Shanghai.

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The unprecedented urban regulation of PRC’s early years is indicative of the Party’s

change of heart towards the cities. Previously, the cities were associated with capitalism,

imperialism and the Guomindang. After the liberation, the communist authorities

(presumably influenced by the Soviet practice) took an urban-centered perspective on

China’s development, stressing the critical role of workers and the cities in the

industrialization process. As a consequence, the new state accepted a responsibility that no

previous Chinese state had ever assumed: to provide jobs, food and housing for all urban

residents.

First Implementation of the Hukou System (1953-1957)

At the start of the First Five-Year Plan in 1953, China had completed the land reform and

accomplished full economic recovery after a century of disintegration, invasion and war. By

the end of 1956, 97 per cent of rural households had joined cooperatives, and 68 per cent of

factories had been nationalized, with the remainder classified as joint state-private

enterprises (Naughton 2007). Parallel with the extension of Soviet-style planned economy,

the state established more restrictive mechanisms to control population movement, in

order to bind peasants to their collective-village, and regulate entry to the cities.

In 1954 the Ministry of the Interior and Ministry of Labor promulgated a “Joint Directive

to Control Influx of Peasants into Cities”. The term manliu “blind migrant” came to be used

extensively to describe rural migrants and assumed a negative connotation - its reverse

homophone being liumang, “hooligan”. The state proclaimed that all subsequent

population and labor flows from the countryside to the cities would be determined by the

authorities (Cheng 1994).

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In 1955 the State Council passed “The Directive Concerning Establishment of a

Permanent System of Household Registration”, formally initiating a hukou system, just

months before the collectivization was completed. Unlike the previous regulations which

pertained most exclusively to the cities, this new hukou system was all comprehensive,

covering city and countryside. In the same year general rationing was introduced, making it

difficult for illegal migrants to satisfy basic needs. People registered in each household were

classified according to categories reflected in the rationing cards. Seven types of cards

differentiated residence, occupation and grade:

- city and town resident grain-supply card

- industrial and commercial trade grain-supply card

- city and town animal feed-supply card

- city and town resident grain-transfer card

- grain ticket for nationwide use

- local area grain card

- local area animal-feed card7

Urban residents had to present grain-supply cards to their local grain store to draw local

or nation-wide grain tickets; villagers who planned to travel had to bring their own grain to

state grain stations where they could exchange it for grain tickets.

In November 1955 the directive “Criteria for the Demarcation Between Urban and Rural

Areas” was promulgated to divide the country into three spatial categories:

1. urban areas including cities and towns (chengzhen qu)

7 Tien, China’s Population Struggle, p. 87.

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2. urban residential enclaves (chengzhen jumin qu), localities outside urban areas

where state employees and their families live, such as oil fields and research

institutes

3. villages

In 1956 the eligibility criteria for urban rationing were simplified. Those who lived in the

countryside and were not state employees were classified as agricultural households (nong

ye) and therefore were not entitled to receive state grain rations. Rationing sharply

differentiated urban and rural residents. While urban residents were supported by the state,

rural residents were responsible for feeding themselves, except in time of especially severe

famine when the state provided emergency relief. In this, as in many other ways, ranging

from retirement to health care to education to subsidized housing, the state assumed

responsibility for the livelihood of urban workers, particularly state sector employees, while

encouraging rural people to practise collective self-reliance (Cheng, Selden 1994).8 In the

case of a female state employee, her children enjoyed the same classification.9

8 Among the most rankling of the Hundred Flowers criticisms for Mao personally was the charge that the Party

neglected the interests of the rural population. Mao chose to respond to critics who (rightly) noted a growing

urban-rural gap with the following arguments: "... generally speaking, the income of the workers is larger than

that of the peasants, but the value of what they produce is also greater than that of what the peasants

produce, and their necessary living expenses are also higher than those of the peasants. The improvement in

the standards of living of the peasants mainly depends on the peasants' own efforts in developing production.

The government, also, is giving the peasants a lot of help, such as constructing water conservation projects and

issuing loans to the peasants, etc." Leung and Kau, The Writings of Mao Zedong, Vol II, p. 232. Not only was the

productivity of urban labour higher than that of peasants, Mao held, ignoring the fact that this was a direct

function of the state's decision to transfer substantial portions of the rural surplus to urban industry, but rural

living costs were lower. Mao proceeded to compare China favourably to the Soviet Union, claiming that China

had no system of compulsory crop sales and that China was reducing the scissors gap. Both claims were false.

