(Yicai Global) April 8 -- All but 13 Chinese cities with a population of at least a million will lift or ease restrictions on hukou, essentially domestic passports, as Beijing looks to encourage rural-to-urban migration.

Cities with a population of between 1 million and 3 million will lift restrictions on the household registration system entirely, the National Development and Reform Commission, China's top economic planner, said today. Those with between 3 million and 5 million will ease limitations.

The hukou system dates back to ancient times, but since 1958, nine years after the formation of the People's Republic of China, it has been a nationwide legal system used to document citizens' personal data, births, deaths and legal addresses.

The current mechanism recognizes two types of registration -- urban and rural -- which are based on lineage and location. The central government has been reforming the system since 2013, making it easier for rural registrants to apply for an urban hukou, which can grant them greater social welfare. Many migrant workers in big cities are unable to claim benefits there as they are registered in their rural hometowns -- where wages are lower and local welfare may be limited if existent at all.

The NDRC's latest plan aims to get more migrants to settle in cities and promote urbanization, and cities with a permanent population of less than 1 million have already lifted hukou limits. The commission has set a goal of moving 100 million registrations from rural to urban areas by 2020 and is offering financial incentives to areas that attract the most registrants.

China's 13 biggest cities, each with a population of 5 million or more, are expected to improve their existing points-based registration policies and substantially increased the number of registered permanent residents. These are Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Chongqing, Wuhan, Chengdu, Nanjing, Zhengzhou, Hangzhou, Shenyang and Changsha.

Boosting the Second Tier

Second-tier cities, like Xi'an, Suzhou, Jinan, Qingdao and Xiamen, are set to benefit the most, Zhang Dawei, chief market analyst at Centaline Property, told Yicai Global. Eased restrictions in small and medium-sized cities could make them more attractive than the country's mega-metropolises, he added.

Some third- and fourth-tier cities will also reap rewards, Zhang said. Many people will pick these areas for their more affordable homes, as house prices in higher-tier cities are expensive, he continued, adding that the smaller cities still have better education and healthcare facilities than rural areas.

Editor: James Boynton