Central Government Investigates Chengdu's Hukou Reform

By Xie Liangbing
Published: 2010-12-09

Nation, page 12. Issue 497, December 6
Translated by Tang Xiangyang
Original article:

Some ministerial agencies are conducting an investigation into Chengdu, the capital of Sichuan Province. They intend to find out whether the reform of the city's household registration system, (户口 hukou), could be copied by other Chinese cities, and possibly spread across the country.

The Chengdu government launched its hukou reform on November 16. As it allows urban and rural residents to freely migrate within Chengdu, the reform has been labeled by media as "the most drastic hukou reform in China." The Chengdu Municipal Development Planning Commission has said detailed regulations regarding the reform will be released gradually.

Farmers Allowed to Keep their Land

Chengdu's hukou reform can be traced back to seven years ago.

In 2003, it canceled restrictions on the yearly number of rural residents allowed to transfer their residency to urban. As long as rural residents met requirements set by the local government, they would be accepted as urban residents.

By 2004, the local hukou system which separated urban residents and their rural counterparts and had lasted for 50 years was disappearing. The city government then began to explore the registering of local residents according to their location instead of where their families are from.

In 2006, Chengdu farmers renting factory-constructed housing units were allowed to be registered as urban residents.

In 2008, farmers renting privately owned housing were accepted as urban residents, too.

It is the mainstream belief that the goal of hukou reform is to abolish the current registration system which separates rural and urban residents. However, when reform actually begins taking place, local governments are more interested in obtaining the property that belongs to farmers. The process of farmers being forced to give up their land by local governments is now referred to as "going upstairs" (被上楼).

At the beginning of Chengdu's hukou reform, Chengdu also equated granting urban residence with sacrificing ones rural property. In 2007 when Chengdu became a pilot area of the integration of urban and rural areas, for the purpose of obtaining a large scale of land, some counties and districts required farmers to give up their land before they could be included in the local social security system.

One of the reasons the Chengdu government desires obtaining farmers' land lies in the central government’s policy which allows local governments to change rural land to land used for urban construction as long as they maintain enough agricultural land. This policy has been widely criticized for depriving farmers of their right to benefit from their property.

"This policy made farmers reluctant to become urban residents," Qin Daihong, deputy director of Chengdu Municipal Development Planning Commission, said. Other obstacles to hukou reform are those leftover from the household registration system put in place during the planned economy era: the separation of urban residents and their rural counterparts and the imbalanced allocation of social security benefits, including education and healthcare.

Qin Daihong said the biggest obstacle to reform is farmers' fear that they would lose their property.

In 2008, Chengdu treated Wenchuan earthquake reconstruction as an opportunity to reform their rural property right system. They allowed those with a rural registration to be registered as urban residents while still maintaining their rural property.

Liu Li, social department head of Chengdu Municipal Development Planning Commission, told the EO that the reform has changed the term "farmer" from an identity to a mere profession. Along with the integration of the urban and rural social security systems, comes equality for rural residents.

Where is the Money for Reform From?

Many people are worried about how Chengdu will finance their hukou reform.

In 2006, Zhengzhou started to reform its hukou system but was forced to halt reform due to a shortage of money.

Chengdu has done a detailed evaluation on the potential risks of the reform. Chen Jiaze, vice president of the Chengdu Academy of Social Sciences, stated that before National Day, the Chengdu government collected public opinions on the hukou reform project and evaluated its risks. Those opinions were divided into the categories political, social and economic, and were presented in a risk assessment report.

This report evaluates the capacity of Chengdu's social security system, public healthcare system, educational resources, etc. The report focuses on Chengdu’s financial capabilities and the potential problems brought about the flow of a large rural population into urban areas.

The result of the evaluation is yes, Chengdu is capable of handling its hukou reform.

During the past seven years, Chengdu has spent a large amount of money on establishing an equal public service system for its rural and urban areas and providing them with equal social security benefits.

For example, Chengdu invested 900 million yuan in three years to construct 410 standardized schools and raised the salaries of teachers working in rural areas. Additionally, it integrated the basic healthcare insurance of rural residents, urban residents, and university students into one system and provided rural residents who entered the insurance program with a 2 percent subsidy.

Chen Jiaze said the city government deposits 2.8 billion yuan into its fund dedicated to protecting arable land; 90 percent of the money is directly transferred to farmers' social security accounts.

Liu Li said, in 2009, the city government spent 14.7 billion solving problems concerning farmers.
"We are not closing the gap between rural and urban areas overnight. Instead, we have been investing in this field for seven years. Therefore hukou reform will not call for a large amount of investment now," stated Qin Daihong.

However, although Chengdu invested 14.7 billion yuan into helping farmers in 2009, that's not a big burden for Chengdu as the city had an income of almost 100 billion yuan that same year. The EO has learned that the Chengdu government plans to invest 60 percent of its public expenditure in rural areas and the remaining 40 percent in its urban areas.

Are Farmers Willing to be Registered as Urban Residents?

While hukou reform has attempted to raise farmers' desire to become urban residents, but has also tried to prevent a mass migration by providing access for rural residents to enjoy the same social security benefits as their urban counterparts.

Chengdu emphasizes the purpose of hukou reform is not to provoke farmers to become urban residents. According to Qin Daihong, the purpose of reform is to remove all the obstacles obstructing the free migration of farmers.

Chengdu farmers are currently unwilling to become urban residents. The EO has learned that during the past seven years, aside from farmers who have been "forced" to become urban residents since their land has been expropriated; only around 200 farmers have chosen to be registered as urban residents.

She Shulin, a 65 year old Chengdu farmer told our reporter that he did not want to be an urban resident. He is content with his life as Chengdu's first rural spokesman; the Yuanshan community he lives in has supermarkets, fitness equipment, and entertainment. He told the EO, "Life is almost the same in my community as life in urban areas," he said.

Wang Bo, deputy director of Chendu Xinjin County Municipal Development Planning Commission, said, Yuanshan Village was one of the 40 communities the county had built for local farmers, all of which are equipped with facilities for education, healthcare, and employment training.

Wang Bo said, aside from the 250,000 yuan financial subsidies offered by the city-level government of Chengdu and the Sichuan provincial government, Yuanshan Village obtained money by selling land and establishing a joint rabbit-raising company with a local enterprise, providing the village with 600,000 yuan of annual revenue.

Chen Jiaze said farmers knew they would have difficulties finding jobs, healthcare and education if they migrated to urban areas. Though Chengdu's hukou reform doesn't require them to give up their property, they know that once they are settled in the city their rural property will have to be dealt with somehow.

The EO has learned that the Chengdu government is considering policies to allow farmers to freely sell their land, which means urban residents will have access to buying houses and settling in rural areas – another bright spot of reform.

An elder rural resident has informed the EO that even though the above policy has not yet been implemented, the price of his home has surged to 130,000 yuan, from a construction cost of less than 60,000 yuan.

Things are different even among farmers who choose to keep living in rural areas. According to the elder resident, while older farmers will not sell their homes, younger people will choose to sell their houses in order to meet their desire for material items like cars and motorcycles. Younger rural residents do not want to be migrant workers or farmers so they "spend their money on motorcycles or running their own shop." But the problem is, without property, it will be difficult for them to come back to the villages the elder resident said.

This article was edited by Rose Scobie