Population Is a Problem | Tianjin Underestimated What Its Own Hukou Is Worth, but the Shortage of People Is Real

Infrastructure, recruiting talent, and job opportunities — together these three decide what growth is possible.

On June 3, no line had formed outside the government office in Tianjin's Hedong District that handles hukou applications. Thirty-odd people waiting to register their residency in Tianjin sat or stood around the nearly empty lobby. As their numbers were called, they went upstairs one by one to wait while staff checked their materials and issued a Certificate of Approval for Relocation.

A month earlier the scene here was very different. On May 16, at the Second World Intelligence Congress in Tianjin, Vice Mayor Sun Wenkui announced that five categories of talent could now register for a Tianjin hukou. The lowest bar was the education category: a bachelor's degree holder under 40, a master's holder under 45, or a doctorate holder of any age could register directly with nothing but an ID card and a degree certificate.

The night this policy — called the Haihe Talent Program — was announced, 300,000 people downloaded the Tianjin police app to apply. The app's servers buckled, and people who could not log in set off for Tianjin overnight. Real-estate agents and hukou brokers turned up too. Long lines suddenly stretched outside the Northern Talent Market and the administrative service centers in every district of Tianjin.

By the end of May 2018, 28 cities had loosened their rules on recruiting talent, but none drew a crush like Tianjin's. Even Xi'an, covered heavily by the media, had registered only 300,000 new hukou holders in the first four months of the year.

The Tianjin government may have underestimated what its own hukou is worth.

The war for people has escalated over the past six months, and behind it sits anxiety about population. The share of China's population aged 20 to 40 keeps falling. People born in the 1980s, 1990s and 2000s number 219 million, 188 million and 147 million — a 33% contraction over three decades. Because the birth rate keeps dropping, China had 36% fewer people aged 10 to 19 in 2016 than in 2005, which means the number of young people entering the workforce over the next decade will be more than a third smaller than it was ten years ago.

Tianjin's case is especially severe. In 2017 the city's permanent resident population was 15.56 million, down 52,000 from 2016, while cities of roughly the same rank, such as Chongqing and Hangzhou, each added more than 200,000 permanent residents.

A shrinking population brings a chain of problems: weak consumption, a hollowed-out city, pension shortfalls. Over time a city slowly decays and finally dies out — like the Rust Belt cities of North America, or like Northeast China, which keeps losing its young people.

Set against that bleak future, the problems Tianjin faces now — padded GDP figures, the Yujiapu financial district mocked as a ghost town, piled-up local debt — count only as short-term problems. For the long work of growing its own people, the near-zero-threshold Haihe Talent Program arrived on May 16.

Education

For many people in a hurry to register hukou in Tianjin, education is the biggest consideration.

Shang Peng, born in Gansu in 1981, knows what a Tianjin education is worth. At the workplace where he is employed, a colleague from Shandong scored more than 520 on the gaokao; that colleague's brother-in-law, a Tianjin native, scored just over 490. They sat the exam the same year, and the Tianjin man got into the better school — never mind that Tianjin's exam paper is nowhere near as hard as Shandong's.

Five years ago Shang Peng decided to leave the military. The army could have arranged a job for him in Beijing, but Beijing was "fiercely competitive," and a hukou and an apartment would have been hard to come by. To give his child a stable schooling, he settled with his wife and child by Dongli Lake, about 40 kilometers from downtown Tianjin.

In 2013 homes in Dongli District went for a little over 8,000 yuan a square meter — not too expensive. Shang Peng found a job in accounting in Tianjin, paid social insurance for more than two years without a break, and got his child's school registration approved.

Tianjin has the easiest gaokao in the country. In the 2018 exam that has just ended, only 55,074 candidates sat it in Tianjin, 2,000 fewer than in 2017. Admission rates have not been released yet, but in 2017 Tianjin's combined first- and second-tier undergraduate admission rate was 72%, with the first tier alone above 25%. Its admission rate to elite Project 985 universities reached 5.81%, against less than 1.5% in neighboring provinces such as Hebei and Shandong.

