China to reform its Hukou( residential policy) by 2020

In what would be a big relief for the migrant workers ( approx 260 million) and their employers , china has announced a big leap forward in removing its Hukou system.

The Hukou as it is termed in china is a household registration formality introduced as early as 1951 and though subjected to some minor changes in 1980, it has still remained a big stumbling block in welfare issues.
The rationale behind Hukou was to limit the number of people moving to minor and major cities. For example a migrant worker who has moved from the area where he has hukou to another where he does not have it is not eligible for healthcare, education and pension.

I have highlighted in one my blog how the hukou system has an impact on the business in china. While the change may not happen fast and quick ( as it can be catastrophic to completely abolish it in one go), the direction the government is moving is indeed commendable.