Abstract: In this paper, the decision on household registration transfer and farmland relinquishment is expounded through the discussion of the features of different households' livelihoods. Rural households are classified into full farm households, dominant farm households, non-dominant farm households and non-farm households, based on a survey of 376 households in Yunyang County and Stalagnate Tujia Nationality Autonomous County of Chongqing. The data were collected in October and November, 2010, using PRA (participatory rural appraisal) method. The results show that, (1) The level of concurrent business activities of the households is high in Chongqing, with non-farm income being the most important characteristics of the households' economic activities; Households' livelihood capital increases from full farm households to non-farm households in terms of labor, finance and social capital; Environmental capital is an important driving force of households' non-farm livelihood. (2) Households' livelihoods strategy has been diversified with the increase of the level of their concurrent business activities. Full farm households' livelihood is highly dependent on the land; dominant farm households begin to do some non-farm concurrent business activities; non-dominant farm households' livelihood is the most diversified; Non-farm households have set feet on construction, service and many other non-farm business. (3) Based on Efficient Market Hypothesis, the households are regarded as“rational people”, and their livelihoods (availability of capital) are considered as a key factor impacting their decisions on farmland transfer or relinquishment. In details, the full farm households, as short of capital, make their decision under the obvious influence of the governmental' guidance and are considered not fully rational; Dominant farm households show little response to the policy, due to their dependence on economic benefit of the land; Non-dominant farm households show vague response to the policy because they would judge and weigh the gain and loss of household registration transfer and farmland relinquishment; Non-farm households, possessing the most capital, response to the policy actively as rational decision-makers. From the perspectives of household registration system reform and farmers livelihoods, this article proposes rational behaviors for the government.

Key words: Chongqing, farmland relinquishment, household registration reformation, livelihood capital, livelihood strategy, rational government