The development of “hukou” has to do with the development of China as a whole. It is true that nowadays people still struggle with taking their hukou to another city or bringing their hukou from a certain city back to their home town. For Chinese, things are different. They cannot live in every city they want.
The phenomenon ‘hukou’ originates from the Shang dynasty. In the beginning its goal was to let people serve in the army. Later, it became a measure to collect taxes easily. Actually, no matter for what reason, it is a form of government management. Today, a hukou exists for the allocation of resources. We all know the population in China is huge, yet limited resources are available.
Only by collecting information of the inhabitants in a city, the government is able to make a reasonable plan to develop cities. Take Beijing as an example. Especially young people would love to live in such a big city. However, if that would be possible, traffic in Beijing would be the first to collapse. People will never arrive at their offices because of the endless traffic jams. This will influence the daily life of Chinese. That is exactly the reason the Chinese government set up some rules according to hukou to restrict population mobility and in this way keep cities balanced.