Reform of the Hukou System and Rural-Urban Migration in China: the Challenges Ahead

Reform of the Hukou System and Rural-Urban Migration in China: the Challenges Ahead^*

Li Zhang

Chinese University of Hong Kong

New Territory, Hong Kong

Fax: (852) 26035006

Email: lizhang@cuhk.edu.hk

Introduction

The hukou policies have undergone considerable changes over time, especially since 1980 in line with marketization reforms, reflecting changing functions of the system. These changes, nonetheless, have displayed a gradual nature rather than in a radical manner. The essential operational mechanisms of the system are still kept their places and a function of regulating migration remains a salient feature in the process of changes. Governments at all levels have pursued a selective reform that aimed at preserving migration control power while allowing desirable migration from their economic point of view.

Based on a review of the development of hukou policies and discussion of changing functions of the hukou system and their implication on migration, this paper argues that both political and economic considerations are at work in shaping hukou policies for migration. The progress of the hukou system reform will be constrained by systemic characteristics that had deep roots in the Chinese socialist past. It will be a trend that the migration-control function of the hukou system will be continuously downplayed. The prospects of this change, however, depend much on the transformation of China’s current semi-market system, in addition to economic growth.

The first section of this paper gives an overview of the development of hukou policies with regard to migration. Special attention is paid to the latest changes , which have not been systematically examined elsewhere. The second section discusses changing functions of the hukou system in various periods and their impact on migration. The last section addresses the problems that should dictate policy attention to further reform of the hukou system.

1. The hukou policies before and after the economic reform

The basis of the hukou system prior to the economic reform

Figure 1 encapsulates the categories of hukou registration in the Chinese settlement hierarchy. An entire population was grouped into four hukou categories: urban agricultural hukou, urban non-agricultural hukou, rural agricultural hukou, and rural non-agricultural hukou. Under this categorization, one's legal registration was dual-classified, both by residential location ("hukou suozaidi", literately referring to the place of hukou registration) and by the hukou status ("hukou leibie", literately referring to the type or “status” of hukou registration).

The "hukou leibie" was essentially referred to as the "agricultural" and the "non-agricultural" hukou. This classification used to determine one’s entitlement to state-subsidized food grain (called "commodity grain") and other prerogatives. The hukou leibie originated from the occupational divisions of the 1950s,¹ but later on, as the system evolved, the "agricultural" and "non-agricultural" distinction bore no necessary relationship to the actual occupation of the holders, but to their socioeconomic eligibility and distinctive relationships with the state. Table 1 highlights the differences of treatment by the state between the agricultural hukou and the non-agricultural hukou in the pre-reform period.

The dual-classification scheme produced several impacts on migration. Any move from one location to another required going through a process of seeking approvals from various government departments. A move within one of four hukou categories was generally subject to registration, if that move went down from a settlement with a higher administrative status to one with a lower status. A move crossing the hukou category or going up from a settlement with a lower administrative level to one with a higher level was subject to control. A move from rural agricultural category to urban non-agricultural one was required to complete a correspondingly dual approval process: changing the regular hukou registration place and converting the hukou status from agricultural to non-agricultural. The latter was an important process commonly known as nongzhuanfei in China. To change the locale of regular hukou registration, the applicant needed to present appropriate documents to the public security authorities to obtain a migration permit. In the case of nongzhuanfei, one had to satisfy the qualifications stipulated by the state and went through official channels. The granting of full urban residence status was often contingent upon the successful completion of nongzhuanfei, the core of the hukou conversion process.

The key to regulating formal rural-urban migration by residence and employment controls was to control nongzhuanfei, which was simultaneously subject to "policy" (zhengce) and "quota" (zhibiao) controls. The policy control defined the qualifications of people entitled to non-agricultural hukou, whereas the quota control regulated the number of qualified people who would be assigned non-agricultural hukou. In order to be eligible for nongzhuanfei, a person had first to satisfy the conditions set out in the policy control criteria while obtaining a space under the quota control at the same time. If one fulfilled the former criterion but did not have a space, he or she would not be able to succeed with nongzhuanfei. The way the system works was somewhat similar to the experience of international migrants with trying to get visa permits in many countries. Through both policy control and quota control, the state regulated both the kinds of people and the number it wanted to admit into the urban areas.

