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Chinese cities and towns are expected to absorb about 300 million people from rural areas in 20 years if the urbanization drive maintains a growth of 1 percent annually.

The massive migration of rural laborers will contribute greatly to the development of cities, Liu He, vice-minister of the Office of the Central Leading Group of Financial and Economic Affairs, said yesterday.

The urbanization rate currently stands at 1.4 percent, which means that about 20 million farmers become urban residents each year.

Statistics from Liu's office indicate that nearly 40 percent of farmers' annual per capita income last year, about 3,200 yuan (US$395), was earned in cities.

But China faces many problems in its urbanization drive, such as low wages and lack of social security for migrant laborers, Liu told the 2006 China Development Forum organized by the State Council Development and Research Center

To protect the rights of migrant workers, barriers such as the household registration system (or hukou) must be removed, suggested Justin Yifu Lin, an economics professor at Peking University.

Liu said China would adopt a step-by-step reform of its decades-old hukou system but suggested that the "green card" system practiced in Shanghai and some other cities which enables long-term inhabitants to obtain urban hukou be adopted in more cities.

In 2003, about 110 million surplus laborers left the farming sector; and 61 percent of the migrant workers, or 69.1 million, worked in cities, Liu said.

In Wuxi of east China's Jiangsu Province, for example, about 1.5 million of its 6 million population are from elsewhere. And 100,000-150,000 newcomers settle down in the city each year, he said.

The maximum population the city can accommodate is 8 million, Liu said. "It faces huge pressures on environment, resources, especially water, in the next 10 years."

(China Daily March 21, 2006)