It was more than a decade ago that Kam Wing Chan and Will Buckingham asked: “Is China abolishing the hukou system?”Footnote 1 Today, however, the duality of rural–urban household registration system remains strong.Footnote 2 Why is China unwilling to abandon these “two systems in one country” and how does it maintain these systems in their different forms? Although the Chinese government has claimed to have cast off the household registration (hukou 户口) system, evidence indicates its continued implementation.Footnote 3 For example, in November 2017, an apartment complex in the Daxing district 大兴区 of Beijing caught fire, resulting in the tragic loss of 19 lives. Blaming the residents for lighting a fire to keep warm in the winter cold, the municipal government ordered the expulsion from the apartment building of the so-called “low-end population” (diduan renkou 低端人口), a phrase which typically refers to migrant workers who lack a Beijing hukou. Migrant workers with no local hukou are often disadvantaged: they live in slum-like villages around the cities, are unable to enrol their children in school and receive little in the way of healthcare subsidies. Although disclosure of the poor living conditions endured by the evicted “low-end population” triggered a wave of public criticism, debates on hukou reform were quickly suppressed in Chinese mass and social media. The points-based system that grants migrant workers access to a local hukou is based on credentials, investments, house ownership and “social credits” and has become increasingly stringent in megacities such as Shanghai, Beijing and Guangzhou since 2016. These restrictive reforms were also applied in other large cities and provincial capitals until 2020. With the COVID-19 pandemic, the unequal distribution of healthcare resources between urban and rural areas was thrust into the spotlight. The strict regulation of hukou once again became a target of criticism as a result of the disparate effects of the pandemic on local and non-local residents.Footnote 4
Since its inception in the 1950s, the hukou system has been a key mechanism for urban bias in the Chinese economy, funnelling resources into cities at the expense of rural areas.Footnote 5 To control rural-to-urban migration, the system classifies people according to their hukou type (leibie 类别), which is either agricultural (rural) or non-agricultural (urban), and residential location (suozaidi 所在地), which is either local or non-local. Hukou type indicates an individual's eligibility for specific types of welfare, and residential location determines where the welfare is received.Footnote 6 This double distinction has created a controversial system of welfare entitlement for migrant workers: they are allowed to work and live in the city but are denied the citizen rights and welfare privileges granted to urban hukou holders.
Although the hukou system has remained in place for over half a century, its original design has been adapted to account for the urbanization that has followed market reform. In this study, we develop an analytical framework to explain the institutional evolution of the hukou system based on two theoretical strands: selectorate theory and historical institutionalism. We use selectorate theory to examine the development of China's welfare stratification in the Maoist era, and historical institutionalism to elucidate the gradual institutional changes since market reform. Founded on a rational choice perspective, selectorate theory maintains that ruling elites typically gain political support and form a small coalition through the provision of public goods in authoritarian regimes.Footnote 7 However, the theory fails to explain the realignment and resistance of coalition members that have historically constrained the power of the elites. Therefore, we adopt historical institutionalism to analyse the Chinese Communist Party (CCP) leadership's strategies for political realignment and the conflicts that constrained institutional changes in different phases of hukou reform.Footnote 8
In brief, we argue that hukou reform has been used to reshape the boundaries of welfare provision. Privileged public provision for essential supporters of the authoritarian regime, namely the party-state and military cadres, has remained intact after market reform. By contrast, the once comprehensive public provision provided by state-owned enterprises (SOEs) and collectives has diminished dramatically with market reform, leading to large-scale redundancies and bankruptcy, to the detriment of rural residents’ welfare. In addition, market reform has resulted in new members of the selectorate, namely wealthy and educated urban residents, replacing SOE workers. According to the latest hukou reform, cities with populations of 3 million or more are allowed to control access to local hukou. We define these cities as “guarded cities,” in which those with hukou serve as the selectorate of the regime and secure public provision, especially healthcare and education resources. Although recent reforms erased the distinction between urban and rural hukou, the guarded cities responded by restricting access to citizenship. We conclude that the institutional conversion of the hukou system since 2014 has become a new “Great Wall,” a barrier that protects the beneficiaries of welfare provision in guarded cities from the “low-end population.”
We gathered multisource data from official documents, media and commentary reports, and interviews. The interviewees were professionals and experts on Chinese social welfare, the hukou system, and education and healthcare services. The organization of this paper is as follows. First, we employ selectorate theory to explain the institutional structure of the hukou system and the historical institutionalist perspective to examine its endogenous institutional changes. Second, we divide the history of the hukou system into four phases and analyse the CCP leadership's strategies and stakeholders’ resistance. Third, we illustrate the institutional conversion of welfare stratification and its effect on medical and educational resources. Finally, we discuss the implications of hukou reform.
