ZHEJIANG: In 2023, China’s eastern Zhejiang Province, one of the wealthiest provinces with a population of more than 66 million, has announced the lifting of household registration restrictions in most areas, except for the capital city of Hangzhou. A month later, the neighboring province of Jiangsu also announced the abolition of household registration requirements in most areas, except for the cities of Nanjing and Suzhou.
In recent years, an increasing number of cities in China have relaxed and abolished household registration requirements, allowing the migrant population to access the same public services as registered locals, such as education, health care, and housing purchase, among others. The move reflects China’s determination to further reform the household registration system to promote income equality and foster common development.
China recently concluded the Third Plenary Session of the 20th Central Committee of the Communist Party of China (CPC), during which a resolution was passed to further deepen reforms and advance China’s modernization. Among the various reform measures outlined, China emphasized promoting integrated urban-rural development to reduce disparities and promote shared prosperity and development.
Shortly after the Third Plenary Session, China’s State Council presented an ambitious five-year plan emphasizing the importance of advancing China’s urbanization and rural revitalization. The plan stated that the central government aims to increase the urbanization rate to around 70 percent within five years to better promote high-quality economic and social development.
Data from the National Bureau of Statistics shows that China’s urbanization rate will reach 66.16 percent by the end of 2023. Since its reform and opening up in 1978, China has undergone the largest and fastest urbanization process in the world. Its urban population grew by 760.22 million, from 172.45 million in 1978 to 932.67 million in 2023, an increase exceeding the total population of Europe.
An urbanization rate of 30 to 70 percent is generally considered to be the extent of rapid urbanization development. Experts say that China has reached the late stage of rapid urbanization growth, and the growth rate of urbanization will slow down, but with the introduction of deep reforms, China’s urbanization rate will continue to improve.
Gao Guoli, director general of the China Urban Development Center of the National Development and Reform Commission (NDRC), said the main cause of urbanization is the significant income gap between urban and rural residents. Currently, the per capita disposable income of urban residents is 2.39 times that of rural residents, indicating strong demand and ample opportunities for agricultural workers to relocate to cities.
In addition, developed countries such as the US, Germany, and Japan have maintained rapid growth for more than 10 years after reaching 65% urbanization rates. “Based on their experience, China’s urbanization rate will continue to increase,” Gao said. But he stressed the need to further reform China’s household registration system and address rural migrant workers’ most pressing issues, such as social insurance, housing and access to compulsory education for their children living with them.
China’s household registration system, hukou, established in the 1950s, classifies people as rural or urban. A person’s classification is generally based on the legal residency of their parents at the time of their birth. The system was designed to manage population distribution and resource allocation and ensure balanced regional development and economic stability. However, over time it has also led to a development gap between rural and urban areas.
In recent years, China has been implementing reforms to ease restrictions aimed at reducing the gap between rural and urban areas and allowing more people to move freely and access services. So far, China’s reform of the hukou system has seen advances that make it easier for people to settle in urban cities. For example, cities with less than three million residents have generally lifted restrictions, and most cities now offer equal access to public services for all residents regardless of their hukou status.
Zheng Bei, deputy director of the NDRC, said at a press conference last week that turning rural migrants into citizens is the top priority of China’s new urbanization, and to achieve this, China will further deepen hukou reform.
“New urbanization is helping to boost consumption and investment and contains huge potential for domestic demand,” Zheng said, adding that official estimates suggest that a one percentage point increase in China’s urbanization rate can lead to an annual increase in consumer demand of more than 200 percent.
