Shandong Governor Li Chunting said at a recent urbanization conference that all restrictions on movement to county or smaller towns will be abolished.

As part of the new positive policy towards population migration, citizens who have lived in cities for a certain time with fixed legal residences and stable incomes will be granted legal registration.

Investors, and people with management and technical skills will have no restrictions placed on them. Migrant workers will be granted temporary residence first and then formal residence after a certain time.

Shandong is not the only Chinese region to start similar reforms to the "hukou" system.

The State Development Planning Commission announced in August that China aims to abolish the system over the next five years, and that reform is to be carried out in the rich coastal regions as the first step, the commission said.

According to Li Chunting, the reforms in Shandong will lead to a residence registration system based on proven residence.

From October the province has ordered the abolishment of migration restrictions to cities in the form of "hukou" quota or the so-called fee for expansion of urban facilities.

Shandong, the second most populous region in China, has a population of 89 million, of which 62 percent are living in rural areas.

As in other parts of China, the province is facing a massive influx into the cities of rural workers, who are only admitted as migratory workers with little access to any social benefits and the protection of the social security system.

Throughout China, the number of surplus workers in rural areas has already exceeded 150 million and is increasing by five to six million every year, according to official figures.

The reform of the "hukou" system will help increase employment and establish a unified labor market in rural and urban areas which will allow the distribution of labor forces according to market demands, the official said.

(People's Daily November 01,2001)