David Rennie, Beijing bureau chief & "Chaguan" columnist, The Economist, narrates the tale of a Mr Chang being called to show his hukou internal passport, to see if he’s a legal resident of Beijing. Recent arrivals are considered migrant workers; however, he has a degree from a Western university and a great job. Still, his internal passport had to be revised, and he was challenged by the old woman who sits at the downstairs front door. Beijing is sort of the Silicon Valley of China, but firms can't keep good hires because of the archaic Communist Party control mechanisms. The venture capitalists in their Bentleys can send their children to foreign high schools, but the upper middle class is stuck. Can you have real, twenty-first century tech innovation if the Communist Party insists on maintaining its old, repressive social controls? Shenzen has much easier regs, but its schools are poor and its culture isn't much compared to Beijing. If you just abolish the hukou, a lot of beneficiaries of the status quo get jumpy.