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The reforms will provide migrants' children with more educational opportunities. Photo: EPA

China's hukou reform plans will improve the lot of millions, over time

Winston Mok says it may take a generation for many rural migrants to see genuine equality

Under a just-announced proposal in China's ongoing reform, the country's 900 million rural residents will no longer be designated as such. While their lives will not change for the better overnight, many may become better integrated urban residents by the end of this decade - if the government's programmes go according to plan.

Premier Li Keqiang has set out ambitious goals of better lives for millions of Chinese. At its heart is a target to permanently resettle an additional 100 million rural residents in cities by 2020.

This involves giving permanent residency to rural migrants already working in the city, or encouraging rural residents in central and western China to permanently move to a nearby town or city.

The urban integration of migrant workers will happen in phases. The government has already eased the way for them to gain permanent residency in smaller cities. But for large cities, where the more attractive economic opportunities are, the hurdles remain high.

While there are about 270 million workers of rural origin in towns and cities, only about 170 million are strictly migrant workers - the rest stay close to their homes.

Significantly fewer than half of migrant workers want to convert to an urban , for a variety of economic and personal reasons. Given the difficulties of resettling in a major city, there is also a mismatch between where migrant workers want to settle, and where they are welcome to do so.

For rural residents in inland regions who take on industrial and service jobs in a nearby town or city, the government's push for them to convert their could potentially affect a lot of people. But why would they want to move a few kilometres to a town or small city, be reclassified as urbanites, and lose the value and security of land in the process? Most small inland cities lack the economic dynamism of the coastal regions, and provide less attractive social benefits than large cities.

Here, the latest proposed change to abolish the distinction between rural and urban may help.

By removing this distinction, a key barrier to urban integration is also removed. After buying apartments in nearby towns or cities, people can enjoy better urban benefits without losing rural ones.

A key goal for gaining urban status for many is better education for their children. It would be a lot easier for the state to provide quality education in such towns and cities than in villages. A decent school system may well be a key driving force for development in inland China.

Meanwhile, the majority of migrant workers in large cities who have little hope of getting a there may still receive better social benefits. These workers can become residents in the city - with access to some benefits through a residential permit - without permanently converting their .

Thus, turning 100 million migrant workers into urban residents becomes easier. And tens of millions of "left behind" children may be reunited with their parents.

China's reforms are to be broadly applied nationwide. But the pace and extent of implementation will vary from region to region.

So, the new policies by themselves may not lead to immediate improvements, but they make possible key changes over time. While some hitherto rural residents will start to see better benefits in the next few years, others may see real equality only in the next generation.

From the early days of state-directed programmes to the more market-driven growth of the past three decades, China's industrialisation over the past 60 years has been achieved through exploitation of the rural class. Economic growth was possible because of the labour surplus, and welfare shortfall, of farmers first, and then migrant workers. But as China moves to the next stage of its industrialisation and towards a service economy, such divisions of people at birth are no longer effective or sustainable.

China's economic miracle has been possible because of a mobile workforce - the migrant workers who toil at factories and service jobs on the coast. But its system has made such mobility only partial, and at great personal cost.

There is no reason why a migrant worker or an urban professional cannot work in many cities during his or her lifetime - following the changing market conditions. High-end service jobs in Beijing may be attractive to Shanghai professionals, yet mobility between the two cities is constrained by restrictions.

Unblocking these impediments, facilitating the dynamic deployment of human resources to jobs where they are created, will propel China onto the next lap of efficient growth - and improve the lot for millions, indeed, hundreds of millions, of people.

This article appeared in the South China Morning Post print edition as: China's hukou reform plans will improve the lives of millions of workers, over time
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