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What Is Hukou and Why China Is Creating Mega-Cities

Morning Commuters As China's Economy Stages Comeback
Photographer: Qilai Shen/Bloomberg

People in China have for decades faced serious hurdles when trying to relocate around the country, whether to find a new job or a better school. One is known as hukou (pronounced who-co) -- a government system that registers every household and determines where people can live, work, go to school and claim benefits. There’s a growing consensus, however, that it may be holding the economy back. President Xi Jinping, who argued for abolishing the hukou in his doctoral thesis, has made overhauling it part of a strategy to boost growth by having more Chinese living in big city clusters.

Physically it’s a small maroon passbook that serves as a sort of internal passport, containing information on marriages, divorces, births and deaths in a household, as well as the city or village to which each person belongs. Such benefits as health care, a pension and free education are more easily accessed if a person lives where he or she is registered. Not having the proper hukou makes it more difficult to buy a house or a car. The system was set up in 1958, at the start of the Great Leap Forward, to enable the Communist Party to control the movement of China’s vast population in support of its twin policies of farm collectivization and rapid industrialization.