MNI China Press Digest May 11: Hukou, Property, Market Reforms

Highlights from Chinese press reports on Thursday:

• China must reform its residents permit system known as the Hukou system to boost rural productivity, according to Cai Fang, high-quality growth expert at the Chinese Academy of Social Sciences. Cai notes China’s rural sector is inefficient, with high-income nations employing 3% of workforce in agriculture, versus China’s 23%. To boost rural productivity, authorities must reform the Hukou system to transfer rural workers into the urban sector effectively and enact policies to support the development of human capital. China must increase its social welfare system to tackle declining population, Cai said. (Source: 21st Century)
• The real-estate sector can expect declines in wages this year, as many property companies face pressure and the recovery remains slow, according to Zhang Bo, the director of Anjuke Real Estate Research Institute. Recent data from the Population and Employment Statistics Department showed real estate was the only sector where wages fell during 2022, with urban workers seeing a 3.2% decline overall. Yicai noted the data was significant as wages have not fallen in at least a decade and managed to keep stable through the 2008 financial crash.
• China should prioritise reforms to open its economy and boost confidence to secure the rebound, according to Lu Ting, member of the China Chief Economist Forum. The economy has benefited from the post Covid-19 service rebound, but could face headwinds in H2. As a result, authorities should maintain easing policies and enact market-oriented and legal adjustments to boost confidence and stimulate foreign investment. Lu noted this year's recovery differs from previous examples, as China’s economic cycle remains out of sync with the world economy, geopolitical tensions are high and the real-estate sector depressed. (Source: Yicai)