The Chinese Communist authorities recently issued a document announcing a large-scale plan to “urbanize agricultural migrant workers” over the next five years in order to boost domestic demand. This plan involves lifting restrictions on urban household registration and addressing the voluntary compensation for farmers’ homesteads, which has sparked concerns. Experts believe that the Communist Party is not interested in a genuine household registration reform but is instead focused on the money and homesteads of farmers, deceiving them into moving to cities to buy houses to resolve the Party’s crisis.
The State Council of the Chinese Communist Party issued a document on July 31 outlining a “five-year action plan for a new type of urbanization strategy,” which aims to increase the urbanization rate of permanent residents to nearly 70% within five years.
The document mentions that it will “relax restrictions on settling in cities, except for a few super-large cities, and implement a system of registering household residency based on habitual residence. It will fully implement the cancellation of settlement restrictions for cities with a permanent population of under 3 million, and significantly relax the conditions for settlement in cities with a permanent population between 3 million and 5 million. It will also improve the point-based settlement policy for super-large and mega cities with a permanent population of over 5 million, and encourage the elimination of annual settlement quotas.”
Using vague terms like “relax restrictions” and not specifying which super-large cities are excluded from the plan, it is widely believed that Beijing is at the forefront of this initiative.
Beijing’s household registration points have been tightening year by year. According to data from the Beijing Municipal Human Resources and Social Security Bureau, in 2024, more than 100,000 people applied for settlement points, but only about 6,000 ultimately qualified for settlement.
Associate Professor Feng Chongyi of the University of Technology Sydney told Epoch Times that the Chinese Communist Party is opening up settlement restrictions, encouraging farmers to move to cities to buy houses. While different regions used to have various tactics, they are now working together, but there are still conditions, and only a minority of the population can settle in cities.
Feng Chongyi stated that the three major crises in China are the real estate crisis, financial crisis, and the fiscal crisis of the government, especially local governments. They currently do not have good solutions because they have run out of money. There is no “white knight” to revive the real estate market. So they are thinking of exploiting rural areas, especially those who have earned some money in the city to act as the “white knight.”
Feng Chongyi said this is an emergency measure where rural residents with some money move to cities to buy houses, solving the Communist Party’s crisis. Once the real estate market picks up, local governments will sell land again, rejuvenating the real estate market.
Since the establishment of the regime, the Chinese Communist Party has imposed strict household registration systems to control population movements, creating a dichotomy between urban and rural residents. For decades, there have been calls from various sectors to abolish the household registration system. The authorities proposed to accelerate household registration reform in November 2013, but progress has been slow over the past decade. The relevant “reform measures” announced by the National Development and Reform Commission in July 2022 and the Public Security Bureau in August 2023, are similar to this year’s “plan.”
Professor Xie Tian from the University of South Carolina’s Moore School of Business told Epoch Times that the Party’s annual “Number One Document” claims to address the “three rural issues” (agriculture, rural areas, farmers) but fails to deliver each year. The Party has never really wanted to improve the status of farmers. If they truly wanted to reform the household registration system, they should allow farmers and anyone else to move freely, and Beijing and Shanghai should not be excluded.
The official document on the plan states that this action can boost domestic demand and promote industrial upgrades. According to official estimates, for each 1% increase in urbanization rate, there can be an additional consumption demand of over 200 billion yuan annually and stimulate investment needs of up to 1 trillion yuan.
Legal scholar Yang Chun (pseudonym) told Epoch Times that the household registration system was established during the Mao era. The current five-year plan proposed by the Communist Party is akin to Deng Xiaoping’s “reform and opening up” and is also a measure of necessity. Due to the Party’s three years of stringent control, the economy has slumped. Coupled with rampant money printing and currency diplomacy, China’s economy has been drained. Now they are seeking a new economic growth point by luring farmers to cities to drive urban economies.
Xie Tian said that the Communist Party’s recent launch of a new round of the “urbanization of agricultural migrant workers” plan is essentially aimed at the money and land holdings of these farmers.
