MALAYSIA - A MALAYSIAN friend told me last year that she was looking to enrol her children in a local school in Shanghai.

She felt the pinch of the increased cost of living, especially when tuition fees at international or privately-run schools tend to prove too costly for some expatriates.

She hoped that her children would interact with native-speaking Chinese pupils and learn to speak fluent Chinese at the local school.

While other Chinese pupils in the class do not need to pay tuition and miscellaneous fees thanks to China's compulsory education system, my friend's children will still have to pay, but at a much lower rate than international schools.

China has a nine-year compulsory education policy where children receive six years of free education in primary school and three years in secondary school, Mabel Wu, a Shanghainese said.

It's a good way to increase literacy and help parents and their children. But, if you're not from Shanghai, then you have to pay the fee that can be quite high.

Wu said China is a big nation with the economical gap between cities and Shanghai schools, like other cities, could only cater to the needs of its own residents.

Under the compulsory education system, only children aged six and above with Chinese citizenship are entitled to free education. However, the children and their parents must have their hukou (residence account) of that particular city to enjoy such privileges, though they can have their hukou transferred to that school.

When the Communist Party came to power in 1940s, the government began using the residence account system to control the movement of people between rural and urban areas. Those outside the place where the account is issued will not enjoy the same education and social benefits as the local account holders.

A common problem faced by young graduates from other parts of China working in Shanghai is that they need to apply for a residence account as skilled or talented worker to enjoy such benefits and the red tape has discouraged them from settling in the city.

Will the city government review its hukou policies? A netizen asked Shanghai mayor Han Zheng in an online chat on eastday.com a few months ago.

The mayor said it would be important to resolve the hukou issue for the working class as the city attracted graduates from all over the country every year.

"Shanghai is the most international city in China and should have the most open policies. We have already started implementing the residence account system for talented workers, but this system needs to be further improved," he said.

The residence account issue is vital as it determines whether the graduates can send their children for free education. Over the years, the government has made efforts to reduce the bureaucratic process of approving or transferring residence accounts from another place.

On improvements to the compulsory education system and shortage of teaching staff, Han said the government would do its best to provide every child with an education especially the nine years of compulsory education.

"In reality, our schools in urban areas have better facilities and standards than schools in the suburbs. But after all these years of balanced development, we can see that our educational resources have been diverted to the suburbs.

"Things have improved but the school facilities on the outskirts are still not ideal. We don't want to have a few better schools but rather balanced development and to ensure the residents have high quality education," he said.

The schools on the outskirts are very well equipped with good infrastructure, Han said, but the government would have to look into reinforcing the software aspect such as the teaching staff's wages and perks.

"We are attracting more quality teachers from graduate and teaching profession's schools to work in the suburbs. Salary is the driving force for them to move to these places," he said.

Besides free education, the government also funds and provides scholarships to poor students and has expanded the free education scheme to migrant workers' children, who will not be granted residence accounts because of their nature of moving places.

Now, some 3,900 children of migrant workers in four private schools are able to enjoy education subsidy as those of permanent residents.

These children go to special private schools where parents are required to pay higher fees.