Migration and Exclusion in China:
the Hukou System
Gabriela Correa* and René Núñez**
Date received: February 27, 2012. Date accepted: August 1, 2012

This work analyzes the well-being of the Chinese population and considers some of the related problems from the point of view of capabilities and segmentation of the labor market, which has been driven by the household registration system (hukou). This study also points out that China’s notable economic growth in the past few decades has resulted in social economic inequality and, despite the fact that reforms to hukou increased mobility among the population, both rural migrants and urban residents from other cities still face obstacles in accessing public benefits and services, as they are registered in a different place.

Keywords: China, migration, hukou, well-being, economic development.

One of the main reasons to analyze the welfare of the population of the People’s Republic of China (China), is that alongside economic expansion, the country has experienced an increase in social and economic inequality, which has been recognized by the government and international organizations: “growth of almost 10%, nearly 500 million people lifted from poverty” and “relatively high social and economic inequality” are some of the phrases used to describe these issues (World Bank and Development Research Center of the State Council, 2012: xv-xvii).

Economic inequality tends to result in conflict, protests and undesired social consequences, which may become an obstacle to sustainable growth and development in China. These challenges are mainly handled by the central government (Chinese Government’s Official Web Portal, 2011: 1).

Over the last forty years, the Chinese population has moved to the urban and coastal zones of the country, due to both economic expansion and the increasing flexibility of the hukou system.1 For example, one-third of the nearly 20 million inhabitants of the municipality of Beijing are currently not registered as local residents, while in Shanghai, 6 million inhabitants out of the 19 million total are not registered as local residents (Xiaodong, 2011: 24). In the destination cities, migrants have limited access to public services and social protection, and must resort to private services that are generally outside of local regulation.

When migrants move to cities, they participate in a segment of the labor market with poor salaries and working conditions, few or no labor benefits, minimal retirement funds and labor immobility. Additionally, persons registered with hukou in the locale have restricted access to public health services, education and housing. Even so, the wider variety of employment alternatives in urban zones, such as construction workers, manufacturing subcontractors, self-employment sales and personal services is a strong attraction for migrants.

In other words, the hukou system is relevant in terms of the segmentation of the labor market and is also important in the sense that it fractures access to basic social security (World Bank and Development Research Center of the State Council, 2012: xv-xvii).

Among the other factors that drive rural migration to urban zones is the importance of remittances sent to family members that stay on in the rural areas, as well as the limited productive capacity of agricultural activities in some zones and the possibility to save and establish a future business (Huafeng Zhang, 2010: 53).

This work will first describe some features of the hukou system, as well as the major reforms that have been applied. Then the relationship between market reforms, migration and social welfare will be analyzed. The third section shall review the arguments that question the current management of hukou and discuss some alternative public policies for social welfare related to hukou, which have been proposed in both official and academic forums.

It is important to clarify that national figures regarding the hukou system are not officially recorded, so that data included should be taken as a reference, as it is the result of research from certain provinces and locales. The numbers should be considered estimates, although they are illustrative of the themes discussed in this text.

* Professor-Researcher, Economics Department. Autonomous Metropolitan University, Iztapalapa, Mexico. E-mail: gcl@xanum.uam.mx.

1 The exact translation of the term is household registration, which captures the hereditary feature of the system.