appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Kandy Wong

China’s decision to ease residency restrictions on social insurance applicants will help unleash positive, long-term economic growth, according to analysts.
The new measures announced on Friday by the State Council are part of China’s broader push to create a unified national market by removing barriers to the free flow of capital and talent.
Under the new policy, workers can enrol in social insurance programmes in the cities where they are employed, regardless of their official household registration, or hukou.
In China, social insurance costs are shared among employers, employees, and the government, depending on the coverage type.
In the past, many employees could not qualify for social insurance programmes and their benefits – such as pensions and medical coverage – because their household was registered in another jurisdiction.
Peng Peng, executive chairman of the Guangdong Society of Reform think tank, said the nationwide change would have widespread effects, from promoting urbanisation and the real estate market, to helping establish a national market and even releasing some consumer spending power.
“This policy will further reduce the significance of household registration [hukou] and adapt to the larger pattern of population mobility,” Peng said, adding that it dovetailed with the direction of national development.

Xu Tianchen, a senior analyst at the Economist Intelligence Unit, said that broadening social security coverage was “probably the most important reform”.
“Think about migrant workers: they earn a decent income but they spend very little, and part of the reason is the low level of social security involvement,” Xu said.
“Historically the government largely ignored the issue. But a lot of workers themselves also preferred short-term financial gains to long-term protection, and many opted out of social security.
“Both need to change.”
Over the decades, the hukou system locked migrant workers out of vital public services – such as healthcare and public education – in the places where they lived and worked. In recent years, however, these rigid restrictions have been progressively relaxed.
The new system is known as “non-local social security”, and emerged in areas such as the Pearl River Delta and the Yangtze River Delta as more people began working away from their hometowns, according to Peng.
At the same time, China’s jobs landscape has changed dramatically in recent years, with a rapid rise in flexible employment and new forms of work tied to the booming digital economy.
This has compounded the pressure on Beijing to provide equal access to social welfare benefits for all workers.
Peng said that for the growing number of flexible workers and those in new forms of employment, the State Council’s decision was an important macro element of social security coverage, and therefore would benefit the real estate market, consumer spending and the reform of the employment system.
In the near term, Peng said, this new approach could help improve the social security system and strengthen the willingness of migrant workers to sign up for social insurance.
It might also increase the desire of rural-to-urban migrant workers to settle down and “establish roots in cities”, he said.
“In the long run, this measure will make the social security system more comprehensive, human-centred and rational,” he added.
“In particular, it will help ensure a more sustainable social security fund pool and make the system more adaptable to the advent of AI+ work styles and lifestyles.”
Xu, at the Economist Intelligence Unit, said that while the new policy could create short-term costs by increasing the burden of social security contributions, it would bring long-term benefits to society.
“This also aligns with Beijing’s new policy theme of ‘investing in people,’” he added.


In a China first, low-altitude sector hits turbulence as subsidies face reality check

China economists urge Beijing to act fast on local-level debt before low prices vanish

US, China agree AI dialogue ahead of Trump-Xi summit

China boosts crude oil, LNG imports from Canada as Ottawa-Washington relations sour

China economy

Will China’s residency changes to social insurance unlock economic growth?

Allowing employees to sign up for social insurance where they work could have benefits for the economy as a whole, observers say. Photo: Getty Images

In the past, migrant workers have only had access to social services such as education in their registered hometowns. Photo: Reuters

China removes hukou hurdle for migrant workers in social insurance shake-up

Migrant workers in Yunnan province head to a railway station during Chinese New Year in February 2024. Photo: VCG via Getty Images

Guangzhou to tweak ‘hukou’ residency system in major drive to revive home sales

Residential buildings and apartments in Guangzhou. Photo: AFP

A drone view of an under-construction residential development by Country Garden in Shanghai in February 2024. Photo: Reuters

Chinese cities ease residency requirements as ‘war for people’ heats up

 Migrant workers wait to board a train at Dingxi North Railway Station in Dingxi, Gansu province, on February 19. Photo: Xinhua

Migrant workers attend a Spring Festival farewell ceremony at Qujing North Railway Station in Qujing, Yunnan province, on February 19. Photo: VCG via Getty Images

China’s property crisis forces local hukou reform, laying groundwork for national change

China’s millions of migrant workers could stand to benefit if national-level reform of household registration is carried out at an upcoming economic meeting. Photo: Xinhua

China’s millions of migrant workers could stand to benefit if national-level reform of household registration is carried out at an upcoming economic meeting. Photo: EPA-EFE

China eases entry visa and hukou rules in all-out push to save the economy

The Ministry of Public Security says the changes are meant to encourage the free movement of people and information. Photo: EPA-EFE

News

China

Politics

Economy

China Economy

The State Council’s decision to decouple household registration from welfare services could have benefits for society as a whole, analysts say


The State Council’s decision to decouple household registration from welfare services could have benefits for society as a whole, analysts say.


Peng Peng

Guangdong Society of Reform

Will China’s residency changes to social insurance unlock economic growth?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The State Council’s decision to decouple household registration from welfare services could have benefits for society as a whole, analysts say

The State Council’s decision to decouple household registration from welfare services could have benefits for society as a whole, analysts say