'If I could have known where I've ended up right now, even if I'd had to pay 50,000 yuan [for a Shanghai hukou back in 2005], I wouldn't have batted an eyelid,' said Liu, a department manager at a Shanghai company, who arrived in the city from Heilongjiang in 2002. 'If I needed to sell my blood to pay for it, I would definitely do it.'

A legacy of the planned economy, the hukou system can no longer stop people migrating to major cities, but it does deny them the same access to public services as those who have household registration.

Liu's plight as the holder of a Shanghai residence permit calls into question the viability of similar schemes in other cities, like Beijing, designed to dilute the hukou regime and to address the social injustices caused by the outdated system.

Shanghai introduced the system of residence permits for skilled professionals in 2002, saying holders could apply for hukou in seven years.

However, Liu said very few applications had succeeded since 2009 because the criteria had been set unreasonably high. He said he would not qualify for Shanghai hukou next year, after holding the Shanghai residence permit for seven years, because two of his employers had not paid social security contributions on his behalf.

'I still believe it was right to go for a residence permit over a cash-for- hukou deal, but apparently I was terribly wrong to have that much faith in government,' he said. 'Now I feel sorry for my son as he will be punished for my mistake.'

Following in the footsteps of Shanghai and several other cities, Beijing's municipal government announced last month that it would introduce a residence permit scheme this year to help manage a sustainable population in the capital.

The municipal authorities have yet to announce details of the new scheme, but say it will be open to all residents without Beijing hukou and will allow them access to social welfare in accordance with their length of stay and their contributions to the social security fund and tax revenues.

However, the new scheme has been met with scepticism following the fiasco of a so-called green card system for skilled professionals in the capital introduced in 2003. The municipal government promised holders of valid work and residence permits would be entitled to a Beijing hukou in three years, but the promise was never kept.

Project engineer Gu Rong, who received a Beijing green card in 2004 and has renewed it every year, said he had little faith in the coming residence permit scheme given the failure of the green card system.

Gu, 46, who came to Beijing from Kaifeng, Henan , in 2000, said he was depressed by the prospect of sending his son to their hometown to continue his education.

'Both I and my wife have been working and paying taxes in Beijing for more than 10 years. How come we can't see any help coming along?' he said. 'It's time for the authorities to come up with something to address the problem if they really mean what they say when they talk about justice and fairness, because it's just way too stressful to be a parent like me.'

Li Hui, an employee at a Beijing electronics company who arrived in the capital from Shanxi last year, said he was worried the population control push would drive up living costs for young university graduates.

To apply for a residence permit in Beijing, Li said he needed to obtain a written lease, but that meant the landlord might raise the rent to offset taxes. He would also be unable to share a flat with five friends due to a government crackdown on the renting of partitioned homes.

Li moved to Beijing after graduating from a Shanxi university and earns about 3,000 yuan a month. He pays 650 yuan a month in rent and at least 1,500 yuan for meals, utilities and public transport.

He said that if the cost of living in Beijing rose too high, he would not rule out the possibility of going to a second-tier city or returning to his hometown.

'The consensus among young people like me is pretty clear; unless you're exceptionally good or have an influential parent to network on your behalf, you basically take whatever comes along,' Li said. 'What's on my mind right now is whether my landlord will raise my rent in March when I need to renew the lease.'

Beijing Institute of Technology professor Hu Xingdou , who has studied the household registration system extensively, said he was concerned that a municipal government interagency office overseeing general public order had been given the task of formulating the residence permit regime.

He said this could result in the scheme leaning too far towards population control instead of addressing the injustices of the hukou system.

Hu was particularly critical of the recent crackdowns on the renting of partitioned homes and basements, which was widely seen as a move to drive out those with little in the way of education or skills. 'Beijing is not a place reserved for high-end professionals and it's not only wrong to target the less privileged, it will drive up the cost of living to make the city less competitive,' he said.

Hu said introduction of a residence permit system open to all migrants was the right move for cities like Beijing to maintain a sustainable population. He said sustainability was especially important for Beijing because it lacked many natural resources, such as water, but had unrivalled public services.

However, Renmin University professor Tao Ran said it was difficult for a municipal or district government to tackle population issues.

Tao said Beijing's residence permit scheme should not just target skilled professionals, particularly as the country was beginning to show signs of a labour shortage that would undercut its competitiveness.