Explaining the Origin and Institutional Changes of the Hukou System
In this study, we integrate political survival theory and historical institutionalism to explain the institutional changes of the hukou system. According to rational choice institutionalism, to sustain their political careers, rulers must use their limited fiscal resources to buy loyalty from supporters, although some supporters are more vital than others.Footnote 9 Bruce Bueno de Mesquita and colleagues argue that most polities comprise three groups: a core group of essential supporters (winning coalition), common supporters (selectorate members), and other residents (the disenfranchised).Footnote 10 Within this framework, the cost of maintaining supporters and the risk of losing their support determines the ruling elites’ decisions on delivering public goods. For example, studies in comparative politics have reported that a party-state typically survives longer than a patrimonial dictatorship or military junta does because of its larger winning coalition, which then shares power and material interests with the selectorate.Footnote 11 In this respect, China is a typical case that demonstrates the logic of party-states’ public spending in relation to its own survival.
As Figure 1 illustrates, the winning coalition (first tier) of the CCP regime comprises high-level Party and central administrative cadres, police and judiciary personnel and officers of the People's Liberation Army (the party-state cadres). This group is at the core of welfare stratification and enjoys the most favourable public provisions such as generous pensions and free medical services. The second-tier beneficiaries are selectorate members, consisting of local-level party-state officials, SOE employees and other urban hukou residents who were previously organized into the work unit (danwei 单位) system prior to market reform. Based on their unit ranks, selectorate members receive welfare in the form of labour insurance, housing, education and healthcare, as dictated by the unit's budget.Footnote 12 The third tier (disenfranchised) comprises rural residents, whose agricultural surplus is extracted to feed the industrial population in urban areas, with only the minimum public services provided in rural areas.Footnote 13 This framework in which an urban hukou represents the margin of public goods provision illustrates the institutional structure of China's welfare stratification before hukou reform.
Figure 1: Institutional Conversion of Three-tiered Welfare Stratification in China
Although selectorate theory elucidates the political logic of three-tier welfare stratification, the mechanism that changes the boundaries of these tiers over time remains unclear. As Mary Gallagher and Jonathan Hanson suggest, the theory fails to explain the CCP's combined strategies of repression and generation of public goods, which are buttressed by robust economic performance.Footnote 14 This combination indicates that authoritarian rulers aim to reconcile market reform and political stability through the inclusion and exclusion of certain selectorate members. When rulers prioritize the winning coalition in welfare provision, they alter the composition of the selectorate to account for political risk. In China's case, the former members of the selectorate, namely SOE workers, were critical to the Maoist regime's survival. Following market reform, the regime gradually changed by instead relying on the resources of capitalists and the new “middle-income group” (zhongdeng shouru qunti 中等收入群体), who then benefited from the reform in large cities. Accordingly, the party-state welcomed these new members into the selectorate and protected them through hukou reform. When sizable protests occurred following the SOE worker lay-offs,Footnote 15 CCP leaders initiated compensation policies in exchange for political loyalty and attempted to reconcile old and new members of the selectorate for the sake of political stability and economic growth. Nonetheless, the hukou reform encountered resistance from local governments, who were forced to pay for the public provision of goods for the new selectorate members and to filter out the “low-end population.”
The process of altering the selectorate suggests that in an authoritarian regime, the rulers’ capability of institutional change is constrained by the supporters and standing institutions designed to protect them. To understand the dynamics of hukou reform, we adopt historical institutionalism to evaluate the pivotal role of political conflictsFootnote 16 in specific historical contexts.Footnote 17 Among the threads of historical institutionalism, James Mahoney and Kathleen Thelen's model of endogenous institutional change provides an insightful analytical tool for our examination of China's hukou reform.Footnote 18 They distinguish the following four types of endogenous institutional change. Displacement occurs during radical transformation, such as revolution or democratization, in which new political elites replace the old elites, introducing new institutions to consolidate their own coalition. Layering occurs when new rules are attached to or amended for existing institutions, which were established to preserve the beneficiaries’ role as veto players. Drift refers to the strong incentive of the elites to reshape the institution to incorporate an extraneous change along with the reluctance of other stakeholders. Ensuing political conflicts may lead to ineffective institutional change or unintended consequences. Conversion occurs when existing institutions remain similar but are differentially enforced and interpreted by the stakeholders to serve their own interests. Unlike drift, conversion can lead to subtle but effective institutional change.Footnote 19
We adopt this model and divide China's hukou reform into four phases, namely displacement (1949–1958), layering (1959–1991), drift (1992–2013) and conversion (2014–present). In each phase, the institutional changes demonstrate the relative power leverage and conflicts between the ruling elites and selectorate members.
