China's financial hub, Shanghai, announced new measures to its "hukou" policy in June 2009. The Shanghai Municipal Government said it would improve the famously bureaucratic system to give more residents a chance at qualifying for permanent residency.

The hukou system has been in place in China since 1958, piding the population into urban and rural households. With better social security, welfare benefits and public services in the cities, permanent urban residency appeals to many.

Shanghai's latest reform of its hukou system is the fourth adjustment since 1978. Government officials said thousands of people will benefit from the new reforms.

China's household registration system is known as Hukou. In the city of Chongqing…which is one of the four municipalities directly under the central government in China… the hukou system is now starting to be reformed. This is allowing ten million rural residents to have urban residency certificates. Over the next two years, an estimated three million people will gain urban citizenship. Within just a week after the reform plan started, 34 thousand villagers had already obtained an urban residency certificate. As the hukou strongly affects Chinese in their everyday life, the reform is bringing much attention to the system. BON's Hattie Zhao went to find out how ordinary Chinese people are experiencing the system change.

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Hukou: A Case For Reform

Most Internet users don't think this is a good policy. A lot of people here feel that this is a form of discrimination. Many thought that the government was supposed to be phasing out the hukou system, so they are asking why is Beijing still using it to attract these so-called “top talented people.” Another commenter says the hukou system has nothing to do with attracting more talented people. But others think that this policy marks a good start for softening restrictions throughout the whole country. They also believe that it’s good for the capital's development, but only if it’s implemented well.

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China's controversial hukou system for registering households has been blamed for entrenching inequality by giving unfair advantages to city residents over rural residents. But in some cases, those advantages can be reversed - and a rural hukou can be worth a lot of money.

Chinese Premier Wen Jiaobao last week promised to reform the country's controversial household registration system, known here as the 'hukou'.
The system's modern incarnation has been in place since 1958 and affects the lives of hundreds of millions of Chinese, from the jobs they get to the schools they can send their kids to. Tom Mackenzie takes a look at what the hukou means for people here, and why there is a clamoring call for change.