Prof. Kam Wing Chan, university of Washington, has recently released his proposal for a possible hukou reform. The problems caused by hukou have been widely discussed, but Chinese authorities fear the consequences of its dismantling. For prof. Chan, the persistence of this policy prevent the growth of the middle class, which is necessary to build a consumer-based economy.
According to his research, the hukou reform needs to be progressively implemented in order to make its financial costs bearable for local government, and so hukou could be dismentled by 2030. To obtain this result, prof. Kam suggests to adopt a three-step-approach. Graduates should be the first group free from hukou registration. This policy would not threaten cities’ social security system as gradautes because of their youth and higher qualifications, are net contributors to social welfare.
Then, houselhold registration should be made easier for skilled workers. Chinese cities urgently need more qualified people in order to upgrade their productions. As skilled workers get higher wages, this second move would not endanger social welfare programmes.
The last part of this proposal is of course the most ambitious, since it has for objective to resolve registration issues for the remaining migrants. But for prof. Chan, China can afford this policy if the two former groups have already been turned into urban citizens. Thanks to the contributions of graduates and skilled workers, cities would be able to strenghten their welfare programmes and so they could integrate other migrants.