Despite the controversy, the new round of liberalization of the hukou system launched in China’s major cities appears to be backed by the central government. On April 8, the National Development and Reform Commission (NDRC), China’s top economic planner, released a guideline outlining major tasks for China’s “new types of urbanization” in 2019.
In the document, the NDRC stressed that China will substantially relax residency limits on domestic migrants for China’s biggest cities, which marks a significant shift in China’s long-time policy to prioritize population control.
More specifically, cities with a population between three and five million are asked to “comprehensively lift or relax restrictions” and cities with more than five million should “lower the threshold and boost the number of people gaining residency permits,” read the document. It is estimated that 75 Chinese cities will be affected under this policy.
According to Zhou Tianyong, a researcher at the Central Party School, free movement of labor between cities and between rural and urban regions can boost domestic consumption, deal with the ongoing economic slowdown, and help China escape the middle-income trap.
In an interview with Singapore-based newspaper Lianhe Zaobao published on April 9, Zhou said his research shows that in 2016 alone, restrictions on free movement of labor led to losses of 4.38 trillion yuan (US$654m) in domestic consumption, of 18.52 percent of the year’s total individual consumption.
It is still unclear whether the policy will be implemented according to a central agenda or at the local level. But the massive loosening of China’s decades hukou system may have a major impact on China’s urban landscape.
Contrary to existing perceptions that China’s urbanization is still in full swing, a research team led by Long Ying, an urban planning expert with Tsinghua University, found that the population in one-third of Chinese cities has been shrinking.
According to an article in the South China Morning Post on March 18 that reported the findings, the team used satellite imagery to monitor the intensity of light at night from more than 3,300 cities and towns between 2013 and 2016. They found light intensity dimmed in 938 cities, or 28 percent. As China’s big cities, or those with more than three million people, adopt more migrant-friendly policies, smaller cities, where the quality of public services is less attractive, jobs less abundant and wages are lower, could shrink further.
Apparently, policy makers are taking this possibility into consideration. In the guideline released in April, the NDRC said smaller cities should be ready to downsize and shift their focus to the quality rather than quantity of its population, and centralize their population and public services.
Amid the backdrop of China’s ongoing economic slowdown and demographic changes, how major policy shifts in China’s hukou system will affect urbanization and economic growth will be a major focus in the near future.