The dual-control mechanism strictly confined hukou conversion from agricultural to non-agricultural status to official channels. In accordance with the relevant circumstances, there were two authoritative channels through which nongzhuanfei is granted: a "regular" channel and a "special" channel. Common categories under the regular channel included recruitment by a state-owned enterprise (zhaogong), enrolment in an institution of higher education (zhaosheng), promotion to senior administrative jobs (zhaogan), and migration for personal reasons. These categories, except for the last case, were dictated by state labor plans. The qualifications for conversion through this channel had not changed much over time, although the annual quotas varied from year to year. Within the regular channel, the policies with regard to recruitment, enrolment, and promotion were made by labor, education, and personnel authorities, respectively, and the conversion quotas associated with these policies were ultimately set by the officials of the State Planning Commission in the annual economic plans. Migration for personal reasons, mostly cases of sick or disabled spouses or parents, or dependent children relocating to urban areas to be looked after by their family members, was determined in accordance with the qualifications defined and with the quotas set by the Ministry of Public Security (MPS).

The categories of conversion of hukou status under the special channel were defined by ad hoc policies concerning nongzhuanfei for certain groups of people under special circumstances. Most commonly, these involved workers changing from temporary to regular positions in state enterprises. There were also particular cases that arose from time to time (like the return of rusticated youths in the early reform era). This channel gave the state the flexibility to deal with unanticipated situations. It also included nongzhuanfei granted to a small proportion of demobilized military servicemen assigned urban jobs.² The hukou allowances under the special channel came out of sporadic but supplementary quotas for these transfers. In many cases, policies for hukou transfers under the special channel were matters of joint decision among various government departments.

An approval process for nongzhuanfei reflected the fact that the restriction of people from rural to urban areas involved multiple institutions. The real power of the hukou system in regulating migration did not come from just the system itself but from its integration with other social and economic control mechanisms. In the pre-reform period, formal migration operated within a political and economic context such that economic activities were strictly controlled by the bureaucratic apparatuses, with the state monopolizing the distribution of important goods. Few of these were available in the market at affordable prices, and people’s daily lives were closely connected to and monitored by various state agents. Urban recruitment and job transfers were controlled by government bureaucrats. There were few opportunities for urban employment outside state channels. The state's monopoly of living necessities made it hard to survive outside one’s place of hukou registration without proper documents. People’s daily lives were tightly bound to their work units and watched over by the police and by residential organizations (street committees in the city and village committees in the countryside). Violations of the hukou regulations could be easily found out. Overall, the hukou system worked in conjunction with other institutions to form a multi-layered web of control, each of them administering one or more categories of rural-to-urban migration. The various lines of control were interrelated and complementary to each other.

Through dual-classification and nongzhuanfei, policy and quota controls, and other administrative mechanisms, rural-urban migration and population redistribution were fully bureaucratized. The procedures of hukou registration provided certification of the legal basis for residence in one or another of China's urban areas. Officially-sanctioned rural-urban migration required a formal hukou transfer, subject to both policy and quota controls. Thus, the state had nearly total control of rural-urban migration and decided where people should work and reside, leaving, at the same time, little room for individual preference and decision. Given the predominant role of state control, the outcome of rural-to-urban migration, in geographical terms, had largely been a function of state policies.

Hukou policies since economic reforms

One area of changes is in the administration of population registration, characterized by the reinforcement of managing temporary residence and the introduction of citizen identity cards in the mid-1980s. The policy of “temporary residence certificates” (TRC) was nationwide promulgated by the MPS in 1985. Formerly, outsiders who stayed for three days or more were required to register with local police. If they were to stay more than three months, approval from the police was required. In any case, the certificate of temporary registration could not be used as a legal paper for urban employment applications. The key provision of the new policy was that people of age 16 and over who intended to stay in urban areas other than their place of hukou registration for more than three months were required to apply for a TRC. The TRC is valid for a specified period and is renewable. The TRC system was extended to rural areas in 1995. It also lowered the length of stay to one month. As a TRC became a key legal document for employment and residence, the new regulations differed in an important way from the past practice in that self-motivated migration to jobs in urban areas was tacitly allowed. The measure created institutional conditions which would allow population mobility under certain circumstances but would simultaneously provide the authorities with the power necessary to counteract the inflow of undesired migrants by means of the issuance of residence permits.

