The system was first introduced in 1994 to allow out of town residents to obtain permanent residency in Shanghai. There are two major types of people the policy was designed to attract: investors, who include homebuyers, and outstanding professionals. Migrants can apply if they meet certain standards when they invest, work or buy homes in the city.

But the permits are so sought after that the number of applications for residency have put extreme pressure on the city.

Shanghai is now trying to control its population to 13.36 million next year, compared with the current 13.27 million, with a suspension on resident permits.

Since 1999, the city's yearly quota of permits was expanded to 10,000 people, last year the quota was filled, and by mid-March of this year, over 7,000 permits had already been given, city officials said.

Applicants who signed property contracts before April 1 can obtain residency, said Le Weizhong, from Shanghai Public Security Bureau in charge of the residence administration.

So far, some 49,000 migrants have got the residence including 7,000 were issued this year.

Police found that most of these people chose this way of buying apartments.

"Last year, statistics found that 88 per cent of these people chose to own a house," Le explained. "Recently, the percentage jumped to around 96 per cent, and usually parents bought the house for their children."

Thus, the policy is considered not to work very well on the aspect to draw talents. Among these migrants with blue-cover residence in Pudong New Area, for example, local authorities found that only one tenth are professionals.

Domestic and overseas professionals can apply for the card since it does not change their residence or nationality.

Applicants should have degrees above bachelor or a special ability. Applicants should have lived in the city for more than six months and have steady work and income.

(China Daily April 4, 2002)