The Chinese government signalled that it will start reforming the hukou system of household registration at its annual Central Economic Work Conference in Beijing.
In its press statement (in Chinese) it resolved to "relax the restrictions on household registration" for smaller cities and towns, allowing them to formally integrate workers who have migrated from rural areas. However, the same restrictions won't be lifted for larger cities and provincial capitals.
This is intended to stimulate property investment and improve the capacity of smaller cities to act as hubs for regional economic development, without overwhelming the larger cities with new waves of rural-to-urban migration.
The government renewed its commitment to urbanisation as an economic development strategy, calling for improvements to urban planning and management systems, and the strengthening of urban infrastructure construction.
Few international newspapers picked up on the significance of the pronouncement, though one writer who did is Jane Macartney, the Times' China correspondent, whose keen observations were published only in the Australian.
She notes that the proposal is an economic response to the current financial crisis. Relaxing the hukou system will encourage thousands of migrant workers to fulfil their dream of buying a home in the cities where they now work, increasing investment, stimulating the property market and boosting the economy.
It will also allow them to bring their children into the cities, children currently left behind in the countryside, who would gain access to the better schools and health and social services available in the cities, as the China Economic Review also notes.
However, Macartney warns that relaxing the system might unleash new tides of rural-to-urban migration, creating even greater slums in cities' peripheries, as is seen throughout much of Asia.
In a brief interview with Wall Street Journal's Andrew Batson, two Goldman Sachs analysts, Yu Song and Helen Qiao, say this should not be a concern as long as the government stays focused on improving the lives of migrant workers already living in the cities.
Much will depend on the implementation. In the best-case scenario, reinforcing the role of smaller cities may relieve population pressures on the larger cities, improving the quality of public services at all levels; in the worst case, it may create new unintended forms of inequality if families or older persons become trapped in shrinking rural economies, as occurs in the US and Australia.
In a related story, the city of Beijing is reforming their administration of the hukou system, as the China Daily reports. Temporary residency permits are to be renamed 'floating population residency permits', containing additional information on the permit-holder's origins.
Yet the friendlier name belies the fact that this is less about improving migrant workers' access to services as it is about improving the management of these populations. The Beijing Youth Daily (in Chinese) quotes Miao Lin, deputy director of Beijing's municipal comprehensive management office, saying that what additional services, if any, will be extended to new 'floating population residents', is yet to be worked out.