China Moves to Expand Benefits for Urban Migrants as Cities Struggle With Shrinking Populations

The Chinese State Council has issued a new policy expanding access to public services for non-registered urban residents, in what analysts describe as part of a broader effort to shore up struggling local economies and stem population decline.

The directive, released by Chinese state media outlet Xinhua News Agency on May 22, calls for expanding access to education, healthcare, housing, and social security for people living in cities without local household registration.

Beijing has operated a strict household registration system since 1949 that has restricted citizens’ movements based on where they were born. Migrant workers from rural China to urban cities have limited rights to public education, social security, and job opportunities.

The timing comes as China’s property market remains weak, population inflows into smaller cities slow, and local governments face mounting fiscal pressure.

Expanding Services for Non-local Residents

Under the new policy, children of rural migrant workers will be gradually included in preschool and high school public education systems in their cities of residence. The plan also calls for expanding access to public rental housing, allowing flexible workers to participate in housing provident funds, and removing hukou-based restrictions on participation in employment-based social insurance.

The document also encourages the mutual recognition and portability of residence permits across regions, signaling a continued effort to reduce barriers tied to China’s long-standing household registration system.

Some of these provisions—particularly the removal of hukou restrictions on social insurance enrollment—are presented without the “gradual” or “locally appropriate” qualifiers that appear elsewhere in the document.

The policy comes amid a prolonged real estate downturn that has left oversupply and vacancy problems across many parts of China.

The Chinese National Bureau of Statistics has reported that the country’s population had declined for four consecutive years as of 2022.

Analysts spoke to The Epoch Times about the policy on condition of anonymity out of fear of reprisal.

A Chinese economist told the publication that the policy is less about equalizing public services than about stabilizing shrinking urban populations and improving local fiscal sustainability. He said the policy reflects a shift in concern among local governments.

“Previously, the biggest fear was population inflow being too fast,” he said. “Now, many places simply don’t have people. In many second- and third-tier cities, housing prices are falling, and still no one is buying.”

He noted that the situation in some northeastern cities has become particularly severe. In his view, the new policy serves as an economic stabilization measure rather than a structural liberalization of the household registration system.

A Chinese financial analyst told The Epoch Times that the policy should be read in the context of rising strain on local social welfare systems and fiscal accounts.

He noted that many local governments are already facing tightening pension and healthcare funds, with some relying on alternative revenue sources to fill gaps.

“Second- and third-tier cities [in China] are facing serious aging and declining birth rates,” the analyst said. “The funding pool for pensions and medical insurance is getting tighter.”

He argued that encouraging migrant workers to settle in cities and contribute to social insurance systems may help shore up local budgets, even as demographic pressures persist.

China’s local governments have long relied heavily on land sales and real estate development to finance public spending, a model that has come under strain as property developers—including major firms such as Evergrande—face debt crises and stalled projects.

“Even if people stay in the city, they may not necessarily spend or buy property,” the analyst said.

‘Population Retention’

The new policy emphasizes allocating public resources based on resident population rather than household registration status. It also calls for aligning land-use quotas with changes in the resident population.

One Chinese online commentator interpreted the move as a practical attempt to retain population rather than a broad liberalization of China’s migration system.

The commentator told The Epoch Times that the policy is widely misunderstood online as a sign of expanded social welfare.

“On the surface, it looks like the government is being generous to the public,” he said. “But the real goal is to keep people who have already moved into cities there long-term. Only when the population stabilizes can it generate fiscal returns.”

He said he does not expect significant loosening of China’s household registration system, arguing that structural barriers to migration are unlikely to disappear in practice.

Wang Yibo contributed to this report.