The State Council of the People’s Republic of China recently released a new policy to expand public services for permanent residents, proposing to extend the welfare coverage in education, healthcare, housing, and social security for the population without local household registration. This move comes at a time when many parts of China are facing pressures such as continuous sluggish real estate market, declining population inflow, and tight local finances. Scholars interviewed believe that the expansion of “resident welfare” by the Chinese Communist Party (CCP) at this time is primarily aimed at keeping the migrant population in cities for long-term consumption to fill the local financial gaps.
On May 22, the State Council of China announced the “Implementation Opinions on Providing Basic Public Services for Permanent Residents,” which includes incorporating children of migrants into pre-school and high school education services, expanding coverage of public rental housing, facilitating flexible workers’ participation in housing provident funds, and claiming to “completely abolish the household registration restrictions for participating in social security at the employment location,” while also proposing to “promote mutual recognition of residence permits.”
Chinese economic scholar Li Xiao told Epoch Times that this document appears to promote equal access to public services but actually reflects a rapid decrease in population growth in second and third-tier cities.
He said, “In the past, local authorities were most concerned about rapid population influx, but now many places have fewer people, and many houses in second and third-tier cities are not being purchased even as prices drop. My friend said that the Northeast is becoming a ghost town. They are in a hurry to introduce measures to boost the market – it’s just that the CCP cannot say so explicitly. Some online comments talk about fully lifting household registration restrictions. Why would the Communist Party do that?”
In recent years, the real estate market in China has been continuously sluggish, with many areas experiencing inventory backlogs and vacant properties in new districts. Third and fourth-tier cities in provinces like Guangdong, Henan, Anhui, and Liaoning have numerous uninhabited residential buildings, shrouded in darkness at night, earning the nickname “ghost buildings.”
The State Council’s “Opinions” propose the complete removal of household registration restrictions for participating in urban social insurance, and the promotion of flexible workers, migrant workers, and other groups to participate in social insurance in their work locations. It also includes provisions for “relocating children” to receive compulsory education at their permanent residence and to stabilize employment, gradually include families of unregistered permanent residents in the scope of public rental housing guarantees.
Financial scholar Song Huan, in an interview, noted that this is one of the few policies in the “Opinions” that doesn’t include cushioning terms like “gradual” or “tailored to local conditions,” suggesting that many aspects are buffered with such language, allowing for adjustments or retractions at any time.
He added, “Everyone knows that second and third-tier cities are facing serious declines in the birth rate and an aging population. Pension funds and medical insurance funds are getting tighter, with many places supplementing social security funds with 20% of profits from sports lottery sales. This so-called full opening up is essentially about keeping the labor force in cities, having them contribute to social insurance pools and taxes, using the money from young newcomers to fill the financial gap left by local aging. Yesterday (May 24) I was discussing with a friend; this is also a way to ‘clip the sheep.'”
According to the data from the National Bureau of Statistics of the People’s Republic of China, the country’s population has declined for the fourth consecutive year in 2025. Some provinces in the western and northeastern regions continue to see population outflows. Meanwhile, some second and third-tier cities have started lowering the threshold for…