China Ends Hukou Link to Public Services in Landmark Reform

China’s State Council has issued a landmark policy directive mandating that basic public services including housing, healthcare, and education must “follow the people” rather than remain tied to household registration (hukou), in what analysts describe as one of the most significant reforms to the country’s residency system in recent years. The policy directly affects over 250 million people who live long-term in urban areas without local hukou, including 170 million migrant workers and their families, according to CCTV News.

Context: Breaking the Hukou Barrier

China’s household registration system has long tied access to public services — including education, healthcare, and housing — to one’s registered place of residence, creating a significant divide between urban residents with local hukou and the millions of migrant workers who contribute to urban economies but cannot access the same services. The new policy, formally titled the “Implementation Opinions on Providing Basic Public Services at Places of Permanent Residence” (State Council Document No. 11 of 2026), was signed on May 18 and publicly released on May 22, with a press conference held at the State Council Information Office on May 26 to explain implementation details.

The full text of the document, published on the Ministry of Ecology and Environment website, outlines six key tasks: strengthening education guarantees for children accompanying migrant workers, expanding public rental housing coverage, improving the system for participating in employee social insurance at place of employment, strengthening basic healthcare security, enhancing employment public services, and improving social safety net services.

Housing, Healthcare, and Education: The Three Pillars

At the May 26 press conference, officials from the National Development and Reform Commission (NDRC), Ministry of Housing and Urban-Rural Development, National Healthcare Security Administration, and Ministry of Education detailed how the policy will be implemented.

Housing: Xu Liang, Director of the Housing Security Department at the Ministry of Housing and Urban-Rural Development, stated that families of unregistered permanent residents who meet eligibility criteria will be promptly included in the public rental housing waiting list. Support will be provided through physical rental allocation or monetary subsidies within a reasonable waiting period, fully respecting residents’ preferences.

Healthcare: Jiang Chengjia, Director of the Planning, Finance and Regulation Department at the National Healthcare Security Administration, announced that cross-provincial direct settlement of medical expenses now covers all insured groups and all medical scenarios, with inpatient expense cross-provincial direct settlement reaching over 90%. The administration will further expand direct settlement insurance types and promote inter-provincial sharing of individual employee medical insurance accounts.

Education: You Sen, an official from the Basic Education Department at the Ministry of Education, said the government will continue strengthening school place supply to ensure migrant children “have schools to attend,” while simplifying procedures and expanding coverage of quality educational resources. The goal is to gradually increase the proportion of migrant workers’ children enrolled in public schools during the compulsory education stage, reducing the education burden on migrant families.

A Watershed Moment for Urbanization

NDRC Deputy Director Zheng Bei emphasized that when a person’s permanent residence changes, the length of residence in the previous city can be accumulated or converted in the current city to continue enjoying public services. The policy also promotes cross-regional data sharing to enable one-stop online processing of out-of-town matters, as reported by 21st Century Business Herald.

Liu Xu, Director of the Institute of Social Development at the NDRC Academy of Macroeconomic Research, described this as “the first specialized document issued at the national level focusing on providing basic public services at places of permanent residence,” according to Jiemian News.

The policy builds on earlier directives from the December 2021 Central Economic Work Conference and the July 2024 Third Plenary Session of the 20th CPC Central Committee, which first formally proposed implementing a system of providing basic public services based on permanent residence registration. The Securities Times noted that the policy is designed to boost domestic consumption, improve urbanization quality, build a unified national market, and address demographic challenges.

Challenges Ahead

While the policy represents a fundamental restructuring of the relationship between residency and access to social welfare, significant challenges remain. Implementation capacity of local governments, fiscal sustainability — particularly in mega-cities facing the largest influx of new service recipients — and enforcement across provinces will test the policy’s effectiveness. The document acknowledges these challenges, allowing for gradient supply mechanisms and pilot programs in city clusters before full nationwide implementation.

What to Watch For

As cities begin implementing the new framework, attention will focus on how quickly local governments can expand capacity in education and housing, whether fiscal transfer mechanisms adequately support population-inflow regions, and how the policy interacts with China’s broader push for a unified national market and higher-quality urbanization. The success of this reform could fundamentally reshape the lives of hundreds of millions of Chinese citizens and mark a new chapter in the country’s urbanization story.