Highlights: Accelerating the process of the reform of the household register management system helps promote the shift of surplus rural labor power; increase the consumption demand for agricultural products and manufactured industrial goods, stimulate infrastructure construction and the development of real estate industry; promote the raise of China's urbanization level and speed up the pace of the strategic readjustment of the national economy.

Reporter: Recently, household register has been decontrolled in the country's small towns as well as in some small and medium-sized cities one after another. The household register management system featuring the separation between towns and countryside that has been in force for as long as over 40 years in China has broken the hard ice, what do you think is the most important significance?

Li Tie: In the late 50s, China began to institute the household register management system featuring the partition of towns from the countryside as well as the systems of employment, land and public welfare featuring the differences between towns and the countryside. After the introduction of the reform and opening up policy and in the process of stepping into a socialist market economy, the national economy underwent rapid growth and urban construction and the quality of cities experienced changes from day to day, whereas there was no fundamental change in the household register management system that restricted the rural population from entering cities and towns. Such being the case, the present household register reform which is more open has enabled China's rural reform to have finally broken the traditional, mutually closed relationship between town and countryside, the rural economy has begun to carry out the reorganization of production elements in a broader space.

Reporter: When the repeatedly called upon household register reform is surging forward, many people still ask: Are conditions ripe for the reform?

Li Tie: With the beginning of the 21st century, China's urbanization has developed to a crucial period. Accelerating the process of the reform of the household register management system is conducive to promoting the transfer of redundant rural labor force, raising the agricultural labor productivity, optimizing the rural economic structure and increasing farmers' income; it helps change the consumption methods of farmers entering the cities, increase consumption demands for agricultural products and manufactured industrial goods, stimulate infrastructure construction and the development of real estate industry; it also helps raise China's urbanization level and speed up the pace of the strategic readjustment of the national economy, reduce the differences between industry and agriculture and between city and countryside and bring about progress and long-term stability of social civilization of the country's cities and countryside.

Viewed from the current situation, implementation of household register reform is a must. First, the balanced supply of and demand for farm produce with surplus in good years and the general excess of industrial production capacity make it possible to satisfy the demand for various types of commodities following farmers' entry into cities and towns. Second, there have been large numbers of people engaged in non-agricultural industries in rural areas, most of them hope to live permanently and steadily in cities and towns and enjoy the civilization of modern cities. Third, failing to timely reform the current system that separates towns from countryside and to raise the level of urbanization, it will be subjected to the restriction of more real cost factors. In addition, after two years of trial implementation of household register reform, fairly mature experiences have been gained, which facilitate the popularization and development of the reform nationwide.

Reporter: The implementing scope covered by the present reform of the household register management system mainly encompasses all small towns including county-level urban districts. At the same time, some provincial capital cities have also adopted corresponding measures. In cities such as Beijing and Shanghai, there has been louder and louder voice demanding further relaxation of the current household register system.

Li Tie: The domicile reform should not be carried out with undue haste in big cities. First, the grade of infrastructure construction is higher in big cities, the amount of government public expenditure needed for an increase of every urbanite is large, before fundamental reform of investment and fund-raising methods for infrastructure facilities is carried out, it is financially impossible for the city government to support the large numbers of newly added low-level rural employed population under the condition of investment in high-level infrastructure facilities. Second, because the per-capita public welfare level in large and medium-sized cities is fairly high and the influx of large numbers of outside population, it is bound to share out these public welfare outlays, proceeding from the angle of maintaining social stability in cities, before substantive progress is achieved in the reform of State-owned enterprises and the urban social security system, it is temporarily unsuitable to pursue the policy of decontrolling the household transfer in large and medium-sized cities.

In the near future, at least from the 10th Five-year Plan period to 2010, in the reform of the domicile management system, it is necessary to make full use of small cities, particularly small towns. The cost of infrastructure construction in these regions is relatively low, and the cost and risk involved in the transfer of labor force is small and it is possible to absorb redundant rural labor force and avoid a series of social problems brought about by population blindly pouring into big cities as the case in some developing countries.

(People's Daily 09/24/2001)