Kong Lingling is a direct beneficiary of Tianjin's schools. She is from Hebei and would otherwise have faced brutal gaokao competition. But in the years she was sitting the high-school entrance exam, Nankai High School in Tianjin let students from other provinces take its entrance test; those who passed got Tianjin school registration and could take the gaokao there. Three years later Kong Lingling was admitted to Peking University.

At Peking University, Kong Lingling met a younger student who was also from Tianjin. Learning that she had graduated from Nankai High School, he complained on the spot that in those years the Peking University and Tsinghua places allotted to Tianjin's gaokao takers had been taken up by students from other provinces. Kong Lingling, who had not yet had a chance to tell him she was actually from Hebei, found the moment more than a little awkward.

Different levels of gaokao difficulty in fact reshape the whole system of basic education. In QDaily's interviews, many people from Hebei brought up Hengshui High School. Outsiders describe it as a gaokao factory, its strict, fully enclosed management dictating every detail of a student's life, from clothes and haircuts to meals and sleep. Students rise at 5:30 a.m.; after the morning run come classes, exams and homework all day, until lights out at night. This assembly-line production has been criticized for suppressing human nature. No parent wants a child to live like that.

Kong Lingling's father worked at the local education bureau. Inside the system, he knew better than anyone how unevenly educational resources are spread across China's provinces. From the start he was looking for a way to send his children somewhere easier. By the time Kong Lingling had begun her PhD, the family bought a home in the Eco-City in Tianjin's Binhai New Area for her younger brother's sake. To attract talent, the local government had ruled that paying 600,000 yuan in cash for a home was enough to obtain a blue-stamp hukou.

A Fallback

If a family like Kong Lingling's, moving from Hebei to Tianjin, chose to make life easier, for many more people going to Tianjin is a fallback they take because they have no choice.

Lin Kai and his wife Shan Li come from Zhangjiakou, Hebei, and work in Beijing — he in education and training, she in new media. Last year Shan Li obtained a collective hukou in Tianjin through a broker. It was not that they had never considered registering in Beijing; it was simply too hard, "almost impossible." As it happened, Shan Li's older sister had already gotten a Tianjin hukou so her child could start elementary school, and the couple, who are thinking about having a child themselves, decided to register in Tianjin too — "it makes school easier, and at least we're covered."

Zhang Xia's story may capture best how Beijing's policies have shifted over the past two years. On June 3, speaking in a thick Beijing accent, she came along with a colleague to file a hukou application. She had moved to Beijing with her parents as a child, had lived in the old capital for more than twenty years, and works at a state-owned enterprise that holds hukou quota slots — but because her ancestral home is in Henan, she has never managed to get a Beijing hukou.

Buying a home later, sending a child to school: both would require a Beijing hukou. Worried about that, Zhang Xia settled for second best and came to Tianjin. Her colleague had already worked through most of the process; she came to see how it went and to pick up a transfer letter from the staff. The transfer letter lets an applicant move their personnel file from wherever it is held to Tianjin — the first step in the whole hukou application.

Zhang Xia went to school in Beijing from childhood through adulthood; back then she only had to pay the fee charged to students without a local hukou, on time, and she could study in Beijing without worry. She had never given hukou a thought — until, as more and more happened recently, she came to see that if her own child was going to live in Beijing without obstacles, a hukou was indispensable.

Two days before Zhang Xia came to Tianjin, on June 1, Children's Day, a large crowd of parents gathered outside the Tongzhou District Education Commission in Beijing to protest the 2018 elementary-school enrollment rules. The commission had published those rules in detail on April 27. Parents who had prepared their documents in advance according to previous years' rules found that a Beijing residence permit now had to be not only "within its valid period" and "matching the address of the proof of actual residence in Tongzhou District," but also that "the applicant is verified to have lived at the current address since December 31, 2017 (inclusive)."

Another clause raised the bar further: "Once a housing address is used to register a school-age child for enrollment, in principle it will provide only one enrollment place within six years, starting from the year of registration." That meant that even residents who met every other requirement would find their children shut out of school if the landlord of the home they rented happened to have a child enrolling as well.