The establishment of photo citizen identity cards (IDC) is officially interpreted as a means of both reforming and strengthening rather than replacing the hukou system. The IDC system was established nationwide in 1985. The identity card entails the holder’s personal information, the registered regular address and the social security number, with a stamp endorsed by the police unit of the area of registry. Those who legally and permanently change their place of regular hukou registration are required to change their IDCs. Unlike the hukou system, the use of the IDC has led to a change of the unit of administration of registration from a family to an individual basis. These, complementary to the hukou system, no doubt make social control easier to handle. The individuality and portability of IDC also make the card become widely accepted ID document than other types of certifying documents and are better suited to the new circumstance of population mobility.

Another change in hukou policies is that there are more openings in nongzhuanfei policies. In the pre-reform era, the nongzhuanfei was the core of any formal rural-to-urban migration and was subject to strictly control. The quantity and qualifications of the nongzhuanfei were mainly based on state manipulation, emphasizing the need of economic planning and the personal contributions to the nation. The mechanisms of nongzhuanfei (dual channel and dual control) were designed to work to the one-sided advantage of the state. This remained true in the earlier reforms except that in the recent period there was a trend to reduce the differences between agricultural and non-agricultural hukou, which undercut the significance of the nongzhuanfei. In the reform period the mechanisms of nongzhuanfei have continued to function. But the policy control has been relaxed substantially, particularly in the late 1970s and in the early 1980s, to cope with both the problems inherited from the pre-reform era and the ones created by the ongoing reform of the centrally planned economy. This was done through opening the special channel and an increased quota of nongzhuanfei, mostly to deal with those who suffered from the various political and economic policies in the past. There was also a rising concern on granting the nongzhuanfei to those who contributed significantly, evaluated by the state criteria, to the country.

There has been the emergence of two new types of urban hukou in the past two decades. One was the urban hukou with self-supplied food grain in towns and the other was the “blue-stamp” urban hukou. In 1984, the State Council endorsed a conditional opening of market towns to peasants. Peasants were allowed to get a type of urban hukou, called a “self-supplied food grain” hukou, in market towns, provided that they satisfied a number of requirements. The main requirements were that these migrants must either be employed or run business and have their own accommodation in market towns. They must also make their own food-grain arrangements.

The blue-stamp hukou, the second new type of urban hukou, was introduced in the early 1990s against the background of "urban hukou for overt sale". The most important aspect of this policy was to “sell” an urban hukou to whoever could afford to pay. It was intended for addressing the need of local governments for local development. The blue-stamp urban hukou constituted a policy alternative offered by the central government whereby to "legalize" the practice of commodification of urban citizenship that was implemented by many locales since the late 1980s.

These new urban hukou were provisional and non-transferable. To obtain these hukou, applicants must meet a number of qualifications and fulfill the requirements anticipated by the regulations, as examined by Chan and Zhang.³ The holders enjoyed only limited rights and obligations, as compared to regular urban hukou. They were required to resume their original hukou status when moving out of the registered urban areas. They had to go through the normal procedures if they intended to convert their current hukou into regular urban hukou. Importantly, these people were not considered as having gone through the nongzhuanfei process from the viewpoint of the government or with respect to the hukou system.

The destination of migration continues to be a matter of hukou policy concern. "Controlling the size of large cities" has long been the guiding principle for migration policies. This was also reflected in the pilot project of hukou reform in small cities and towns launched in 1997. Under the project, the provincial governments were allowed to select certain county-level cities and designated towns with a higher level of economic and infrastructure development and greater degree of financial success for a two-year experiment. Qualified rural people would be granted a regular urban hukou in the selected cities and towns. The qualifications for getting an urban hukou under this reform project were essentially the same as those for a “self-supplied food grain” urban hukou. It appeared that this project formalized and replaced the earlier ad hoc provisions for the “self-supplied food grain” urban hukou. Successful applicants were supposed to be entitled to the same rights as regular urban residents with regard to education, employment, social security and welfare benefits, as these might be very limited in such small urban places.

Latest changes in hukou policies

Although there are many changes in the early reform period, issues of the hukou system are continuously high both on the public debate and on the official agenda as the Chinese economy is more marketized. Among the publics, the hukou system is simply perceived as an inhumane and unfair social control. It is widely criticized to deprive citizens’ freedom to choice of a place to work and to reside, and incompatible with a marketized economy where factors of production (capital and labor) require mobile. Inside the bureaucracy, the difficulty in using the system to manage migrants has long been a matter of serious concern. Consequently, there have been numerous proposals and projects to reform or revamp the system recently. While, so far, nothing really substantive has been passed in the level of legislation, these efforts, nevertheless, have pushed several policy changes in the governance of rural-urban migration.

