Shanghai has become the first city in mainland China to crack down on residents who hold permanent residency, or a "Green Card," in another country.
From May 1, the city will revoke the household registration, or "hukou," of anyone known to hold permanent residency overseas.
A hukou is essential for access to fundamental social services, including education and healthcare, and is usually linked to a person's place of birth.
Transfers of one's hukou to another place are theoretically possible, but highly sought-after cities like Beijing and Shanghai have in place labyrinthine and expensive bureaucratic barriers, as well as population caps and a quota system for migrants, which make them very hard to regain.
A notice posted to the Shanghai city police department's official website called on any residents "settling abroad or acquiring other nationalities," must report to police, who will revoke their hukou.
China initially made these requirements nationwide in 2003, but they were rarely implemented. Now, Shanghai residents who acquire permanent residency in another country, but do not report to police, will have their hukou revoked forcibly from May 1, the notice said.
A Shanghai resident surnamed Zhao, who also holds permanent residency in Australia, said the authorities apparently want to stop people from enjoying the benefits of residency in two different countries.
"It seems that in the future, they won't use your nationality to determine [your residency rights]," Zhao said. "There are large numbers of people who have green cards in the United States and Australia, who don't have citizenship in those countries."
"Now, this section of the Chinese population are having to make a fast choice," she said. "They don't want us to enjoy the benefits of residency in two countries, but China always allowed this to happen before ... It's totally unreasonable."
Beijing-based rights lawyer Mo Shaoping said the move may also be in breach of the Nationality Law of the People's Republic of China.
"Actually, there are calls now to amend the Nationality Law, so as to prevent people holding dual nationality," Mo said.
He said anyone who believes the Shanghai authorities are breaking relevant legislation with the new requirement has the right to request an interpretation of the rules from the National People's Congress (NPC), China's parliament.
"[The NPC] would then carry out an investigation into the legality of this measure," Mo said.
Repeated calls to the Shanghai municipal police department rang unanswered during office hours on Friday.
Nearly half of China's wealthiest families are planning to emigrate or are in the process of emigrating, according to a recent survey of the wealthiest private individuals by the Hurun report.
And a total of 44.5 percent said they were either in the process of emigrating, or were planning to do so in 2017.
While the majority gave better educational opportunities and a cheaper cost of living as their main motivation for leaving China, nearly one-third said they were mainly emigrating in order "to better effect the transfer of family wealth."
The United States is still the top destination for investment emigration and property purchasing, Hurun said in a statement issued with the report, with Los Angeles remains the most popular city in North America among Chinese high net-worth individuals with average wealth of 20 million yuan (U.S. $3.17 million).
"Education and living environment continue to be the main reasons for emigrating overseas," it said, accounting for 76 percent and 64 percent, respectively.
More recently, the ruling Chinese Communist Party's removal of term limits from the posts of president and vice president, allowing incumbent Xi Jinping to rule indefinitely, have provoked a surge in the number of people wanting to leave the country.
Overseas-linked realtors and immigration advisers reported a sudden boost in interest after the move was announced, while search engine Baidu reported a huge surge in queries relating to emigration recorded soon afterwards.
Baidu said queries relating to emigration and visas for other countries had risen tenfold in the wake of the announcement.
Reported by Qiao Long for RFA's Mandarin Service. Translated and edited by Luisetta Mudie.