Parents were furious at the sudden change in standards, and at the gap in timing — a policy issued on April 27 required that they not have moved since December 31 of the year before. That June 1, Beijing was sweltering at 36 degrees Celsius. Amid the anger at the Tongzhou Education Commission's unreasonable approach, some parents could be heard saying they would go to Tianjin instead. It may not amount to much in practice, but it showed that for many people Tianjin had become a psychological line of defense.

Hukou Benefits

The benefits a Tianjin hukou can bring are not that simple. Shang Peng, now 37, has begun to care about healthcare. Tianjin's medical insurance reimburses more, and the city can also offer better medical care; back home in Gansu, many old people who fall ill can do little but wait to die.

Kong Lingling's hukou is for now still filed with the Beijing service center for overseas students, and the address on her ID card is still a Beijing one. But she understands that for many foreign visas and for Hong Kong, Macao and Taiwan travel permits, the paperwork required without a Beijing hukou is very different, and she might not be able to apply in Beijing at all. Plenty of travel agencies will handle it for you now, but that is an extra expense.

Shan Li and Lin Kai are also thinking about retiring in Tianjin. In 2016, Tianjin's per-capita pension was 2,731 yuan, well above Hebei's 2,387 yuan. "And Tianjin's supporting facilities are fairly mature, so retiring there should be pretty good."

The Tianjin government clearly underestimated all of this. Through sheer carelessness, the first version of the Haihe Talent Program had almost no threshold at all, and that produced the alarming scenes in Tianjin in the days after May 16.

Tianjin locals have reacted in different ways. Some are excited by the Haihe Talent Program: "Tianjin is finally saved!" People who think this way tend to resent the city for having no vitality; they believe only bringing in talent and sharpening competition can make Tianjin shine again. But more of them feel Tianjin is squandering its own resources, and that the people brought in under the program will contribute little to Tianjin and eat up its resources instead.

That view may get at what a hukou really is. At bottom, the hukou is a way of allocating resources.

Between 1951 and 1953 the Chinese government gradually built a household-registration system across the country's cities and countryside. In 1958 the Regulations on Household Registration of the People's Republic of China were issued, dividing people into agricultural and non-agricultural hukou and, in practice, closing off the freedom to move. From then on, Chinese people were tied to the place where they were born.

Urban and rural China differ enormously, and the resources available in each are not the same. Because resources are distributed through geography, the hukou became one of the standards determining how much a Chinese person could get.

Shang Peng understood the importance of hukou from a very young age. "Back then you needed ration coupons to buy things. City people were allotted more coupons, country people fewer. City people could eat their fill; country people couldn't." Many lives turned on it. After junior high, many people in Shang Peng's hometown would not choose an academic high school even when they had the chance; they went to a technical secondary school instead, because graduating from one converted an agricultural hukou straight into a non-agricultural one.

The gap between agricultural and non-agricultural hukou can look utterly absurd. In 2009 Guangdong Province issued the Standards for Calculating Compensation Items for Personal Injury in Road Traffic Accidents, which stated that if a driver bore full responsibility for a victim's death and also had to support a dependent with no income of their own, an urban resident's family could receive more than 760,000 yuan in compensation, while a rural resident's family would get only just over 250,000 yuan. The argument over "same life, different price" has run in China for many years.

Provinces and cities began scrapping the agricultural-hukou category one after another in 2016, but the disparities remain. Shang Peng says that back home many people would rather hold a rural quota slot than a county-town hukou, because the state has raised rural subsidies in recent years, so keeping a hukou in the countryside actually pays better.

The urban-rural divide is only one sign of regional disparity; the gap between cities is just as plain. In 2016 the average Shenzhen pension came to more than 4,400 yuan a month, while Chengdu's was under 2,000 yuan. On 985-university admission rates, Tianjin's 5.81% is more than five times Anhui's 1.11%, the lowest in the country.

What makes all of this harder and harder to bear is the return of population movement since the 1990s. The hukou system still exists, but controls on migration have relatively loosened. Country people come to the cities for work; people from small cities go to big ones looking for a chance. Economic growth has let most of them find a foothold and keep up a decent daily life. But a great deal of resource allocation — education and healthcare, for instance — still runs on hukou, just as the Tongzhou Education Commission mentioned above would not guarantee residents' children the right to go to school.

