The urban and rural cleavage is very prominent in China, and is a result of most of China's economic growth taking place in the cities. It started in the 1960's where the CCP's hukou system was implemented. This household registration prohibited villagers from leaving their villages to obtain better opportunities in the cities. Thus, the inequalities of the rural community deepened, "they were based on where you were born (for villagers) or where you had been bureaucratically assigned (for urbanites), rather than on your own talents and efforts," (230). Even under the iron rice bowl, this system furthered the income divide between villagers and city folk, favoring the ones in urban areas. .
By the 1980's the some of the reforms actually caused more harm on the rural areas, like de-collectivization and non-farm employment. "[they] led to a collapse of most Mao-era village medical insurance plans, producing anxiety about how to pay for medical bills out of pocket," (231). De-collectivization brings less employment on the farms, leading migrants to leave their villages to seek work in the cities. The few rural families left, do not share equal benefits as those in the urban areas, and they also have to work twice as much to pay for medical bills without the government's aid. Even with the massive education expansion, Whyte states,"most of the added college spaces have gone to urban youths, with children of villager and migrant families facing greater obstacles," (233). The urban kids have a much higher chance of gaining admission to a university. This widens the gap because a higher education provides a better chance of success in the future. The rural kids who didn't make it to university will have to continue living with menial jobs and low pay. .
The Chinese view current social inequalities as fair, as people are free to choose where they want to work, what they want to do, and can change jobs with ease.