The State Council released the details of household registration (hukou) reform last week. Migrant workers will be encouraged to settle in urban areas especially in towns and small cities, while settling in large cities will be controlled by point systems.
As part of the reform, the difference between rural and urban hukou will be eliminated, and the differences in education, healthcare, population control, employment, social welfare, housing, and land use will be abolished. Fiscal reform will also accelerate to cope with rising local-government expenditures in the urban areas. We believe this is a major breakthrough in China’s urbanization drive that have a significant impact on structural reforms in many areas.
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