The smaller cities surrounding China’s largest urban centers are altering local household registration, or the "hukou" system, to attract skilled labor in a tight market, while avoiding reforms that might shift China’s industrial base further inland. Without full hukou reform, China’s persistent rural-urban income divide will inhibit the expansion of its consumer base and threaten the political stability that Beijing relies on for its governing mandate. Since late 2020, the cities surrounding Shanghai in the Yangtze River Delta have resorted to passing limited, local reforms to China’s hukou system to attract skilled labor, which tends to pool in major cities like Shanghai and Beijing. In March, Suzhou -- a city of 13 million that abuts Shanghai to the West -- started allowing college graduates to receive a local hukou without making requisite social security payments. On June 15, local Suzhou officials also began focusing the city’s labor recruitment efforts on artificial intelligence and...