In fact the Soviet Union had done better than China in reducing urban-rural income and welfare gaps, and

particularly after the 1960s it would do even better as collective farmers shifted to a system of regular cash

wages and benefits and the worker-peasant income gap narrowed. Cheng, Selden, Ibidem, p. 659. 9 For hukou purposes, children have always been classified on the basis of maternal classification. If a state

employee is male and his wife has a rural hukou, their children have rural hukou. At first glance, this is

surprising, particularly in light of the fact that class status follows the male line, just as lineage position was

and is determined exclusively through the male line. There were, however, practical reasons of state for this

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Full Implementation of the Hukou System (1958-1960)

On 9 January 1958 the Standing Committee of the National People’s Congress (NPC)

promulgated the Hukou Dengji Tiaoli, a set of administrative regulations on the household

registration system which has remained in effect to this day. Its rationale was to maintain

social order, while officially protecting citizens’ rights and interests in the name of the

socialist construction. But freedom of residence and movement had disappeared from the

list of state-guaranteed rights, nor would they be restored in the decades ahead.10

Ironically the 1958 regulations – conceived to bind farmers to the land and reduce the

population of large cities by blocking urban migration - came at the top of a population

mobilization with the Great Leap Forward (GLF). What happened was that the leadership’s

priority in those days changed dramatically from population control to accelerated

development. Therefore the new household system restrictions were swept aside to

facilitate recruitment of new workers by factories and pursue the forced super

industrialization. When in the early 1960s the disaster of the GLF emerged in its full scale,

the tough 1958 hukou restrictions were re-enforced and millions of workers were sent back

to the countryside to face starvation.

classification. By applying this "matriarchal" definition of the position of children, the state substantially

reduced the number and burden of the urban population since the great majority of state employees were

male. The effect of this rule was to force children and wives of families in which only the father had an urban

hukou and urban job to remain in the countryside. Not only were they ineligible for state rations and housing,

but children were also ineligible to attend urban schools. For a suggestive analysis of the Chinese social

structure in terms of caste-like divisions between city and countryside pivoting on the household

registration system, see Sulamith Potter and Jack Potter, China's Peasants. The Anthropology of a Revolution

(Cambridge: Cambridge University Press, 1990) especially ch. 15; cf. Friedman, Pickowicz and Selden, Chinese

Village, Socialist State. Ibidem, p. 660. 10

Chan, The Chinese Hukou System. These regulations effectively superseded Art. 90 of the 1954 Constitution which provided in pertinent part, “Citizens of the People’s Republic of China enjoy freedom of residence and freedom to change their residence.” Subsequent constitutions adopted in 1975, 1978, and 1982 eliminated the right of free mobility. In 2003, the Standing Committee of the NCP passed the Identity Card Law, which requires any citizen above the age of sixteen to possess a card indicating, among other information, his/her household registration. See Zhonghua Renmin Gongheguo Jumin Shenfenzheng Fa [PRC Identity Card Law], available at http://news.xinhuanet.com/overseas/2005-01/18/content_2476920.htm (last visited Nov. 2, 2009).

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In 1977 the State Council promulgated a document that added further restrictions,

forbidding rural dwellers who married urban hukou-holders from moving to cities, and

stipulating that the hukou be granted to children according to mother’s status, thus barring

a child with an agricultural hukou from living with a city-registered father. 11

Features and Functions

Features

The hukou has a dual classification, one socio-economic and one residential. The socio-

economic distinction relates to the hukou type (leibie) or nature (xingzhi) of it: “agricultural”

(nongye) and “non-agricultural” (fei nongye, also called chengzhen “urban”). The hukou

leibie had its origins from occupational divisions in the 1950s’ China, but as the system

evolved and economic conditions changed, the distinctions did not necessarily bear any

relationship with the actual occupation of the holders.

The distinctions between agricultural and non-agricultural status defined one’s

relationship with the state and eligibility to social benefits. Non-agricultural status entitled

the bearer – regardless whether he lived in a town, small city, large city, or even in the

countryside - to housing, employment, grain rations, education and access to medical care.

