"The hukou, a small red passbook, contains key information on every family, including marriages, divorces, births, and deaths, as well as the city or village to which each person belongs. What comes attached to the hukou [pronounced hoo - ko] are benefits including health care, a pension, and free education for one’s children. These benefits are only available if a Chinese citizen lives where he or she is registered. Not having a hukou for where one lives makes it more difficult to get a driver’s license, buy a house, or purchase a car."You may live and work in Beijing, but without an urban hukou, you and your children won't have access to the services and benefits provided by the municipality. According to the article, there are four ways of obtaining an urban hukou for out-of-towners:
1. Employment. For example, "6,000 hukou were given to Beijing companies last year." [The city's current population is about 19.6 million.]It's interesting to note that household registration may actually be holding back the formation of a larger middle class in China's cities, a phenomenon which normally springs from -- and contributes to -- economic growth. Experts find that it influences consumer patterns (less consumption, more savings), restricts the mobility of labor markets (somewhat worrisome, given the country's aging demographics), and often keeps families apart (parents stay in the city, while kids go back to the countryside).
2. Black Market. "Buying one on the black market can cost ￥150,000" [Over US$23,000]
3. Inheritance. "If one or both of your parents were born in Shanghai or another big city, you're in luck!"
4. Marriage. "You can get the same hukou as your spouse, but have to drop your original registration."
The issue is ripe for reform, and the State Council "announced plans to make it easier for rural migrants to obtain a city hukou" last month. However, "this doesn't mean the hukou system will be swiftly dismantled: Authorities fear that would trigger a nationwide flood of migrants into the biggest cities and raise the prospect of mass unrest. Providing social welfare benefits to new urban residents will also be costly."
Also see the piece in Caixin magazine advocating a major overhaul of household registrations (http://english.caixin.com/2012-03-08/100365919.html).