China's Regional Pay Gap Is Holding Back Growth, HSBC Says

  • Poorer provinces growing quickly can keep expansion above 6%
  • Stalled hukou reforms may lead to a 1990s Japan-like slump

Chinese men wait in line with their belongings as they enter a railway station. China has vowed to deepen and speed up reform of the household registration, or “hukou,” system. Introduced in the 1950s.

Photographer: Kevin Frayer/Getty Images

Ending a household registration system that restricts worker mobility can help keep China’s economy humming by boosting incomes and growth in poorer regions. Keeping it risks expansion tumbling well below an average of 6 percent for the next 15 years or, even worse, a 1990s Japan-like slump.

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