The Chinese government is working to boost domestic consumption by addressing the high savings rates of internal migrants, a group that has long been affected by the hukou system. This system, which dates back to the 1950s, links each citizen to a specific commune and determines their social status, whether agrarian or non-agrarian. However, hundreds of millions of Chinese now live and work in cities different from where they are officially registered. On May 22, 2026, the State Council of China issued directives aimed at providing essential public services based on where people actually live, rather than their administrative registration. These services include healthcare, social security, employment, public housing, education, childcare, and elderly care. This follows a long-term effort to ease access to hukou in medium-sized cities since 2014, with many benefits now tied to residence permits rather than administrative registration. The Third Plenum of the 20th Central Committee of the Communist Party of China, held in July 2024, emphasized the need to remove restrictions on social security access for people based on where they work. Approximately 177 million active migrants are currently identified, but this number could rise to nearly 300 million if a broader definition of migrant workers is used. These migrants often rely on their home provinces for social services, which leads them to save more than other households. The uncertainty about future healthcare, education, and employment rights motivates significant savings. In densely populated cities, obtaining local hukou remains limited, with Beijing issuing only 6,030 hukou in 2023. This selectivity is linked to efforts to control population growth and manage urban infrastructure. Chinese households have historically had to self-insure, with direct healthcare expenses rising from 20% in 1978 to 60% in 2001. This has since decreased to 27.5%, with social insurance covering nearly half of healthcare costs. However, the affiliation rates to social insurance vary significantly: about 22% of migrant workers are covered compared to 52% to 69% of those with local hukou. Unemployment insurance covers 17% of migrants versus 44% of residents, and work injury insurance covers 27% of migrants versus 54% of residents. These disparities are partly due to the nature of migrant jobs, which are often mobile or informal. The uncertainty surrounding social benefits has economic implications. Households with the same income may consume differently if one faces unexpected costs such as hospitalization or unemployment. Studies suggest that migrant households have a savings rate three to six percentage points higher than urban households with local hukou. One study estimates this gap at 5.25 to 6.60 percentage points after accounting for observable characteristics. If the additional savings of migrants were converted into consumption, the country's consumption could increase by 0.23% to 0.79% of GDP annually. Other estimates suggest a potential increase of 1.5% to 2.2% of GDP, considering additional impacts on income, housing, and household composition. The financial implications of these reforms are complex, as expanding public services to non-registered residents requires additional spending on education, healthcare, and housing in host cities, at a time when local finances are already strained. The cost is estimated at 80,000 to 100,000 yuan (10,000 to 13,000 euros) per rural hukou holder, or up to 1.5% of GDP annually over fifteen years. However, this cost can be mitigated by existing reserves in pension and health insurance funds, which total 12.4 trillion yuan (1.6 trillion euros), or 9.2% of GDP. The current low affiliation rate of migrants effectively reduces labor costs, as 80% of employers do not pay contributions, equivalent to 1.3% to 2.2% of GDP. Gradually phasing out this benefit could provide a comparable funding source. China can boost domestic consumption by expanding protection for internal migrants, provided that rights are portable across provinces and financing is shared between the central government, home provinces, and host cities rather than borne solely by host cities. This approach could help balance the economic and social impacts of the hukou system while promoting more equitable access to public services.