Xinhua Insight: New benefits mean clearer future for China's migrant workers

Despite living and working in Beijing for 10 years, the city's doctors are still inaccessible to Hebei-native Liu Yushun.

Without a Beijing a residence permit or a "hukou" (urban household registration), seeing a doctor in the capital is too pricey for the 35-year-old taxi driver.

"We only have rural medical insurance, and can't afford to see a doctor here. I just take vitamins to avoid getting sick," he said.

But a new national policy announced Saturday could soon change Liu's life, along with hundreds of millions of other migrant workers across the country.

The new regulation, effective from Jan. 1, 2016, requires every city in China to offer a baseline of public services, mainly healthcare, for migrant workers that have lived in the city for at least six months and either have a stable job, a place to live or are studying.

Previously, such benefits were determined at the local level.

This means Liu and his family can now gain access to health care and compulsory education, among other benefits.

The policy, which clarifies that residence permits can be converted into hukou, also puts the country on track to achieving its ambitious goal of granting 100 million rural migrants urban household registration.

Unlike a residence permit, which is granted after migrant workers are approved to live and work in a city, the much coveted hukou means the holder is a permanent resident of the city that issues it and gives them full access to social benefits. It is much more difficult to obtain.

WIDE COVERAGE

China's cities are home to 250 million migrants, mainly from rural areas. As they do not hold a city hukou, they are denied full access to social welfare.

Many local governments have been experimenting with their own residence permit systems for years, however, the results have been varied.

The new rule will push local governments to lower the threshold for permits, and offer more services to residents, while eliminating irregularities in implementation, said Ni Pengfei, an urban development researcher with the Chinese Academy of Social Sciences (CASS).

Beijing has issued residence permits that give the bearer access to social benefits similar to those received by local hukou holders since 2003, however, obtaining the benefits has proven to be difficult as they are reserved for individuals who have made extraordinary contributions or are classified as urgently needed talent.

Like the majority of migrant workers in Beijing, Liu, previously a food peddler and now a driver for taxi-hailing company Didi Dache, was in no way qualified for a permit.

Because of the freelance nature of his job, he was also exempt from some of the newer programs providing social benefits to migrant workers with stable jobs.

In addition to the national policy, in Beijing there is a new residence permit system undergoing public consultation at the moment, although the specific benefits have not yet been determined.

Still, many people have reservations about the effectiveness of the new national policy. While it requires every city to provide basic benefits based on the national regulation, it also allows each city to determine the specific benefits on offer, such as affordable housing policies or whether or not children of permit holders can take the national college entrance entrance exams. In some cases, residence permit holders may not receive the benefits desired.

Though the new system could provide him access to basic health care, Liu's children are still likely to have to travel back to Hebei to take the make-or-break exam, which greatly influences higher-education options.

"Given the different conditions in different cities, a 'one-size fits all' policy is impossible. But the basic principles of the national rule must be followed," Ni said.

For Liu, the excitement over the potential benefits of a residence permit is tempered by his slim chances of securing a Beijing hukou.

While the new policy stipulates that towns and small cities with a population of no more than 500,000 should grant hukou to migrants as long as they have legal and stable accommodation, for overcrowded cities like Beijing, it is more complicated.

The capital's overpopulation makes it difficult for the capital to financially support a rush of new hukou.

So, as required by the national rule, Beijing will establish a score-based system, which takes into account employment, how long they have paid into social insurance schemes, housing situation, among other factors, to determine who can get a hukou.

"The main indicators are all my weaknesses," Liu said.

Experts believe more funding is crucial to ensuring qualified public services for permit holders and migrant workers gaining urban hukou.

"The central and local governments need to appropriately share the cost. For now, the burden on the local side should be eased," said Li Guoxiang, a rural development researcher with CASS.

The new five-year development plan pledges more funding for public services and higher urban land development quotas to local governments who successfully integrate migrant workers into cities, Ni said.

NEW BUYERS

The migration campaign is not only significant to improve social justice, it also could help lift domestic consumption by unleashing migrant workers' spending power in China's sluggish property market.

Earlier this year, Premier Li Keqiang called for household registration reforms to boost house sales. During a high-level meeting on the economy on Monday, the government reiterated this strategy, calling for the transformation of migrant workers into home-owning urbanites.

Only about 1 percent of China's migrant workers own a home in cities, signaling huge untapped potential, said Li Guoxiang.

The housing market experienced a downturn in 2014 due to weak demand and a supply glut. The trend continued into 2015, with sales, prices and investment falling, which resulted in easing measures such as interest rate cuts, reducing down payments and scrapping home-purchase restrictions.

The unsold home inventory hit a record 686.3 million square meters by the end of October, up 17.8 percent from the previous year, according to data from the National Bureau of Statistics.

A report published in early December by the National Academy of Economic Strategy under the CASS said existing inventories will take around 23 months to sell. Anywhere between six and 18 months is considered reasonable. The pressure to get rid of empty residences is even more acute in third and fourth-tier cities.

Ni Pengfei suggested developers sell half of the property ownership to migrant workers while leasing the other half with the option to buy it. This would make home buying more affordable.

Li Guoxiang suggested that the public housing fund system, which helps urban employees to buy homes, could be expanded to include migrant workers. Endi