Institutional Changes in the Hukou System
From displacement (1949–1957) to layering (1958–1991)
The hukou system in China was first implemented in 1948 in the north-east regions. After the devastating civil war, the hukou system served as a means of regulating outlaws and unemployed migrants from rural areas. Based on the north-east experience, the first national hukou policy, the “Provisional regulation on management of urban hukou” (Chengshi hukou guanli zanxing tiaoli 城市户口管理暂行条例), was instituted in 1951 and has since served as a governmental tool for regulating migration by categorizing people's identities.Footnote 20 In 1958, the national hukou system was established to limit rural–urban migration and identify the public service beneficiary margin.Footnote 21 This represented the beginning of the three-tiered welfare stratification of party-state cadres, urban residents and rural residents.
The party-state cadres, as the winning coalition, shared the highest ranks of power and free welfare provision. Urban residents, as the selectorate, particularly those working in SOEs and collectives, shared the urban public services covered by the labour insurance system, which were largely paid for and managed by work units. Rural residents, as the disenfranchised, collectively paid for their own childcare, primary schools and basic healthcare. As Table 1 shows, the winning coalition accounted for an increasing proportion of the population, from 1.5 to 3 per cent between 1958 and 1982. The selectorate population accounted for 15.5 per cent (8.5 per cent SOEs and 7 per cent collective work units) in 1982, and the rural residents constituted the majority of the population (81.5 per cent).
Table 1: Tiers of the Hukou System, Financial Sources of Welfare and Welfare Provision in the Maoist Era
The members of the winning coalition, who were also granted urban hukou, enjoyed the most privileged public goods provision. For example, in the 1950s, the CCP regime promulgated an ordinance that provided free public services to senior revolutionaries and offered publicly funded healthcare for party-state cadres. The pension system was established, and healthcare services were extended to the family members of cadres from 1955 onwards. According to the ordinance, the maximum rate of income replacement for cadres after retirement was 80 per cent.Footnote 22 All aforementioned welfare was covered by the government.
The members of the second tier, the selectorate, were managed under the danwei system, which was established during the First Five-Year Plan (1953–1957). Each danwei controlled workers’ incomes and welfare to foster the “organized dependency” of workers and nurture patron–client relations in factories.Footnote 23 For the benefit of these supporters, the State Council implemented “Labour insurance regulations” (1951–1969), which covered most healthcare expenditures for large enterprises. In 1957, the government updated retirement and resignation regulations to expand labour insurance to all work units and public organizations. The rate of income replacement in the pensions of SOE retirees was 50 to 70 per cent, whereas the rate for collective retirees was 40 to 65 per cent.
The third tier comprised rural residents, namely peasants, who were obligated to maintain the industrial and urban sectors by selling their products at unequal prices. Organized as members of a commune, they possessed neither the freedom to migrate nor the “citizenship” enjoyed by urban residents. Between 1953 and 1957, the State Council released a series of documents that prohibited the “blind flow” (mangliu 盲流), or migration, of rural residents to cities. Only those who were discharged from military service, possessed college degrees or had a “job replacement” for their father's position in an SOE were permitted access to an urban hukou.Footnote 24 The peasants received a poor income, rationed grain and self-sustained minimum welfare without any insurance or pension from the planned economy.Footnote 25 Although a “five guarantees” programme designed to meet the basic needs of the disabled and poor was implemented in 1956, the rural population was not protected from famine, as demonstrated by the Great Leap Forward (1959–1961).Footnote 26 And it was not until 1965 that the low-quality “rural cooperative medical system” was rolled out at Mao's behest.
In the phase of institutional displacement, the hukou system was established to consolidate this three-tiered welfare stratification and ensure the Maoist regime's survival. When market reform was initiated in 1978, the restrictiveness of the hukou system gradually relaxed. In rural areas, reforms such as the “household contract responsibility system” (baochan dao hu 包产到户) and decollectivization resulted in surplus labour flocking to the coastal cities. Moreover, the young adults returning from the countryside, where they had been sent during the Cultural Revolution, pressed for institutional changes to the hukou system. Consequently, various unregistered urban resident identification categories emerged, including “self-supplied food-grain” hukou holders (zili kouliang hu 自理口粮户) and small entrepreneurs (getihu 个体户), which allowed the holder to remain and work in a city. In response, the State Council promulgated the “Regulations on internment and repatriation of urban vagrants and beggars” (Chengshi liulang qitao renyuan shourong qiansong banfa 城市流浪乞讨人员收容遣送办法) in 1982 to restrict the flow of rural migrants to the cities. According to these regulations, the police could arrest and detain people without a residence permit in repatriation shelters. These hukou adjustments in the early years of market reform matched the theory of institutional layering in that the elites’ concern for political survival led to careful adjustments of the hukou regulations to protect the ordinary selectorate from the effects of the reform. The layering strategy, however, was challenged by deepening market reform.
