The Communist Party came to power in China in 1949. Under the leadership of Mao Zedong, one of the government’s goals was to create economic stability between the country’s large rural farming population and the growing urban areas. The party had a few potential road blocks to steer clear of while creating this stability.

One potential problem was a large influx of rural workers to the cities looking for higher paying jobs. Latin America and India saw large slums develop outside of their major cities with similar conditions.

Another threat to the Communist’s effort was public protesting and civil unrest, especially in the cities. The plan they developed would have to address both concerns while creating stability for the entire country.

The plan was to implement a classification system to keep record of all Chinese as either a rural or urban citizen. The government then tied all social benefits (healthcare, education, social security, working rights, etc.) to a person’s local government.

The system is called “huji” but it’s commonly known by the name of the records “Hukou.” The Hukou System was implemented in 1958 and it still in place today.

Application of the Hukou

The practical application of the Hukou System gave the Communist Party answers to both of their major concerns:

  • The Hukou System would effectively limit the amount of rural-urban migration. Rural Chinese would be far less likely to move to urban areas if it meant giving up their healthcare, education and social security.
  • Chinese in urban areas would be essentially given preferential treatment. They would get better social benefits since their local governments had more resources, they would have access to higher paying jobs and rural workers would be limited in competing in the urban marketplace. Because the urban Chinese were more likely to have an education, they were more likely to protest. The preferential treatment would calm the risk of any major uprising against the Communist Party.

Impact on Rural Chinese

While the urban citizens enjoyed a supply of labor opportunities and comfortable benefits for their families, their rural counterparts struggled. The agrarian culture in rural China is very difficult. The land isn’t nutrient rich for farming, the terrain is mountainous, there’s little economic infrastructure, they lack access to modern farm equipment, there’s often extreme draught and access to clean water is scarce.

Even with all of these challenges to daily life and extreme poverty the norm, the Hukou System was successful. At least for a while.

The Chinese population remained primarily rural all the way up to 2012. During that year, China’s urban population officially grew larger then the rural population.

The trends show that as China’s economic power grew, the cities grew. As the cities grew and jobs become more available, the tradeoffs for rural farmers to move to the city became more attractive. In fact the rate of Chinese rural-urban migration in recent years as been suspected to be the largest in the history of the world. More than 250 million Chinese are estimated to migrate to the cities each year (that’s 2/3 of the population of the United States).

Often it is the parents moving to the cities, leaving their young children to be raised by grandparents. These children are the forgotten casualties of China’s economic boom.

Infographic: Rural vs. Urban – China’s Great Divide

Hukou System in China, rural-urban migration

Hukou Reform Coming

While the Hukou System proved successful for many years, it has always been widely disliked. The Communist Party created an organized caste system with Hukou. Rural Chinese were systematically discriminated against. This injustice has widely been challenge by Chinese for all levels of society, though. In 2014, reform was finally addressed by the government.

The reform will remove the rural and urban distinctions of Hukou. All Chinese will now simply be called residents. The removal of the rural-urban classification doesn’t hold much promise for practical improvement, though. All social benefits are still tied to a resident’s hometown.

There is a process to transfer residency, but it is extremely limited in the major cities where more of the economic opportunities are. It will be easier now for rural Chinese to move to other rural towns and smaller cities, though.

It’s a step in the right direction, but widely accepted as not enough.

Poverty in Rural China Remains

The socioeconomic impacts of 50+ years of “rural” and “urban” classification are incalculable. Generations were conditioned to believe they were second-rate citizens and received second-rate treatment. Even with restrictions somewhat relaxed, it will take help for the damage to be repaired. This is an acceptable condition for China as they have successfully avoided slums around their major cities and have largely avoided public protests.

Today, there are still over 250 million rural Chinese living on less than $2/day. Part of the problem is the Hukou System, but there are other factors.

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