As China's cities grow, the economic policy that determines who is a rural resident and who is an urban resident are in need of some changes, according to this article.
"At present 46% of China's population (some 600 million people) is classified as urban, while some of the 700 million considered rural already live under semi-urban conditions. Urban incomes and expenditure are three times higher, on average, than their rural equivalent.
Hukou reform is one of the longest-running sagas of Chinese economic policy, but has never made it on to the statute book. This time, Chinese economists note, the conditions are right. The global economic crisis has made a change of course inevitable.
The decision to change now 'has a lot to do with the government's plan of structural adjustments for China's growth model ... Urbanisation is one of the structural adjustments aimed at reducing China's reliance on external demand,' writes Yao Yang, a researcher at the China Centre for Economic Research, in an article on ending hukou, published by the China Daily."
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