Floating population place hopes in hukou reform

People bemoan the restrictions of the residency system but change hinges on resources of cities

PUBLISHED : Monday, 11 November, 2013, 5:15am
UPDATED : Monday, 11 November, 2013, 5:15am

After living in Beijing for 15 years, Jenny Sun, a 33-year-old arts teacher, was finally able to obtain a hukou that made the capital her legal home.

Despite the change on paper, Sun doesn't feel like a true Beijinger, not least because owning a home in the city remains a distant dream. She earns about 5,000 yuan (HK$6,400) a month, too little to arrange a flat purchase. "I find it ironic," Sun said. "I've spent so much effort to become part of the city. Now I'm finally a Beijinger, but I don't feel like one at all."

Sun moved away from the small city in which she was born in Hunan province, and moved to the capital to pursue a degree. But Sun's attempts to climb up the ranks of the middle class have been made more difficult by the hukou system.

Hukou refers to permanent residency status, and an urban hukou often affords its bearers a slew of benefits. For instance, in an effort to control property prices, the Beijing municipal government has set a rule that allows only permanent residents to buy a second home. To buy a first home, those without a hukou need to show tax documents going back five years and proof of social security payments.

Similar restrictions apply in other areas of life, including qualification for low-income housing, buying cars, schooling and pensions. Local media say more than 80 welfare services in Beijing are contingent on permanent residency, with potential benefits worth more than 500,000 yuan. Sun's plight provides a glimpse of the challenges facing the mainland's 118 million floating people.

As economic growth slows, social inequality and high living costs have become more conspicuous, fuelling expectations that the Communist Party will unveil reforms to address these sources of public dissatisfaction at the third plenum taking place in Beijing.

Hu Xingdou, a professor who studies socio-economic issues at the Beijing Institute of Technology, said the government needed to reform the hukou system and social security, and introduce better regulation of the property sector.

"Social reform should not be postponed any longer," he said. "However, it may meet obstacles when new measurements affect stakeholders' benefits."

Mainlanders have long viewed the hukou system as unfair, a tool of the bureaucracy that locks them to one spot. In recent years, leaders have suggested changes should be made, but it's unclear whether they are willing to abolish it altogether.

As the central government tries to shift the economy away from a reliance on exports and towards domestic consumption, the residency system has shown itself to be a problematic way of managing the movement of labour. Market-driven economies require workers to be free to move according to demand. Such freedom would help drive growth in the economy, Hu said.

"The great challenge is that social services may not be able to meet the demand from the increased number of urban residents. Growing city populations also lead to a bigger demand for more resources for housing, jobs and education."

Sun recalls the difficulty she faced after moving to the capital. "Without resident status in Beijing, I could not buy a car, a home or even get reimbursed for health care," she said. "I think the hukou system creates inequality and leads to problems."

In order to gain her hukou status in Beijing, Sun decided to pursue a graduate degree in film studies after completing college in 2002. "I don't feel happy at all. My generation from the 1980s has been forced to carry too much baggage and fight for limited social resources. I struggled to fulfil one expectation of society, but it has moved me away from another," she said.

The hukou quota for college graduates in large cities is tightly controlled. This year, 10,000 spots will be shared by 229,000 new graduates in the capital, according to the Beijing Municipal Education Commission.

Hu warned it would be almost impossible for the leadership to dispense with the system in a single move. "It requires central co-ordination to provide resources and funding for creating jobs, housing and education opportunities for a change in the size of the urban population," he said.