China will continue to offer rural migrants easier access to urban residency this year and expand the availability of basic public services for city residents, the country's top economic planner said.
The moves are part of a broader plan to help 100 million rural migrant workers obtain household registration, also known as hukou. This year marks the last year of a six-year plan to boost the country's urbanization rate that was rolled out in 2014.
Meng Wei, a spokeswoman for the National Development and Reform Commission, told a news briefing on Jan 19 that China will make it easier for rural migrant workers to obtain urban residency this year and enable more people to move to cities.
To further improve the urbanization rate, Meng said the authorities will move forward with the development of city clusters, including the Chengdu-Chongqing economic circle.
"The priority is to improve the level of connectivity and transport infrastructure between key city clusters and standardize the development of townships with special characteristics," she said.
The government will also work to improve cities' sustainable development capacity and the efficiency of their allocation of public resources, and upgrade urban governance, Meng said.
In China, hukou ties residents' access to basic public services such as education and subsidized health services to the place where their household is registered.
Last year, 60.6 percent of China's population lived in urban areas, up 1.02 percentage points year-on-year, figures from the National Bureau of Statistics show.
The NDRC scrapped residency restrictions in cities with populations of between 1 million and 3 million last year and relaxed them in cities — including many provincial capitals — with populations of between 3 million and 5 million.
A number of major cities, including Xi'an, Changsha and Nanjing, offered hukou status to college graduates last year, among other policies designed to attract high-caliber talent.
The NDRC said that at the end of 2018, there were 226 million rural migrant workers permanently resident in urban areas — 65 percent of them in major cities — who had not obtained hukou status.
"It would take measures beyond relaxing the residency curbs in small cities and townships to solve the problem. It requires scrapping the restrictions in large, small and medium-sized cities," said Chen Yajun, head of the NDRC's Department of Development Planning.
Chen told a news briefing in May that helping rural migrant workers settle down in cities was a primary issue to be addressed if China was to advance its urbanization drive.
It would also help promote the free flow of labor between rural and urban areas, improve social productivity, boost the incomes of migrant workers and expand the domestic market, he said.
Chen said cities must open themselves up to all types of people, ranging from college graduates to migrant workers, adding that relaxing residency restrictions was not aimed at shoring up home prices.
Yu Bo, an analyst with Haitong Securities, said the essential part of China's household registration reform is to transform migrant workers into urban residents, which would spur domestic demand by expanding investment and consumption.
"As the country continues its new urbanization drive, the population will continue to flow to major cities and city clusters," he said. "The further growth in population density will definitely improve productivity and usher in new demand for housing, education and healthcare."
He said the opening up of urban residency to key groups such as migrant workers, college graduates and veterans would help residents of city clusters rein in their debt levels by stabilizing home prices.
"This will be more than enough to shore up real estate sales and prevent a major collapse in the market," Yu said. "In the meantime, it will also provide a pillar for the stable growth of consumption."
