The Chinese Government will not get rid of the decades-old household-registration "hukou" system, but it will relax the system that has prevented people from living outside their place of birth in an increasingly market oriented economy.

　　Introduced in 1958, the current"hukou" system divides China's populationsintosagricultural and non-agricultural categories with the aim to meet the needs of a planned economy and restrict excessive growth of urban population.

　　Bao Suixian, deputy director of the Public Security Bureau under the Ministry of Public Security, told a press conference recently in Beijing: "The household-registration system is an important part of - as well the basis of - the State administration."

　　Through resident registration, the system can help uphold citizens' civil rights and can also provide basic information when the government is drawing up national economic and social development plans and arranging the rational distribution of the workforce, according to Bao.

　　For public security departments, such a system plays a major function in safeguarding public security and fighting against crime, he added. But, after decades of development, the two-tier system now fails to reflect the real process of urbanization in the country and is throttling the healthy development and rational flow of China's labour market, said the official.

　　For example, the immobility of labour caused by the old residence system has deterred the rational allocation of human resources. In most job categories in the past, employments are only for those applicants with a local permanent residence card, which has smothered the vitality of human resources and yields a rather slow urbanization process.

　　Since the early 1980s, the nation has adopted many reforms on population migration, which enable rural residents to settle in towns more freely, said Bao.

　　For one example, great success has been achieved in the reform of food supply system. The link between food supply coupons and household residences was eradicated across the country about 10 years ago.

　　The combination of a traditional registration system to restrict the expansion of urban population with the current talent policies will serve the goal of controlling the urban population while giving free rein to talents, said Wang Tongxun, deputy director with the Chinese Academy of Personnel Science under the Ministry of Personnel.

　　Offering a permanent residence permit is one of the best options for retaining talent.

　　Since 1999, a policy has been in effect in Shanghai that any non-Shanghai talents in the city's hot job categories can transfer and movesintosShanghai.

　　The inflow of the right talents will be a catalyst for the city's rapid economic development, Wang said. Besides, driven by urbanization, millions of rural labourers have rushed to cities to make a living.

　　On March 30, 2001, the State Council approved a new reform under which it is no longer an impossible dream for farmers to live permanently in cities.

　　Since then, small cities across China and a few medium-sized ones have begun to give farmers and their family members unrestricted access to permanent urban residence rights, provided they own a residence in the cities and have a stable income.

　　This measure opened a new chapter of nationwide reform on the household registration system to align antiquated laws with the massive movement of labour in China's fast-changing economy.

　　The small and medium-sized cities that have permitted greater freedoms in residency are joined by many crowded cities, such as Beijing, Shanghai and Shenzhen, which offer flexible temporary residence permits to their much-needed professionals from other parts of the country.

　　China plans to build 10,000 more small cities and towns in the coming years to boost rural development and absorb more than 40 million of the country's 800 million rural residents.

　　Statistics indicate approximately 55,000 small cities and towns have been built during the past several decades, accommodating 100 million rural residents.

　　At present, there are nearly 400 million people living in cities, making up roughly 30 per cent of the population, significantly lower than the world's average of 50 per cent.

　　In addition, the system's loopholes could not fully record all births, deaths and changes in registration details among residents, and this has affected the authenticity and effectiveness of vital statistics, said Bao. Such statistics provide fundamental data about the national economy and social development.

　　The reforms also introduced an identity-card system, sped up the development of small cities and towns and perfected the rural household registration system, said the official.

　　The government will adjust its policies on the settlement of rural residents in cities based on legal and permanent residence, stable occupation or income, he stressed.

　　In Shijiazhuang, capital of North China's Hebei Province, many labourers from rural areas got their chance to become permanent residents of the city thanks to a radical residence reform introduced on August 1.

　　As permanent residents in the city, they are now eligible for a number of services previously reserved exclusively for local urban residents, such as access to local schooling for their children.

　　Encircling Beijing, the province of Hebei plans to allow 10 million farmers to become permanent urban residents in small cities within the next five years.

　　In Central China's Henan Province, the government announced recently a total of 15 to 18 million of the province's rural residents are expected to become permanent residents in small and medium-sized cities in the province during the coming five years.

　　Meanwhile, South China's Guangdong Province, which borders Hong Kong, plans to scrap the practice of dividing its populationsintosagricultural and non-agricultural categories.

　　Officials said Guangdong will register its residents according to their places of residence, and introduce unified and non-discriminatory rights of abode to all residents in the province.

　　The government should shift its agriculture administration system - which is still a legacy of the planned economy - to a market-orientated one, proposed Chinese People's Political Consultative Conference National Committee member Zheng Li when attending the CPPCC annual session. The proposal suggested speeding up the development of small cities and towns and of tertiary industries insgroupsto absorb more surplus labourers from rural areas.

　　``These ex-farm workers contribute a lot to the cities' construction and their earnings have become a major part of farmers' incomes,'' said Chu Zhuang, also a member of CPPCC.

　　China has a big number of rural surplus labourers, who stands at 160 million, and a transient population of 70 million.

　　Statistics indicate that China's ex-farm workers send back about 100 billion yuan (US.1 billion) in income to their places of origin each year. Increases in the number of migrant labourers are believed inevitable as the economy develops. And 7 to 8 million surplus rural labourers will be absorbed by small cities and towns each year in the future.

　　However, some officials and experts also warned it will take a long time for large, crowded cities to provide non-local residents with unrestricted access to residence and their employment markets.

　　They argued the already overtrained infrastructure in large cities, such as Beijing and Shanghai, will not be able to cope with the vast amount of influx from labourers across the country.

　　This huge influx of labour brings population strains and causes problems in food supply, traffic, housing and garbage treatment, they said.

　　From the perspective of urban management, the large number of transient workers will make it difficult for the municipal governments to conduct a population census and crime rate might rise.

　　Compared with developed countries,swheresindividuals enjoy the freedom to move, the practice will be inapplicable in China due to severe regional economic inequality and its huge population.

　　Considering the cities' current capacity to hold the population, the increase in urban population should be in proportion to the demand of urban development, said Wang.

　　Although a unified labour market without the restrictions of the present residence system is not feasible, there are still many things that should and can be done.

　　First, the special benefits that are linked with a permanent residence should be gradually reduced, said experts. Second, information management of the population with the help of ID cards should be gradually introducedsintosthe residence registration system.