1). New provisions for urban regular residence

One more recent development in the hukou reform is that the State Council in July 1998 approved the MPS four-point proposal further removing some of the past restrictions on urban hukou. ⁴ The new measures of consequence are three new provisions relating to family reunion and one provision for those making contributions to local economies. First, a person aged less than 18 is officially permitted to choose to inherit his/her hukou status from either parent, mother or father. Second, the hukou conversion of spouses who have been long-term separated in residence caused by the past hukou restrictions is made easier, based on less restrictive qualifications than heretofore. Third, an aged or retired person who needs to be taken care of by his/her child is granted a priority to process his/her application for moving into the place of his/her child's residence. Lastly, investors of urban business, purchasers of urban commodity housing, professionals working in local enterprises and institutes, and their family members are promised the convertibility of their temporary hukou into the regular hukou after having residing in the city in question for certain consecutive years -- provided they have permanent jobs and stable incomes as well as regular accommodations. Applicants under these categories are not required to pay any form of urban-entry fee, according to the MPS proposal.

The MPS proposal has been widely publicized after being approved by the State Council. It has impressed the publics as a new and significant breakthrough of rural-urban migration control (Guangzhou Daily, September 7, 1998; Yangcheng Evening News, October 25, 1998). As the proposal seems to open new channels for certain categories of people to go into “once-walled” cities, the new policies receive favorable comments from those who are thought to be beneficiaries. The response is positive. It was reported that, as of May 2000, one and half years after the policy announcement, 7,600 children were granted regular hukou in Guangzhou municipality (Yangcheng Evening News, May 14, 2000).

Contrast to the popular sense, the MPS proposal by no means represents brand new policies with regard to the rural-urban hukou conversion. As a matter of fact, all of policies stipulated in the proposal have been practiced for some time before they are made known to publics. Beginning as early as 1991, a child whose mother living abroad has been allowed to follow the hukou status of his/her domestic father. Family reunion and family hardship are never said in hukou policies as not being factors for consideration for hukou conversions from one residence to another, though the detailed terms were more restrictive and were kept under the dark in the past. In fact, one main part of hukou migration was made in the name of marriage and under humanitarian reasons. Possibility of converting a temporary to full hukou status has always, under certain conditions, open in the blue-stamp hukou scheme as well as in the small town hukou reform project. Of course, the qualifications for urban residency were very restrictive in the period of tight control over rural-urban migration. Only a small proportion of people could really qualify for urban citizenship. Indeed, the MPS proposal only reflects an extension of past policies that are applicable to larger population and more transparency of the hukou exercises that make the publics aware of their entitlements under the existing hukou policies.

While the MPS proposal can be regarded as taking a further step to loosen once-stringent control over urban migration, it, at the same time, reiterates the government’s stance on urbanization promulgated in 1982. It emphatically re-states that “controlling the size of large cities and rationally developing medium and small cities” is the guiding principle for the reform of hukou system and the amendment of hukou policies. This seems to create a paradoxical reality, especially for big municipalities. As the proposal does not specify any working policy to enforce the new provisions under such guiding principle, it leaves room for local governments to articulate the details.

Local responses to the MPS proposal are not straightforward. On the one hand, local governments cannot openly reject applications for urban hukou from qualified people stipulated in the proposal. On the other hand, they have set their own additional conditions for those no question qualified under the MPS proposal. Table 2 gives an example of Guangzhou municipality. While the table only exemplifies the case of Guangzhou, it perhaps reflects a popular trend of local reactions to the central policies. Local governments tend to set much stricter entry criteria or to impose stricter control for those who are nominally qualified, under the central policies, but seem to make little contributions to the local economy to obtain urban hukou than those who could, in the eyes of local authorities, bring into economic benefits.

In the local articulation of the MPS proposal, the procedures for migration, which was a major issue of public frustration and discontent, has basically remained unchanged. Aside from the entry criteria, the documents and procedures required give the authorities in both sending and receiving areas certain control/intervention powers for processing applications. As applicants have to overcome many institutional barriers to acquire all needed documents and to complete necessary procedures, obtaining a regular urban hukou is by no means an easy and pleasant undertaking.

