BEIJING - China's sweeping hukou reform will grant 100 million migrant workers equal access to urban social welfare by 2020, but many have started to wonder where the 100 million strong rural population will settle down.

Will they flock to already over-crowded mega cities like Beijing and Shanghai, where increasing population will further strain urban resources? Or will they become residents of China's smaller cities, which would be better able to accommodate them but provide fewer job opportunities?

The State Council, the Cabinet, issued the most comprehensive guideline for the newest hukou reforms, China's household registration system, on July 30.

To ensure orderly migration of the 100 million migrant workers, the guideline asks local governments to set differentiated household registration policies based on their ability to absorb migrants and provide public services.

Under the guideline, migrants can settle in towns and small cites with populations under 500,000 freely, with previous hukou restrictions abolished. For medium-sized cities with populations between 500,000 and 1 millon, however, controls have been set in hopes of establishing an orderly resettlement of rural population.

More conditions apply for big cities of with populations between 3 million and 5 million, and movement into mega cities with more than 5 million people will be strictly controlled.

Primary conditions include legally being employed at a stable job for a certain period and owning or renting a residence in the city they wish to move to.

China's hukou system is tied to one's place of residence and was set up in 1958 to control movement of rural population into cities. The hukou system has prevented the country's 269 million migrant from receiving the same public benefits as city dwellers and is widely believed to hold back urbanization and domestic consumption.

The new guideline says China will implement a single household registration, scrapping the nominal distinction between rural and urban hukous, but the benefits tied to hukous of different areas still exist with more developed areas providing better public services.

The differentiated hukou relocation policies are based on three socioeconomic factors, Huang Ming, vice minister of the Public Security Ministry, told Xinhua

After years of rapid urbanization, with 52.6 percent of the population living in cities last year, imbalances have arisen in the process. While more industrialized eastern areas are under increasing environmental strains, middle and western regions are still underdeveloped; the industrialization potential of underpopulated small cities have yet to be realized; and mega cities suffer from excessive populations, causing deteriorating "urban malaise" such air pollution and traffic jams.

For instance, migration has stretched Beijing's capacity to the extreme. According to official figures, Beijing's population increased by 87 percent from 1990 to 2011, reaching 20.18 million. Among the new residents, 7.42 million are migrants. The surge in population means Beijing now has to import its natural gas and fuel supply, as well as 64 percent of its power.

Wang Xiaoguang, an expert with the Chinese Academy of Governance, said differentiated policies could serve the goal of encouraging development of middle and western areas. At the same time, these policies are necessary, given the fact relocating to big cities costs much more.

After 15 years in the booming province of Guangdong, migrant worker Liu Yong finally decided to settle in Longshe Township near his hometown in southwest Chongqing Municipality. Liu, a former villager from Dadi Village, bought a new house in the town in 2010 and relocated his hukou from his rural home to the town.

The reason for his move is simple. Settling down in the nearby town is affordable and allows him to live near his relatives. The same year, the housing price in Guangzhou, capital city of Guangdong, soared beyond Liu' s financial reach.

Chongqing, as one of the two pilot hukou-reform regions in China, abolished its hukou restrictions in 2010. So far, nearly 4 million migrant workers have relocated their household registrations to urban areas, with 70 percent of them choosing to settle in towns and small cities. This shows migrant workers are more likely to relocate to more livable and affordable small cities.

Zhang Xiaode, another professor with the Chinese Academy of Governance, said setting employment and residence requirements for hukou relocation can prevent rural populations from flooding into cities, which could cause slums and widespread unemployment in cities.

According to a survey, about 50 percent of China's migrant workers who have entered cities work in counties and small cities. Keeping this in mind, the government has planned to invest more in infrastructure in small cities so they can attract more migrant workers to settle down.