China Eases Residency Rules for Migrant Workers

China’s State Council last week eased residency restrictions that had prevented migrant workers from accessing social insurance in the cities where they work. The change targets the hukou household registration system, which has tied rural residents to their native villages since the Mao era.

The policy affects an estimated 350 million rural laborers who built and maintain major cities but have been barred from settling there with their families. Officials said the measure is intended to turn these workers into permanent urban residents who will spend more.

Background on the Hukou System The hukou system originated as a population control mechanism and continues to limit access to education, healthcare, and pensions outside a person’s registered area. Internal security forces that oversee the system have historically resisted rapid administrative changes.

Urban governments have also expressed concern about increased demand for schools, hospitals, and retirement funds if large numbers of migrants relocate.

A multi-year property market decline has reduced local government revenues, raising questions about who will pay for expanded urban services. Analysts at Trivium China noted that the reform plan stopped short of promising major new funding support from the central government.

The State Council stated the policy will enable rural families to move to cities where higher-paying jobs are available. Officials have not announced a timetable for full implementation.