Macroeconomic research: interpretation of Several Policies and Measures for Shenyang to Further Promote the Settlement of Migrant Population

Event: On May 10, Shenyang Municipal Government issued the Notice on Printing and Distributing Several Policies and Measures to Further Promote the Settlement of Migrant Population in Shenyang, proposing to cancel the quota limit for points settlement, relax the scope of academic degree settlement, and further relax the settlement conditions by taking ten policies and measures such as renting houses, working, and going to school in Shenyang.

    Core point:

    We focus on the policy of "renting into households". The notice mentioned that "you can settle down after renting a house in Shenyang.

    Non local residents who rent houses in urban areas of our city can settle down in our city themselves and their close relatives.

    We believe that measures such as "renting houses into households" will help to move from urbanization of permanent residents to urbanization of registered residents, ensure the medical and educational level of more "new citizens", better "open arms" to the migrant population, and to some extent, help to attract the migrant population.

    Since 2012, China has entered the stage of new urbanization, and the urbanization rate has slowed down slightly. However, in fact, the population entering the cities and towns every year from 2012 to 2019 is still around 20 million, but the epidemic impact, industrial structure transformation and other factors from 2020 to 2022 have a certain impact on the urbanization process. In 2020, 2021 and 2022, the annual increase of urban permanent population will decline year by year, respectively 17.94 million, 12.05 million and 6.46 million. The urbanization rate in 2022 will only increase by 2.5 percentage points to 65.2% compared with 2019. It is not until 2023 that the new urban permanent population will rise again to 11.96 million.

    The slowdown of urbanization will also affect the demand for commercial housing to some extent. As of April this year, the price of new houses in 70 large and medium-sized cities in China has dropped by about 5.8 percentage points from the peak in September 2021, and the price of second-hand houses has dropped even more. In some cities, the downward pressure on house prices is even greater. Many cities, such as Zhengzhou and Qingdao, have begun to relax settlement policies and allow "renting into households". According to the data of the National Bureau of Statistics, as of April 2024, the prices of second-hand houses in Shenyang, Zhengzhou and Qingdao have all fallen by more than 7% year on year, which is greater than the average level of 70 large and medium-sized cities in China.

    At present, China's urbanization has entered a new stage, and cities are constantly promoting the reform of the household registration system. We think that we can pay special attention to the promotion and implementation of the policy of "renting houses into households". In 2016, the General Office of the State Council issued the Plan for Promoting the Settlement of 100 million Non registered Population in Cities, which requires that "no restrictions on settlement shall be set by means of house purchase, investment and tax payment".

    Population is an important basis for economic development. Now, the inflection point of China's total population is emerging, and the overall population tends to flow into areas with concentrated industries such as super large cities and megacities. We believe that a series of relaxation of settlement restrictions, represented by "renting houses into households", is conducive to further breaking the restrictions that restrict the flow of labor factors. On the one hand, it is conducive to improving the power of urban economic growth, and on the other hand, it is also conducive to stabilizing local housing prices.

    We expect that more cities will allow renting houses.

    Risk warning: domestic macroeconomic policies are not as expected; The downward pressure on the real estate market increased more than expected; Urbanization slowed down faster than expected; Credit events broke out intensively.