The agricultural population was expected to fend for itself, receiving very limited, if any,

state benefits. The change of status from agricultural to non-agricultural was theoretically

possible, though subject to very strict regulation and control by the central government

11

Children initially inherited the hukou status of the head of the household (huzhu), as per Regulations of the People’s Republic of China on Hukou Registration [Zhonghua renmin gongheguo hukou dengji tiaoli], issued 9 January 1958, Art. 5. Since 1998, children can choose to inherit either their mother or father’s hukou location and type. See Congressional-Executive Commission on China, October 7, 2005.

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through the mechanism of the nongzhuanfei, the conversion of hukou from agricultural to

non-agricultural, examined later in this paper.

The other classification of hukou is based on the residential location. All citizens are

classified according to their place of hukou registration (hukou suozaidi). Under the

household registration system, each individual is required to register in one and only one

place of permanent residence, therefore everyone is distinguished by whether they have a

local (bendi) hukou with respect to the administrative unit (such as a city, town or village)

where they happen to find themselves in, be it temporarily or permanently. The local

household registration defines one’s rights to activities in a specific locality. To sum up, the

hukou leibie establishes the type of services and welfare available to individuals; the hukou

suozaidi determines where individuals would receive them.

Given that the two classifications mean different things, cities and towns have both non-

agricultural and agricultural hukou population living in them; conversely, in the countryside

agricultural hukou population may exist with non-agricultural citizens, as explained above.

Therefore, until recently, in any city there were four types of people, excluding foreign

nationals, based on hukou dual classification. To illustrate it, we take Nanjing as a “local”

place and see the four types of household registration cards its inhabitants hold:

1. Local and Non-Agricultural (Nanjing urban residents)

2. Local and Agricultural (people living in Nanjing’s outlying districts and counties)

3. Non-Local and Non-Agricultural (migrants from other cities)

4. Non-Local and Agricultural (migrants from the countryside outside Nanjing (Kam

2008).

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Functions

The most notable feature of the Chinese household registration system has been that of

producing a vertical differentiation of people based on their hukou type – agricultural versus

non-agricultural – and a horizontal distinction based on hukou location – urban and rural.

However, in order to understand the hukou reforms, it is also important to analyze its

functions. The nucleus concept of the household registration system as a divisive and

exclusionary institution has remained intact over the last sixty years, but its role as a

resource allocator has changed over time to cope with a different environment. These

changes have been well summed up by Chinese scholars Zhao and Li in their statement: “[…]

private goods have largely been unlinked from hukou status, while public goods and services

have yet to be unlinked.”12 In the subsequent sections, I will try to unfold the meaning of

this statement by describing the various functions, and the factors that caused the changes.

Wang Fei-ling (2005) in his research on China’s hukou system has identified four main

functions:

1. Social-political control

2. Internal migration control

3. Resource allocation of private goods

4. Resource allocation of public goods

The first function has changed very little since its early days, and still serves as a

cornerstone of the Chinese Communist Party’s authoritarian rule to control targeted people.

According to Wang (2005), in the early 2000s there were five categories of these people:

residents suspected of threatening national security, those suspected of serious criminal

12

Zhao, Litao, Jianying Li, “China’s Hukou System: Multifaceted Changes and Institutional Causes”, p. 3.

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activities, those showing early tendencies towards violent acts, ex-convicts released within

the last five years, and narcotics users.

The second function has been reduced in the past three decades. Due to economic

reforms, in the early 1980s many rural workers were laid off while urban demand for cheap

labor had grown significantly, leading to a mass migration towards the coastal cities. A first

change was the introduction of “temporary permits” (zanzhu hukou), granted to those

migrating for legitimate business or employment purposes; this entailed no hukou change.

Another change was the “transitional hukou”, created “to allow legal migration of selected

groups of people – mainly the rich and the talented or educated – through hukou

relocations and changes.” 13 Unlike the former type, this latter granted social benefits in the

new destination.

As for private goods, until the mid-1980s, rationing made the hukou a prerequisite for

access to food in the cities, where the state controlled grain purchase and marketing. As

food marketization expanded, rural migrants were also able to buy food, though at higher

prices, while urban hukou holders had still access to food rations at lower prices. When

state rationing was terminated in the early 1990s, the inequality also disappeared.

