Institutional interplay in China’s economic system on the example of hukou

Abstract

Background: The introduction of the 14th Five-Year Plan (2021–2025) re-emphasizes the transformation of China’s economic order and draws the hukou system back into the limelight. Hukou, a system of population registration and movement control developed since the 1950s, has experienced several reform waves. It is worth examining its new strategic role as a supporting element of the evolving Chinese economic system in interaction with other institutions. Research objectives: The article aims to examine and assess the evolution of the hukou and its interaction with other formal (meta)institutions: the labour market, welfare system, and education system, as well as its institutional support for China’s economic model. Research design and methods: We based the study on qualitative research using our two-level model for analysing the relationship between selected institutions and the evolution of hukou. Results: The changes in the household registration system go in line with China’s evolving economic strategy. The hukou’s relationship with individual institutions has been effective or ineffective depending on the period. Conclusions: Hukou has played a major role in supporting the Chinese economic model in terms of the supply of cheap labour, local economic development, and talent selection.