Question

How did the Hukou system advance economic and social policies during the Maoist era? What distortions has it created in labor markets in in the post Mao era. And, how has it contributed to income inequality and social tensions?

Answer 1

Hukou system is a familial registration scheme which operates as a domestic passport, regulating populace distribution & rural-to-urban immigration. Its an instrument for geographic & social control which enforces an apartheid structure which denies agriculturalists the same benefits enjoyed by urban dwellers.

It has historically always aided the urbanites. During the Great Famine of the 20^th century, persons with rural Hukous had been collectivized into communal farms, where most of their agricultural output was taken in the form of a taxation by the state & passed to city residents. This caused considerable starvation in the countryside, & the Great Leap Forward wouldn’t be abolished till the impacts were felt in the cities.

After the Famine, rural dwellers continued to be marginalized, whilst urban residents enjoyed a variety of socio-economic advantages. Even currently, a farmer's income is 1/6^th that of an average urban resident. Agriculturalists have to pay 3 times more in taxes, but obtain a lower standard of healthcare, education & life. The Hukou system hampers upward mobility, building basically a caste system which governs society in China.

Since the capitalistic reforms (of the 1970's), an estimated two hundred sixty million rural residents have unlawfully moved to the cities, in an endeavour to partake in the noteworthy economic development happening there. These immigrants brave discrimination & likely arrest whilst staying on the urban fringe in small towns and street corners. They’re usually blamed for augmenting crime & unemployment.