China migration: Policy bottlenecks add to labour shortage

Navigating the challenge of a shrinking labour force is being complicated by government policy, in particular China's household registration system, known as hukou.

Hukou discourages would-be migrants from leaving rural villages by denying social welfare benefits like healthcare, education and pensions to those outside their area. For many, that means leaving family at home while they work in the city.

"If you're denying people access to good housing, good schools for their kids, good healthcare, they won't stay in the cities for as long and won't bring their families in to settle down," says Ross Garnaut at Australian National University. "That means that quite a few of the migrants will leave the city just when they've built up skills to make them really productive." Communist party leaders approved a plan in November 2013 to dismantle the hukou system gradually. But implementation is complex, not least because regional governments, which are responsible for providing benefits, often lack the money to offer benefits to millions of migrants.

Economists say a full dismantling of the hukou system cannot happen without broader fiscal reform. Yet for older migrants, who have spent most of their lives away from home but were never fully integrated into big cities they helped build, any hukou reform is likely to come too late.

Yin Zhengquan, who left Guang'an in Sichuan province to work in Huizhou in Guangdong province, has no doubt about where he will settle down. "Of course I'll come back to Linshui (a county in Guang'an) in the end. This is my home," he says in Mandarin still coated in a Sichuanese accent even after 30 years away.

"People who've been gone for years . . . know they can always come back, grow some vegetables, buy some rice and survive."

Additional reporting by Ma Nan

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