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In recent decades, China has dramatically expanded its capacity to collect, analyze, and utilize information about its population. What drives this transformation? We argue that population shocks pose unprecedented governance challenges, compelling states to expand their information capacity. Leveraging China’s 2014 household registration (hukou) reform as a quasi-experiment, we systematically examine government procurement records, public service, judicial, and social media data. Our findings show that population shocks accelerate state’s investment in information capacity, and the state’s imperative for “legibility” is the primary mechanism, rather than fears of social unrest. Additionally, we find that population shocks shift information capacity from a focus on surveillance and control towards service-oriented governance.