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Economics

China May Finally Let Its People Move More Freely

The household registration system has outlived its usefulness
China May Finally Let Its People Move More Freely
Illustrations by Serge Bloch

Hundreds of millions of Chinese live in China’s biggest cities as second-class citizens, with no access to social benefits and limited ties to the locales in which they work. Their situation leads to unhappiness, lower consumption, and lost productivity.

The culprit: China’s household registration—or hukou—system. The hukou, a small red passbook, contains key information on every family, including marriages, divorces, births, and deaths, as well as the city or village to which each person belongs. What comes attached to the hukou are benefits including health care, a pension, and free education for one’s children. These benefits are only available if a Chinese citizen lives where he or she is registered. Not having a hukou for where one lives makes it more difficult to get a driver’s license, buy a house, or purchase a car.