Decentralized hukou reform: institutional drift, 1992–2013
Institutional layering in the 1980s transformed into the drift of hukou reform in the 1990s. As the private economy grew, the rise of urban capitalists and the reduction of the SOE work force changed the size and composition of the selectorate. The CCP leadership had to decide between encouraging market reform and reallocating resources to SOE workers, who were granted urban hukou along with public goods provision. The welfare of the winning coalition was also curtailed but fully compensated by various state budgets. By contrast, rural-hukou holders in large cities were still discriminated against in terms of access to pensions, home ownership, high-quality education and medical subsidies in the 1980s.
After the political conflicts of the late 1980s, Deng Xiaoping's 邓小平 southern tour in 1992 settled the marketization debate between conservatives and reformists. As a result of privatization and firm bankruptcies, SOE workers were subjected to large-scale lay-offs and reductions in public goods provision.Footnote 27 In 1993 and 1994, the implementation of the Corporate Law, Labour Law, and Enterprise Bankruptcy Law demonstrated that SOE workers were no longer under the protection of the state. To survive, SOE workers commonly became self-employed labourers,Footnote 28 and some organized large-scale protests in response to the reform.Footnote 29 Accordingly, the State Council issued a series of compensation policies, including regulations for unemployment insurance in 1993, maternity insurance and health insurance in 1994, and pension reform in 1995.
This successive compensation for SOE workers reflected their reduced role in the economy but potent role in politics. By contrast, the development of the private economy created new urban beneficiaries, including some locals and non-locals who became affluent enough to acquire urban hukou. The urban wealthy became the pivotal group in the Chinese economy, and the CCP leadership increasingly fine-tuned socialist discourse to their benefit.Footnote 30 In 2000, Jiang Zemin's 江泽民 famous announcement of the “three representatives,” codified in the constitutions of both the Party and China in 2002 and 2004, respectively, signified an official welcoming of the bourgeoisie and intelligentsia into the Party and selectorate.Footnote 31
The other source of political conflict that resulted in the drift of hukou reform was the central–local relationship, especially following the 1994 tax-sharing reform that centralized fiscal resources in Beijing. This reform compelled local governments to reduce their deficits and extract revenue themselves, thus forcing them to rely heavily on the benefits of land development projects, which prefaced central–local conflicts of interest with respect to hukou reform.
Local governments were allowed to ease restrictions on urban development and local hukou to attract additional labour and capital, with various experiments in hukou reform undertaken in light of local conditions from the early 1990s.Footnote 32 Some local governments began to issue “blue-seal” hukou certificates (lanyin hukou 蓝印户口), which granted wealthy home buyers a transitional hukou with the same rights and welfare provisions as those residents with local hukou. Some local governments were more radical, such as the municipal government of Zhengzhou, which abolished the rural–urban distinction and granted urban hukou to the dependents of those with an existing urban hukou in 2003. However, this experiment was halted after less than a year, during which over 1.5 million people had relocated to the city, paralyzing its public schools, transportation system and general infrastructure.Footnote 33 The Zhengzhou experiment demonstrated that although local governments were allowed to ease restrictions on urban hukou to attract migrants, this brought with it a new dilemma.Footnote 34 Additional migrants may increase tax revenue and labour supply in the long run, but they increase expenditure on public goods provision and infrastructure in the short run.Footnote 35
During the peak of hukou reform between 1997 and 2013, some local governments of large cities initiated a “points-based” (jifen luohu 积分落户) system to filter migrants based on their personal income, education, skillset and property ownership. The points-based system has since become the most contested factor in central–local conflicts. When the central government attempted to filter the new selectorate by allowing large cities to implement an extremely high points threshold for obtaining local hukou, it left access to other small cities fully open. However, local governments were reluctant to comply with the mandate; some even rejected legitimate applications by migrants for urban hukou.Footnote 36 Local resistance eventually compelled the central government to issue a “Notice on actively and steadily promoting the hukou reform (2012)” (Guanyu jiji wentuo tuijin huji guanli zhidu gaige de tongzhi 关于积极稳妥推进户籍管理制度改革的通知) as a firm warning to local governments to follow the central policies.Footnote 37
The phase of institutional drift illustrates the constraints of the party-state's power under its fragmented authoritarianism.Footnote 38 With the rise of the private economy, the ruling elites embraced the new urban wealthy into the selectorate and initiated compensation policies to SOE workers in exchange for political loyalty. Local governments stimulated urban development but narrowed access to public welfare provision for migrants. Among the various welfare benefits associated with urban hukou, the most desirable included high-quality healthcare and educational opportunities for children. The following section explains how the institutional drift and conversion of hukou reform preserved inequalities in healthcare and higher education for the benefit of those with local hukou status in large cities.