He added, “With the economy declining, there is a desperate need to find people to absorb the real estate market’s excess. The real estate problem is severe and also involves financial institutions. Currently, there are not enough buyers. We know they are encouraging young people in cities to use their parents’ retirement funds to buy houses, even asking college students to buy houses absurdly, but property sales remain stagnant. Now they have turned to farmers.”
Xie Tian noted that while Chinese farmers may not be wealthy, they number in the hundreds of millions and still possess some purchasing power. The Communist Party hopes that by luring farmers to cities, they can help resolve urgent economic issues. “This is the sole purpose of the Party; it is not about the welfare of farmers or genuinely eliminating the urban-rural gap and the oppressive household registration system.”
The official plan states that legitimate land rights of farmers, including land contract rights, homestead land use rights, and collective profit distribution rights, must not be used as conditions for farmers to settle in cities. It explores establishing methods for voluntary compensated exits.
Due to land being crucial to farmers’ livelihoods, whether farmers give up land contract rights, homestead land use rights, and other related issues have been a point of contention.
Currently, over 200 million people in China have moved to cities but have not settled. Many rural migrant workers do not meet the settlement thresholds requiring education levels of college or above, or have not contributed enough years to social security. There are also those who “do not wish to settle” due to concerns about housing and children’s education in cities. Many rural migrant workers prefer to retain their rural household registration to preserve their homestead and contracted land in rural areas.
To stimulate domestic demand and stabilize the housing market, many local governments have recently expanded the implementation of the nearly decade-old “voluntary compensated exit of homestead land.” Those who meet the criteria and buy houses in designated areas may receive rewards or housing discounts.
The authorities describe homestead land as land used by farmers to build homes based on their collective membership. Historically, homestead land was only allowed to be owned by villagers within the same village. However, this year, restrictions were lifted to allow for the transfer of homestead land between all rural households or for free buying and selling in pilot areas.
Xie Tian stated that those who are able to buy and turn over homestead land are usually the Party’s elite or those with connections. “When farmers give up their homestead land, in the end, this land goes into the hands of the Party’s elite.”
Feng Chongyi remarked that the authorities aim to exploit farmers’ homestead land under the guise of “voluntary compensated exits,” but in reality, various regions may deceive farmers into surrendering their homestead land.
“The Communist regime does not recognize land ownership; farmers’ homestead land use rights and profit rights are in the hands of farmers. Now, they are using vague concepts to claim this land actually belongs to the collective, not to individuals. They cannot evict you since the land is yours, but if you sign a contract to surrender it, they will sell the land. This is their way of addressing the financial crisis related to land,” Feng Chongyi added.
However, he believes that only a few farmers would fall victim to these schemes.
The recent Third Plenum of the Communist Party claimed to introduce 300 specific measures, with this new five-year urbanization plan being one part of it.
Xie Tian mentioned that the Third Plenum gives local governments more power to increase revenue through excessive taxation. Now they are deceitfully luring farmers into cities, but Chinese farmers are not that easily fooled. “Housing prices continue to decline, and no one will rush to buy.”
Yang Chun mentioned that although the Communist Party is relaxing urban settlement requirements, they are not providing sufficient job opportunities for new city residents from rural areas. The private economy, which helps with employment, has long been suppressed, and foreign-invested enterprises are leaving, resulting in a surge in urban unemployment.
Official Chinese government data claims that the average survey-based urban unemployment rate in China for the first half of the year was 5.1%. The labor force in urban areas mainly consists of college graduates and around 300 million rural migrant workers. However, the group with the highest unemployment rate, the rural migrant workers, is not included in the official urban survey-based unemployment rate calculation by the Communist Party.
Additionally, this year, the number of college graduates in China reached 11.79 million. A study cited by Caixin Net last year, based on research by Zhong Dan, an associate professor at Peking University, indicated that the actual youth unemployment rate in China in March was as high as 46.5%.
Yang Chun remarked, “The so-called urbanization should not simply mean expanding the population of major cities. Emphasizing ‘making the country economically big and strong’ in the communist mindset inhibits market development, making it impossible to provide sufficient job opportunities. Ultimately, it should be resolved politically.”
This revised English news article provides a detailed account of the recent urbanization initiatives in China, shedding light on the government’s motives and potential implications for farmers and urban populations.