China’s overhaul of its social insurance program for migrant workers could narrow urban-rural divides in the country and unlock new streams of economic growth, analysts said.
Beijing on Friday moved to ease residency restrictions on coverage, removing a hurdle that required people working in Chinese cities to claim benefits in their home regions. The change to the hukou system could mark a step toward “eliminating the major rural-urban inequality which has characterised the post-1980s Chinese economy,” an agrarian political economist said.
Nearly 400 million migrant workers keep China’s larger cities running, and analysts say hukou reforms could boost domestic consumption by easing the precautionary savings migrants stockpile because they can’t tap safety nets in the places where they work.