From Wiki China org cn
The Household Registration System in China.

The hukou (户口) system, or Household Registration System, is a system of residence permits unique to China, dating back over 2,000 years. It identifies a person as a resident of a particular area of the country and includes basic information such as date of birth and marital status.

The information is kept in a hard-covered book called the hukou bu. Each family normally has one book containing entries for each family member. But collective hukous are sometimes issued to people who are not from the same family. For example, a firm in Beijing may maintain a collective hukou bu for employees who are not originally from Beijing.

There is a major divide between rural and urban residence permits. Not only are the two registration systems regulated differently, but people with urban hukous have advantages over rural residents in almost every aspect of life.

Nowadays with mass migration of the population from rural areas to cities, the hukou system has become outdated and perpetuates great unfairness, especially regarding entitlements to housing and education. Some delegates to the National People's Congress (NPC) and the Chinese People's Political Consultative Conference have proposed the abolition of the system and allowing people to choose freely where to settle. But there is strong opposition from others who say that because China is still a developing country, abolition would lead to social chaos.

Huge numbers of people already live away from their officially registered places of residence, according to Zhang Yi, a researcher from the Institute of Population and Labor Economics of the Chinese Academy of Social Sciences.

Inequalities brought by the current hukou system have prevented migrants from enjoying equal access to services in cities. This creates a major barrier for the country's urbanization process.

The Ministry of Public Security and 11 other ministries and commissions have drafted reform guidelines for China's hukou (household registration) system that, if approved by the central government, will take effect immediately and aim to establish a new hukou system by 2020, Huang Ming, vice-minister of public security, said on Dec. 17, 2013.

Huang said the new hukou system will gradually extend pension, education and healthcare services to qualified residents, both urban and rural.

The new hukou system will be based on a person's place of residence and job, instead of birthplace, and it will be easier for the people to transfer their hukou, Huang said.