FUN AND FREE: Pupils attend an art class at the No. 2 Experimental Primary School in Zouping County in east China's Shandong Province, on December 23, 2010. On December 25 last year, the Ministry of Education eliminated the extra fees for the primary school students who have no local hukou (DONG NAIDE)

The latest move of the reform was in prosperous Guangdong Province, which is the temporary home to more than 26 million migrant workers. The province unveiled a scoring system in June last year.

A migrant worker will qualify for urban household registration once his or her scores reach a certain level. The children will also be able to register. They can earn different points according to their educational background, skill level, social security records and participation in charity activities like blood donations.

Through this system, more than 17,000 migrant workers became urban citizens within a month. But the change of their hukou means that they have to give up their plots of farmland back in their hometown, as only those registered as farmers are entitled to farmland.

During the annual sessions of the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference of this year, Chen Xiwen, Director of the Office of Central Rural Work Leading Group, warned of land grabs in the household registration reform.

He said that the household categorization should be differentiated between various tiers of cities and towns.

"While urbanization may be good for some farmers, it does not justify the seizing of land by municipal authorities," Chen said. "The first stage of urbanization was motivated by capital accumulation in the agricultural industry. The current phase ought to require industry to nurture the agricultural industry, and governments should provide policies that respond to this."

A pilot project

Pilot hukou reforms have been conducted in Chengdu since last year.

On November 16, 2010, the Chengdu Municipal Government issued a document, saying the city was to build a unified hukou system that no longer categorizes residents into rural and non-rural residents by the end of 2012. Thus all residents of the city can move freely and have equal access to basic public services and social welfare.

That means privileges previously attached to urban hukou will be gradually stripped away, and people from both urban and rural areas in Chengdu will eventually enjoy equal access to social resources, said Guo Zhengmo, Director of the Institute of Economics of the Sichuan Academy of Social Sciences.

According to the document, all Chengdu residents will be able to register as either urban or rural residents based on their residences, and they can freely change their registration once they move. Registered residents from outside the city will also receive the equal treatment as native residents.

"Farmers can register as urban residents, even though they have land and houses in the countryside, while urban residents can register as rural residents with proof of residences in the countryside and then rent a piece of land to grow vegetables," said Qin Daihong, Vice Director of the Chengdu Rural and Urban Development Coordination Committee. "'Farmers' will be a vocation, not an identity any more."

Once implemented, the plan will make it possible for more than 5 million rural residents in Chengdu to enjoy the same social insurance and public services, such as education and healthcare, as their urban counterparts.

"The new plan is the first in the country to break down the long-term barrier hindering the free movement of residents and the first to eliminate inequality in education and healthcare between urban and rural residents," Qin said.

He said that in order to prevent farmers' interests from being damaged by changes of places of residence or occupations, the city has made specific provisions that allow farmers to live and work in cities as well as be covered by social insurance without losing their contracted farmlands. If they continue to live in the countryside, they will still enjoy the same basic public services and social welfare as urban residents.

For rural residents, there is one added benefit, a share in their village's collective assets, since villages in China collectively own their land and other fixed assets.

China started a reform to turn fixed assets of villages into financial assets in the mid-1990s, as a result, villagers have become shareholders in their village's assets.

Chen Tao, spokesman of Beijing Municipal Commission of Rural Affairs, says such shareholding rights are important for farmers, because even if they leave their land for the city, they are still entitled to earnings from the collective assets.

Meanwhile, Chengdu will build an ID-number-based residents information management system by the end of 2012, covering almost all aspects of life, including place of residence, marital status, occupation, tax payment and social insurance.

Furthermore, the city will also build an urban-rural unified employment status management system, employment assistance system and housing insurance system that will help solve resident housing problems through low-rent housing, affordable housing, government-subsidized housing and rent allowances.

As a pilot area for the comprehensive supplementary reforms for the coordinated development of urban and rural areas, Chengdu has been making great efforts to promote the integration of urban and rural social and economic development since 2003.

In 2003, the city canceled restrictions on the yearly number of rural residents allowed to transfer their residency to urban. As long as rural residents met requirements set by the local government, they would be accepted as urban residents.

However, at the beginning of Chengdu's hukou reform, the city equated granting urban residence with sacrificing one's rural property. In 2007 when Chengdu became a pilot area of the integration of urban and rural areas, some counties and districts required farmers to give up their land before they could be included in the local social insurance system.

"This policy made farmers reluctant to become urban residents," Qin said.

Previously, Zhengzhou in central China's Henan Province and Shijiazhuang in north China's Hebei Province have experimented with similar household registration reform but found their infrastructure, particularly schools, were insufficient to handle the large influx of people.

Many people are worried about how Chengdu will finance its hukou reform.

Chengdu has done a detailed evaluation of potential risks of the reform. During the past eight years, the municipal government has spent a large amount of money on establishing an equal public service system for its rural and urban areas and providing them with equal social insurance benefits.

Chengdu invested 900 million yuan ($131.77 million) in three years to construct 410 standardized schools and raised the salaries of teachers in rural areas. Additionally, it integrated the basic healthcare insurance of rural residents, urban residents and university students into one system and provided rural residents who entered the insurance program with a 2-percent subsidy.

The municipal government has deposited 2.8 billion yuan ($409.96 million) into its fund dedicated to protecting arable land and 90 percent of the money was directly transferred to farmers' social security accounts.

"We are not closing the gap between rural and urban areas overnight. Instead, we have been investing in this field for years. Therefore the hukou reform will not call for a large amount of investment now," said Qin.