Q: China artificially divides its people into urban population and rural population, resulting in inequalities social and economic status. What are the reasons for such a division? What will the government do to solve the issue, so as to eradicate discrepancies between urban and rural areas and to promote a more coordinated development of the two?

A: The urban-rural classification system was adopted during the time when China practiced a planned economy.? Such a division was based on a household registration system, which deprived the rural population of grain supply, employment opportunities and social welfare benefits enjoyed by its urban counterpart. Further more, it restricted rural people's freedom to chose where to live, work and to get married.
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Though a number of attempts have been made in to rectify the household registration system since the country started to implement the reforms and the open policy in 1979, little development has been achieved so far, due to the complexity of the issue. Inequalities and discrepancies still persist between urban and rural populations.
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With the deepening of the reforms and the implementation a series of measures to promote coordinated development of urban and rural areas, changes have taken place in the fundamental structure upon which the double-tier society has been formed. The household contract responsibility system replaced the people's commune system in 1983. The practice to force farmers to hand in all agricultural products t the State was phased out in the late 1980s.? And the4 rationed supply of basic living necessities in urban areas was abolished in 1993. The government has also started to reform the household registration system, urban employment system and social security system.

Entering the 21rst Century, the reform to overhaul the discriminating household registration system has been introduced nationwide. Starting from March 2001, farmers have been allowed to enter freely small townships under the county level. Requirements restricting farmers to live and work in large and medium-sized cities have also been relaxed. At present, more than 100 million farmers work in cities. On national average, salary income has accounted for one third of farmers' total annual income.

At the same time, the government has taken budgetary, tax and other policy measures to contain the widening of the gap between urban and rural areas. It is hoped that industrialization and urbanization will divert more and more farmers from the farming sector to non-farming sectors. It is expected that by the year 2020, China' urbanization rate will have increased from the present 40% to 55%. That will create favorable conditions to completely close the gap between urban and rural areas.