The allocation of public goods in the hukou system still plays an important role in areas

such as education, housing, pension plans, unemployment benefits, health insurance,

mortgage lending, and so forth. In modern China this function has remained intact and it

represents the most important source of discrimination against ruralites.

Given that China is politically authoritarian but economically liberal, it was expected that

the first three functions would change, though not all at the same speed. But the resilience

of the fourth function is considered an anomaly by scholars, because in advanced market

13

Ibidem., p. 5.

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economies it is quite common for a government to use public goods as a tool to promote

equality (Zhao, Li 2006).

Reforms

Resilience to Change

The market reforms in China have played an important role in separating the private goods

provision from hukou status. By contrary, the state has failed to disjoin public goods from

household system, perpetuating the social divide in the country. If this has been done

purposely or not is still an open debate, but we could trace the mechanism that has led to

this situation by observing two phenomena: the shift in social security provision and the

enhanced role of local government and officials.

Since the 1950s, social security in China was provided by three institutions: the state, the

urban work-unit (danwei) and the rural collective. The security offered by the state was

funded by the government and granted to all public employees working for state organs and

public institutions; the danwei-provided security was managed by individual work-unit in

state and urban collective enterprises and paid for with their funds; the rural collective

security was provided by the communes and brigades with funds generated locally. When

reforms were introduced for state-owned enterprises (SOE) in the 1990s, the danwei-based

security system was shifted to a state-based one, in order to provide social protection for

millions of urban dwellers. By contrast, no such thing was made available when rural

collectives were dismantled, leaving farmers to fend for themselves without any public help.

As Zhao and Li have rightly noticed:

“Instead of creating a society-wide system, the social security system proceeded within the

dual structure created by the hukou system to produce different policies for urban and

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rural areas. The shift from state-danwei to state society-based social security provision has

been confined to the urban area without expanding into the countryside, and a nationwide

system is still not in sight.”14

Local governments’ attitude has been another obstacle towards equality in social

security provision. With state decentralization in the early 1990s also came devolution

of control and ownership of SOE from central to local governments, with the latter

gaining the right to collect revenues from businesses under their jurisdiction. In return,

local governments had to provide social services that were previously paid for by the

central government. To be sure, decentralization has indeed added flexibility to

regulations for internal migration – though hukou-based barriers have not disappeared15

- but as for social security provision is concerned, things have remained pretty much the

same for rural migrants.

So why is there in China still so much resistance on the part of local authorities to

provide public goods for migrants who in the end contribute massively to the local

economy? In this buck-passing game, responsibilities should be equally distributed

between center and periphery, with the balance probably tipping more on the central

government side for not wanting to solve this issue once and for all.

Anyway, what we can say about local officials’ attitude migrants is this. First, during

the devolution, the central government transferred many responsibilities to localities

but not enough funds. Therefore local authorities had little choice but to restrict service

delivery to local residents. On the other hand, given budget constraints, including

migrants in the service scheme would dilute the value of benefits, which in the eyes of 14

Ibidem, p. 11. 15

An example is hukou-based access to labour market. It is quite common for city governments to classify jobs into three categories. Jobs in the first category, the most sought-after, are reserved exclusively for locals; jobs in the second category favour locals over migrants, and are filled by locals first; jobs in the third category, the least desirable ones, are fully open to migrant workers (Chan and Zhang 1999; Wang 2004).

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local hukou holders would be seen as unfair and unjustified. Second, local officials’

policy is greatly affected by the cadre performance evaluation system. Since providing

services to irregular migrants is probably not in the evaluation list, it is in the local

officials’ interest to exclude them from performance indicators based on population

ratios, such as per capita GDP.

The Hukou Conversion

In China there are only two categories of migration: the one with a formal transfer of

local residency (hukou migration), allowed by authority at the destination; and that with

no hukou change and thus no formal right of residency in another place. In the PRC only

hukou migration is officially considered qianyi (migration); anything else is just renkou

liudong (population movement or “floating”), implying a low degree of expected

permanence (Chan, Buckingham 2008).