Table 2 Details for Acquiring a Regular Hukou in Accordance with the MPS Proposal, by Applicant Categories, Guangzhou Municipality

Conditions for Local Registration	Control Mechanism		Documents Required for Application	Priority of Application	Procedure
	Plan	Quota
1. Persons under 18 whose fathers are local regular residents
Born after July 22, 1998, under the scheme of family planning, not having registered in any place	Regulatory plan for natural growth	No	Applicant’s birth certificate; applicant’s certificate of family planning; applicant’s parent certificate of marriage; applicant’s parent hukou registrations and Ids	High	Following the normal procedures for hukou registration
Born after July 22, 1998, under the scheme of family planning, having registered in other places	Regulatory plan for migration	Yes	Applicant’s birth certificate; applicant’s certificate of family planning; applicant’s parent certificate of marriage; applicant’s hukou registration; applicant’s parent hukou registrations and Ids	High	Following the normal procedures for hukou transfer to acquire a permit to move and a migration certificate
Born after July 22, 1998, outside the scheme of family planning	Regulatory plan for migration	Yes	Applicant’s birth certificate; applicant’s certificate of family planning; applicant’s parent certificate of marriage; applicant’s parent hukou registrations and Ids	Low	Registering in his/her mother’s place of regular hukou Following the normal procedures for hukou transfer to acquire a permit to move and a migration certificate
Born before July 22, 1998	Regulatory plan for migration	Yes	Applicant’s birth certificate; applicant’s certificate of family planning; applicant’s parent certificate of marriage; applicant’s hukou registration; applicant’s parent hukou registrations and Ids	High for those in schooling ages	Registering in his/her mother’s place of regular hukou Submitting an application for hukou transfer Waiting for a move quota With a quota, following the normal procedures for hukou transfer to acquire a permit to move and a migration certificate
2. Local regular residents' spouses
Having married for 15 years, having regular accommodation and stable income	Regulatory plan for migration	Yes	Applicant’s hukou certificate from a police agent in an originating area; applicant’s certificate of family planning; couples’ hukou registrations and IDs, and a certificate of marriage	Normal	Following the normal procedures for hukou transfer to acquire a permit to move and a migration certificate
Having seriously sick, or facing severe hardship in the family, or having serious financial problems	Regulatory plan for migration	Yes	Medical documents; a hardship certificate from appropriate authorities	High	Following the normal procedures for hukou transfer to acquire a permit to move and a migration certificate
Both couples over 40 years old, or one over 45 and the other over 35	Regulatory plan for migration	Yes	Applicant’s hukou certificate from a police agent in an originating area; applicant’s certificate of family planning; couples’ hukou registrations and IDs, and a certificate of marriage	Normal	Following the normal procedures for hukou transfer to acquire a permit to move and a migration certificate
Having married for at least 25 years for those violating family planning policies	Regulatory plan for migration	Yes	Applicant’s hukou certificate from a MPS agent in an originating area; applicant’s certificate of family planning; couples’ hukou registrations and IDs, and a certificate of marriage	Low	Following the normal procedures for hukou transfer to acquire a permit to move and a migration certificate
3. Local regular residents' parents
Males over 60, females over 55; A local child is their only child; His/her child has permanent accommodation which size exceeds the average level (on the per capita basis) in the city; His/her child has stable income and living expanse per family member exceeds the average level of the city	Regulatory plan for migration	Yes	Applicant’s hukou certificate from a police agent in an originating area; applicant’s and a local child’s hukou registrations and IDs; a notarization of parent-child relationship; the documents that can prove local resident’s situations of income and housing	Normal	Following the normal procedures for hukou transfer to acquire a permit to move and a migration certificate
4. Commercial housing purchasers and their family members
Having purchased at least 50 square meter commercial housing from the designated agents in the designated districts, and Having local blue-stamp hukou at least 5 years and without any criminal records	Instructive plan for migration	Yes	Applicant's ID and hukou certificate from a policy agent in an originating area; applicant's blue-stamp hukou certificate; applicant's certificate of family planning; documents of housing purchase	Normal	Following the normal procedures for hukou transfer
5. Talents and their family members
Having university degrees or having higher professional qualifications, and Having signed at least 3 consecutive year employment contract with a local enterprise, and Having resided in the city for 5 consecutive years and having local regular accommodation, and Having local blue-stamp hukou at least 5 years and without any criminal records	Instructive plan for migration	Yes	Applicant's ID and hukou certificate from a policy agent in an originating area; applicant's certificate of family planning; applicant's certificates of degree and qualifications; a copy of employment contract; documents that can prove the situation of accommodation; applicant's blue-stamp hukou certificate	Normal	Following the normal procedures for hukou transfer
6. Investors and their family members
Having local blue-stamp hukou at least 5 consecutive years and without any criminal records, and Investing over US$5 million, or Having paid taxes over RMB$300,000 per year, or Having defined as hi-tech enterprises, having paid taxes over RMB$250,000 per year, or Having conducted business for at least 3 consecutive years and having paid taxes over RMB$400,000, or having conducted business for at least 5 consecutive years and having paid taxes over RMB$80,000 per year, or Purchasing and merging money-lost state-owned enterprises and having paid taxes over RMB$350,000 for two years	Instructive plan for migration	Yes	Business licenses; tax forms; documents that can prove the situation of business; documents that can prove the situation of accommodation; applicant's blue-stamp hukou certificate	Normal	Following the normal procedures for hukou transfer

