The photo taken on January 1, 2009 shows two old men taking bus with their coutresy cards. From 2009, Beijing seniors over age 65 are able to take buses, visit parks, and go sightseeing for free with a kind of courtesy card. However, non-local seniors have to pay the fares and tickets on their own. [File Photo: Beijing Morning Post]

Shanghai's decision to lift a residency permit restriction recently is welcomed by the public. There are questions, however, as to whether it might discriminate against people who fall into the "non-talent" category.

The new policy categorizes people into a "talent" or "non-talent" group based on their education, income and taxes paid in Shanghai. It sends a clear message that Shanghai welcomes talented people only because they will make greater "contributions".

This interpretation has been publicly echoed by the press. Local newspaper Shanghai Daily applauds the amendment to its old registration system, arguing that it will "lure talent" to this city.

According to Shanghai's new policy, non-locals have to hold a non-permanent Shanghai residency card and live in the city for at least seven years before they are qualified for a "hukou", or a permanent residency. They must also abide by local rules too, and must pay social insurance fees and taxes on time, and have no criminal record. In addition, professional qualification certificates are a necessary condition to convert their non-permanent residency status into a hukou.

The city government has said it will give priority to scholars and talents who have made great contributions to Shanghai, like skilled technicians, teachers, doctors working in the suburbs and individual investors. These people will enjoy exemption from the criteria above.

For example, individual investors who could pay higher taxes and create jobs can obtain a permanent residency faster than many other newcomers under the new amendment.

At the same time, those labelled "non-talented" are denied access to social welfare benefits that locals receive. This includes millions of immigrant workers from rural areas. Most of them are not eligible to receive even a non-permanent residency card because they do not have a university degree, not to mention a hukou. When they are old, they have to return to their hometowns despite years of hard work and contribution to the city.

Shanghai is not the only city that has adopted this discriminative "hukou" policy. Recently, amid the ongoing financial crisis, several other cities including Chongqing and Wuhan, have adopted a policy of providing household registration for non-local house-buyers so as to boost the real estate markets.

This policy has sparked various responses in China. Some, like Yang Kaizhong, an economist at China's leading college Peking University, suggest that other cities like Beijing follow Shanghai's example. Others contend that the policy offers exclusive hukou access to the rich, which is unfair for lower-income households.

On January 23, China's State Council asked all Chinese cities, except for the four municipalities, namely Beijing, Shanghai, Tianjin and Chongqing, to ease household registration requirements to non-local college graduates, in an effort to encourage companies to employ more graduates.

This move has been hailed as an important step forward in reforming the "hukou" system. But the beneficiaries of new policy are limited to young people who have received a higher education.

A major concern here is that too many people flock to the big cities where legally registered residents can enjoy higher-level social welfare, putting pressure on areas such as employment, the environment and public finance. It is for this reason that the complicated and rigid hukou system has been in place. Generally, well-educated and high-income people are welcomed.

These policy-makers seem to have forgotten that merchants and scholars in the so-called ivory tower are not the only people who can make the society tidy and healthy. We need street sweepers, construction workers and housekeepers too, even if they haven't got a university degree or any professional certification. It is unfair to enjoy their services but decline hukou access to them.

In fact, any amendment to the hukou policy would inevitably spur controversy since the policy itself is some kind of way categorizing people into different groups. The only method to solve the hukou problem is to promote fair distribution of social wealth and offer equal treatment to all.

For instance, if passengers over age 65 from all walks of life were able to take the bus for free, seniors from outside the capital will feel less envious towards their Beijing counterparts. In Beijing, locals over the age of 65 can take buses and enter parks free of charge while non-local seniors have to pay the fares and tickets on their own.

In late 2008, China announced a stimulus package estimated at 4 trillion yuan (about 586 billion U.S. dollars) to finance programs in 10 major areas, such as low-income housing, rural infrastructure, water, electricity, transportation and the environment. If these investments could help bridge the gap between urban and rural areas, between large and small cities, the time is right for hukou abolishment. We are eagerly looking forward to seeing the day.

(CRI March 3, 2009)