One in every four people living in China's cities lacks adequate social welfare, in a trend that is causing problems for the country's urbanization plans, the government says.

Li Shouxin, director of the development and planning department at the National Development and Reform Commission, said 46.6 percent of China's population, or 622 million, lived in urban areas at the end of 2009, up from 45.7 percent in 2008.

Included in this total is about 167 million migrant workers, who have lived and worked in cities for more than six months and do not have a local residence permit giving them access to social welfare, Li said.

"While their production and lives are unstable, it causes a big problem," Li said at a press conference on Monday.

Migrant workers move frequently and often pay their life and healthcare insurance in the various cities where they are working. These policies cannot be rolled over into one account, which threatens their livelihood after retirement.

To address the problem, policies have been relaxed in some cities. The Ministry of Human Resources and Social Security has also drafted national policies.

At a press conference on Monday, Yin Chengji, the ministry spokesman, said that a regulation to address the problem with life insurance will be implemented this year. Another regulation on the healthcare insurance will be enacted on July 1.

China has been promoting urbanization since the 1990s to boost economic development. Between 75 to 80 percent of the population live in cities in developed countries.

Li said the number of cities in China grew to 655 by 2008, with 122 mega-cities (with a population more than 1 million) and 118 big cities (with a population between 500,000 and 1 million).

"China is getting closer to the average level of middle income countries," he said.

Li said the strategy has proven conducive to the country's economic development. For example, China's three city clusters in Bohai Bay, the Yangtze River Delta and the Pearl River Delta, which occupy 4 percent of the total territory, hold 18 percent of the population and contributed 40 percent of the GDP in 2008, he said.

"We expect the proportion of the urban population to exceed 50 percent between 2011 and 2015," he said.

However, the urbanization campaign has faced problems, including the country's heavy dependence on selling land to generate income, Li said.

"Driven by local interests, some cities have extended their scale and tried to earn revenue by selling land," he said.

As a result, the urban area expanded by 7.2 percent from 1999 to 2007, faster than the 4 percent growth of the urban population, he said.

"Such development means is unsustainable and wastes land resources," he said.