Despite policy changes, black market for Beijing residency thrives

Tao Qian has been trying to get a Beijing residency permit, or hukou, for over eight years.

That struggle began when he graduated with a Master's degree from a science and engineering university in Beijing. Only 27 out of 278 of his fellow graduates received one.

Ever since then, the inconvenience of living in Beijing without hukou has been a shadow haunting his life.

China uses a household registration system to control the flows of migrant populations, especially in large cities headed by Beijing and Shanghai.

The hukou system offers access to various social services like education, healthcare and other benefits. Normally, non-local citizens cannot enjoy social security such as education and healthcare if they don't have a local hukou.

In Tao's case, his son is about to enter primary school, which means he needs a Beijing hukou to get him into a local school without paying the high sponsorship fees required for non-local students.

Among all the cities and provinces, getting a hukou in Beijing is the most difficult.

Only citizens with Beijing hukou or non-local residents who have paid taxes in Beijing for over five consecutive years qualify to apply for a car license plate via a lottery. Children of non-local citizens in Beijing have to pay sponsorship fees if they get enrolled into local schools. Also, children have to return to their birth place to sit the all-important college entrance examination, or gaokao, if they don't have Beijing hukou.

The population migrating to Beijing rose from 3 million in 2003 to 8 million in 2013, but only around 180,000 non-local citizens have been able to acquire Beijing hukou - then become Beijing citizens - every year.

But it would appear that things are changing. On July 30, the State Council issued a notice on household registration system reform, asking Beijing to introduce a points system to "strictly manage" the population. Analysts say the move might open a new channel for the migrant population who want to hold Beijing hukou.

Normally, only certain types of non-local citizens qualify to get a Beijing hukou legally, and generally it is only if their employers have a hukou quota when new staff sign a contract.

Eligible employees include soldiers, graduates, civil servants, overseas returnees, senior administrative officials or private company owners who have investments in Beijing. They can also be granted to non-local spouses and the children and parents of Beijing citizens.

But given the high demand for Beijing hukou, the underground hukou trade has been thriving.

On one social media website, an advertisement selling Beijing hukou promised they could help people who had graduated from college and had no criminal record to get a Beijing hukou.

This illicit market is far from new.

An anonymous book editor from a Beijing publishing house admitted that in 1999 she spent over 20,000 yuan to transfer her hukou from Chongqing to Beijing.

But the price is always increasing. With the growing migrant population, the huge demand, as well as the government's efforts to control the ballooning population of Beijing, has pushed up the price.

Since Tao Qian graduated from college in 2006, the price for a Beijing hukou has increased fivefold.

A hukou agent who asked to remain anonymous said that it now costs a college graduate 450,000 yuan ($73,143), on average, to get a Beijing hukou.

Legal barriers

According to a survey by the Beijing People's Political Consultative Conference, only 26 units affiliated to 41 departments within the central government, the military or local governments are capable of offering their employees hukou. The quotas differ according to the administrative level of these departments.

The rush to get a hukou has often been likened to thousands of horses and soldiers trying to cross a single log bridge.

Chen Jian, a private mold company owner came to do business in Beijing in 1998. He began to try to get a Beijing hukou soon after his son was born the same year.

To attract investment, Beijing encourages private business owners to apply for a hukou if they reach certain requirements relating to capital.

Chen discovered that according to local regulations, non-local citizens, who invest 250,000 to 500,000 yuan in eligible locations in Beijing's suburbs and purchase a house property, can apply for a Beijing hukou.

Chen was pleased to be able to apply but quickly discovered the catch: there were only two or three hundred hukou available in this program for non-local citizens each year, but over a thousand applicants.

Even though Chen's business is growing bigger and bigger, the threshold for non-local citizens to get Beijing hukou is also increasing.

Previously, the government took into consideration the investment amount, but now they mainly evaluate the amount of taxable revenue and how many employment opportunities the company offers.

Chen is still waiting. But for college graduates, the situation is even more ominous.