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Capital's Plan for Hukou Revamp 'Will Raise Cost of Living'

A proposed points system that the capital's government is considering using when giving permanent resident status to migrants will push up living costs by attracting high earners while driving away less-skilled workers, an expert has said.

Beijing's government released a draft plan on December 10 that would introduce a scoring system similar to the merit-based points scheme for people who move to the United States so that migrants can get household registration documents known as hukou if they meet certain criteria.

The government released the draft so that the public can provide feedback until December 30.

The proposed plan requires applicants to be under 45 years old, already hold a Beijing temporary residency permit and have paid social security payments in the city for at least seven straight years.

Applicants will get points for employment status, ownership of a home in Beijing, and tax and credit history. For example, applicants would get 15 points for a bachelor's degree and 39 for a doctorate. The government said it will set a minimum score each year for people to get a hukou.

Applicants would get an extra six points if they paid at least 100,000 yuan in tax each year for three straight years, meaning they had made at least 500,000 yuan a year.

Nie Riming, a professor at the Shanghai Institute of Finance and Law, said the policy is apparently designed to benefit highly skilled workers, and added that the difficult criteria mean few people employed in construction, commerce and service industries will get a hukou, which gets the bearer a range of public services such as health care and education.

The change would ultimately mean services and goods will become more expensive in Beijing, pushing up the cost of living in the long run, he said.

"This policy is at odds with what the central government wants to achieve because only a very few can benefit from the system," Nie said.

The central government has said since July last year that it wants to overhaul the rigid household registration system so that a broad range of people from other provinces can get equal access to public services places they work and live.

Nearly two in five people in the capital – or about 8.2 million people – lack hukou valid in the city, official data show.

Efforts to revamp the residence registration system coincide with the capital's desire to limit population growth. The overcrowded capital is home to 21.5 million people. The city wants the figure to stand at no more than 23 million in 2020, but it's targets have been missed before.

Huang Wenzheng, a demographer at Johns Hopkins University in the U.S. city of Baltimore, said Beijing will suffer if policymakers try to limit population growth by getting rid of "low-end labors."

For one thing, fewer workers would mean less tax revenue, he said, meaning the standards of public services will fall.

(Caixin Online | By staff reporters Shi Rui and Sheng Menglu and intern reporter Luo Ruiyao, Rewritten by Li Rongde | 2015-12-14)


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