Reform and the HuKou System in China

Abstract

China created the dual hukou system in an effort to modernize and manage rural to urban migration. The system restricted the mobility of most Chinese and limited rural peasant migration. In 1978 the demand for labour increased rapidly and rules controlling migration, including the hukou system were loosen to encourage relocation. The establishment of a semi-capitalist market system in 1991 further encouraged the flow of labour and forced the liberalization of some aspect of the registration policy and by 2014 and in response to continued growth the Chinese government implemented a unified hukou system to build equality among rural and urban citizens. In this brief, we review the reforms and argue that the hukou system can play an important role in Chinese development.