Before the reforms, any change of residence had to be approved by the State

through a conversion process called nongzhuanfei, which entailed not only a change in

status – from agricultural to non-agricultural - but also in residential place – from rural

to urban. The nongzhuanfei was granted only to certain categories of citizens: SOE’s

employees (zhaogong); those displaced due to land expropriation (zhengdi); university

or higher education students (zhaosheng); administrative cadres (zhaogan); special

cases of reunification of family to assist sick relatives or for child care; military (canjun);

people who suffered past policy mistakes, as a compensation; people who acquired

special merits, as a reward. Conversely one could lose non-agricultural hukou by

committing serious crimes. The whole process was approved and regulated by the

central government, which not only established the annual quota for the nation and

localities, but also provided the corresponding resources for all increases.

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Nongzhuanfei Reform and Localization

In the late 1978, at the beginning of the economic reforms, most major cities contained

a floating population of up to ten per cent of the permanent population, which then

represented fifty million people on a national scale. The largest part of it was

“temporary migration”, that is without change of hukou (Mallee 1995).

In the early 1980s many town and village enterprises (TVE) were disbanded, leaving a

large number of rural people out of work. At the same time urban enterprises were

badly in need of workers. In 1985 Beijing construction firms managed to find only 37 per

cent of the workers they needed (Mallee 1995). Therefore they started to recruit rural

workers bypassing the Labor Bureau’s regulations for employment of rural hukou

holders. This procedure became common practice and spread out rapidly to other

industries in the country, with central authority’s attention more diverted by economic

growth plans.

In 1992 and 1998 directives of the Ministry of Public Security (MPS) allowed city

authorities to grant local hukou to investors and professionals who had a stable job and

a place of residence in the city. This started what was later called the “commoditization”,

that is the selling of hukou, through which local officials could raise revenues.

In June 1993 a commission set up by the State Council proposed the abolition of

nongzhuanfei and the simplification of dual classification into a single system based on

permanent residence-location. The new project distinguished the individual hukou into

three categories: permanent hukou (changzhu hukou), temporary hukou (zanzhu hukou)

and visitor hukou (jizhu hukou) (Kam, Buckingham 2008). This plan, though never

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formally approved by the State Council, nevertheless was used as a guideline for new

hukou policy at national and local level.

By the mid-1990s the central government had devolved household registration

management, classification and quotas to most cities. As a result, an array of permanent

or semi-permanent hukou with various names (blue–stamp, green card, etc.) was

created by local authorities. In 1992 the food grain rationing was terminated in many

parts of China, therefore the nongzhuanfei lost its relevance. As a consequence the new

form introduced in 1995 by the MPS for registering hukou did not include the non-

agricultural and agricultural hukou classification.

In the early 2000s many provinces, such as Guangdong, Zhejiang, Guangxi, Shanghai,

Hebei, Henan and Jiangsu, had announced the abolition of rural and urban hukou

distinction within individual jurisdiction, mostly towns and county-level cities. In 2001

the use of the urban food-grain ration transfer certificate (shizhuanzheng) also

terminated (Kam, Buckingham 2008) – this was a document essential for obtaining

migration permit in the nongzhuanfei process.

Citizen Identity Card

Proposed in 1983, and tried first in Beijing in 1984, the photo citizen identity card (IDC)

was applied nation-wide in 1985 to all citizens above 16 of age (Kam, Li 1999). This is

probably the most important innovation introduced by the MPS in order to deal with

the growing population mobility, and it is becoming more and more important as an

official document for bureaucratic and commercial transactions in today’s China, such as

applying for a job, opening a bank account, registering to a hospital, and so forth. IDC

has also changed the mode of household registration: previously the hukou system

entailed the registration of one book per household in cities and towns, and one book

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per village in the countryside; now IDC is a one-card one-person system. Furthermore,

with the computerization of the hukou registration and the creation of IDC databases,

the central government has now more tools of social control, as well as an improved

accuracy in population statistics collection.

