Last year, eight-year-old Wang Fuman went viral in China. Covered in ice after walking an hour and a half to school, he featured in government media as a testament to the determination of the poorer Chinese to secure a good education. But he also shows the effects of the government’s Household Registration System (Hukou) that separates urbanities from rural China.
Before his fame, his father was a migrant worker whom he saw twice a year. Neither his home nor his school had central heating. He spent his time outside the classroom tending his grandmother’s farm and subsisted on a diet of boiled potatoes. He was one of the hundreds of millions of losers in the Hukou lottery.
The system originally controlled the movement of Chinese people, with changing registration from one place to another almost impossible. In times of famine, being registered to a rural area could be a death sentence.
Nowadays urbanities can relatively easily transfer their registration between two cities in the same tier (every Chinese city is classified into one of four tiers based on population, GDP and whether it is a provincial capital). Once leisure travel was almost impossible tourism, but now it is a trillion-dollar industry fuelled mostly by China’s newly rich, urban registered middle class.
Those registered in rural areas are now free to move to the city – and hundreds of millions have. But when they arrive, they usually cannot transfer their registration. This means they have no access to the local ‘minimum level’ service, which tops up incomes for the urban working poor and provides a workfare program for the unemployed.
They often also lose their land in the countryside. They have limited access to non-emergency care in urban hospitals, which are of much higher quality than rural ones. Their children cannot be educated in urban schools. Fees can sometimes be paid to allow access, but this is too expensive for most migrants, who are left with the option of either sending their children to low-standard, illegal private schools in the city or leaving them behind with relatives in the village. Some children spend their entire childhood living apart from their parents, just so they can access a second rate rural education – with education spending in cities around 10 times higher than in nearby rural areas.
Last autumn, the Beijing local government destroyed the homes of thousands of people with rural Hukou, urging them to ‘go back home’ to villages thousands of miles away that many had not seen in decades.
While this campaign was eventually halted after outrage from both the public and government media organisations, it shows how precarious the existence of those with rural Hukou is. Around 250 million rural people who have moved to the city are illegal immigrants in their own country. Those unable to make the move forgo wages that are three to four times higher in the cities. At least 30 million Chinese people still live in extreme poverty – almost all of them in the countryside.
Hukou is therefore a massive anchor on Chinese growth. While urban-based industries and service sectors struggle to fill vacancies for unskilled and semi-skilled workers, Chinese agriculture is over-manned and inefficient.
While China’s economic growth is impressive and shows no sign of stopping, it no longer follows the trajectory of countries like South Korea and Taiwan, which went from a near universal extreme poverty to near universal prosperity in a generation.
Many economists blame Hukou for China continued status as a middle-income country, with World Bank China expert Yukon Huang estimating it reduces China’s growth by one per cent every year. Reports calling for its abolition surface regularly from the most prestigious Chinese universities and the Central Party School.
Yet after 20 years of talking about reforming Hukou, the system has changed very slowly – and the latest attempt at giving 100 million migrants urban Hukou by 2020 has made almost no progress. There are three main reasons for this:
Firstly, second class citizens are cheaper than first class citizens. Cities that already run massive budget deficits are not keen to start providing education, healthcare and welfare to all their citizens.
Secondly, despite the hundreds of millions of losers created by the system, there are also plenty of winners. If you are one of the 12 million registered residents of Beijing, you currently receive some of the best healthcare in the country and your children have access to some of the best education in the world. If the 8 million unregistered were allowed in, standards would probably drop.
Beijing natives already ridiculously blame migrants, who must apply for a new car permit every week, for the city’s traffic and pollution problems. Those with rural Hukou have been assaulted for trying to get their children into local schools. While obviously not all urban hukou holders have these attitudes, privileged people are unlikely to give up their privileges without complaint – and unrest could well result from rapid changes.
Finally, central government reforms have to be implemented by local city officials; many of whom share the worst prejudices of the urban middle class they almost all come from. With dozens of party workers in Beijing caught referring to migrants with rural Hukou as ‘the low-end population’ in internal documents, change does not look like it is coming anytime soon.