Prior to this year, the new administration seemed poised to try ending practices dividing China into rural and urban residents and, in so doing, take a necessary step in combatting the growing inequality that has accompanied the country’s rise. China’s Communist Party leadership, in particular premier Li Keqiang, have stressed the importance of urbanization as a means to both address the increasingly dire rural-urban wealth gap and to unlock the spending potential of Chinese in the countryside. Bringing them into the fold of the county’s middle class, the thinking goes, would swell its ranks and its pocketbooks, providing a boost to discretionary spending while raising living standards.
With the State Council’s latest announcement that the household registration system will no longer classify citizens as agricultural (rural) or non-agricultural (urban), China would seem to be on track to implement real reform. But as has been the case with previous efforts to spearhead hukou (registered residence) reform, the latest changes have been mostly surface-level and show that the leadership still isn’t willing to let migrants put down roots where they work: the big cities, where jobs are most plentiful and which have benefitted most from the rural workforce’s cheap labor. In truth the hukou system still has plenty of restrictions to effectively bar rural Chinese from enjoying government-provided benefits outside their hometowns, and land laws still won’t let them sell their land freely and at fair prices.
Changes to the rural land system are perhaps the most politically charged, since the collectivization of rural land was made to prevent accumulation of wealth in the hands of a few rapacious landlords at the expense of an uneducated peasantry. A more practical objection to land reform is that farmers would be cheated when selling their land, or will burn through their new money so quickly in the city that it would be better to not let them sell it off at all. However trial programs in eastern China show that, when handled carefully and transparently, farmers can benefit substantially from receiving land rights more like those already enjoyed by their urban brethren.
This would of course deprive local governments of one of their main sources of income: land requisition. Governments often partner with the collectives charged with guarding farmers’ interests to buy rural land at dirt-cheap prices, then rezone it as urban to be sold at huge profit. This is all done without farmers’ consent, meaning that the system offers none of the protection it claims to provide. That means that new sources of funding for local governments – provided, for example, by tax reforms enacted by the central government –- are another precondition for fair and open rural land markets.
The need for new income sources is also true of the big cities that now host most migrants. In the meantime, city governments, which now serve as gatekeepers to their own hukou supplies, should use their power over local policy to employ less often the harshest tools at their disposal for enforcing the local-migrant divide. Beijing, for example, has seen officials deny public education to hundreds of migrant children whose parents can’t meet the city’s unreasonable documentation requirements.
Such enforcement exacerbates social tensions by pursuing a course of local protectionism. More cities should take their cues from Shanghai and Guangdong, whose migrant communities, while still not granted full residence, are at least afforded access to more basic necessities, and are better able to avoid splitting up so that their children can attend class back in their registered hometown.
The most restrictive elements of the hukou system were ostensibly put in place to avoid a repeat of the gross inequalities of the pre-PRC days. Without collectives regulating land, party leaders feared a minority of powerful landlords would once more gather obscene wealth at the expense of a majority of peasant farmers tied by debt and duty to the land they tilled. Reforms have lifted millions here out of poverty since the end of China’s high-Maoist days, but the local-migrant divide and rural land system now threaten to enshrine a new urban landowning elite. If urbanization is the goal, whatever form it takes will need to allow people freedom of movement and ownership in equal measure.
More from this issue:
Cover story | Hukou reform: Long way from home
Q&A feature | Hukou views: Policy and property prices