The National Development and Reform Commission issued a notice on Tuesday, demanding that cities with a permanent urban population of less than 3 million fully cancel restrictions on household registration and give equal treatment to home renters and buyers while implementing the hukou policy.

According to China's current standards, an urban resident population of less than 3 million covers all small and medium-sized cities and the cities with an urban resident population of more than 1 million but less than 3 million. Therefore, the promulgation of the NDRC circular means all these cities will fully suspend restrictions from this year.

The 14th Five-Year Plan (2021-25) clearly stipulates that China will advance a people-centered, new type of urbanization strategy that the authorities have repeatedly stressed is the key to marching toward higher-quality urbanization. In the first year of the 14th Five-Year Plan, the new household registration policy is testimony to the decision-maker's people-centric approach.

In the past few years many migrant workers and non-urban residents have been floating between the urban and rural areas of China without a hukou. From the replacement of temporary residence permits with residence permits, to the continuous easing of the hukou threshold in most cities, from the point-based hukou acquisition in megacities to the latest easing of hukou restrictions, it is not difficult to see that the country has, in recent years, been reforming the household registration system in a steady manner.

According to the notice, the new policy should be applied equally to home renters and buyers, a substantial step toward implementing the undifferentiated "people-oriented" concept. This is clearly a milestone in the history of China's hukou reform, which means that in the vast majority of Chinese cities, hukou will no longer restrict free movement of people.

With the absorption of a number of new residents, the development potential of many cities, especially small and medium-sized ones, will get a boost and the integrated development of urban and rural areas will be accelerated. Next, it is necessary for these cities to increase their public service capacity, accelerate the construction of education and other facilities to meet the increased demands as a result of expanded city scale.