New five-year plan targets urban residency for over 50 million migrants
Authorities are launching a major new urbanization initiative.
On Wednesday, the State Council dropped a five-year plan to boost the proportion of urban residency (hukou) holders from 66% to 70% of the population.
- That four percentage point jump equates to over 50 million people – roughly the population of South Korea.
The plan doubles down on driving cities to relax residency restrictions.
- While this has been a long-term policy focus, localities lack the fiscal resources to support millions of new residents.
The action plan outlines fiscal incentives to address the issue, pledging support for cities that accept new residents, including:
- Linking central fiscal transfers to localities' urbanization rates
- Using central and provincial-level incentive funds to support urbanization
- Giving cities with more migrants a larger share of central funds for construction projects
The plan also demands cities ensure rural migrants "enjoy the same rights" as fully fledged urban hukou-holders, including granting them access to:
- Compulsory public education
- Social insurance schemes
- Urban housing security programs
Get smart: Expanding access to public education, employee medical insurance, and housing support will encourage more folks to settle in cities and free them up to spend.
- The more fiscal resources Beijing commits, the bigger the impact will be.
The bottom line: This effort is a stimulus measure in disguise – set to deliver a much-needed boost to both consumption and housing demand over the next five years.