China’s property crisis forces local hukou reform, laying groundwork for national change

Local governments in China are experimenting with changes to their household registration system, leading some to wonder if national policy is forthcoming

Reading Time:2 minutes

China’s millions of migrant workers could stand to benefit if national-level reform of household registration is carried out at an upcoming economic meeting. Photo: EPA-EFE

Published: 9:30am, 2 Jul 2024Updated: 11:02am, 2 Jul 2024

A slump in China’s property market has helped remove some of the restrictions of its rigid household registration system, paving the way for a possible relaxation on labour migration at a major economic conclave.

More than 20 cities have allowed people from any region of the mainland to change their official residency under a scheme known as the hukou.

In China, household registration is tied to social benefits, and migrants can change their status in these localities as long as they buy a home in the city.

The new policy is one incentive some areas are trying to destock their cluttered housing inventory, according to property researcher the China Real Estate Index System (CREIS).

Rules for hukou registration – which restricts population mobility and is widely believed to be responsible for China’s wide gap between urban areas and the countryside – have been relaxed for home purchasers in these cities, including those deemed as emerging centres like Hangzhou and Nanjing, CREIS said in a report last week, citing recent policy changes.

Breaking down barriers formed by the system has been an unsolved issue in China’s decades-long process of reform, and has gained renewed attention as the Communist Party’s Central Committee prepares for its economic-focused third plenum in two weeks.