Reform of the hukou system: a litmus test of the new leadership

Since the release of the 12th Five-Year Plan in 2011, a reform of China's household registration system – the so-called hukou reform - is mentioned as a possible tool to promote labour mobility, boost incomes, rebalance the growth model towards consumption and create a stable urban society. While there has been a lot of "talk of reforms", concrete proposals remain scarce so far (beyond some experiments at the provincial level). In the context of growing urbanisation pressures in China, a hukou reform is increasingly becoming both an economic and political necessity – and expectations are rife that it will be included in the new urbanisation plan due by the end of this year. In view of its complexity and heavy financial implications, the hukou reform appears as a litmus test of the new leaders' willingness and capacity to undertake reform.