https://peoplesdispatch.org/2023/07/10/why-are-there-no-slums-in-china/

What is the “hukou” system and what does it have to do with socialism?

One unique characteristic of China’s urbanization process is that, although policies encouraged migration to cities for industrial and service jobs, rural residents never lost their access to land in the countryside. In the 1950s, the Communist Party of China (CPC) led a nationwide land reform process, abolishing private land ownership and transforming it into collective ownership. During the economic reform period, beginning in 1978, a “Household Responsibility System” (家庭联产承包责任制 jiātíng lián chǎn chéngbāo zérèn zhì) was created, which reallocated rural agricultural land into the hands of individual households. Though agricultural production was deeply impacted, collective land ownership remained and land was never privatized.

Today, China has one of the highest homeownership rates in the world, surpassing 90 percent, and this includes the millions of migrant workers who rent homes in other cities. This means that when encountering economic troubles, such as unemployment, urban migrant workers can return to their hometowns, where they own a home, can engage in agricultural production, and search for work locally. This structural buffer plays a critical role in absorbing the impacts of major economic and social crises. For example, during the 2008 global financial crisis, China’s export-oriented economy, especially of manufactured goods, was severely hit, causing about 30 million migrant workers to lose their jobs. Similarly, during the COVID-19 pandemic, when service and manufacturing jobs were seriously impacted, many migrant workers returned to their homes and land in the countryside.

Beyond land reform, a system was created to manage the mass migration of people from the countryside to the cities, to ensure that the movement of people aligned with the national planning needs of such a populous country. Though China has had some form of migration restriction for over 2,000 years, in the late 1950s, the country established a new “household registration system” (户口 or hùkǒu) to regulate rural-to-urban migration. Every Chinese person has an assigned urban or rural hukou status that grants them access to social welfare benefits (subsidized public housing, education, health care, pension, and unemployment insurance, etc.) in their hometown, but which are restricted in the cities they move to for work. While reformation of the hukou system is ongoing, the lack of urban hukou status forces many migrant parents to spend long periods away from their families and they must leave their children in their grandparents’ care in their hometowns, referred to as “left-behind children” (留守儿童 liúshǒu értóng). Though the number has been decreasing over the years, there are still an estimated seven million children in this situation. Today, 65.22 percent of China’s population lives in cities, but only 45.4 percent have urban hukou. Although this system deterred the creation of large urban slums, it also reinforced serious inequities of social welfare between urban and rural areas, and between residents within a city based on their hukou status.