By Ding Yuanshan (丁远山)
Economic Observer Online
Dec 22, 2012
Translated by Laura Lin
Original article: [Chinese]

The official announcement came from Zhang Ping, head of China’s top economic planning agency, the National Development and Reform Commission: The government would “speed up household registration reform” as part of its drive for urbanization of the rural population.

The household registration system, hukou, dates back to the Mao era and prevents rural people who move to cities from getting access to local benefits such as health care, pensions and public education.

Vice-Premier Li Keqiang said that the global economic slowdown requires China to create domestic demand, as it can no longer rely on exports. Urbanization of the rural population would create a large domestic demand and be a driver of growth. For that to happen, China needs to relax the hukou system so that rural migrant workers can become official urban residents.

This is the first time we have seen a precise signal from key decision makers that the household registration system will be changed.  

Not only has China’s current hukou system long lost its moral grounds, it has also become a bottleneck for social and economic development. In the mid-1980s, China started relaxing restrictions on the mobility of migrant workers living in the cities, giving them temporary resident permits. By 2003, 13 Chinese provinces had abolished the distinction between a “rural hukou” and an “urban hukou,” that made migrant workers less eligible for rights than their counterparts with urban resident registration.

In recent years, there have been repeated calls for further reform of the system. One of the important reasons is the fact that China is gradually facing an ageing problem – it will “get old before it gets rich.” In order to maintain China’s cheap labor advantage, economists and policy-makers believe that speeding up the pace of allowing rural workers to become city residents can delay the disappearance of China’s demographic dividend.

No matter what the consideration is, as long as it contributes to reforming the household registration system, it is worthy of recognition.

The limits on Chinese citizens changing their permanent place of residence has resulted in a fractured society. It has aggravated the psychological rift – and even hatred – between rural and urban residents.

Recently, an appeal for an off-site college entrance exam right by a student whose parents were migrant workers triggered a lively debate on the Internet. There has also been an increasing number of clashes between migrant workers and local residents in China’s developed coastal regions. These are all alarming events. Reforming this “quasi-caste system” will help avoid the social conflicts that were no doubt coming.

Left Behind Children

According to government statistics, there are currently 130 million migrant workers in China. Because the hukou system bans them from accessing public education and healthcare, their children are often forced to stay home. More than 58 million of these workers’ children make up the “home-staying children” or “left-behind children” who remain in the countryside with their grandparents or other relatives. Another 27 million follow their parents to the cities but remain at the margin of urban society because they are not allowed to enroll in local schools.

How can one expect to bring up these children, whether they are “home-staying” or “floating,” with a healthy personality and psychology -- without a sound and healthy educational environment? And how can we not expect that such a huge social group will not grow up to become a social powder keg?

Many years ago, some predicted that the tenacious existence of the household registration system would usher in a civil war in China’s urban centers. To a certain extent this has been confirmed by the frequent conflicts between rural workers and local populations.

As to the concrete plan of the reform, a rational consensus has been formed over years through discussion. In principle, a graduated reform is accepted by most people. The idea is to allow rural workers who have stable work and are living in the county-level cities to be registered as city residents, and to allow the ones who have worked in prefecture-level cities over three years to join the local population. As for the cities that are directly under Central Government control, there will be additional requirements.

This is reform based on realism. Unless the levels of public services in the cities and the capability to absorb employment demand are significantly improved, it is not rational to accept more migrant workers.

The cities’ policymakers should be working actively to create the conditions to absorb these rural workers. They should speed up infrastructure construction – particularly in education, housing and medical facilities. They should realize that although on the surface the beneficiaries of a hukou reform are the tens of millions of rural workers, in the long term it is the whole of China’s future generations who will benefit from it. This will not have an instant positive affect like GDP growth would, but it will be remembered by the people as benevolent rule.

In addition, particular attention should be paid to the communication with the urban public. Authorities should hire professional public relations agencies instead of using the traditionally blunt propaganda tactics. New communications methods are needed to make the urban population realize that upholding their interests should not be built on the premise of suppressing the rights of others.

A lifestyle built on such a basis is a disgrace. Urban residents should welcome their rural compatriots, who have been victims for too long of an unfair system.

News in English via World Crunch (link)