Unequal Welfare Provision: Healthcare and Education
Following market reform, the subsequent meltdown of the danwei system and the tax-sharing reform deprived hospitals of state financing. Consequently, hospitals in cities were forced to engage with marketization and self-sufficiency.Footnote 39 This led to the overpricing and overprescribing of treatment and medicine as hospitals and doctors sought to extract profits from patients.Footnote 40 As healthcare expenditures increased, the insurance system associated with hukou became vital to demarcate social status within the three tiers.
With regard to the first tier, the publicly funded healthcare system was fiercely criticized for its profligacy. In 1995, the Health Ministry implemented the “Method of assessment on medical institutions” (Yiliao jigou pingshen banfa 医疗机构评审办法), which categorized hospitals into three levels and three grades. Unsurprisingly, the high-grade hospitals (grade 3A) servicing the party-state and military cadres were located in large cities because of their dependency on the public budget. In 2006, an official report indicated that members of the first tier (approximately 8.5 million) consumed 80 per cent of the national healthcare budget. For instance, the China–Japan Friendship Hospital, a high-grade hospital in Beijing, reserved premium clinics and wards (gaogan bingfang 高干病房) for cadres with an administrative level above that of department or deputy minister. However, this profligate, publicly funded healthcare consumed the bulk of medical resources, with high-grade hospitals subject to severe financial losses as a result of payment arrears.Footnote 41
In response to the dwindling healthcare resources for workers, in 1998 the State Council issued its “Decision on establishing the basic medical insurance system for urban employees” (BMISUE) (Guanyu jianli chengzhen zhigong jiben yiliao baoxian zhidu de jueding 关于建立城镇职工基本医疗保险制度的决定). In 2003 and 2004, the Ministry of Labour and Social Security promulgated two further reform documents that incorporated individuals in various categories of employment, including local cadres, urban employees and migrant workers, under a unified healthcare system. Although these reforms aimed to equalize healthcare resources for all urban employees on the basis of a labour contract, public funding for the party-state cadres formed a supplementary insurance system.Footnote 42 For example, in Beijing, the first experimental city for such reform, the annual spending of urban residents on healthcare per capita in 2010 was 1,327 yuan; however, the amount for publicly funded beneficiaries was 11,000 yuan, leading to criticism of these “supracitizenship conditions.”Footnote 43
The second tier comprised urban employees, who enrolled in the labour healthcare insurance. However, local governments usually insisted that hospitals demand a much higher reimbursement rate for those with local hukou status than for non-locals. For example, local patients received 90 per cent reimbursement, but non-local patients received only 65 per cent in well-regarded Beijing hospitals.Footnote 44 Local hukou was also required to join and file claims with supplementary healthcare schemes.
In 2007, a healthcare reform trial was launched for urban residents who were not employed, such as elementary and high school students, children and older adults. According to the “Guiding opinions on the pilot basic medical insurance system for urban residents” (BMISUR) (Guanyu kaizhan chengzhen jumin jiben yiliao baoxian shidian de zhidao yijian 关于开展城镇居民基本医疗保险试点的指导意见), this insurance partially covered serious illness and hospitalization, but at a substantially lower reimbursement rate than that of the BMISUE.
For the third tier, the rural healthcare system was largely undermined by de-collectivization. By the end of 1997, rural cooperative healthcare covered only 17 per cent of villages nationwide, with only 9.6 per cent of rural residents participating.Footnote 45 Rural residents typically sought high-quality healthcare in large cities, such as Beijing, where they were ineligible for reimbursement and so became impoverished by their illness. In 2003, the “Opinions on the establishment of the new rural cooperative medical system” (NRCMS) (Guanyu jianli xinxing nongcun hezuo yiliao zhidu de yijian 关于建立新型农村合作医疗制度的意见) allowed rural residents to participate voluntarily in a healthcare programme for an extremely low fee (5–10 yuan/year) that partially covered payment for major illnesses and hospitalization. Although the NRCMS reimbursement rate was 50 per cent or less in urban hospitals, rural residents welcomed this minimal healthcare. However, the NRCMS system failed to prevent rural and non-local residents from crowding into large cities to access high-quality hospitals.
