analysis paper

Urban informality in China The Hukou system

Hukou: Chinese urban informality • An example of a socio-political institution • Hukou: a document that records attributes of an household • Location based • Major institutional pillar underlying the deep urban-rural divide in

China • Half a century old • Discriminates against 800 million rural Chinese • Took away the freedom of movement and residence • Freedom of mobility increases political and economic mobility • Impeding mobility decreases choice and bargaining power for labour

Implications of the hukou system • Industrialization strategies • Urbanization • Rural-urban dichotomy • Social and spatial stratification • Migrant labour

Hukou: pre-1949 origins, Communist period history • Propiska system ( residence registration system in the USSR) • Before 1949, system was used for tax collection purposes • Managing migration, but never existed in its present form • More encompassing form of hukou • Meticulous planning of micro and macro facets of society • Big Push entailed prioritizing industrialization and extracting surplus

from the compulsory procurement and monopoly sale of agricultural produce • The commune system, the hukou system, in addition to monopoly

procurement all worked in tandem-meant to meet the goals of industrialization

Introduction of Hukou in the 1950’s • Constitution- 1954 had assured people of rights to move • Between 1955-1957, control measures were introduced • “Undesirable flows” • 1958 was the year when it was codified • Each person was classified as “rural” or “urban” • Newborns actually would be given the hukou classification of

their mother • All internal migrants should be subject to approvals from the

authorities at the destination

Big Push era • Industrial sector locates in cities • State management and support • Social welfare and subsidies for urban workers • Agriculture was treated as a residual • Cheap labour and capital for the industrial sector • Collectivization of rural population and production • Agriculture-people worked at subsistence levels

Hukou classifications and changes • The peasantry became an underclass • Agricultural or non-agricultural hukou-defined the relationship

between the individual and the state and eligibility for an array of state provided welfare • State provided goods and services apportioned on this

classification • Non-agricultural population was loosely considered the holders of

urban hukou • Non agricultural hukou had better prospects for conversion • Hukou acquired a social status

Hukou classifications and changes • Place of hukou registration • Residence • Defined rights to engage in certain activities in a given locality • Movement from one category to another was permitted only by the

state • The most sought after category for change was movement from B to C • Percentage of non-agricultural population declined between 1958 and

1980 • Geographical mobility controls were imposed between the urban and

rural areas, they were differentiated according to the administrative rank of the locale

Age of Migration: Post reform hukou • Migrants, after staying for a period, are usually granted the

right to vote and access to social welfare at the destination • What is unique about migration in China is that the two aspects

of internal migration (movement and citizenship) can be totally disparate: i.e. one can move to a new place but can be permanently barred from access to entitlements and rights • People who have moved to a new place but do not possess

local citizenship (hukou) are referred to as the non-hukou population.

Floating labour in the context of reform • Its size has grown rapidly from a few million in the early 1980s

to about 221 million in 2010 (Chan 2012b). Its largest constituent subgroup is ‘rural migrant labour’. • The goal of reform in the early years of the post-Mao era was

to improve the command system then in use and not to dismantle it. Except for rural de-collectivization and the ‘open door’ policy, the government actually sought measures to reinforce the command economic system • Immediate goal-rural surplus labour had to be absorbed

somewhere

New category created • A small breakthrough occurred with the introduction of a new

hukou category, called ‘hukou with self-supplied food grain,’ in small towns in 1984 • The state was not fiscally responsible for any of the welfare of

the new migrants in these towns • This new policy was to accommodate the growing demand for

low-cost, low-skilled workers to fill positions shunned by many urban locals and the even larger number of factory jobs created by China’s new export-oriented industrialization strategy in the late 1980

Local governments get more power and discretion in defining hukou • Local governments have had more control in deciding the levels

of both hukou and non-hukou migration to their respective administrative jurisdictions, especially since the late 1980s • Other measures put into effect include easing hukou

conversions to small towns where state-provided welfare is minimal (in 1997 and 2001); permitting transfers in family cases that involve either children or elderly parents, when parents or children, respectively, are already urban citizens (in 1998); and offering local hukou status to the ones who have money (investors and home buyers) or occupational skills fitting the requirements stipulated by local governments

Post 1970’s industrialization and liberalization • The hukou system has been a major institutional foundation for

the command economy. Without such a system, China would not have been able to achieve the paramount goal of the command economy • When China’s export processing industry roared into high gear

in the mid-1980s and 1990s, the deployment of rural labour to the cities for the export industry became a major post-Mao strategy • A strategy unshackling labour from the rural collectives

( parallel to what Lewis would argue “should happen”

Backbone of industrialization • Rural-hukou labour had become the backbone of the export

industry and, more generally, the manufacturing sector. In coastal export-oriented cities, such as Shenzhen and Dongguan, migrant labour easily accounts for the great majority (70 to 80 per cent) of the labour force (Liang 1999). • Even for a more typical urban site like the inland city of

Wuhan, workers without local hukou accounted for 43 per cent of the manufacturing workforce in 2000 • ‘Rural migrant labour’ has grown into a large mass, reaching

132 million in 2006 and about 160 million in 2011

Backbone of industrialization and a reservoir of “exploitable” labour • In the cities, in addition to the lack of access to many basic social

services, these migrant workers also face many formal and informal obstacles to securing jobs other than low-skilled ones • The lack of local hukou for migrant workers, combined with factors

such as the plentiful supply of labour and lack of access to legal information and support, has created a huge class of super- exploitable, yet highly mobile or flexible industrial workers for China’s new economy • Their ‘temporary’ nature and lack of local citizenship also make them

very expendable. For example, the global financial crisis (2008–09) hit China’s export sector seriously and led to the unemployment of about 20 million migrant workers

Urbanization in China • China has witnessed rapid industrialization but relatively slow

‘urbanization’, a phenomenon manifested in various forms under different conditions • During the Maoist era, the strategy was to stop peasants from going

into cities. As a result, relative to China’s industrialization level its level of urbanization (the percentage of the total population living in urban areas) was low by world standards, leading to the phenomenon of ‘underurbanization’ • Physical controls on migration into cities have been lifted but the

extension of urban social and economic benefits to migrants remains largely non-existent. Thus, migration rates of peasants to cities have risen over the past three decades but a significant part of urban in- migration is by rural–urban migrants lacking hukou status at the destination

What has hukou served? • Rapid industrialization in the socialist period-Mao’s forced

industrialization strategy • Export oriented industrialization in the post reform period(the era

of the market, post-1979) • By turning peasants to a mobile population, land has been

requisitioned by the state for industrialization and urban construction • Mass peasant and mass labour protests • Reforms-granting of 100 million new hukou • Reluctance to open up the hukou system in big cities, thus the

real test will be implementation at the local level