You live in a city, work for it, pay taxes to it, and still cannot use the resources that ought to come with it, because of your hukou. The sense of unfairness has never been this strong, and it reaches everyone who lives there.

Why Is Tianjin Recruiting Talent?

The official figure released so far is that, as of May 23, 7,000 people had registered hukou in Tianjin. On June 5, appointments to file personnel records at the Tianjin Human Resources Development Promotion Center were already booked out to June 21. At 600 filing appointments a day, roughly 20,000 people could register hukou in Tianjin over the course of a month.

At every administrative service center, staff make applicants sign a written guarantee — that they hold no job and no social insurance elsewhere — and warn them repeatedly that if fraud is discovered later, they bear the consequences. Even so, many still want to try their luck in Tianjin. QDaily approached several people applying for a Tianjin hukou; all of them were guarded and unwilling to say much. One criticized the Tianjin government for being "shameless about grabbing what it wants."

Among the many criticisms of the Tianjin government, besides the charge that it went back on its word, another recurring voice holds that its motives are not clean. Shan Li believes the Haihe Talent Program is the city government's way of clearing excess housing inventory. Hukou granted under the program are all collective hukou, and applicants are required to convert to an individual hukou within two years, which requires owning a home.

A February 2016 report said Tianjin had 17 million square meters of unsold real estate floor space, a figure near the top among 35 cities. The 2017 Tianjin Statistical Bulletin on National Economic and Social Development broke out real-estate destocking for the first time, writing: "Destocking kept taking effect, with commercial housing floor space for sale falling 29.9% over the year."

The crisis at Tianjin's largest state-owned developer, Tianfang Group, has deepened the suspicion. In May 2018 word began to spread that Tianfang Group's debt had reached 183 billion yuan. Because the company picked up a number of prime land parcels back in 2014, a rise in home prices driven by the influx of talent under the Haihe Talent Program could help it climb out of that debt crisis.

Of course, the reasons the Tianjin government states openly — recruiting talent, growing the economy — could also be true. Shang Peng says the construction company he works for has seen business slide over the past two years, because Tianjin is drawing less investment and naturally fewer projects are breaking ground.

In 2017 Tianjin's general public budget revenue was 231.011 billion yuan, down 15.2% from 272.346 billion yuan the year before. GDP growth was only 3.6%. By the first quarter of 2018, Tianjin's GDP growth had fallen to 1.9%, last among all of China's provinces and municipalities.

Tianjin's population structure is no more encouraging. In 2017 its permanent resident population fell for the first time, mainly because the migrant population shrank. At the same time, although the natural birth rate has risen somewhat, the city is aging faster and faster. 23.35% of Tianjin's registered population is now over 60, against 33.2% in Shanghai, where aging is most severe.

Is Tianjin Ready?

Tianjin should not be short of talent in the first place — it is one of the country's strongest cities for higher education. Nankai University, Tianjin University and the rest keep drawing in young people from all over China. The question is whether Tianjin can hold on to them. According to the graduate employment report Tianjin University publishes each year, overall only 40% are willing to stay and work in Tianjin, whereas more than 70% of college graduates without a Shanghai hukou stay on in Shanghai.

Against the backdrop of the Haihe Talent Program, whether Tianjin can keep talent turns on two questions. The first test is how much Tianjin's public services can carry. Take education: Tianjin natives are not willing to let outsiders take away their gaokao advantage. The entrance-exam route that got Kong Lingling into Nankai High School was scrapped entirely a few years later, because many Tianjin parents protested to the municipal education commission that it was unfair to Tianjin students.

Tianjin has issued no rules on this yet, but one example already in plain view is Xi'an, which took in 300,000 new hukou holders in four months and then announced that anyone who registered after November 21, 2017 would have to return to their original hukou location to sit the 2018 gaokao. After that, for their children to take the gaokao locally, they would have to meet a requirement of three years of school registration and three years of hukou registration in Shaanxi.