In addition to healthcare provision, another favourable step for migrants was the increase in educational opportunities for their children. Under the one-child policy, many parents sought an urban education for their child as the primary channel for upward mobility. However, the rural–urban hukou divide determined eligibility for admission from as early as elementary school. Prior to its formal repeal in 2010, non-locals were forced to pay a dependent studying fee (jiedu fei 借读费) or school selection fee (zexiao fei 择校费) to enrol in public elementary schools. These fees were often excessive and became a means through which prestigious public schools attracted only wealthy non-locals. For most migrant workers who could not afford the fees or international schools, migrant schools located in the city outskirts, where educational quality was relatively poor, were their last resort.Footnote 46 After 2010, the abolition of excessive fees forced local governments to erect alternative barriers against non-locals. For example, the Beijing Municipal Council of Education issued its “Opinions on the entrance of compulsory education of 2018” (Guanyu yiwu jiaoyu jieduan ruxue gongzuo de yijian 2018 年关于义务教育阶段入学工作的意见), which stipulated the forms of proof required for non-local students, such as their parents’ residence permit, proof of employment and family hukou booklet. These requirements may seem normal to wealthy families, but according to one official report, over 60 per cent of migrant workers had no such documentary proof.Footnote 47 Many unqualified children had no choice but to return to their parents’ hometowns, where they had hukou status, and live with their grandparents, resulting in the phenomenon of the “left-behind children” (liushou ertong 留守儿童).Footnote 48
Non-locals also encountered barriers to higher education. Since the 1950s, the College Entrance Examination (gaokao 高考) has been the most crucial avenue to a promising future for rural students. With a college degree, they could change their hukou type and resettle in cities. However, prospective candidates could only sit for the examination at their designated hukou location. Moreover, school textbooks and examination questions were different in every province. Consequently, even if non-local children were fortunate enough to enrol in public elementary schools, they typically returned to their parents’ hometown to attend high school and prepare for the examination.Footnote 49 In 2016, severe criticism forced some local governments to allow non-locals to sit the examination in their school district. However, students must provide proof of study in a local high school for three years to be eligible for this exam; hence, unfair treatment remains.Footnote 50
Moreover, eligibility to sit for the exam in resident cities is no guarantee of a fair chance of admission to higher education in China, which operates under a quota system. Since 1977, the Ministry of Education has dictated the total number of places each college must offer to students from poor and remote regions and delegates a certain proportion of the quota to local governments and colleges to allow for flexible admission. However, the governments of cities where prestigious colleges (for example, the 211 and 985 project colleges) are located often reserve admission quotas for local hukou students rather than for non-locals. For example, in 2019, 48.6 per cent of admissions to Sun Yat-sen University were reserved for local students in Guangdong province.Footnote 51 The “Independent freshman admission programme” (Zizhu zhaosheng 自主招生, IFAP hereafter), launched in 2003, was yet another form of hukou-based discrimination against non-locals. This programme authorized prestigious colleges to offer admission according to their own set criteria and soon became a privileged route for those with local hukou status.Footnote 52 For example, in 2007 and 2008, 58 elite high schools were selected by Peking University as being eligible for the IFAP; however, more than half of the quotas were reserved for local students.Footnote 53
The increasing number of local hukou-biased admissions to higher education and the inequality of healthcare provision have been publicly criticized. Although the central government has initiated reforms of the educational and healthcare systems, the urban bias remains. Because prestigious colleges and hospitals are concentrated in large cities, the hukou reform has intentionally reinforced the barriers that prevent non-locals from accessing public goods. The State Council's 2014 “Opinions on further promoting the reform of the hukou system” (Guanyu jinyibu tuijin huji zhidu gaige de yijian 关于进一步推进户籍制度改革的意见) permitted cities with more than 3 million permanent residents to adopt a points-based system. This enabled local governments to impose strict conditions for non-locals to attract only migrants who are deemed desirable. Thus, these guarded cities represent the boundary of public provision associated with local hukou.
The concentration of high-quality public provision in guarded cities has fuelled discontent, as illustrated by the criticism that followed the widely publicized expulsion of the “low-end population” from Beijing. In response to the discontent, however, the party-state replaced the rural–urban distinction of hukou with the residence permit (juzhu zheng 居住证). This further weakens the connection between hukou and welfare provision through the regulation of the urban population according to an urban scale. Consequently, after the institutional drift, the centralization of the Xi Jinping 习近平 administration's authority and weakening of both the resistance of SOE workers and autonomy of local governments have led to a compromise in institutional conversion.