Sources:

1. Guangzhou Municipality Government (1999), Zhuanfai sheng renmin zhengfu zhuanfai guowuyuan pizhuan gonganbu guanyu jiequ danqian hukou guanli gongzuo zhong jige tuchu wenti yijian de tongzhi (Circular on circulating the suggestions of Guangdong Province Government for implementing the proposal of the Ministry of Public Security circulating by the State Council with regard to handling several key issues of hukou administration), issued on May 17, 1999.

2. Public Security Bureau, Guangzhou Municipality (1999), Guanyu guanche shizhengfu (1999)35 hao wenjian de shishi yijian (Suggestions for enforcing the no. [1999]35 document issued by the Guangzhou Municipality Government), issued on June 15, 1999.

3. Hukou Administration Department, Public Security Bureau, Guangzhou Municipality (1999), Guanyu guanche guangzhoushi gonganju guanyu guanche shizhengfu (1999)35 hao wen de yijian de tongzhi (Circular on implementing the suggestions of Guangzhou Public Security Bureau for enforcing the no. [1999]35 document issued by the Guangzhou Municipality Government), issued on June 17, 1999.

4. Guangzhou Municipality Government (1999), Guangzhou shi lanying hukou guanli guiding (Stipulations for administration of blue-stamp hukou), issued on October 6, 1999.

5. Personal interviews with officials of Public Security Bureau, Guangzhou Municipality, July 1999.

2). New measures of “blue-stamp” hukou

The last provision of the MPS proposal indicates another development of hukou reforms: the continuity and expansion of a controversial blue-stamp hukou practice, which introduced the fee charge for urban entry. Since its introduction, the blue-stamp hukou policy has been condemned for its nature of turning the urban residency, which should be an entitlement for all citizens, into a kind of commodity, that are available only for those who can afford to pay. Enforcement of this policy also appears to be in direct conflict with the implementation of other hukou reform programs that banned fee charges for urban hukou.

Although the commodification of urban hukou is not its intention in the process of hukou reform, the central government cannot stop the sale of urban hukou by local governments, which has been a bonanza for them. Except Beijing where is the site of the central government and where practices against the central intention are hard to be implemented, few locales have not imposed urban-entry fees for newcomers. The hukou price highly reflects the status and attractiveness of a city (Table 3).

Table 3 “Urban Entry” Fee by the Administrative Level, 1999, Selected Cities

1st Level City		2nd Level City		3rd Level City		4th Level City
City	Price (RMB)	City	Price (RMB)	City	Price (RMB)	City	Price (RMB)
Shanghai	10,000 – 40,000	Guangzhou	13,000 – 40,000	Zhuhai	5,000 – 15,000	Conghua	3,200
Tianjin	10,000	Shenzhen	20,000	Dezhou	3,000
Chongqing	10,000 – 15,000	Hangzhou	5,000	Dongguan	4,000 – 10,000
		Naning	1,500 – 8,000	Huaihua	300 – 3,000
		Jinan	2,000 – 10,000

Source: Nanfang Zhoumo (Southern Weekend), July 30, 1999.
The blue-stamp urban hukou practice nowadays is not a simple continuity of its earlier version, however. Many local governments now use it not only for handy cash collection but also for promotion of local development. In addition to a requirement of urban-entry fees for newcomers, eligibility of the blue-stamp urban hukou is more and more emphasized on "contributions" to the individual locales, calculated by a specific local government and mostly in terms of investment dollars or the degree of professionals. The blue-stamp hukou policies have become more biased toward wealthy business people and prospective talents. Those who are expected to bring in capital and/or other benefits to satisfy local needs are highly welcome and their urban-entry fees can be reduced or waived. The urban hukou of their family members are also committed. In this sense, the hukou policies have become one powerful expedient of local governments to compete human and financial resources that are still quite scarce in today's China by any measure.

