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China set to relax its rules on internal migration.

China is to relax its rules on internal migration, making it easier for people to settle in small cities, in an attempt to boost its ailing economy and spur growth, the government has announced.

The ministry of public security (MPS) announced plans to lower the bar for obtaining an urban hukou, or household registration. Beijing wants local governments to cancel hukou restrictions in cities with fewer than 3 million people and relax the restrictions for cities with 3-5 million people, the MPS said.

hankue restriction Hukou is a system of household registration used in mainland China. The system itself is more properly called “huji and has origins in ancient China; a distinctive feature of China’s urbanization is the hukou, or household registration system, which links receipt of social services (from healthcare to education) to a residence permit.

Larger cities with populations of more than 5 million will also be encouraged to relax their hukou quotas, allowing more people to obtain the highly prized urban registration documents.

The plans were first announced by China’s national development and reform commission, which oversees economic and social policy, in 2019. But it is not clear how many cities have complied with the rules so far.

The measures are an attempt to encourage rural migrants to settle permanently in the cities and contribute more to the urban economy. About 292 million people—one-third of the total working population—are rural migrants working in China’s expanding cities. But without access to public education, healthcare, or other social benefits, many leave their families behind and end up returning to their villages themselves. Without urban hukou, rural migrants have to pay more for social services and are often barred from buying property in the city.

As well as creating a two-tier system of citizenship, the hukou system deters migrants from spending and settling in cities, which economists say has sandbagged China’s growth.

He Wenlin, a deputy director at the MPS, said the government planned to implement the new measures by the end of the month. But since the 1990s, hukou policies have been decentralised, with local governments allowed to set their own rules about registering new citizens. Chengdu, for example, allows graduates to apply for a hukou while they are looking for a job, as a means of attracting young talent.

Last year, Shanghai relaxed its rules so that any graduates from the world’s top 50 universities could apply for a Shanghai hukou, without having to make any social security contributions in advance.

Thursday’s announcement underlines Beijing’s concern about the need to boost China’s flagging economy. Chinese academics and policymakers have long talked about the need to overhaul the system to help address inequality and labour shortages.

But George Magnus, a research associate at the University of Oxford’s China Centre and the author of Red Flags: Why Xi’s China is in Jeopardy, said China’s slow economic growth was caused more by its ageing population and weak fertility rate. He said: “To the extent that there is a spare capacity of workers in the rural areas to draw upon and go and work in the urban areas, easing the registration requirements may help at the margins … but I don’t think it’s really going to alleviate labour supply problems”.

China’s economy grew by 6.3% in the second quarter of 2023 compared with 2022 – below expectations – and marking only a 0.8% increase on the first three months of the year. Part of the problem is the rapidly shrinking workforce: the number of people aged 16 to 59 declined by more than 40 million between 2019 and 2022.

Thursday’s announcement included other measures aimed at encouraging international businesspeople to return to China. The MPS said it would introduce visas on arrival for business travellers and allow expats to keep their passports while applying for residence permits. all. We couldn’t do this without you. Unlike our politicians, when we say we are in this together, we mean it. sources

Who will this whole changes benefit?

A hukou differs from a residence permit, as a residence permit is a temporary document that allows a person to be in a particular place and gives them access to certain socio-economic benefits. A further distinction is made between the two in that the benefits granted for a residence permit are significantly limited compared to those granted for a Shanghai hukou.

The main purpose of a hukou in China is to serve as proof of identity and residence. For Chinese residents, a hukou is highly important as it determines access to healthcare, education, social welfare, and housing.

Benefits of a Shanghai Hukou?

Hukou System in China: Healthcare and Social Security

Each city in China has different medical insurance and social security contributions. If a person is to relocate from one city to another, their contribution from their previous city will not be carried over to the new city. Therefore, if they require medical care and do not contribute to medical insurance in Shanghai, their medical insurance will not cover a portion of the amount, and they will have to pay the total amount due.

China Hukou System and Education

A Shanghai hukou allows children to attend public school locally. For those who only have a residence permit, their children are able to attend elementary and middle school in Shanghai; however, they would have to return to their hometown for high school.

Furthermore, major cities in China, such as Shanghai and Beijing, boast some of the best universities in the country. These universities have limited space, and as such, students with a local hukou may have preference over those from other cities.

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