In modern China, legal distinction is made between urban and rural dwellers, and movement from rural to urban status is difficult. Urban life is felt to be far preferable, and living standards and opportunities for such advantages as education are much better in the cities. This firm and absolute distinction, which had no precedent in traditional society, is the result of a set of administrative decisions and policies that have had major, if unintended, consequences for social organization. Modern Chinese society has been marked by an extraordinary degree of residential immobility, and internal migration and population movement have been limited by state control. For most of the period since 1958, there has been no legal way to move out of villages or from small cities to large cities. Although people have not inherited estates and private property, they have inherited rural or urban status, which has been a major determinant of living standards and life chances.

China's cities grew rapidly in the early and mid-1950s as rural people moved in to take advantage of the employment opportunities generated by economic growth and the expansion of heavy industry. The authorities became alarmed at this influx, both because of the cost of providing urban services (food supply, waste disposal) and because of the potential problems of unemployed or semi-employed migrants creating squatter settlements. Additionally, Chinese leaders held a certain anti-urban bias and tended to regard China's cities as unproductive. They accused city residents of living off the countryside and indulging in luxury consumption. Extolling large, smoking factories, they sought to engage the population in the manufacture of utilitarian commodities, like steel or trucks. The authorities demonstrated their bias against commerce and service trades by closing down many shops and markets. Since 1958 they have employed household registration and food rationing systems to control urban growth and general migration (see Migration , ch. 2).

In the 1980s the distinction between urban and rural status grew mainly out of the food distribution and rationing system. Rural registrants were assumed to be growing their own staple foods, and there was no provision for state allocation of grain to them. The state monopolized the trade in grain it collected grain in the countryside as a tax or as compulsory purchase and used it to supply its functionaries and the urban population (see Internal Trade and Distribution , ch. 8). Urban status entitled one to purchase an allotment of grain, oil, and various other staple items. These were rationed, and a ration coupon as well as money was necessary to obtain grain legally. Ration coupons were good only in their own localities. The rationing system served several purposes. They included the fair distribution of scarce goods, prevention of private speculation in staple foods, and residence control. In addition, the police in cities kept household registratio71e ion records and could make unannounced inspections, usually at night, looking for people who did not have legal permission to reside in a city. The controls have not been foolproof and have worked more effectively in times of shortages and strict political control.

In the 1980s the reasons for the administrative barriers around cities were fairly straightforward. Incomes and living standards in China's cities are two to three times higher than in the countryside. In addition, more urban dwellers have secure state jobs with their associated benefits. State investment has been concentrated in heavy industry, mostly urban, and agriculture and the rural sector have been left to their own devices, after meeting their tax obligations. The ironic consequence of a rural and peasant-based revolution has been a system that has acted, intentionally or not, to increase the social and economic gap between country and city.

Data as of July 1987