China eyes residence permits to replace divisive hukou system

BEIJING (Reuters) - China's new leaders are planning a system of national residence permits to replace the household registration or 'hukou' regime, a government source said, a vital reform that will boost its urbanisation campaign and drive consumption-led growth.

The hukou system, which dates to 1958, has split China's 1.3 billion people along urban-rural lines, preventing many of the roughly 800 million Chinese who are registered as rural residents from settling in cities and enjoying basic urban welfare and services.