BEIJING, July 31 -- In the latest bid to remove obstacles to its urbanization drive, China on Wednesday announced plans to help about 100 million people settle in towns and cities by 2020.

A circular on the household registration, or "hukou," system said China will remove limits in townships and small cities, relax restrictions in medium-sized cities, and set qualifications for big cities.

The move could finally put an end to a system that has divided the nation into rural and urban populations since the 1950s.

Just like all other popular reforms launched in China recently, loosening the grip on hukou registration will no doubt contribute to China's future reforms and its pursuit of social justice.

Turning hundreds of millions of rural dwellers into urban consumers could also generate a dynamic driving force for the world's second-largest economy.

First launched in 1958, the hukou system classes China's population into rural and non-rural categories, to control the movement of people between those areas. Household registration is tied to one's place of residence and used to obtain access to basic welfare and public services.

But an increasing number of people are complaining that the way the registration is categorized has created an urban-rural divide.

About 52.6 percent of the population in China now live in cities. However, the proportion falls to 35.3 percent if the calculation is based on people's hukou.

Caught between the 17-point percentage gap are an army of over 200 million migrant workers, who have no urban social security entitlement and no access to public housing. Even their children have to pay extra fees to attend public schools.

The urban-rural gap has prompted previous administrations to experiment with reforms on the fringes of hukou for years.

As the country now embarks on a new campaign to comprehensively deepen reforms, expectations have been high for the hukou reform to also accommodate the broad changes that have taken place in China's social and economic spheres.

In a reform plan approved by the Third Plenary Session of the 18th Communist Party of China Central Committee last year, the country vowed to accelerate reform of the household registration system.

The country will relax control over farmers settling in towns and small cities, set reasonable requirements for rural residents to obtain hukou in large cities but will strictly control population size in megacities.

Such a differentiated approach is understandable and reasonable in the short run, given that the reform will concern hundreds of millions of people and thus should not be rushed.

According to an urbanization plan for the 2014-2020 period unveiled in March, China wants 60 percent of its population of 1.3 billion to be living in cities by 2020, while residents with city hukou should account for about 45 percent of the total population.

In addition, a large-scale population exodus from the countryside to cities could translate to enormous pressure on urban public services such as education, employment, medicare, pensions and affordable housing, and would call for coordinated reforms on every front.

But in the long run, attempts to control the size of the population in megacities by means of government regulations alone is far from enough.

Only by making small and medium-sized cities more attractive by recalibrating public services can the government truly relieve large cities and megacities of their huge population pressure, while bringing the benefits of China's hukou reforms into full play at the same time.