3). Control over urban employment

Control over urban employment is always a major part of control over rural-urban migration and the growth of urban population. By the Chinese employment regulations, the urban labor market is never open for unauthorized rural laborers. The government always tries to block what it characteristically called the “blind and disorderly flow of job-seeking peasants”. Under certain circumstances, the government may allow rural labor to take up the slack in certain occupations in accordance with the needs of the urban economy. Nevertheless, its approach to the opening of the urban labor market to rural workers is mainly a matter of temporary or seasonal, not permanent, contracts. The conditions and terms of employment contracts are officially articulated. These conditions and terms ensure that both employment opportunities of urban workers and government efforts to control the size of the urban population are not undercut by the use of rural labor in urban industries.

Control over urban employment has recently been intensified with mounting pressure from a large number of laid-off workers. The principle to guide this control is "urban first, rural second; local first, non-local second". Migrants are not allowed to work in the host cities on equal terms with locals. The hukou system is used for intention to regain urban full employment, along other economic efforts such as the shielding of state-owned enterprises. Obviously, the essence of such control represents the protection of locals and the discrimination of outsiders. Despite the legal base of this principle has provoked debate, it is in fact practically applied in everywhere in China.

The role of the hukou system on restrictions on the employment rights of migrant laborers has been signified in the current process of marketization when other institutions have been withdrew from employment control. Today, the government is no longer heavily involved in job assignments. Job searching has become the personal responsibility of job seekers. The regulatory role of labor planning is no longer as significant as before. Managers of enterprises are granted more autonomy to choose their employees. However, the government has continuously imposed its control over the entry of rural labor into urban labor market, now emphasizing the local urban hukou as a major term of hiring.
Table 4 Major permits required for dealing with migrant employment, selected cities

City	Service Category	For Employment Agent	For Local Employee	For Migrant Worker
				Place of Regular Hukou	Place of Work
Beijing	Workers	Permit for career services	Permit for recruitment of migrant workers Certificate for public security responsibility Certificate for family planning responsibility Permit for recruitment of rural labor* House-leasing permit* Certificate for housing quality and safety*	Registry of outside employment Employment registration Certificate of marriage or certificate of family planning Medical certificate	Work permit for migrants Certificate of temporary residency Certificate of family planning
	Professionals	Permit for career services for professionals	Permit for recruitment of non-local professionals	Not required	Permit for working away from home
	Self-employers	Not applicable	Not applicable	Certificate of marriage or certificate of family planning	Business license Tax registration Certificate of temporary residency Certificate of family planning
	Nannies	Permit for career services	Certificate for public security responsibility House-leasing permit Certificate for housing safety	Registration for outside employment Employment registration Certificate of marriage or certificate of family planning Medical certificate	Identification of domestic helpers
Guangzhou	Workers	Permit for career services for workers	Permit for recruitment of migrants Certificate for housing lease and public security Certificate for family planning	Registration for outside employment Certificate for family planning	Work permit for migrants Certificate of temporary residency Certificate of family planning
	Self-employers	Not applicable	Not applicable	Certificate of marriage or certificate of family planning	Business license Tax registration Certificate of temporary residency Certificate of family planning
Shenzhen	Workers	Permit for worker exchange services	Permit for recruitment of migrants Contract of public security responsibility Contract of family planning responsibility House-leasing permit*	Registry of outside employment Certificate for family planning	Certificate for temporary work Certificate for family planning

Note: * Required if accommodations are provided for non-local employees.

Sources:

Beijing Labor Bureau, A circular for the issues with regard to the administration of non-local workers, issued on 27 May 1998.

Beijing People’s Congress, Regulations for administration of labor market in Beijing, issued on 31 July 1998.

Beijing Municipal Government, Provisional measures for professional import and work permit for outside labor, issued on 24 June 1999.

Guangzhou Municipal Government, A circular for enhancing administration of floating population, issued on 9 June 1999.

Guangzhou People’s Congress, Regulations for administration of labor market in Guangzhou, issued on 22 February 2000.

Shenzhen Municipal Government, Suggestions for further enhancing administration of floating population, issued on 4 February 1997.

