“I LIKE it here,” says Zhang Xiaojie, as she surveys the crowds scurrying below her spick-and-span apartment. Migrant workers bend under sacks of flour or lug around huge circular saws for use on the building sites where they work. Young professionals crowd into a local restaurant. Ms Zhang, a young information-technology officer, is one of millions of people from the countryside who have flocked for work to Chongqing, a province-sized “municipality” in south-western China (its core city has the same name). She looks around at a forest of 30-storey tower blocks, all built and run by the local government, and smiles: “It’s a good place to live. The government has done a pretty good job.”

Chongqing is the setting for China’s most ambitious social reforms. They are aimed at keeping economic expansion going while ensuring that the huge social changes unleashed by growth do not perpetuate inequalities, or foment unrest. Some 250m people have moved from the countryside to cities, the greatest migration in history. Millions live in dormitories or doss down where they can. Most have no formal contracts with their employers, and are denied access to urban public services such as subsidised education and health care. As the country’s growth slows, the Communist Party hopes migrants will play an even bigger role in boosting the economy, not just by toiling in factories, but by joining the middle class and spending their new wealth. So it is looking for ways to improve their lot.

For several years, Chongqing’s efforts to achieve this have gone further than anywhere else in the country. Though called a municipality, Chongqing covers an area the size of Scotland. Around 12m of its residents are villagers; another 18m live in the core city and other widely scattered towns. As elsewhere in China, the urban population has been growing fast thanks to a rapid influx of migrants (some are pictured). To manage this better, Chongqing persuaded the central government nine years ago to let it test out new ways of handling the newcomers and of making good use of the land they leave behind. The municipality’s special political status may have helped: it ranks on a par with Beijing and Shanghai.

Under Bo Xilai, a now-imprisoned rival to President Xi Jinping, the municipality’s government touted what admirers called the “Chongqing model”. This involved three main initiatives. First, the government said it would build 40m square metres of housing in the decade to 2020 for rent to the urban poor, including rural migrants. To be eligible, tenants had to earn less than 1,500 yuan (now about $230) a month. It was a big undertaking: governments elsewhere in China are reluctant to spend money on housing migrant workers. Chongqing set the rent at about 60% of comparable private properties and allowed tenants to buy their homes after living in them for five years.

Next, the government said it would give full urban status to 10m migrants, meaning they would get access to subsidised urban health care and education (typically, these services are available only in the place of one’s household registration, or hukou—usually the place of birth of one’s mother or father). Third, the government announced changes to the urban-planning system to allow land left behind by migrants to be traded for use in building new houses and offices. That was a breakthrough in a country that still officially disapproves of selling farmers’ property.

The reforms are unique in scale and coherence. By providing housing, they aim to attract migrants and thus expand the urban labour force. By offering migrants better access to public services they aim to make life in cities fairer and thus more stable. By introducing a land market, they hope that migrants will arrive with cash in hand. If the reforms work, they should have a range of benefits, from reducing the loss of farm land to eroding age-old urban prejudice against farmers and, vitally for the economy, fuelling urban consumption.

Breaking down barriers

The most promising and controversial of the reforms involves the trading of rural land, at a price set by the market. Urban China is used to free trade in property, but in the countryside farmers are not allowed to sell their homes, nor the land they till. The idea of revising Mao’s hallowed notion of “collective” ownership of rural property remains all but taboo.

That creates problems. As people move, they often leave houses in the countryside unoccupied. Chongqing’s reform allows land used for housing in faraway villages to be converted to use for farming, and a corresponding amount of farmland near towns to be used for urban expansion. The aim is to promote urbanisation, while slowing the rate at which Chongqing loses arable land. (National self-sufficiency in food is one of the party’s obsessions.)

The reform was intended to be of particular benefit to farmers in remote areas, who would otherwise have no opportunity to benefit from land appropriations, which usually occur on city margins. Sometimes the compulsory acquisition of rural land for construction is carried out violently, with farmers receiving little or no compensation. Chongqing’s system aims to make this fairer. Farmers who want to sell their rights to their village land are given what is called a land ticket, or dipiao. Developers who want to build, say, a 10-hectare (25-acre) project on farmland, can buy 10-hectares’ worth of dipiao. They do not have to be tickets owned by farmers on that very plot. The farmers get to keep 85% of the sale price of the dipiao. Their village administrations get the rest.