Residence permit reform as institutional conversion: 2014–present
The year 2014 was a milestone for the institutional conversion of hukou reform. On 16 March, the first National Plan for Urbanization (2014–2020) (Guojia xinxing chengzhenhua guihua 国家新型城镇化规划 2014–2020 年) was unveiled. Its primary goal was to narrow the gap between the urbanization rate of temporary residents and those with hukou status (17.3 per cent) by 2 per cent. A series of reforms in this phase marked the CCP elites’ response to widespread discontent stemming from discrimination against rural residents and migrant workers. The following three momentous reforms were implemented: first, the distinction between rural and non-rural hukou was abolished; second, the population threshold for the points-based system was officially drawn (population of 3 million); and third, the universal document for non-locals was institutionalized as a residence permit, a measure which was formally codified as the “Interim regulation on residence permit” (juzhuzheng zanhang tiaoli 居住证暂行条例) in 2015. This permit gave migrants access to basic public goods such as legal aid and family planning services but did little to improve education and healthcare provision.
The Plan was supported by the 2014 “Notice on the adjustment of urban scale division standards” (Guanyu diaozheng chengshi guimo huafen biaozhun de tongzhi 关于调整城市规模划分标准的通知), which provided classification for four types of large cities based on their population size: 1–3 million (type II); 3–5 million (type I); 5–10 million (extra-large); and more than 10 million (megacity). This typology of urban scale formed the baseline for regulated access to local hukou.Footnote 54 In 2016, Xi Jinping announced that it was imperative for the middle-class social group to be enlarged for the sake of structural adjustment and stability maintenance.Footnote 55 This formal announcement was endorsement of the CCP elites’ strategy of embracing those with new urban wealth as selectorate members. The 2018 “Resettlement in the city for 100 million migrants programme” (Tuidong 1 yi feihuji renkou zai chengshi luohu fang'an 推动1亿非户籍人口在城市落户方案) has further connected the stratification of access to urban hukou with urban scale. The 37 guarded cities are allowed to apply the points-based system to filter out migrant workers who are hardly able to obtain enough points for local hukou. By contrast, the 621 non-guarded cities have to be openly accessible; they are, however, unappealing destinations for migrant workers seeking quality education and healthcare.Footnote 56 Converting the provision of welfare from a rural–urban designation to an urban scale perpetuates the three-tier welfare stratification, but those holding guarded-city hukou are now included in the selectorate. This conversion of the hukou system is illustrated in Figure 1 (right side).
To detail the difference in education and healthcare resources on an urban scale, Table 2 lists the concentrations of prestigious colleges (985 and 211 project colleges) and hospitals (grade 3A) at the three levels of guarded cities at the time the reform was enforced in 2015. Despite being home to only 16.8 per cent of the population, the guarded cities contain almost 80 per cent of prestigious universities and over 30 per cent of high-grade hospitals. By contrast, the other regions comprising over 80 per cent of the national population contain only 20 and 67 per cent of prestigious universities and Grade 3A hospitals, respectively.
Table 2: Concentration of Education and Healthcare Resources
Source:
Notes:
*Military and Chinese medical hospitals are excluded. The list of 3A hospitals was acquired from https://www.163.com/dy/article/EI6HDMG50517E1AP.html, and was double-checked with the search website of the National Health Commission of the People's Republic of China (formerly National Health and Family Planning Commission), http://zgcx.nhc.gov.cn:9090/unit/index. Accessed 6 August 2018; **provincial capitals include only those qualifying as guarded cities.
The CCP leadership was acutely aware of the discontent caused by the unequal distribution of healthcare resources. According to the 2016 “Opinions on integrating the basic medical insurance systems for urban and rural residents” (Guanyu zhenghe chengxiang jumin jiben yiliao baoxian zhidu de yijian 关于整合城乡居民基本医疗保险制度的意见), migrant workers with rural hukou, or those ineligible for the BMISUE, could choose to enrol in either the NRCMS or BMISUR. To address their urgent need for healthcare, most migrant workers chose the BMISUR for its higher reimbursement rate. Nevertheless, the NRCMS still covered 130 million rural residents in seven provinces.Footnote 57 Although the incorporation of the NRCMS into the BMISUR seems favourable for migrant workers, the reimbursement rate (50–55 per cent) and maximum payment – 3,000 yuan in Beijing, for instance – are much lower than those of the BMISUE (70–99 per cent and 20,000 yuan, respectively).Footnote 58 Consequently, the unequal distribution of healthcare resources between locals and non-locals has persisted.
