A new round of urbanization over the next five years aims to lift the proportion of urban residents to 70 percent of China's population and overhaul the country's two-track urban-rural hukou system, an official said on Friday.

The reform will enable migrant workers to better access public services, including healthcare and schooling, in their adopted homes, and help bolster domestic spending, Zheng Bei, deputy head of the National Development and Reform Commission, said at a policy briefing organized by the State Council Information Office in Beijing.

China has around 300 million rural migrant workers who work in its cities, according to official figures.

Their lack of city hukou, or permanent residency, means many have to leave their children behind in rural hometowns in the care of aging parents. They also end up paying more for medical services because they are not entitled to the same reimbursement rate as people holding city hukou.

Zheng said about 165 million migrants have settled down in cities and obtained permanent residency over the past decade.

The nation's urban residents, including those who live and work in cities but do not have urban hukou, comprised 66.16 percent of the population by the end of last year — up from 53.1 percent in 2012 — with the coverage of urban public services expanding significantly in that time.

That demographic shift has not only supported China's economic growth but also enhanced the livelihoods of Chinese people, Zheng said, while acknowledging that there are still issues that need to be addressed during the urbanization process.

In the next five years, authorities will accelerate the construction of affordable housing and the redevelopment of shanty towns as part of a broader initiative to mitigate safety risks associated with rapid urbanization, she added.

The State Council, China's Cabinet, released a plan to advance "people-centered" urbanization over the next five years on Wednesday. It aims to enhance the country's domestic consumption by extending public service coverage to rural residents who have relocated to cities and by removing barriers preventing them from obtaining permanent residency in their adopted homes.

The measures are widely viewed as promising tools for policymakers to reduce living costs and encourage consumer spending.

Citing official estimates, Zheng said that every 1 percentage point increase in China's urbanization rate equates to an increase of more than 200 billion yuan ($27.8 billion) in annual consumer demand.

From an investment perspective, urbanization can drive investment in urban utilities, public services, residential housing and other areas, she said.

"Therefore, the new type of urbanization can play an important role in expanding domestic demand, thereby promoting the stability and quality of economic growth, and enhancing people's livelihoods," Zheng said.

Qiu Baoli, director of the public security administration bureau of the Ministry of Public Security, said the ministry and other departments have been making adjustments to internal migration policies across the country since 2021. The residency thresholds in small and medium-sized cities have essentially been removed, while major cities have further relaxed migration restrictions, leading to an increase in the number of rural migrants moving to urban areas with their families.

Ministry figures show that from 2021 to 2023, over 40 million rural migrants obtained urban hukou.

"The recent urbanization plan provides clear directives for deepening hukou system reforms over the next five years," Qiu said at the policy briefing.

As part of the effort to relax internal migration policies, migrants only need to live and work for six months in cities with a population of less than 3 million to qualify for local hukou, and no additional restrictions such as property ownership, investment or tax payment requirements shall be attached, he said, adding that thresholds for permanent residency in larger cities will be lowered.