The floating population

China's floating population, which mostly consists of migrant workers, reached 221 million last year,

Li Bin, head of the National Population and Family Planning Commission, said on Monday. The

number of rural migrant workers stood at 160 million, Li told a conference on the management of the

floating population held in Guangzhou, the capital of south China's Guangdong province. Another

300 million people coming from rural areas are expected to move to work and live in cities and towns

in the next three decades, Li said. Among the total floating population, 42.8 percent were born after

1980, Li added. (Xinhua, 2011-02-28)

Most of today’s internal migration in China is made up of the so-called balinghou

generation, migrant workers born after 1980. Unlike their previous generation, they

have very little if any experience of agricultural work, and show no intention of

returning to the countryside, preferring to remain in the cities even without an urban

hukou. Following central government directives, in most coastal cities fees to purchase a

hukou have been lowered, but more often than not this would entail giving up claims to

rural land back in their home regions, which many rural migrants seem not to be ready

to do. Recent reforms in Chengdu and Chongqing municipalities, though, no longer

require rural residents to immediately give up their rural land use rights. However the

lack of a nation-wide long-term resolution on this issue gives more reasons for

uncertainty, justifying a cautious attitude on the part of migrants.

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According to a survey conducted by Tsinghua University and Gzhong.cn,16 migrants

born after 1980 are more likely to work in manufacturing, service sector and

construction. Like their parents, these new generation migrants are also relegated to

low-skilled, low-paying jobs that urban workers no longer want. This is also due to cities’

regulations. For example, in 1998 Beijing government stipulated that 40 types of

professions would be forbidden to non-urban hukou holders (Mackenzie 2002).

Most of rural migrants still come from China’s poorest central and western regions,

though the wage differentials have been eroding in the latest years. For instance, in

Henan 12.7 million migrant workers took jobs within the province in 2012, for the first

time more than those who left for other provinces. In Sichuan, the largest migrant-

exporting province in China, the number of migrants seeking work outside the province

has shown a zero growth since 2009. 17

The same study found out that three out of four young migrants are not willing to

convert a rural hukou to an urban hukou, the main reasons given being “housing prices

are too high” and “urban hukou does not have significance”.18 The latter response might

seem very surprising, considering the previous generation’s long for it, but it can be

explained in light with new social findings. First, today’s migrants are very mobile and

more willing to move quickly from city to city in search of better opportunities and

higher wages; unlike their parents, 70 per cent of young migrants under the age of 30

have changed jobs within a year.19 Second, the central government’s legislation and the

cities’ own regulations on hukou are still so confusing – and at times contradictory - that

16

Jing, Ulrich, Amir Hoosain, Ling Zou, March 13 2012, “Urbanization, Hukou Reform and Investment Implications”, in Hands-on-China Report, J.P. Morgan’s Hands-on-China Serie, pp. 1-4. 17

Ibidem, p.4. 18

Ibidem, p.4. 19

Ibidem, p.4.

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most migrants do not feel the urgency and prefer to delay the conversion waiting for

better times, until the whole issue will be cleared out and settle.

Conclusion

Following the case of Sun Zhigang illustrated in the introduction, on 20 June 2003

Premier Wen Jiabao announced that Custody and Repatriation regulations (shourong

qiansong) were abolished (effective August 1), and detention centers replaced by

general assistance for beggars and homeless people. 20

This case well shows the central government’s attitude toward the household

registration system: to step in when troubles attract national media attention, but to

stay away from the general idea of introducing a deep nationwide reform of hukou or

the simple abolition of it. As one Chinese academic has noted: “the current reforms do

represent a reform, but they ignore the forest for the tree”, in that they do not address

the primary problem of migrants: the continued linkage of hukou registration system to

public services.21 The reasons for this playing-for-time attitude are many and would

need further research, but they all have a common denominator: economy.

After thirty years of export-oriented economy, China is now turning toward a policy

that will allow it to be less dependent from export by increasing the internal demand.

This can be possible only by raising minimum wages, providing more public services so

people do not need to save money for them, and by stabilizing population distribution.

As was with the economic reforms in the late 1970s, such a shift process will also

20

The C&R was an administrative procedure established in 1982, by which police in the PRC could arrest and detain people who did not have valid hukou. 21

www.cecc.gov, October 7, 2005, p. 7.

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require a gradualist approach – probably through trials and errors – until the conditions

are right to proceed at a fast speed. In the meantime the hukou system helps to

maintain a large pool of cheap labor in order to sustain high growth levels, and defer the

critical Lewis turning point.

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