More than 140 million rural residents left their home villages to go to work in cities and towns. Since they didn't have residential status (hukou) in the cities and towns, they could not enjoy the benefits given to urban residents, such as free nine-year compulsory education to their children, medical insurance, unemployment insurance and minimum living allowance. In response to these problems, the central government has adopted two measures in the residency system reform since 1997.
One measure is to reform the residency management in small towns. On 10 June 1997, the State Council approved the "Notice on Test Spots and Improvement of the Residency System Reform in Small Towns" issued by the Ministry of Public Security. The notice allowed rural residents who are working and living in towns and their families to apply for non-rural residency to live in towns, provided that they fulfill certain conditions. The conditions include that they go from villages to towns to work or they start businesses in the secondary and tertiary industries, and that they have bought or built their own property in towns.
In addition, the "Notice on Pressing Forward the Residency Reform in Small Towns", issued by the Ministry of Public Security and approved by the State Council on 30 March 2001. The notice said rural residents can apply for non-rural residency to live in towns if they have a legal living place or a stable job in the county-level towns. According to government statistics, a total of 22.755 million rural residents had applied for non-rural residency in towns as of the end of 2005.
The second measure is to reform the residency system in large and medium-sized cities. The central government plans to gradually lift the restrictions on the residency system in large cities according to the local economic and social situation, so as to help solve some rural migrant workers' residency problem in the cities.
Source: PRC government website (3 October 2006), see original Chinese report: http://www.gov.cn/ztzl/nmg/content_404990.htm
16 November 2006