Volume 44, Number 172,
January-March 2013
Migration and Exclusion in China:
the Hukou System
Gabriela Correa and René Núñez
THE MARKET, MIGRATION AND WELFARE ( ...continuation )

Amartya Sen’s (1999: 59) Capabilities Approach would say that the family registration system is negatively impacting the welfare of the people by limiting their choices within the Chinese society. According to Sen’s proposal, quality of life depends on what the person is capable of achieving with a determined set of resources and the ways in which the person is able to live, and does not depend on income, availability of social services, whether basic needs are satisfied or the simple possession of assets. The author also holds that individual liberty is inevitably molded by the available social, political and economic opportunities; as such, welfare is a function of the real opportunities that a person has to achieve goals in life.

Keeping in mind the historical and political circumstances in China, which is considered a “socialist market” economy as described in official terms, the hukou system limits this set of possibilities to choose, which, according to Sen, each person must have in order to reach full development, despite the central government’s concern for improving the welfare of the population by policies to reduce inequality and fight poverty. Thus, in aggregate terms, the relevance of fighting inequality in China is confirmed, as it prevents advances in economic development, which has been recognized as one of the principal challenges that the government will face in the future, as a policy written in the twelfth Five-Year Plan.

The segregation brought about by the hukou system aggravates rural and urban inequality as well as inequality between regions, not only because coastal zones have higher incomes, but also because the differences in education, health services and life expectancy further reproduce conditions of inequality, while the hukou system perpetrates exclusion (Herd, 2010: 23).

Government measures to diminish regional and income gaps between urban and rural zones have considered establishing minimum levels of living with different standards. The center of these social security plans is linked to the workplace that shares contributions with workers in five categories (unemployment, health, labor accidents, retirement and pensions). Individual and social funds are managed at the provincial or municipal level and are complemented by other benefits and coverage depending on the financial capacity of local governments. The rural scheme includes a lower number of categories and coverages, particularly in the areas of health and housing, with cooperative plans (Correa López, 2009: 165).

There are three additional elements to consider when analyzing the social welfare of the migrant population in China:

  • The first is associated with the expanding market system in the country.
  • The second is access to housing.
  • The third is the urbanization process in China.

The expansion of the market system in China is linked to the government’s relative distancing from some economic and regulatory activities. China has achieved international insertion by making state economic management more flexible and gradually relaxing issues related to production and the labor market, which has been compensated by the supply of private social services with insurance mechanisms for minimal health coverage, social protection and pensions (Correa López, 2009: 160).

Access to housing is also important to analyze the welfare of the Chinese population. This is another problem that migrants face, because as the housing market has opened up over the past two decades, the price for houses available to rent has gone up, which excludes migrants and other low-income groups from the real-estate market. This has led to neighborhoods on the outskirts of the cities where migrants establish their own communities (Li Shi, 2011: 1). In July 2012, for example, in the Beicheying settlement of the Fangshan district in the Beijing area, where bricklayers, informal merchants and sellers were living, the monthly rent for a 25 square-meter space was 50 yuan, while a similar space in a central zone was up to 1,500 yuan (Yining, 2012: 1).

Regarding the housing problem, Li Shi (2011: 1) has proposed that in order to improve access for all population groups, housing prices would have to be reduced to a level that is reasonable for migrants, and this would require governmental subsidies. The same author also proposed that local authorities establish lower rent and housing prices, which would affect their fiscal efforts and would also require converting hukou to local. The key idea is to reduce the precarious nature of the life of a migrant, because their living conditions put them at physical risk, residing in old buildings that are at risk from falling down or in zones on the outskirts of town. The choice made will depend on the local administration, which is the level of government responsible for this area.

An example of the risk that migrants face occurred in July 2012, when there was intense rain in Beijing that destroyed migrant communities and their possessions. Although this also happened to residents with local registration, the problem was that the emergency help provided by local authorities by way of “refuge, blankets, food and water was not available for persons not registered in Beijing or without a permanent residency permit” (Yining, 2012: 2).

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 193, April-June 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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