Li Qiang's Move to Abolish Household Registration? What Does This Action From the State Council Signify?

Illustration: The difficult lives of elderly people in rural China (Getty Image)

[People News] On May 22, 2026, the State Council of the Communist Party of China released the "Implementation Opinions on Providing Basic Public Services at Permanent Residence," boldly announcing the complete removal of household registration restrictions for participating in employee social insurance at one's place of employment. Almost immediately, state media hailed this as a major initiative to "deepen household registration reform," "promote urbanisation," and "benefit hundreds of millions of migrant workers." Is it possible that Li Qiang is daring to challenge the household registration shackles that have long constrained the Chinese populace?

However, those with even a basic understanding of China's situation know that this is not a genuine deepening of household registration reform; it is clearly a meticulously packaged emergency measure. The household registration system, a tool for maintaining stability by the Communist Party, has never been a livelihood mechanism managed by the Ministry of Civil Affairs, but rather a social control system firmly under the authority of the Ministry of Public Security. The Communist Party does not have the courage or capability to fully abolish the real household registration system.

The household registration system is not designed to enhance people's livelihoods; instead, it serves as a foundational element of the Communist Party's stability maintenance framework. Since its inception, the household registration system in China has been closely tied to social control and regime stability. It is overseen by the Ministry of Public Security, not the Ministry of Civil Affairs, which underscores its purpose. The Ministry of Public Security operates directly under the Central Political and Legal Affairs Commission, and while it is nominally part of the State Council's structure, in practice, the State Council has no control over this "weapon." Wang Xiaohong would not regard Li Qiang as a significant figure; the household registration system is the essential tool for Wang Xiaohong's Ministry of Public Security to monitor, maintain stability, and control every individual in China.

Every Chinese individual, from birth through schooling, marriage, employment, home buying, illness, retirement, and ultimately to death, faces significant life events and transitions that are tightly controlled by the household registration system. The treatment of rural and urban household registrations is drastically different; the value of household registration in large cities is entirely distinct from that in small cities. This system is not just a simple identity registration; it functions as a comprehensive monitoring system: all your information, movement patterns, social connections, education, career advancements, and even your death and cremation are meticulously tracked and controlled. Whenever there is a need for stability maintenance, whether through 'grid management', 'big data investigations', or 'key personnel control', the household registration system serves as the fundamental framework and the most accessible tool.

The Chinese Communist Party has consistently called for 'household registration reform', but these efforts have only resulted in superficial changes. While settling in small cities has become somewhat easier, the barriers in large cities remain high. Why is this the case? Because completely abolishing the household registration system would mean relinquishing precise control over the populace, giving up the monopoly on resource distribution, and dismantling the urban-rural dual structure that underpins stability. Allowing migrant workers to genuinely settle in cities and enjoy the same education, housing, and healthcare benefits as urban residents? Who would then provide the cheap labour? Will the Zhao family continue to thrive? Can the iron curtain that separates the system's insiders from outsiders remain as robust? In a context of equality, how will resources within the system be allocated?

Li Qiang's recent 'reform' has merely lifted the household registration restrictions on social security for employed workers, without altering the household registration itself. Workers remain the same, and their household registrations are unchanged. Issues such as childbirth, education, medical resources, and pension benefits continue to face restrictions. This move appears to be a tactic to increase the number of contributors to the social security fund, as the real issue is that the fund is under significant pressure.

In recent years, the basic pension insurance for employees has been under immense strain. China's ageing population is accelerating at an alarming rate, the dependency ratio is worsening, and the number of retirees is increasing sharply while the number of young contributors is declining. Data indicates that the number of employees who have ceased contributing to pension insurance has surpassed 42 million, with a staggering 31.7% contribution cessation rate among the 25-35 age group. The situation is even more dire for flexible workers, who earn a monthly income of four to five thousand yuan, with social security contributions taking up over 30% of their earnings, making it more viable for them to take home cash to survive.

In a pay-as-you-go system, a large portion of young people's contributions is directly used to pay the pensions of current retirees, particularly those in well-compensated institutional roles. There is a significant disparity in pension benefits between urban and rural areas, with a high replacement rate for those within the system, while ordinary workers and elderly villagers receive alarmingly low pensions, often just two to three hundred yuan. In some regions, the income has long been insufficient to cover expenses, relying on fiscal subsidies to stay afloat. Given the current fiscal deficits, the social security fund is indeed struggling to survive. Institutions like the Chinese Academy of Social Sciences had previously predicted that the cumulative balance of the fund might be depleted around 2035, but it now appears that it may not last until then before running out entirely.

The Chinese Communist Party is clearly anxious, as evidenced by the various measures it has implemented over the past two years to desperately extract funds from the populace to bolster the social security fund. In September of last year, the Supreme People's Procuratorate issued a judicial interpretation that effectively mandated universal social security. Following this, the takeout industry began to forcibly withhold social security contributions, and the social security base has been raised annually in most provinces across the country.

The State Council has now begun to lift the household registration restrictions for those employed in different locations to participate in social security. Previously, most regions stipulated that only individuals with local urban household registration could smoothly participate in local employee social security as 'employees.' Many individuals were only able to enrol as 'flexible employment personnel,' facing higher personal contribution rates and lacking employer contributions, which meant they would receive only the minimum pension upon retirement.

This situation has resulted in a low participation rate in social security among migrant workers. Official data indicate that the proportion of migrant workers participating in employee pension insurance has long remained at a low level, with actual contribution rates in many years falling below 30-40%. Additionally, many companies, aiming to reduce labour costs, only provide employee social security for locally registered or formally employed staff, while employing various tactics to evade social security payment responsibilities for incoming workers.

While the State Council's initiative may seem to be a convenience for the public, it fundamentally lowers the threshold for social security contributions, expands coverage, and increases contribution income. The goal is to integrate more mobile populations, flexible workers, and new economy workers into the employee social security system, as every contribution counts, prioritising the patching of the current social security fund's deficit before addressing other concerns.

The message conveyed by this action from the State Council is unmistakable: the system is running out of funds. This is not merely a lack of money for infrastructure and superficial projects; the most fundamental livelihood security pool of social security is also nearing depletion. The decision-makers within the Communist Party are left with no choice but to resort to this desperate measure to increase revenue.

If the intention is genuinely to benefit the common people, why not fully abolish the household registration system? Why not significantly lower the social security contribution rate? Why not reform the distribution mechanism to ensure fairer pensions? Why not eliminate the urban-rural divide and substantially increase retirement benefits for farmers and ordinary workers? Why not remove privileges within the system so that everyone starts on an equal footing?

These 'whys' are consistently met with silence from the Chinese Communist Party (CCP). Abolishing the household registration system would be tantamount to the CCP undermining its own power and destabilising its rule; reducing contribution rates would lead to decreased current income, worsening the social security crisis; and fair distribution would challenge the interests of entrenched groups, causing the system to crumble from within.

The cracks in the system are widening, and many young people are beginning to awaken. The CCP's recent actions are merely a temporary fix before the impending storm, unlikely to alter the eventual outcome.

(First published in People News) △