Please wait a minute...
Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front. Econ. China    2014, Vol. 9 Issue (3) : 438-459    https://doi.org/10.3868/s060-003-014-0021-1
research-article
The Hukou and Land Tenure Systems as Two Middle Income Traps—The Case of Modern China
Guanzhong James Wen1(),Jinwu Xiong2()
1. Department of Economics, Trinity College, Hartford, CT 06106, USA
2. Center for Market and Society, and School of Social Sciences, Tsinghua University, Beijing 100084, China
 Download: PDF(289 KB)  
 Export: BibTeX | EndNote | Reference Manager | ProCite | RefWorks
Abstract

China’s prevailing hukou (household registration) system and land tenure system seem to be very different in their applications. In fact, they both function to deny the exit right of rural residents from a rural community. Under these systems, rural residents are not allowed to freely exit from collectives if they do not want to lose their entitlements, such as their rights to using collectively owned land and their land-based properties. Farmers are neither allowed to sell their houses to outsiders, nor allowed to sell to outsiders their rights to contracting a piece of land from the collective where their households are registered. For migrant workers from rural areas, it is extremely difficult for them to obtain an urban hukou with all its associated entitlements at an urban locality where they currently work and live. The combined effect of the two systems leads to serious distortions in labor and land markets, resulting in discrimination against migrant workers, sprawling yet exclusive urbanization, housing bubbles, and depressed domestic demand. These distortions further entrench the existing and much widened urban/rural divide. Unless these two systems are thoroughly reformed, the rural residents in Chinese mainland will be trapped in their comparatively much lower income and remain unable to share the gains from the agglomeration effects of urbanization.

Keywords Hukou      land tenure system      middle income trap      monopsony      monopoly     
Issue Date: 23 September 2014
 Cite this article:   
Guanzhong James Wen,Jinwu Xiong. The Hukou and Land Tenure Systems as Two Middle Income Traps—The Case of Modern China[J]. Front. Econ. China, 2014, 9(3): 438-459.
 URL:  
https://academic.hep.com.cn/fec/EN/10.3868/s060-003-014-0021-1
https://academic.hep.com.cn/fec/EN/Y2014/V9/I3/438
[1] Yuanyuan Chen, Shuaizhang Feng, Yujie Han. Research on the Education of Migrant Children in China: A Review of the Literature[J]. Front. Econ. China, 2019, 14(2): 168-202.
[2] Zhiwu Chen, Kaixiang Peng, Weipeng Yuan. Usury, Market Power and Poverty Traps: A Study of Rural Credit in 1930s’ China[J]. Front. Econ. China, 2018, 13(3): 369-396.
[3] Keun Lee,Shi Li. Possibility of a Middle Income Trap in China: Assessment in Terms of the Literature on Innovation, Big Business and Inequality[J]. Front. Econ. China, 2014, 9(3): 370-397.
[4] Xudong Chen,Guoqiang Tian. The Nature and Avoidance of the “Middle Income Trap”[J]. Front. Econ. China, 2014, 9(3): 347-369.
[5] Derong Zhang. The Mechanism of the Middle Income Trap and the Potential Factors Influencing China’s Economic Growth[J]. Front. Econ. China, 2014, 9(3): 499-528.
[6] Yanrui Wu. Productivity, Economic Growth and the Middle Income Trap: Implications for China[J]. Front. Econ. China, 2014, 9(3): 460-483.
[7] Nazrul Islam. Will Inequality Lead China to the Middle Income Trap?[J]. Front. Econ. China, 2014, 9(3): 398-437.
[8] Jun Chen, Zhiqi Chen. The Quiet Life of a Monopolist: The Efficiency Losses of Monopoly Reconsidered[J]. Front Econ Chin, 2011, 6(3): 389-412.
Viewed
Full text


Abstract

Cited

  Shared   
  Discussed