Demography, hukou reform & the social-security system

The demographic inflection

China's population peaked and began to contract in 2022, when the National Bureau of Statistics reported 9.56 million births against 10.41 million deaths, the first absolute decline since the famine year of 1961. The total fertility rate fell to roughly 1.0–1.09 by 2022–2023, far below the 2.1 replacement level and among the lowest in the world. India overtook China as the most populous nation in 2023 (UN DESA estimate, April 2023).

The policy lineage is decisive for the exam. The one-child policy, formalized nationally in September 1980 through an open letter from the CPC Central Committee, was relaxed to a 'selective two-child' rule in 2013 (Third Plenum of the 18th Central Committee, November 2013), made universal two-child in 2016, and replaced by a three-child policy in May 2021 (Politburo meeting, 31 May 2021). In July 2021 the Central Committee and State Council issued the Decision on Optimizing the Birth Policy, scrapping social-maintenance fees (fines) and pivoting to a 'birth-friendly society' agenda of childcare subsidies, parental leave, and housing support.

Ageing and the dependency burden

The demographic problem is not merely fewer births but rapid ageing. By the end of 2023, people aged 60 and over numbered roughly 297 million (21.1% of the population); those 65 and over exceeded 15%. China is ageing before it has grown rich—the 'getting old before getting rich' (未富先老) problem. The working-age population (16–59) has fallen every year since 2012.

This drives the contested issue of the statutory retirement age—historically 60 for men, 55 for female cadres, and 50 for female blue-collar workers, among the lowest in major economies. In September 2024 the Standing Committee of the National People's Congress approved a phased increase, raising the male retirement age to 63 and female ages to 55/58, beginning 1 January 2025 over a 15-year transition. This is the most concrete demographic-policy decision a candidate must cite for current affairs. The 14th Five-Year Plan (2021–2025) had already flagged 'actively responding to population ageing' as a national strategy, and the 20th Party Congress (October 2022) elevated it in Xi Jinping's report alongside the 'optimization of population development strategy.'

Hukou: the household-registration divide

The hukou (户口) system, institutionalized by the 1958 Regulations on Household Registration, ties citizens to a registered locality and an agricultural/non-agricultural classification. It historically governed access to schooling, healthcare, subsidized housing, and pensions. The result is China's roughly 290-million-strong floating population (流动人口)—migrant workers resident in cities where they cannot fully access public services.

Reform has been incremental. The July 2014 State Council Opinions on Further Promoting Reform of the Household Registration System abolished the agricultural/non-agricultural distinction in principle and introduced a tiered approach: small cities to open freely, megacities (over 5 million) to retain points-based admission. The 2014 New-Type Urbanization Plan set urbanization targets and aimed to grant urban hukou to 100 million migrants by 2020. In July 2025 authorities continued pushing to relax settlement limits in cities under 3 million and to expand the residence-permit (居住证) system, which delinks some services from full hukou conversion. The governance logic: hukou liberalization is now framed as a demand-side and equity measure—unlocking migrant consumption and addressing rural–urban inequality—central to 'common prosperity' (共同富裕).

The social-security architecture

China's social insurance rests on the Social Insurance Law (effective 1 July 2011), establishing five insurances: pension, medical, unemployment, work-injury, and maternity, plus the housing provident fund. The pension system is fragmented and a key fiscal vulnerability:

• The urban employee basic pension (combining a social-pooling account and individual accounts) is comparatively generous.
• The urban-rural resident pension, consolidated in 2014, offers low flat benefits.
• A private personal pension third pillar launched as a pilot in 36 cities in November 2022 and went nationwide in December 2024.

The demographic squeeze threatens solvency: a 2019 Chinese Academy of Social Sciences report projected the main urban pension fund could be exhausted around 2035 absent reform. To pool risk, China created a national pension adjustment fund in 2018 and moved toward national-level pooling of basic pensions from 2022. Hukou reform interacts directly here, because portability of pension and medical entitlements across provinces is essential to a mobile labour force. For the Shenlun candidate, the throughline is integration: demography, hukou, and social security are a single governance system, not three problems.