Hukou reform key to 'new' urbanization

The "new" type of urbanization is really about hukou reform or, more importantly, public services and social benefits embodied in the hukou system, economists said at a recent conference.

Participants in the Central Economic Work Conference on Dec 14 said the first priority is to urbanize rural migrants who are long-term residents and "who have had and can maintain stable employment and long-term residence in cities", in an orderly manner.

"We estimate that up to 100 million migrant workers may fit this description, of which about 40 million live in small towns and cities, where the hukou policies are expected to be fully relaxed in the coming years," said Wang Tao, a China economist at UBS.

Financing and fiscal reforms will have to accompany the "new" type of urbanization.

The essence of the "new" urbanization is to address unresolved issues from the old, incomplete urbanization process, namely to provide public services and social benefits to migrants who already work and live in cities, Wang said.

The conference discussed various ways to address the financing these changes will require.

The emphasis on protecting arable land, protecting natural habitats and the environment, and the linking of hukou-related urbanization with social benefits and fiscal resources means China's "new" urbanization will likely be more balanced and gradual, Wang said.