China’s declining birth rates and a sluggish property market have led to a renewed push among major cities to attract residents, with urban centers nationwide relaxing residency requirements. In response, cities in China have implemented policies aimed at drawing in new populations, furthering a phenomenon known as the ‘war for people’, according to a report by The South China Morning Post.
Chengdu, a prominent southwestern city with a population of nearly 17 million, recently announced plans to allow migrants to change their residency status upon purchasing property.
This move, outlined in a government proposal open for public input, would make it easier for newcomers to access the city’s social benefits through the local ‘hukou system’, China’s household registration system that dictates social service eligibility.
The hukou, long coveted but tightly controlled to manage population mobility, is increasingly being tied to property ownership as cities vie to attract new residents. Although Chengdu has not specified when it will enact this proposal, the city’s initiative reflects a broader trend over the last few years. Many local governments have been adopting a ‘hukou for home’ approach to remain competitive in the race for skilled labour and talent.
Why is China looking at urban residency shifts?
The report said that today’s competition among cities mirrors the ‘talent war’ that started in 2017, during which urban centres sought to bolster modern industries like finance and culture by maintaining robust population levels. He added that low birth rates and significant unsold housing inventory have only intensified the urgency to attract people, as local economies rely on a stable, sizable population for economic momentum.
China’s population fell for the first time in six decades in 2022, with a reported total of 1.409 billion at the end of last year – a decrease of over two million from the previous year. A strong population base is crucial for supporting China’s innovation sectors and local tax revenue, especially as China shifts towards tax reforms that rely on income and consumption taxes.
More From This Section
Loosening residency requirements across the country
Cities like Hangzhou, Suzhou, Shenyang, and Qingdao have introduced measures allowing residency status for property owners, and in some cases, even renters. Meanwhile, larger cities such as Beijing, Shanghai, Guangzhou, and Shenzhen have eased either their ‘hukou for home’ policies or the points-based systems used for residency applications, the report added.
Cities initially began attracting young talent seven years ago, but demographic changes are reshaping these efforts. He explained that a declining fertility rate nationwide has heightened the competition among cities, as shrinking birth rates diminish local populations and spur the need to attract migrants.
Urbanisation reforms in China to boost population mobility
To address demographic shifts, the Chinese government has taken steps to facilitate urban migration, particularly for rural residents. The National Development and Reform Commission’s recent urbanisation plan proposes eliminating residency restrictions for cities with fewer than three million residents, easing rules in cities with up to five million, and refining criteria for larger cities.
By enabling easier access to urban residency, China hopes to invigorate urban areas, encourage spending, and sustain economic vitality.