The most important aspect of control over urban employment is still institutional. A “permits-for-employment” system to manage migrant labor has been established to give the authorities an administrative means of control over rural job seekers, both in quantity and in structure. A number of certificates issued by the authorities in both the origin and the destination are required in order for migrants to work in the city (Table 4). The requirement for types of certificate may vary slightly, depending on specific cities and occupations. Besides a “permits-for-employment” system, a regional monitoring network is being set up to keep track of the flow and employment of rural laborers in cities. Two-way checkpoints have been set up – in cities which import rural workers and in areas which export them (Nanfang Daily, April 20, 2000). The checkpoints watch the volume and flow of the workers in both their home villages and destinations. The ability of cities to absorb migrant workers and their effect on local labor markets are investigated. The labor department and police are responsible for the management of the checkpoints. The authorities hope that, through checkpoints, they could effectively regulate and even direct the flow of the migrant workers.

Local governments have imposed their own restrictions on the employment rights of migrant laborers. The total number of migrants working in the city is subject to a kind of "planning". Many cities have set up their limitations for the total amount of migrants. For instance, the Beijing municipality government recently announced that total number of migration allowed to stay would not be more than the existing level of 2.15 million and the number of employment certificates issued would not exceed 0.95 million (roughly about 17% of total local workers) (China News Agency, February 16, 2000). One report confirmed that many urban enterprises were in fact prevented from taking on as many migrant laborers as they wanted.⁵ Cities in Guangdong, the most popular destinations for migrants, often prohibit their enterprises to hire migrant labor in a peak season of migration. Usually in the month after the Chinese New Year, employers are banned to advertise their openings for non-locals and to recruit new migrant laborers. Disciplinary as well as financial punishments are enforced for a violation of these restrictions.

In a further move to protect the local workers, there is structure control, in addition to quantity control, over the industries and occupations that migrants can work. Many cities have classified jobs into three types: local regular hukou jobs, non-local regular hukou jobs, and jobs open to all but with local regular hukou people receiving preferences. Thus, the jobs migrant workers can undertake and the maximum percentage of migrant workers to be hired in any given sector are restricted by regulations. Restrictions on occupation entry are not so much based on the requirements of particular skills as on the procession of local hukou. Compliance with these restrictions is regularly inspected. The control details are not fixed in time. They vary according to the local contents and are renewed periodically. The control makes sure that migrant laborers do not compete with local residents in employment opportunities. The jobs that migrants are allowed to take usually are manual ones that required a great expenditure of physical energy or that might have long-term adverse health effects.

City governments also make cost intervention on the recruitment of outsiders and the protection of local employment. Enterprises must pay administrative fees for hiring migrants. The intention of levying administrative fees is to reduce the price incentive of hiring migrant workers. Enterprises receive subsidies, in various forms, for recruiting local laid-off workers.⁶ Inefficient state-owned enterprises are kept alive by government subsidies or policy loans to keep workers employed, with political considerations operating as a major constraint on economic rationality.

It seems that, from the government’s perspective, the employment of migrants is a business decision but the employment of locals is a political decision. On the one hand, outsiders are seen as a source for enriching local revenues. Non-locals are exploited by virtue of their presence, but their opportunities are restricted by government-imposed constraints on job access. On the other hand, political motives often come into play with regard to employment of locals. Urban employment policies are adopted for the sake of political expediency rather than optimal economic efficiency. Locals are protected by preserved or preferential access to urban employment, since governments at all levels are very sensitive to the social consequences of urban unemployment. The employment of migrants is given tacit consent when development of urban economy needs, but the employment of more migrants is not permitted if this puts non-migrant jobs at risk.
Two current trends of hukou policy change need to be paid attention to. First, the new hukou policies focused not much on control over the volume as on the destination of rural-urban migration. As massive rural-urban migration seemed hard to avoid, the government preferred opening small towns rather than uncontrolling big cities as a matter of policy choice. Second, the new polices provided for refusal of conferring urban hukou to those who did not possess sufficient means to support themselves in cities. It based more on raising the economic barriers than on simply banning migrants from coming and settling down in cities. In two cases the economic barriers have been lifted — for the welcome of investors and business people within the context of the "capital drain", and for the acceptance of "talent" migrants (mainly professionals, technicians, and university graduates) within the context of "brain drain".

Despite many changes in hukou policies, the essential mechanisms of the hukou system remain unchanged. Rules and quotas with regard to urban hukou are still in force. The hukou system has been retained as a regulatory rather than a registration institution for population movement.

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