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By Wang Liejun & Gong Sen, Research Department of Social Development of DRC

Research Report No 50, 2010

China's household register system is not only a population management system based on household register, but also a system on rights definition and interest distribution that links with the nature and place of household register. This is the primary reason why it is a highly controversial issue and also a priority to be discussed in this report. Before defining the goal and guideline for the reform of the household register system, it is necessary to briefly review the process of the system's evolution and reform.

I. Household Register's Function Has Gradually Shifted from Restricting Population Movement to Protecting Local Social Welfare

In addition to the general functions of population management and public order maintenance, China's household register system also performed other major functions in different historical periods. After the founding of new China, the country faced food shortage and emphasized the development of heavy industry. In order to ensure a huge accumulation required for heavy industrialization and to protect the limited jobs created, the country must strictly control the size of urban population. The household register system, formally introduced in 1958, was designed to strictly restrict rural population's migration to urban areas. This situation continued till the mid-1980s.

After China began reform and opening up, its food supply became increasingly sufficient and the state-monopolized purchase and marketing was abolished. As the urban economy had a fast-growing demand for labor, peasants began to massively migrate to urban areas. They work in urban areas, but keep their rural household register. They do not settle down in urban areas, preferring to move between urban and rural areas like migratory birds. As a result, "peasant workers" or rural migrant workers became a striking socioeconomic phenomenon. By then, the household register system had in fact lost its function to restrict population migration.

The strict household register system introduced in 1958 had one side-product. As this system could effectively exclude rural population from urban systems and as peasants virtually had no say in policy making, a host of welfare systems such as full employment, housing, medical care, education, nursing and old-age pension were subsequently established to target on urban residents only, who represented a small proportion of China's population at the time (Lin Yifu et al: China's Miracle: Development Strategy and Economic Reform, Trinity Bookstore Shanghai Branch, 1996; Cai Fang: China's City Development in Transition – City Levels, Financing Capacities and Migration Policies, Economic Research, No. 6, 2003). As this process was highly path-dependent and self-reinforcing, household register-related welfare continued to increase. This could be attributed partly to vested interests, and partly to regional governments' inclination to take household register as an administrative tool. Therefore, after the mid-1980s when the household register system ceased to perform the function of restricting rural population's migration to urban areas, the system's main function shifted to protecting the social welfare of local urban population.

II. Household Register Reform since Mid-1980s: Experience and Lessons

1. Reform process

Since the mid-1980s, the household register system has been reformed along two main lines. One main line was to gradually reduce the rights and social welfare associated with household register. This process coincided with a process of marketization. Food, other means of livelihood and jobs were no longer distributed by the state according to the nature of household register. Instead, they began to be provided through market mechanisms. In the new century, this main line began to have a new content: increasing social welfare for peasants. The result was that the social welfare gap between agricultural and nonagricultural households was narrowed. Another main line was to liberalize qualifications for urban household register, which was, in a sense, based on the reform along the first main line. The reform of the household register system, now publicly discussed, mainly refers to the latter.

(1) The reform of small town household register system has made substantial progress and the task has been basically fulfilled. This reform, featuring the liberalization of household register qualifications, began first in small towns for two reasons. One, the development of rural enterprises prompted rural labor to rapidly move to small towns, and small towns also needed to expand the sizes of their permanent residents to promote economic development. Two, small town household register offered less social welfare and qualifications liberalization caused no major social shocks.

In 1984, the state began to allow peasants to work and live in small towns (excluding county towns) (the landmark policy document was the Notice of the State Council on Allowing Peasants to Settle Down in Small Towns). After some ups and downs, a nationwide pilot reform of the small town household register system began in 1997. And in 2001, the Guidelines for Promoting the Reform of the Small Town Household Register System were promulgated to widen areas for peasant stay to the urban districts of county cities and administrative towns. In this state document, the qualifications for small town household register were to "have legal permanent residence and stable job or source of income". In practice, "legal permanent residence" became the main qualification, which gradually evolved into "house purchase for household register". As house prices in small towns were not high, people were enthusiastic about the reform at first. This reform not only boosted local morale and spurred economic growth and especially in the real estate sector, but also helped solve the separation of migrant rural workers from their household register and improve population management. But in recent years, small towns have failed to increase jobs by a big margin, more and more economic and social policies have been introduced in favor of rural areas, potential compensations for land expropriations have become relatively high, and the peasants who have acquired urban household register could have to face stricter family planning policy. Accordingly, small town household register has gradually lost its appeal to peasants, and some peasants who have acquired urban household register want to restore their rural household register. This is precisely an indication that the task to reform the small town household register system has been basically fulfilled. It is also an indication that it is the rights associated with household register, instead of household register itself, that have a real appeal.

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