The higher education reforms of the admission quotas for prestigious colleges provoked much stronger resistance. In 2016, the Ministry of Education announced the “Notice on the planning and management of higher education admission” (Guanyu zuohao 2016 nian putong gaodeng jiaoyu zhaosheng jihua bianzhi he guanli gongzuo de tongzhi 关于做好 2016 年普通高等教育招生计划编制和管理工作的通知). This reform required 12 provinces and cities (excluding Beijing) with high admission rates to fill their admission quotas with students from the ten most competitive cities. However, the plan incited widespread resentment: in Jiangsu, for instance, furious parents blocked the gates of the education department in protest. Concerned by this backlash, the central government promptly responded by ensuring a constant admission rate for local students in guarded cities.Footnote 59 The reform of the gaokao for non-locals (yidi gaokao 异地高考) triggered similar protests by local beneficiaries.Footnote 60
In 2019 and 2020, the National Development and Reform Commission and State Council released several documents that called on type I cities to lift hukou barriers and type II cities to conditionally lower restrictions for young, talented individuals.Footnote 61 However, for local governments, the hukou system is an effective tool with which to cajole local elites and regulate urban development.Footnote 62 Accordingly, the centralized hukou reform was adapted to suit local conditions and the fiscal expenditure and urgency of population needs. For example, Shenzhen raised the threshold for local hukou access to reduce incoming migration, but inland areas including Hubei, Henan and Anhui sought more urban residents to balance their ageing population.Footnote 63 Therefore, the institutional conversion reflected a compromise of interests between central and local governments.
Conclusion
Through integration of the selectorate theory and historical institutionalism, this paper contributes to the investigation into the origin and institutional change of the hukou system in China. The hukou system was established and perpetuated as a governmental tool for preserving privileged public welfare provision for the groups who support the regime's survival. The ruling elites may include new members based on structural changes; however, the vested interests of old members must be addressed to preserve political stability. After the resistance of SOE workers and local governments during the drift phase, the increasing power of Xi's administration resulted in institutional conversion. However, an historical legacy of local autonomy galvanized a diversified path and led to local adaptations of hukou reform. In accordance with the central government's policy, the guarded cities continue to implement the high standards of the points-based immigration system to preserve public welfare provision for local residents.
As Chan and Buckingham argue, the efforts in hukou reform, including the removal of the rural–urban divide, achieved little in terms of citizenship extension because of the negligible redistribution of welfare provision among the local and non-local populations. Our research demonstrates that a new “Great Wall” has been constructed around the guarded cities and other regions in order to protect scarce healthcare and education resources from inbound migrant workers. The findings also imply that the CCP leadership is unlikely to abolish the hukou system as it is regarded as a vital mechanism for sustaining the regime. Rather, hukou reforms have been applied to incorporate the urban capitalists and middle classes into the beneficiary group, which is expected to support the regime, and to shut the “low-end population” out of the guarded cities. This study sheds light on the debates on the authoritarian regime's implicit social control by illustrating the institutional conversion of the hukou system from status identity to urban scale. The analysis shows that the scrutiny of institutional conversion may reveal the contradictions of the ostensibly progressive or widely recognized reform. The findings also contribute to the emerging literature on China's political control by elaborating the subtle tactics wielded by political elites via various institutions at central and local levels.Footnote 64 We expect the “Great Wall” established under Xi's government to become an even bigger barrier for migrants during the Covid-19 pandemic and in the future.
Acknowledgements
The authors would like to thank the anonymous reviewers for their constructive comments. We are grateful to the participants and interviewees for their help. We are also thankful for the financial support of the Ministry of Science and Technology of Taiwan (Project No. MOST 110-2420-H-001-005).
Conflicts of interest
None.
Biographical notes
Ren-Jie HONG is a PhD candidate in sociology in Binghamton University, SUNY. His dissertation focuses on China's labour reform and authoritarian legality. His research interests include Chinese politics, law and society, developmental study and labour politics.
Yu-Chi TSENG is a project assistant professor at the Center for General Education at Chang Gung University of Science and Technology, Taiwan. Her research interests focus on socio-spatial inequality, power and space, and urban studies.
Thung-Hong LIN is a research fellow in the Institute of Sociology, Academia Sinica in Taipei, Taiwan. He is also the director of the Center for Contemporary China, National Tsing Hua University. His research interests include social stratification and mobility, political sociology, and sociology of disaster.
