Hong Kong businesses in Beijing have won further preferential treatment, making it easier for them to attract mainland workers by being able to offer much-coveted Beijing permanent residency permits. The policy will ease the way for college graduates from outside Beijing, urgently needed by Hong Kong-financed high technology enterprises or Beijing-Hong Kong joint ventures, to get a hukou - the all-important permanent-residency permit. The right to Beijing residency can be a coveted prize for many Chinese from poorer inland areas. The move comes as China has been revising the hukou system and adopting a more liberalised labour-market policy. Yesterday's announcement by the Beijing municipal government comes weeks after Mayor Liu Qi offered a six-point plan to stimulate economic co-operation between Beijing and the 6,230 Hong Kong enterprises in the city. The plan gives Hong Kong enterprises involved in joint-venture projects in Beijing the same treatment as their local counterparts, entitling them to subsidised interest rates. Set up in 1955, the hukou system is more suited to a centrally-planned economy. Because the state rationed food to each village based on its population at the time, the hukou was vital to determine how many members each family had. Theoretically, the system also controls the migration of people, especially peasant farmers, from their home village to other cities because without a permit they are ineligible for permanent residency except in their hometowns. But, as the mainland's economy transforms into a market economy, the significance of the hukou has fallen. People have flocked to Beijing by legally transferring their hukou at the expense of losing benefits such as health care and public education for their children. Beijing has been losing the race for talent as many recent Chinese college graduates have been choosing to work in Shanghai instead.