The Chinese government is set to ease restrictions for selected workers and applicants from the countryside who would like to apply for permanent residency in cities, in an effort to encourage a new form of urbanization, the State Council said in a statement released on Friday, Jan. 22.
China Daily reported that the State Council would make revisions to the registration system, known as hukou, to further encourage the integration of migrant workers in cities, as well as boost investment and domestic consumption.
The State Council said that it will ease the rules on permanent residency in most cities, especially for university graduates, skilled technicians and students returning to the country after receiving an education overseas, as well as the restrictions on rural workers.
The report said that the council also called on provincial authorities to fully implement the new residency permit which became available on Jan. 1. The permit, which is granted together with hukou, allows holders to avail of free education, health care, employment and legal services in the city in which they live.
The statement further said that the government will provide more policy support to help improve shantytown dwellings and dangerous homes, and expand policy coverage to more townships.
The State Council said the initiative is aimed at encouraging the investment of more social capital to build city facilities, such as underground pipelines, and enable urban areas to adopt the national Internet Plus strategy to build smart cities.
The report said that the new urbanization practices will be tried and expanded to include more cities, as the government plans to improve land and housing policies, and encourage local authorities to establish urbanization development funds with social and financial capital.
The report added that during the meeting, the State Council also discussed its plan to tackle overcapacity in the iron, steel and coal industries, as the country aims to reduce 100 million to 150 million metric tons of crude steel production and strictly control new industrial capacity.
Xu Hongcai, director of economic research at the China Center for International Economic Exchanges, said the measures will spur effective investment of social capital in cities.
"This new type of urbanization put the focus on the people instead of industrialization or real estate investment," Xu said. "Encouraging a larger migrant population to settle in cities will be a driving force for economic development, as it will encourage more social capital in public services and infrastructure."