The more critical question is still whether Tianjin can offer talent jobs attractive enough to hold them. Lin Kai says flatly that he will not consider Tianjin before he retires, because wages there are simply too low. He works at a vocational-training company in Beijing, teaching online marketing and new-media operations, and he also helps students find jobs. Lin Kai has found that "graduates" of the same course earn 7,000 to 8,000 yuan a month on average in Beijing, and only 3,000 to 4,000 in Tianjin.

Liu Yu, 31, is just as indignant about Tianjin wages. He is a Tianjin native who does design and brand-maintenance work for a hotel group. Even after more than six years there, his monthly pay is only about 5,000 yuan. "The way my salary works now, it just goes up two or three hundred yuan a year, stacked on top."

Even if someone is willing to accept lower pay and stay in Tianjin, the city may not have enough industry to absorb them. Liu Yu studied 3D art design in college. As he recalls, of the 15 people in his graduating class, ten did not stay in Tianjin; those who did ended up doing outsourced 3D modeling and texturing for a game company — "fairly low-end work."

In fact, because the Beijing-Tianjin intercity high-speed line lets people travel between the two cities in thirty minutes, Tianjin has ended up in a very awkward position.

Tianjin's Wuqing District, about 40 kilometers from downtown, is a stop on that line. Even if Wuqing does not strictly qualify as a bedroom town, it carries a great deal of the lives of Beijing drifters. Wuqing high-speed rail station is always packed on Monday mornings. As departure time nears, many people sprint into the station and line up in long queues at the ticket gates. From there they head to Beijing to start the working week.

Shan Li's older sister lives in Wuqing District; for a long stretch she and her husband both commuted between Beijing and Wuqing on the high-speed train. Because her child is about to start school, Shan Li's sister has finally found a job inside Tianjin, but her husband keeps to the old rhythm — he has even rented an apartment in Beijing as a weekday base.

This too is a kind of regional imbalance. The Beijing-Tianjin line has erased the distance between the two cities. Getting from Tianjin Station to Beijing Station may take less time than crossing Beijing from the East Third Ring Road to the North Third Ring Road, which forces Tianjin to compete with Beijing head on. The higher salaries, richer ways of living and wider career paths Beijing can offer leave Tianjin at a loss.

And the one thing Beijing cannot offer and Tianjin can is the hukou. It uses its advantage over other cities as its bargaining chip against Beijing — fighting one inequality with another.

Zhang Xia finds this hard to understand. When she went to collect her transfer letter from the staff at the administrative service center, they asked whether she had a job in Beijing. Zhang Xia thought about it and chose to answer honestly, and was then told that people with jobs in Beijing did not qualify under Tianjin's hukou policy. In the end she did not get her transfer letter.

Expecting Tianjin to solve the hukou problem is probably wishful thinking; all it can do is draw people in. And by the look of things it has met its goal — going by the number of filing appointments, Tianjin is on course to take in 20,000 new arrivals within a month.

Their effect on Tianjin is already showing. Several real-estate agents say prices in outlying areas like Wuqing have risen by 1,000 to 2,000 yuan a square meter, and downtown prices by 2,000 to 3,000. The most optimistic forecast has Tianjin home prices rising a cumulative 8,000 yuan by the end of the year.

For this city, that can hardly count as bad news, whichever way you look at it. Infrastructure, recruiting talent, and job opportunities — together these three decide what growth is possible. Over the past two decades Tianjin built the Binhai New City, a glossy rough draft of a city. People are a resource, and enlarging the city's capacity to hold them is no bad thing for Tianjin.

The Haihe Talent Program has since had patch after patch added to it, above all the rule that anyone registering hukou may not hold a job or social insurance elsewhere, which has shut a lot of people out. Still, the policy's aftereffects are working themselves out, and the key to attracting talent is still creating enough jobs. What Tianjin does next remains to be seen.

(All names in this article are pseudonyms, at the interviewees' request.)

Cover image from: a still from The Master, Mafengwo, and photographs taken by the reporter in Tianjin

All in-text photographs were taken by the reporter in Tianjin.