This new market allowed the trading of land-use rights to rise from nothing in 2008 to over 3,500 hectares’ worth in 2011 (see chart). Since then the amount traded annually has levelled out at around 1,300 hectares, worth roughly 4 billion yuan. The market has enthused villagers. In Wulong county, about three hour’s drive from the main city, the office in charge of dipiao trading is literally knee-deep in applications from farmers who want to sell.

Chongqing’s reforms have helped its economy. Rural migrants attracted by cheap housing, health and education have provided a ready supply of labour for the municipality’s fast-growing car- and computer-making industries (Chongqing is the world’s largest maker of laptops). Doubtless the lure of good wages in these factories would have drawn many farmers into urban areas anyway. But Chongqing’s economy has performed better than many other inland cities; for the past five years its GDP growth has been about three points above the national average.

The reforms may also have helped reduce outbreaks of social unrest. China Labour Bulletin, an NGO based in Hong Kong, says there were 42 known labour-related protests in Chongqing last year, compared with 121 in Shenzhen, a coastal city with half of Chongqing’s urban population. So far, Chongqing has been able to avoid a backlash among holders of urban hukou, many of whom, as elsewhere in China, fear that already strained public services may be overwhelmed if migrants gain more rights.

But the municipality has not fulfilled its promises. Only about 15m square metres of public housing have been built (one project is pictured), half the amount that was supposed to be finished by now. One problem has been the enormous cost. Yang Jirui of Sichuan International Studies University reckons that the municipality has spent about 50 billion yuan building public housing so far and would need another 50 billion to meet its construction target. He says the government may only be able to achieve this by encouraging private developers to do the building, and by offering to subsidise the rents of poorer tenants. The Chinese Academy of Social Sciences calculates that it costs about 100,000 yuan (in total) to provide schooling, health care and other benefits for each rural migrant who becomes eligible to use urban services. For every 1m migrants, that means another 100 billion yuan.

Another problem has been that many migrants still feel a strong sense of attachment to their rural land, even after they move into the cities. This is because of the entitlement they enjoy by law, as people from the countryside, to farm a family plot and to use a piece of land for their housing. Most farmers jealously guard that right: they see it as a form of insurance should they fail to make ends meet in the cities. Many farmers are reluctant to apply for urban hukou because they fear it would mean having to give up these rights.

Through no fault of Chongqing’s, distribution of urban hukou has thus fallen far short of the target of 10m. Around 4m migrants have opted to switch their hukou status since 2010. Most are young and better-educated people: those with the best prospects in the cities and the least inclination to keep a rural bolthole. Some families have tried to ensure they have both kinds of documents. Yang Xianlu is a 60-year-old farmer in Wulong county. He says he was offered urban hukou but turned it down. His daughter-in-law and grandson (who work in the main city) have both applied for it, however. If they succeed, he says, the family would have the best of both worlds.

To calm migrants’ fears about taking urban hukou, Chongqing has offered concessions: it has granted farmers who apply for ita three-year grace period during which they may change their minds. It has also allowed new holders of urban hukou to retain their farming rights—certainly the best of both worlds. In September 2015 it went further still, giving holders of rural hukou access to most urban social services. This sharply narrowed the formal difference between urban and rural dwellers.

Similarly the dipiao system has not taken off as initially expected. Some officials had hoped it would eventually develop into a genuine free market for rural property: if the dipiao system was seen to work on a small scale, they figured, scruples about selling collective land might be overcome. But again, through no fault of their own, the dreams of Chongqing’s reformers have not been fulfilled. That is because officials in Beijing remain nervous of big land reform. Many officials are haunted by the (unsubstantiated) notion that allowing farmers to trade their property freely might prompt millions of them to sell up and move into cities, with no place to return to if they fail to prosper.

Recently, there has been a bit of belated encouragement from on high. In January the finance minister, Lou Jiwei, said other places could try out dipiao trading. President Xi also paid a visit to Chongqing that month. It was the first by a Chinese president since the municipality’s reforms began, and was widely interpreted as a sign of his endorsement of Chongqing’s efforts. But neither men expressed full-throated support for the reforms. Mr Xi likely fears that promoting them may impose crippling financial burdens on local governments and unleash yet more uncontrollable social forces. He may be a leader of enormous power, but he is afraid to use it to make the changes China most needs.