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Over the past few days I've pointed out some of the major issues revolving around the hukou system. So I thought it was important to establish why it is that the hukou system won't be changing anytime soon, despite the ongoing discussions of how to change it.
Surprisingly the hukou system is not something that was dreamed up by the communist party as a way to control the masses (which is how it sounds to most Americans I've talked with), it is actually a modified version of household registration that has been a part of China for thousands of years. The original system was also used to restrict the movement of people, and to remove "troublemakers". The modern system in the 1950′s was used as a way to keep rural peasants out of the cities. This kept the population more spread out, which made it easier for the gov't to maintain control.
There are a number of arguments made for why the system remains, despite China's move away from a command economy, these are the most frequently cited.
It's hard to talk with any party member about the hukou system without hearing them mention the fact that China does not have slums like India or the Philippines. This is an undeniable benefit of the system, but it is not quite as wonderful as they make it seem. Rural Chinese farmers, who can't move to the city, often live in mud brick houses, that frequently lack proper sanitation; migrant workers in the cities live in crowded dormitories with their fellow workers, cut off from their families; and construction worker dormitories are flimsy, temporary buildings thrown up next to the current project. So while there are not "slums" there are millions of Chinese living in substandard housing.
Slums however also often include large numbers of unemployed people of working age, and children who are not attending school. This does not happen at nearly the same scale in China. Unemployed factory workers often return to their hometown, because there is zero benefit of them staying in the city, while they could earn a meager wage in their hometown. Children are also often left in the countryside with elderly parents, which means they attend school, but this of course has a different set of problems.
Critics usually point to the fact that the hukou system brings massive advantages to the factory owners, while oppressing the migrant workers, which is true, but, they seem to forget that the national gov't and many local gov'ts are the owners of thousands of factories throughout the country (remember, a major part of communism that the country kept was State Owned Enterprises). It is in their interest to keep workers wages low, while limiting their bargaining power, even though it is unfair.批评者通常会指出这样的一个事实：户口制度为工厂主带来巨大利益的同时，民工的利益却受到压迫。这两点都是事实，但他们似乎忘记了，遍布中国数以千计的工厂，其所有者是中央政府和地方政府。（要记住，共产主义的一个重大组成部分是国家维持对国有企业的控制）。把工人工资维持在低水平的同时，政府还限制工人们对工资的议价能力，尽管这对工人是不公平的，但对政府却是有利的。
This source of cheap labor has been a huge part of China's economic success, and the hukou system helped to make sure hourly wages stayed low. If migrants had been allowed to flood the cities, slow economic periods would have led to unrest, and undermined the stability that has been another major factor in China's rise.
In the eyes of a local gov't official, migrant workers provide the cheap labor he needs to grow the GDP figures that will earn him a promotion. In my experience, businesses and gov'ts rarely work against their own vested interests for the benefit of the voiceless masses, regardless of the country.
Limits Local Gov't Expenses3：减少地方政府的支出
The third reason I think that the hukou system isn't going anywhere, is that if local gov'ts had to actually provide urban benefits to migrant workers, the whole system would collapse. Consider that migrant workers earn only~2-3,000 rmb ($4-500) each month, but would require education, health care, police, and many other services, while providing a tiny tax base. Because of China's tax structure, these gov'ts would not be able to provide even the modest level of services that they do today. By dividing the population in this way, it is possible to provide a higher level of service to the areas with the highest population densities, and keep the relatively powerful segment of the population happy (read my series on stability).
As Chairman Mao said during the great famine, "When there is not enough to eat people starve to death. It is better to let half of the people die so that the other half can eat their fill." Rural residents are again the ones who are left to "starve" while urban residents eat their fill, unaware of the problems beyond their gates.